GST: FAQs Series 17 (Valuation in GST)

Valuation in GST





Q 1. What is the value of taxable supply to be adopted for the levy of GST?


Ans. The value of taxable supply of goods and services shall ordinarily be ‘the transaction value’ which is the price paid or payable, when the parties are not related and price is the sole consideration. Section 15 of the CGST/SGST Act further elaborates various inclusions and exclusions from the
ambit of transaction value. For example, the transaction value shall not include refundable deposit, discount allowed subject to certain conditions before or at the time of supply.

Q 2. What is transaction value?

Ans. Transaction value refers to the price actually paid or payable for the supply of goods and or services where the supplier and the recipient are not related and price is the sole consideration for the supply. It includes any amount which the supplier is liable to pay but which has been incurred by the recipient of the supply.

Q 3. Are there separate valuation provisions for CGST, SGST and IGST and for Goods and Services?

Ans. No, section 15 is common for all three taxes and also common for goods and services.

Q 4. Is contract price not sufficient to determine valuation of supply?

Ans. Contract price is more specifically referred to as ‘transaction value’ and that is the basis for computing tax.However, when the price is influenced by factors like relationship of parties or where certain transactions are deemed to be supply, which do not have a price, the value has to be determined in accordance with the GST Valuation Rules.

Q 5. Is reference to GST Valuation Rules required in all cases?

Ans. No. Reference to GST Valuation Rules is required only in cases where value cannot be determined under subsection (1) of Section 15.

Q 6. Can the transaction value declared under section 15(1) be accepted?

Ans. Yes, it can be accepted after examining for inclusions in section 15(2). Furthermore, the transaction value can be accepted even where the supplier and recipient are related, provided the relationship has not influenced the price.

Q 7. Whether post-supply discounts or incentives are to be included in the transaction value?

Ans. Yes. where the post-supply discount is established as per the agreement which is known at or before the time of supply and where such discount specifically linked to the relevant invoice and the recipient has reversed input tax credit attributable to such discount, the discount is allowed as admissible deduction under Section 15 of the model GST law.

Q 8. Whether pre-supply discounts allowed before or at the time of supply are includible in the transaction value?

Ans. No, provided it is allowed in the course of normal trade practice and has been duly recorded in the invoice.

Q 9. When are the provisions of the Valuation Rules applicable?

Ans. Valuation Rules are applicable when (i) consideration either wholly or in part not in money terms; (ii) parties are related or supply by any specified category of supplier; and (iii) transaction value declared is not reliable.

Q 10. What are the inclusions specified in Section 15(2) which could be added to Transaction Value?

Ans. The inclusions specified in Section 15 (2) which could be added to transaction value are as follows:

a) Any taxes, duties, cesses, fees and charges levied under any statute, other than the SGST/CGST Act and the Goods and Services Tax (Compensation to the States for Loss of Revenue) Act, 2016, if charged separately by the supplier to the recipient;

b) Any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods and/or services;

c) Incidental expenses, such as commission and packing, charged by the supplier to the recipient of a
supply, including any amount charged for anything done by the supplier in respect of the supply of goods and/or services at the time of, or before delivery of the goods or as the case may be supply of the services;

d) Interest or late fee or penalty for delayed payment of any consideration for any supply; and

e) Subsidies directly linked to the price excluding subsidies provided by the Central and State Government.
Disclaimer:

This FAQ on GST compiled by NACEN and vetted by the Source Trainers is based on the CGST/SGST/UTGST/IGSTAct(s). This FAQ is for training and academic purposes only.

The information in this blogger is reproduced from FAQ on GST publised by CBEC updated on 31 March 2017 and is not intended to be treated as legal ad vice or opinion. For greater details, you are requested to refer to the respective CGST/SGST/UTGST/IGST Acts.

The FAQs refer to CGST and SGST Acts as CGST/SGST as CGST Act and SGST Act are identical in most of the provisions. CGST Act has been introduced in the Parliament. The SGST Acts will be passed by respective state legislatures. A few provisions may be specific to state and may not be in CGST Act.

Tax Planning Series 5: Tax Free Income (Updated by Finance Act, 2016)


LIST OF TAX-FREE INCOMES


Section
 Nature of exemption
Who are entitled
Relevant Rule
(1)
(2)
(3)
(4)
10(1)
Agricultural income
Any assessee
7, 7A, 7B, 8
10(2)
Amount received out of family income, or in case of impartible estate, amount received out of income of family estate
Individual as member of HUF
10(2A)
Partner’s share in total income of firm
Partner of a firm
10(4)(i)
Interest on securities or bonds notified before 1-6-2002 by the Central Government including premium on redemption of such bonds
Non-resident
10(4)(ii)
Interest received on Non-resident (External) Account
Person resident outside India (as defined in FEMA) and person who has been permitted to maintain said account by RBI
10(4B)
Interest on notified savings certificates issued before 1-6-2002 by the Central Government and subscribed to in convertible foreign exchange
Individual (Indian citizen or person of Indian origin, who is a non-resident)
10(5)
Leave travel concession or assistance (subject to prescribed conditions and limited to amount actually spent)
Individual – Salaried employee
2B
10(6)(ii)
Remuneration received by specified diplomats and their staff
Individual (non-citizen of India)
10(6)(vi)
Remuneration received as employee of foreign enterprise for services rendered during stay in India (subject to certain conditions)
Individual – Salaried employee (non-citizen of India)
10(6)(viii)
Remuneration received for services rendered in connection with employment on a foreign ship (subject to certain limits)
Individual – Salaried employee (non-resident, non-citizen of India)
10(6)(xi)
Remuneration received as employee of foreign Government in connection with his training in Government offices/statutory undertakings, etc.
Individual – Salaried employee (foreign citizen)
10(6A)
Tax paid by Government or Indian concern on royalty/fees for technical services from Government or Indian concern under agreement made before 1-6-2002 which either relates to a matter included in the industrial policy of the Government and is in accordance with that policy or is approved by Central Government
Foreign company
10(6B)
Tax paid by Government or Indian concern under terms of agreement entered into before 1-6-2002 by Central Government with Government of foreign State or international organisation on income derived from Government or Indian concern, other than income by way of salary, royalty or fees for technical services
Non-resident (other than company) or foreign company
10(6BB)
Tax paid by Indian company, engaged in the business of operation of aircraft, who has acquired an aircraft or its engine on lease, under an approved (by Central Government) agreement entered into between 31-3-1997 and 1-4-1999, or after 31-3-2007, on lease rental/income
Government of foreign State or foreign enterprise
10(6C)
Income by way of royalty or fees for technical services rendered in India or abroad in projects connected with security of India pursuant to agreement with Central Government
Notified foreign company
10(7)
Foreign allowances or perquisites paid or allowed by Government to its employees posted abroad
Individual – Salaried employee (Indian citizen)
10(8)
Foreign income and remuneration received from foreign Government for services rendered in connection with any co-operative technical assistance programmes and projects in accordance with agreement entered into by Central Government and foreign Government (subject to certain conditions)
Individual
10(8A)
Foreign income and remuneration received by consultant (agreement relating to his engagement must be approved) out of funds made available to an international organisation (agency) under a technical assistance grant agreement between that agency and the Government of a foreign State
Non-Indian citizen/Indian citizen who is not ordinarily resident in India/non-resident, engaged by the agency for rendering technical services in India
10(8B)
Foreign income and remuneration received by an employee of the consultant referred to in section 10(8A)
Non-Indian citizen/Indian citizen who is not ordinarily resident in India (contract of service must be approved by the prescribed authority before commencement of service)
10(9)
Income of any member of family of any individual [referred to in section 10(8), 10(8A) or 10(8B)] which accrues or arises outside India and is not deemed to accrue or arise in India and which is subject to tax in that foreign country
Individual
10(10)(i)
Death-cum-retirement gratuity received by Government servants
Individual – Salaried employee
10(10)(ii)
Gratuity received under the Payment of Gratuity Act, 1972 (maximum Rs. 10,00,000)
Individual – Salaried employee
10(10)(iii)
Any other gratuity received by employee/legal heirs on retirement, termination of services, death, etc., limited to half month’s salary for each year of completed service (subject to certain conditions) [maximum limit Rs. 10,00,000]
Individual – Salaried employee
10(10A)
Payment in commutation of pension received from Government/Private employer (subject to certain limits)/LIC Fund u/s 10(23AAB)
Individual – Salaried employee
10(10AA)
Amounts by way of encashment of unutilised earned leave on retirement limited to 10 months’ salary (subject to certain conditions) [maximum limit Rs. 3,00,000 (in case of retirement after 1-4-1998)]
Individual – Salaried employee
10(10B)
Retrenchment compensation [maxi-mum limit is Rs. 5,00,000]
Individual – Workman
10(10BB)
Payments made under Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 and any scheme framed thereunder (subject to certain conditions)
Any assessee
10(10BC)
Compensation on account of any disaster received/receivable from Government/local authority (subject to certain conditions)
Individual or his legal heir
10(10C)
Payment received or receivable (not exceeding Rs. 5,00,000) on voluntary retirement in accordance with scheme framed in accordance with prescribed guidelines
Individual – Employee of a public sector company, any other company, an authori-ty established under a Central, State or Provincial Act, a local authority, co-operative societies, universities, IITs, any State Government, Central Government, notified institution having importance throughout India or in any State or States, or notified institutes of management
2BA
10(10CC)
Tax paid by employer on perquisite (not provided for by way of monetary payment) given to employees
Individual – Salaried employee
10(10D)
Any sum received under a life insurance policy including bonus on such policy but excluding sums received u/s 80DDA(3) and under a Keyman insurance policy
Any assessee
10(11)
Payment from public provident fund/statutory provident fund
Individual/Hindu undivided family
10(11A)
Any payment from an account opened in accordance with the Sukanya Samriddhi Account Rules, 2014/2016
Any assessee
10(12)
Accumulated balance payable to employee participating in recognised provident fund (subject to certain conditions)
Individual – Salaried employee
10(13)
Payment from approved superannuation fund in specified circumstances and subject to certain limits
Individual
10(13A)
House rent allowance (subject to certain limits)
Individual – Salaried employee
 2A
10(14)
Prescribed allowances or benefits
Individual – Salaried employee
 2BB
10(15)(i)
Interest, premium on redemption, or other payment on notified securities, bonds, certificates, and deposits, etc. (subject to notified conditions and limits)
All assessees
10(15)(iib)
Interest on notified Capital Investment Bonds notified prior to 1-6-2002
Individual/HUF
10(15)(iic)
Interest on notified Relief Bonds
Individual/HUF
10(15)(iid)
Interest on notified bonds (notified prior to 1-6-2002) purchased in foreign exchange (subject to certain conditions)
Individual – NRI/nominee or survivor of NRI/individual to whom bonds have been gifted by NRI
10(15)(iii)
Interest on securities
Issue Department of Central Bank of Ceylon
10(15)(iiia)
Interest on deposits made with sche-duled bank with approval of RBI
Bank incorporated abroad
10(15)(iiib)
Interest payable to Nordic Investment Bank
Nordic Investment Bank
10(15)(iiic)
Interest payable to the European Investment Bank on loan granted by it in pursuance of framework-agreement dated 25-11-1993 for financial corporation between Central Government and that bank
European Investment Bank
10(15)(iv)(a)
Interest received from Government or from local authority on moneys lent to it before 1-6-2001 or debts owed by it before 1-6-2001, from sources outside India
All assessees who have lent money, etc., from sources outside India
10(15)(iv)(b)
Interest received from industrial undertaking in India on moneys lent to it under a loan agreement entered into before 1-6-2001
Approved foreign financial institution
10(15)(iv)(c)
Interest at approved rate received from Indian industrial undertaking on moneys lent or debt incurred before 1-6-2001 in a foreign country in respect of purchase outside India of raw materials, components or capital plant and machinery, subject to certain limits and conditions
All assessees who have lent such money, or in favour of whom such debt has been incurred
10(15)(iv)(d)
Interest received at approved rate from specified financial institutions in India on moneys lent from sources outside India before 1-6-2001
All assessees who have lent such moneys
10(15)(iv)(e)
Interest received at approved rate from other Indian financial institutions or banks on moneys lent for specified purposes from sources outside India before 1-6-2001 under approved loan agreement
All assessees who have lent such moneys
10(15)(iv)(f)
Interest received at approved rate from Indian industrial undertaking on moneys lent in foreign currency from sources outside India under loan agreement approved before 1-6-2001
All assessees who have lent such moneys
10(15)(iv)(fa)
Interest payable by scheduled bank, on deposits in foreign currency when acceptance of such deposits by bank is approved by RBI
Non-resident or individual/HUF who is not ordinarily resident in India
10(15)(iv)(g)
Interest received at approved rate, from Indian public companies eligible for deduction under section 36(1)(viii) and formed with main object of providing long-term housing finance, on moneys lent in foreign currency from sources outside India under loan agreement approved before 1-6-2003
All assessees who have lent such moneys
10(15)(iv)(h)
Interest received from any public sector company in respect of notified bonds or debentures and subject to certain conditions
All assessees
10(15)(iv)(i)
Interest received from Government on deposits in notified scheme out of moneys due on account of retirement
Individual – Em-ployee of Central Government/State Government/Public sector company
10(15)(v)
Interest on securities held in Reserve Bank’s SGL A/c No. SL/DH-048 and Deposits made after 31-3-1994 for bene-fit of victims of Bhopal Gas Leak Disaster held in such account with RBI or with notified public sector bank
Welfare Commissioner, Bhopal Gas Victims, Bhopal
10(15)(vi)
Interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit certificates issued under the Gold Monetisation Scheme, 2015 notified by Central Government
All assessees
10(15)(vii)
Interest on notified bonds issued by a local authority/State Pooled Finance Entity
All assessees
10(15)(viii)
Interest on deposit made on or after 1-4-2005 in an Offshore Banking Unit referred to in section 2(u) of the Special Economic Zones Act, 2005
Non-resident or person who is not ordinarily resident
10(15A)
Any payment made by an Indian company, engaged in business of operation of aircraft, to acquire an aircraft or an aircraft engine on lease from the Government of a foreign State or a foreign enterprise (person who is non-resident) under approved agreement entered into on or after 1-4-1999 but before 1-4-2007. However, payment made for providing spares, facilities or services in connection with operation of leased aircraft is excluded
Foreign State/Enterprise
10(16)
Educational scholarship
Individual
10(17)(i)
Daily allowance
Individual – Member of Parliament/State Legislature/Committee thereof
10(17)(ii)
Any allowance received by MP under Members of Parliament (Constituency Allowance) Rules, 1986
Member of Parliament
10(17)(iii)
Any constituency allowance received
Individual – Member of State Legislature
10(17A)(i)
Amount received in pursuance of award (whether in cash or kind) instituted in public interest by Central/State Government or approved award instituted by other body
Any assessee
10(17A)(ii)
Reward (whether in cash or kind) received from Central/State Government for approved purposes in public interest
Any assessee
10(18)
Pension received by an individual who has won specified/notified gallantry awards and family pension received by any family member of such individual
Individual – Central/State Government employee or his family member
10(19)
Family pension received by the widow, children or nominated heirs of a member of the armed forces (including para military forces) where death of such member has occurred in the course of operational duties (subject to prescribed conditions and circumstances)
Individual (widow, children or nominated heirs of member of armed forces)
2BBA
10(19A)
Notional annual value of any one palace occupied by former ruler
Individual
10(20)
Specified incomes of a local authority
Local authority
10(21)
Income of approved research associations subject to certain conditions
Research Association
10(22B)
Income of notified news agency set up in India solely for collection and distribution of news (subject to certain conditions)
News agencies
10(23A)
Income of approved professional bodies other than income from house property, income received for rendering specific services and income by way of interest or dividends (subject to certain conditions)
Professional associations
10(23AA)
Income received on behalf of regimental fund or non-public fund established by armed forces
Regimental fund or non-public fund
10(23AAA)
Income of approved fund established for notified purposes for welfare of member employees or their dependents (subject to certain conditions)
Approved fund
16C
10(23AAB)
Income of fund set up by LIC or any other insurer under an approved pension Scheme (subject to certain conditions)
Fund set up by LIC or any other insurer
10(23B)
Income of institution existing solely for development of khadi or village industries (subject to certain conditions)
Public charitable trust/registered society
10(23BB)
Income of authority established for development of khadi or village industries
Authority established under State or Provincial Act
10(23BBA)
Income of a body or authority esta-blished for administration of public religious or charitable trusts or endowments, etc.
Body/Authority established, constituted or appointed under Central, State or Provincial Act
10(23BBB)
Income of EEC from interest, dividends or capital gains from investment of funds under specified scheme
European Economic Community
10(23BBC)
Income of SAARC Fund for Regional Projects set up by Colombo Declaration issued on 21-12-1991
SAARC Fund for Regional Projects
10(23BBD)
Any income of the Secretariat of the Asian Organisation of the Supreme Audit Institutions registered as ASOSAI – Secretariat under the Societies Registration Act, 1860 for a period of 10 assessment years relevant to assessment years beginning on 1-4-2001
Secretariat of the Asian Organisation of the Supreme Audit Institutions registered as ASOSAI – Secretariat
10(23BBE)
Income of Insurance Regulatory and Development Authority (IRDA)
IRDA
10(23BBF)
Income of North-Eastern Development Finance Corporation Limited (subject to certain limits)
North-Eastern Development Finance Corporation Limited
10(23BBG)
Income of Central Electricity Regulatory Commission
Central Electricity Regulatory Commission
10(23BBH)
Income of Prasar Bharati (Broadcasting Corporation of India)
Prasar Bharati (Broadcasting Corporation of India)
10(23C)(i) to (iiiaaa)
Income received by any person on behalf of specified Prime Minister’s Funds or National Foundation for Communal Harmony or the Swachh Bharat Kosh or the Clean Ganga Fund set up by the Central Government
Any person concerned
10(23C)(iiiab)
Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government
University/other educational institution
2BBB
10(23C)(iiiac)
Income of any hospital or other medi-cal treatment institution existing solely for philanthropic purposes and not for purposes of profit, and which is wholly or substantially financed by the Government
Hospital/Nursing Home, etc.
2BBB
10(23C)(iiiad)
Income of any university or other edu-cational institution existing solely for educational purposes and not for purposes of profit, if the aggregate annual receipts do not exceed one crore rupees
University/other educational institution
2BC
10(23C)(iiiae)
Income of any hospital or other medi-cal treatment institution existing solely for philanthropic purposes and not for purposes of profit, if the aggregate annual receipts do not exceed one crore rupees
Hospital/Nursing Home, etc.
2BC
10(23C)(iv)/(v)
Income received by any approved charitable fund or institution and approved public religious/charitable trust or institution (subject to certain conditions)
Charitable/Religioustrusts and institutions
16CC
10(23C)(vi)
Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in section 10(23C)(iiiab) and 10(23C)(iiiad) and which is approved by the prescribed authority (subject to certain conditions)
University/other educational institution
2CA/16CC
10(23C)(via)
Income of any hospital or other medi-cal treatment institution existing solely for philanthropic purposes and not for purposes of profit, other than those mentioned in section 10(23C)(iiiac) and 10(23C)(iiiae) and which is approved by the prescribed authority (subject to certain conditions)
Hospital/Nursing Home, etc.
2CA/16CC
10(23D)
Income of Mutual Fund registered under SEBI Act, 1992 and notified Mutual Fund set up by public sector bank or public financial institution or authorised by RBI, subject to notified conditions and provisions of Chapter XIIE
Mutual Fund registered under SEBI Act, 1992, and Notified Mutual Fund set up by public sector bank or financial institution or authorised by RBI
10(23DA)
Income of a securitization trust from the activity of securitization
Securitization Trust
10(23EA)
Income, by way of contributions received from recognised stock exchanges and members thereof, of notified Investor Protection Fund set up by recognized stock exchanges in India either jointly or separately (subject to certain conditions)
Investor Protection Fund
10(23EB)
Income of Credit Guarantee Fund Trust for Small Industries created by Government of India and SIDBI
Credit Guarantee Trust Fund
10(23EC)
Contributions received from commodity exchanges and members thereof (subject to certain conditions)
Notified Investor Protection Funds set up by Commodity Exchanges in India
10(23ED)
Income by way of contributions received from a depository of a notified Investor Protection Fund (subject to certain conditions)
Notified Investor Protection Fund
10(23EE)
Specified income of notified Core Settlement Guarantee Fund set up by a recognised clearing corporation (subject to certain conditions)
Notified Core Settlement Guarantee Fund
10(23F)
Dividends or long-term capital gains of approved venture capital fund/venture capital company from investments made before 1-4-1999 by way of equity shares in a venture capital undertaking (subject to certain conditions)
Approved venturecapital fund/venture capital company
2D
10(23FA)
Any income by way of dividends (other than dividends referred to in section 115-O), or long-term capital gains of approved venture capital funds and venture capital companies from investments made by way of equity shares in a venture capital undertaking (subject to certain conditions) (exemption is not available in respect of investments made after 31-3-2000)
Approved venture capital funds/venture capital companies
2DA
10(23FB)
Income of a venture capital company or venture capital fund from investment in a venture capital undertaking (with effect from assessment year 2016-17, not applicable to venture capital company or venture capital fund, being an investment fund specified in Explanation 1(a) to section 115UB)
Venture capital company/fund
10(23FBA)
Any income of an investment fund other than income chargeable under the head “Profits and Gains of business or profession”
Investment Fund
10(23FBB)
Any income referred to in section 115UB, accruing or arising to or received by, a unit holder of an investment fund, being that proportion of income which is in the same nature as income chargeable under the head “Profits and Gains of business or profession”
Unit holder of an inve-stment fund
10(23FC)
Any income of a business trust by way of interest received or receivable from a special purpose vehicle (i.e. Indian company in which the business trust holds controlling interest and any specified percentage of shareholding or interest)
Business Trust
10(23FCA)
Any income of a business trust, being a real estate investment trust, by way of renting or leasing or letting out any real estate asset owned directly by such business trust.
Business trust, being a real estate investment trust
10(23FD)
Any distributed income, referred to in section 115UA, received by a unit holder from the business trust, not being that proportion of the income which is of the same nature as the income referred to in clause (23FC)or clause (23FCA)
Unit holder
10(24)
Income of trade union under the heads ‘Income from house property’ and ‘Income from other sources’
Registered trade union/associations of registered trade unions
10(25)
Interest on securities and capital gains on sale of securities held by provident fund to which Provident Funds Act, 1925 applies/income received by trus-tees on behalf of recognised provident fund, approved superannuation fund, approved gratuity fund and deposit-linked insurance fund in certain cases
Retirement benefit funds
10(25A)
Income of ESI Fund set up under ESI Act, 1948
Employees’ State Insurance Fund
10(26)
Specified income of member of specified Scheduled Tribes residing in specified areas
Individual (member of specified Scheduled Tribe)
10(26AAA)
Income from any source in the State of Sikkim or income by way of dividend or interest on securities (subject to certain conditions)
Sikkimese individual (other than Sikkimese woman who, after 31-3-2008, marries non-Sikkimese)
10(26AAB)
Any income of agricultural produce market committee/board constituted under any law for time being in force for purpose of regulating marketing of agricultural produce
Agricultural produce market committee/board
10(26B)
Income of Central/State Corporation or Government financed body, institution or association established for pro-moting interests of members of Sche-duled Castes, Scheduled Tribes and/or Backward Classes
Government corporation/body, institution or association wholly financed by Government
10(26BB)
Income of corporation established by Government for promoting interests of members of minority community
Government corporation
10(26BBB)
Income of corporation established by Central, State or Provincial Act for welfare and economic upliftment of Indian Ex-servicemen who are citizens of India
Government corporation
10(27)
Income of certain co-operative societies formed for promoting the interests of Scheduled Castes/Scheduled Tribes members
Co-operative societies
10(29A)
Income accruing or arising to the Coffee Board, the Rubber Board, the Tea Board, the Tobacco Board, the Marine Products Export Development Authority, the Agricultural and Processed Food Products Export Development Authority, the Spices Board and the Coir Board.
Respective Boards and Authorities
10(30)
Subsidy received from or through Tea Board under notified scheme for re-plantation/replacement of tea bushes, etc. (subject to certain conditions)
All assessees (engaged in business of growing/manufacturing tea in India)
10(31)
Subsidy received from or through concerned Board under notified scheme for replantation/replacement of rubber/coffee/cardamom plants, etc. (subject to certain specified conditions)
All assessees (engaged in business of growing/manufacturing rubber/coffee, etc., in India)
10(32)
Income of minor child clubbed u/s 64(1A) to the extent of Rs. 1,500 per child
Any individual
10(33)
Any income arising from the transfer of a capital asset (long-term/short-term) being a unit of US 64 [referred to in Schedule I of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002] and where the transfer of such assets takes place on or after 1-4-2002
All assessees
10(34)
Income by way of dividends referred to in section 115-O
All assessees
10(34A)
Income arising to a shareholder on account of buy back of shares (not being listed on a stock exchange) by a company referred to in section 115QA
Any assessee being a shareholder
10(35)
Income received in respect of (a) units of a mutual fund specified under section 10(23D), (b) units from the Administrator of the specified undertaking as defined in UTI (Transfer of Undertaking & Repeal) Act, 2002, or (c) units from the specified company as defined in above UTI Repeal Act, 2002 (however, income arising from transfer of units of the Administrator of specified undertaking or of specified company/mutual fund, is not exempt)
All assessees
10(35A)
Income by way of distributed income referred to in section 115TA received before 1-6-2016 from a securitization trust by any investor of the trust
Any person being an investor of the trust
10(36)
Income arising from transfer of a long-term capital asset being an eligible equity share in a listed company purchased on or after 1-3-2003 but before 1-3-2004 and held for a period of 12 months or more
All assessees
10(37)
Any income chargeable under the head ‘capital gains’ arising from transfer of agricultural land situate in an urban area mentioned in section 2(14)(iii)(a)/(b) where transfer is by way of compulsory acquisition or consideration for transfer is determined/approved by Central Government/RBI and income has arisen from compensation or consideration for such transfer received by such assessee on or after 1-4-2004 (subject to certain conditions)
Individual/HUF
10(38)
Any income arising from the transfer of a long-term capital asset, being an equity share in a company or unit of an equity oriented fund or a unit of a business trust where the transaction of sale is entered on or after the date on which Chapter VII [Securities Transaction Tax] of the Finance (No. 2) Act, 2004 comes into force (1-10-2004) and such transaction is chargeable to securities transaction tax under that Chapter
All assessees
10(39)
Specified income arising from any notified international sporting event held in India (subject to certain conditions)
Notified persons
10(40)
Income of subsidiary company by way of grant or otherwise received from an Indian holding company engaged in business of generation or transmission or distribution of power if receipt of such income is for settlement of dues in connection with reconstruction or revival of existing business of power generation (subject to certain conditions)
Company
10(41)
Income arising from transfer of capital asset of undertaking engaged in business of generation or transmission or distribution of power where such transfer is effected on or before 31-3-2006 to Indian company notified under section 80-IA(4)(v)(a)
Any assessee
10(42)
Specified income arising to a body or authority which (a) has been established/constituted/appointed under a treaty or agreement entered into by Central Government with two or more countries or a convention signed by Central Government, (b) is established/constituted/appointed not for the purposes of profit, (c) is notified by the Central Government for purposes of this clause
Body or authority
10(43)
Amount received as loan, either in lump sum or in instalments, in transaction of reverse mortgage referred to in section 47(xvi)
Any individual
10(44)
Any income of New Pension System Trust established on 27-2-2008 under Indian Trusts Act, 1882
Any person for or on behalf of New Pension System Trust
10(45)
Any notified allowance or perquisite paid to the Chairman/retired Chairman or any other member/retired member of the UPSC
Individual
10(46)
Any specified income arising to any notified body/authority/Board/Trust/Commission (by whatever name called) which has been established or constituted under an Act or has been constituted by the Government with the object of regulating or administering any activity for the benefit of the general public and is not engaged in any commercial activity
Body/authority/Board/Trust/Commission (by whatever name called)
10(47)
Any income of a notified infrastructure debt fund set up in accordance with prescribed guidelines
Infrastructure debt fund
2F
10(48)
Any income received in India in Indian currency by a foreign company on account of sale of crude oil or any other goods or rendering of services as may be notified by the Central Government, to any person in India under an approved and notified agreement or arrangement (subject to certain conditions)
Foreign company
10(48A)
Any income accruing or arising to a foreign company on account of storage of crude oil in a facility in India and sale of crude oil therefrom to any person resident in India (subject to certain conditions)
Foreign company
10(49)
Income of the National Financial Holdings Company Limited (being a company set up by the Central Government) of any previous year relevant to any assessment year commencing on or before 1-4-2014.
National Financial Holdings Company Limited
10(50)
Any income arising from any specified service provided on or after the date on which the provisions of Chapter VIII of the Finance Act, 2016, come into force and chargeable to equalisation levy under that Chapter.
Any assessee
10A
Profits of undertakings situated in free trade zones, electronic hardware technology parks or software technology park or any special economic zone from export of articles or things or computer software (subject to certain conditions and clarifications)
All assessees
16D, 16DD
10AA
100% of profits from export of articles/things/services for 5 consecutive assessment years beginning with assessment year relevant to previous year in which the unit begins to manufacture or produce article or things or provide services and 50% of profits for next 5 assessment years and up to 50% of profits for next 5 assessment years as is debited to P&L account and credited to ‘Special Economic Zone Re-investment Reserve Account’ (subject to certain conditions)
Entrepreneur referred to in section 2(j) of Special Economic Zones Act, 2005 who begins to manufacture/produce article/thing or provide any service on or after 1-4-2006 [but before 1-4-2021]
10B
Profits derived by a 100 per cent export-oriented undertaking (subject to certain specified conditions)
All assessees
16E
10BA
Profits of an undertaking from export of hand made articles of artisc value which requires the use of wood as the main raw material (subject to certain conditions)
All assessees
16F
11
Income from property held for charitable or religious purposes (subject to certain conditions)
Charitable/religious trust/institution
17, 17C
13A
Specified income of political parties
Registered political parties
13B
Voluntary contributions received by Electoral Trust (subject to certain conditions)
Electoral trust
17CA

Mere loan confirmation letters from lenders couldn’t prove sanctity of loan transaction


Where assessee received unsecured loans, but could not produce lenders for verification and these lenders were found to be shell companies, said loan transactions could not be said to be genuine merely because assessee filed loan confirmations, copies of ledger account and other supporting evidences to justify transactions at fag end of assessment proceedings.
Refer extract of Judgement: 
■■■
[2017] 81 taxmann.com 308 (Ahmedabad – Trib.)
IN THE ITAT AHMEDABAD BENCH ‘SMC’
Pavankumar M Sanghvi
v.
Income-tax Officer, Ward 3(1)(2), Vadodara
PRAMOD KUMAR, ACCOUNTANT MEMBER
IT APPEAL NO. 2447 OF (AHD.) 2016
[ASSESSMENT YEAR 2007-08]
MAY  17, 2017 
Hitesh Shah for the Appellant. Kailash D. Ratnoo for the Respondent.
ORDER
1. By way of this appeal, the assessee appellant has challenged correctness of the order dated 17.08.2016 passed by the learned CIT(A), in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act 1961, for the assessment year 2007-08.
2. Grievances raised by the assessee, which are interconnected and will be taken up together, are as follows:-
GROUND I:-
1.   On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeal) -2, VADODARA (‘hereinafter referred to as ‘the CIT(A)’) has erred in confirming an addition of Rs.20,00,000/- as unexplained cash credit u/s.68 for an unsecured loan taken from M/s. Natasha Enterprises and M/s. Moht International based on information received from DIT (Inv) in the case of Praveen Kumar Jain.
2.   The appellant being aggrieved, prays that the addition of Rs.20,00,000/- on account of unexplained cash credit u/s.68 being unwarranted, illegal, bad-in-law be deleted.
GROUND II :-
1.   On the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeal)-2, VADODARA (‘hereinafter referred to as ‘the CIT(A)’) has erred in confirming an addition of Rs.3,66,041/- on account of interest paid on unsecured loans considered as unexplained cash credit u/s.68 taken from M/s. Natasha Enterprises and M./s. Mohit International based on information received from DIT (Inv) in the case of Praveen Kumar Jain.
2.   The appellant being aggrieved, prays that the addition made on account of Rs.3,66,041/- on account of interest paid on unsecured loans being considered as unexplained cash credit u/s.68 being unwarranted, illegal, bad-in-law be deleted.”
3. Briefly stated, the relevant material facts are as follows. The assessee before me is an individual, owning a proprietorship concern by the name of Ravi Steels, and he claims to have received unsecured loans of Rs 10 lakhs each from Natasha Enterprises on 11th August 2006 and from Mohit International on 27th April 2006. His assessment was initially completed under section 143(1) of the Act, but subsequently the Assessing Officer came to know, through reports received from the Directorate of Income Tax (Investigation), that Natsha Enterprises and Mohit International were a part of the group of shell entities, managed by one Praveen Kumar Jain (PKJ, in short), used as a vehicle for various financial manoeuvres. It was in this backdrop that the assessment was reopened. During the ensuring reassessment proceedings, the assessee was confronted with this information but he had nothing to say. He did, at the fag end of assessment proceedings, filed the loan confirmations, copies of ledger account and other supporting evidences to justify the transactions. The Assessing Officer, however, was not satisfied. He noted that the assessee had nothing to say on the specific questions put to him on genuineness of these transactions He was thus apparently of the view that mere filing of balance confirmation and details of existence of the creditors does not show that the transactions are genuine. It was in this backdrop that the Assessing Officer proceeded to make addition of Rs 20,00,000 as unexplained credits. The Assessing Officer also noted that the assessee had claimed deduction in respect of the interest payments, in respect of these alleged unsecured loans, aggregating to Rs 3,66,041, but since the loan transactions were treated as not genuine, the interest was also liable to be disallowed. He thus disallowed deduction in respect of the interest deduction as well. Aggrieved by the stand of the Assessing Officer, assessee carried the matter in appeal before the CIT(A) but without any success. The assessee is not satisfied and is in further appeal before this Tribunal.
4. Learned counsel for the assessee begins by pointing out that the unsecured loans have been treated as unexplained cash credit only on the basis of the information received, by the AO, from the Investigation Wing. It is pointed out that this information pertains to some investigations, and search and seizure operation, carried out in the case of PKJ on 1st October 2013, and is based on a statement of this person recorded by the investigation wing. However, what the Assessing Officer has overlooked is that PKJ himself had retracted his statement and, in any case, the assessee was never confronted with this statement. It is submitted that the assessee cannot be put to any disadvantage on the basis of a confessional statement recorded by a third party- particularly when the assessee did not even have the opportunity to peruse such a statement. Learned counsel further points out that the assessee was duly entitled to an opportunity to cross examine PKJ but the Assessing Officer did not provide the assessee any such opportunity. On these facts, according to the learned counsel, the impugned additions are contrary to the well settled principles of natural justice which are well entrenched in the tax jurisprudence. In any event, according to the learned counsel, PKJ has subsequently retracted, on 15th May 2014, his confessional statement, as evident from the retraction affidavit dated 15th May 2014 – a copy of which was also filed before me. Learned counsel then submits that nothing prevented the Assessing Officer from using his powers under section 133(6) and examining the matter further by enforcing attendance of the lenders, but, rather than doing what the Assessing Officer ought to have done, he is simply swayed by unverified inputs received from the investigation wing. Learned counsel then invites my attention to the affidavits filed by the proprietors of Natasha Enterprises and Mohit International which confirm that the loans were actually advanced by these persons on 12% interest, that the loans have since been repaid and that the interest earned on these loans has been duly offered to tax. Under these circumstances, there cannot be any lawful reasons to reject bonafides of these loan transactions. It is then submitted that the loan transactions were by cheques, which is duly evidenced from the bank statements of the lenders as filed by the assessee, copies of loan confirmations and statements of accounts were duly filed by the assessee, the accounts of the lenders were duly audited under section 44AB, and that the initial onus of demonstrating the bonafides of loan transactions was duly discharged by the assessee. Learned counsel then referred to Hon’ble Supreme Court’s judgment in the case of Kishanchand Chelaram v. CIT [(1980) 125 ITTR 713 (SC)] in support of the proposition that the income tax authorities could not rely upon any statement which has not been confronted to the assessee and in respect of which the assessee has not been given opportunity to cross examine. Learned counsel for the assessee also referred to certain discrepancies pointed out by the CIT(A) and made an effort to demonstrate that these discrepancies are factually incorrect. A reference was then made to Hon’ble Bombay High Court’s judgment in the case of H R Mehta v. ACIT (ITA No. 58 of 2001; unreported judgment dated 30th June 2016) in support of the proposition that when the assessee was not given an opportunity to cross examine the person, who has deposed against the assessee, such a material could not be put against the assessee, and merely because a lender is not available at the same address several years after the loan transaction has taken place, it cannot be inferred that the transaction is not genuine. As regards the disallowance of deduction for interest, learned counsel submits that since the related loans, in the light of the arguments so advanced, cannot be said to be bogus, the interest deductions are also required to be allowed in accordance with the law. On the strength of these submissions, learned counsel urges me to delete the impugned addition of Rs 20,00,000 and impugned disallowance of Rs 3,66,041. I am thus urged to set aside findings of the authorities below on these points. Learned Departmental Representative, on the other hand, submits that it is inconceivable that some rank outsiders give unsecured loans, aggregating to Rs 20,00,000, to the assessee, and yet the assessee is not even able to produce the same or give sufficient information about the nature of relationship with him. The documents filed by the assessee are self serving documents and a mere statement on affidavit cannot be accepted irrespective of the ground realities. It is submitted that in each loan transaction, three elements are required to be examined- existence of lender, genuineness of transaction and credit worthiness of the lender. In the present case, all that the assessee has proved is existence of the person as the transactions have taken place through banking channels. Just because a person existed, it does not mean that all the transactions with him are genuine and the person had means to advance the loans in question. It is also pointed out that the lenders are believed to be shell entities and this fact was duly brought to the notice of the assessee but the assessee did not have anything to say on this point. On one hand, according to the learned Departmental Representative, PKJ is so closely in touch with the assessee that the assessee is able to obtain and file the retraction affidavit made by PKJ, and, on the other hand, the assessee feigns ignorance about the statement made by PKJ before the income tax authorities. It is then pointed out that at no stage in the assessment proceedings, the assessee asked for the statement of PKJ or expressed the desire to cross examine PKJ. Even the fact of the alleged lenders being in the business of giving accommodation entries was duly put to the assessee during the assessment proceedings, by way of note sheet entries, and the assessee had nothing to say on this point during the assessment proceedings. In any case, irrespective of the statement of Praveen Kumar Jain, the onus is on the assessee to demonstrate that the loan transactions are genuine, in the normal course of business, and bonafide. This onus has not been discharged by the assessee. It is also submitted that the alleged lenders are shell entities, and, in the case of shell entities, it is not the completion of paper work but genuineness of transactions which is crucial. My attention is then drawn to the apparent inconsistencies in the version put by the assessee. I am urged to disregard the make believe documents filed by the assessee and uphold the findings of the authorities below. In his brief rejoinder, learned counsel reiterated his submissions and submits that the legal contentions advanced by him remain uncontroverted. He also submits that the Departmental Representative, or for that purpose, this Tribunal cannot go beyond the case made out by the Assessing Officer and raise the issues which have not been raised by the Assessing Officer. Lack of genuineness is not, according to the learned counsel, case of the Assessing Officer. The short point of the authorities below is that the loan entries are alleged accommodation entries but then there is nothing to evidence this fact. It is for the person who makes the allegations to prove that the allegations are correct. The Assessing Officer, therefore, must demonstrate that the loan transactions in question are not genuine transactions, and when he cannot do so, the related additions can only be deleted. Learned counsel once again urges me to vacate the findings of the authorities below, and delete the impugned additions and disallowances.
5. I have noted that the assessee did not raise any issue against validity of reopening proceedings at any stage- assessment, first appeal as also second appeal. When the assessee was told about the alleged lenders being shell entities, he did not have anything to say either. The assessee did not ask for the cross examination of PKJ in the assessment proceedings nor did he raise that issue, as evident from a copy of the grounds of appeal before the CIT(A)- as filed before me, at the first appellate stage. Yet, his plea before me is that since he was not afforded any opportunity to cross examine PKJ, the impugned additions should be deleted. I donot think such a plea can be entertained at this stage, particularly in the light of peculiar facts of this case. I have noted that the assessee feigns ignorance about the statement of PKJ, as recorded by the income tax authorities, but he files a copy of the retraction affidavit dated 15th May 2014. There is an inherent contradiction in this approach. As a matter of fact, even in the first appellate proceedings, the assessee did not ask for the cross examination of PKJ as evident from the limited argument of the assessee, noted at page 5 of the CIT(A)’s order, to the effect that “it is submitted that Pravin Kumar Jain has also retracted his statement on oath under section 131 dated 15.5.2014 and has confirmed that the above transactions with the said parties are genuine (copy enclosed herewith for your records)”. There is not even a whisper about incorrectness of the original statement of PKJ but all that the assessee states is that this statement in subsequently retracted. It is also interesting to note that, as has been observed in the assessment order at page 2, the income tax authorities had, during the search operations on PKJ group, also recorded a statement of Nilesh Parmar, proprietor of Mohit International and the person who looked after the accounting and all other matters of Natasha Enterprises, but neither the assessee disputes nor raises any issues about it. There is no suggestion about retraction of this statement either. The assessee has filed an affidavit dated 27th February 2017 of Nilesh Parmar, claiming bonafides of assessee s transactions with Mohit International, but neither there is any issue about cross examining him nor any mention of retraction, if any, of his confessional statement. The assessee has so much of an access to these lenders that he is able to produce their bank accounts, their year end financial statements and even all the audit reports, but he is unaware of the statement these lenders made to the income tax authorities and yet he is not in a position to produce the parties or even know their current whereabouts. These contradictions are unexplainable. It was clearly put to the assessee that, as per information gathered by the income tax authorities as a result of search and seizure operations on PKJ group, it is clear that (i) PKJ is a director in some of the entities but he de facto controls a large number of shell entities through various dummy directors and proprietors; (ii) all such PKJ group concerns, while include Natasha Enterprises and Mohit International, are not carrying on any genuine business nor do they have any physical stock of goods that they are dealing in; (iii) all these PKJ group entities have no employees, except common accountants; and (iv) all these PKJ group entities are engaged in the activities of providing accommodation entries. When assessee is confronted with this information, he maintains a stoic silence, and simply gives the documentation in support of the fact of transactions. What he overlooks is that the existence of documentation in support of these transactions was not even disputed by the revenue authorities, and that the real issue, in the backdrop of these inputs, is on the genuineness of the transactions. There was not even an attempt to deal with that aspect of the matter, or state even one word against what the Assessing Officer had to tell the assessee on this front. In these circumstances, it cannot be open to the assessee to contend that the additions should be deleted simply on the ground that the assessee was not given an opportunity to cross examine PKJ. When the assessee is confronted with all the facts at the assessment stage, he has nothing to say. He maintains his stoic silence even at the first appellate stage. However, when he comes before me in the second appeal, his grievance is about violation of principles of natural justice at the assessment and the first appellate stage. There are clear inconsistencies and contradictions in the approach of the assessee.
6. Be that as it may what is even more important is that while the reassessment has indeed been resorted to on the basis of the inputs from the investigation wing, with which the assessee is not aggrieved anyway, in my considered view, the impugned additions are not made on the basis of these inputs simplictor.
7. In my considered view, so far as the legal foundation of the impugned additions is concerned, it consists of assessee’s inability to satisfy the Assessing Officer about all the three essential ingredients of a credit entry in the books of accounts- existence of the lender, ability of the lender to advance funds in question, and, above all, genuineness of the transaction. There is no dispute about the basic legal position about section 68 which provides that where any sum is found credited in the books of accounts of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and sources thereof, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as income of the assessee of that previous year. The expression ‘nature and source’ appearing in section 68 has to be understood as a requirement of identification of source and its genuineness. It is also a settled legal positon that the onus of the assessee, of explaining nature and source of credit, does not get discharged merely by filing confirmatory letters, or demonstrating that the transactions are done through the banking channels or even by filing the income tax assessment particulars. In the case of CIT v. United Commercial and Industrial Co Pvt Ltd [(1991) 187 ITR 596 (Cal)], Hon’ble Calcutta High Court has held that “it was necessary for the assessee to prove prima facie the identity of creditors, the capacity of such creditors and lastly the genuineness of transactions”. Similarly, in the case of CIT v. Precision Finance Pvt Ltd [(1994) 208 ITR 465 (Cal)], it was observed that “it is for the assessee to prove the identity of creditors, their creditworthiness and genuineness of transactions”. There is thus no escape from proving genuineness of a transaction. As regards learned counsel’s contention that nothing can be added to the objections specifically taken by the Assessing Officer, I am unable to approve this plea for the simple reason that as long as subject matter of the disallowance or addition is the same, there is no bar on examination of any related aspect by the Tribunal, as has been specifically held by a full bench of Hon’ble Bombay High Court in the case of Ahmedabad Electricity Co Ltd v. CIT [(1993) 199 ITR 351 (Bom FB)] and reiterated by a Special Bench of this Tribunal in the case of Tata Communications Ltd v. JCIT [(2009) 121 ITD SB 384 (Mum)]. That is, of course, besides the fact that there is no attempt, direct or indirect, to enlarge the subject matter of appeal. The legal plea of the learned counsel proceeds on clearly fallacious assumptions.
8. As I proceed to deal with genuineness aspect, it is important to bear in mind the fact that what is genuine and what is not genuine is a matter of perception based on facts of the case vis-à-vis the ground realities. The facts of the case cannot be considered in isolation with the ground realties. It will, therefore, be useful to understand as to how the shell entities, which the loan creditors are alleged to be, typically function, and then compare these characteristics with the facts of the case and in the light of well settled legal principles. A shell entity is generally an entity without any significant trading, manufacturing or service activity, or with high volume low margin transactions- to give it colour of a normal business entity, used as a vehicle for various financial manoeuvres. A shell entity, by itself, is not an illegal entity but it is their act of abatement of, and being part of, financial manoeuvring to legitimise illicit monies and evade taxes, that takes it actions beyond what is legally permissible. These entities have every semblance of a genuine business- its legal ownership by persons in existence, statutory documentation as necessary for a legitimate business and a documentation trail as a legitimate transaction would normally follow. The only thing which sets it apart from a genuine business entity is lack of genuineness in its actual operations. The operations carried out by these entities, are only to facilitate financial manoeuvring for the benefit of its clients, or, with that predominant underlying objective, to give the colour of genuineness to these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the financial world, as many other evils. Even a layman, much less a Member of this specialized Tribunal, cannot be oblivious of these ground realities.
9. I have noted that the assessee has received an amount of Rs 10,00,000 from Natasha Enterprises on 12th August 2006, and, as a plain look at the Canara Bank statement of the lender, which is placed at pages 40 onwards of the paper book, would show, there is a credit of Rs 10,00,000 just before this cheque is paid. The bank balance before these two transactions, and after these two transactions, was only Rs 13,717. Quite interestingly, again on 14th August 2006 in the same bank account, there are debit and credit transactions of around Rs 15 lakhs each and the balance as on the end of that date is Rs 8,737. On 18th and 19th August 2006, again there are quite a few transactions aggregating to Rs 10 lakhs on debit as also credit side, and yet again closing balance is Rs 7,578. On 22nd August 2006, there are transactions of debits and credits of around R 32.50 lakhs each, and the closing balance at the end of the day is again Rs 7,578. As can be seen from this statement, on 29th August 2006, there are debit and credit transactions of Rs 15 lakhs each and once again the closing balance of the day is Rs 7,578. This kind of the state of bank account does not inspire any faith in the proposition that the entity in question is a genuine business concern. A look at the financial statements filed by the assessee does not lead to this conclusion either. The lender has shown a turnover of Rs 122.92 crores but there is no closing stock, and a profit of almost 0.09% on the turnover leading to a tax payment of Rs 1,96,138. The lender makes purchases of Rs 123.04 crores in such diversified areas as cut and polished diamonds (Rs 73.15 crores), plywood and aluminium (Rs 11.72 crore), rough diamonds (Rs 4.36 crores), software (Rs 25.01 crores) and other items (Rs 8.79 crores), and sells these products too but all that the lender has spent on salaries is Rs 2,26,000, on office expenses is Rs 8,560, on office rent is Rs 27,600 and on printing and stationery is Rs 8,560. All this is simply not representative of what a genuine business would typically be. As regards Mohit International also, the story is no different. The bank statement, which is placed at pages 75 onwards, has the same theme of high transactions during the day and a consistently minimal balance at the end of the working day. On 28th April 2006, i.e. the day the assessee is given Rs 10,00,000, there are credit entries of almost similar amounts, and he balance after these transactions is a small amount of Rs 13,020. Similar is the pattern of transactions on all the days in respect of which this statement is placed before me. On 23rd March 2007, for example, the opening balance is Rs 1,36,611 and there are huge debits and credit entries on 23rd and 24th March, aggregating to almost Rs 4 crores on debit as also credit, and the closing balance at the end of 24th March is Rs 85,991. On a turnover of Rs 127.87 crores, the profit is less than 0.09% resulting in tax outgo of Rs 2,96,218. To effect this scale of operations, the lender incurs no travelling or telephone expense, and entire expenses of the business, except on brokerage and assortment of diamonds, are less than Rs 5 lakhs in the year. Interestingly, in today’s world where an average human being, much less a business organization, can live without telephones, this business entity has prospered without a rupee spent of telephones. The level of turnover and the expenditure incurred on achieving such high turnover do not match at all. The numbers do not add up and the details filed in respect of these lenders donot convince me that the lenders are routine businesses. Given this background the assessee s inability to produce the related persons or even give their current whereabouts makes the story of genuine transactions even more unbelievable. It is also important to bear in mind the fact that lending for an interest @12% p.a. without any security is not something which people do for rank outsiders. There has to be some close association to get such a kind of unsecured credit at such low rates. When I consider this situation, coupled with the fact that (i) the assessee has not been able to produce these lenders for verification and reasonably explain the complete circumstances in which these lenders, who were not even routinely engaged in the business of giving loans and advances, gave him unsecured loans on 12% p.a interest- which essentially is possible in situations of close relationships and trust; and (ii) the assessee has maintained stoic silence on being told about these lenders being alleged to be shell entities, I am not inclined to believe that these are genuine business transactions. As I do so, I am reminded of Hon’ble Supreme Court’s observation, in the case of CIT v. Durga Prasad More [(1971) 82 ITR 540 (SC)], to the effect that “Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities”. Similarly, in a later decision in the case of Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], Hon’ble Supreme Court rejected the theory that it is for alleger to prove that the apparent and not real, and observed that, This, in our opinion, is a superficial approach to the problem. The matter has to be considered in the light of human probabilities. ………………………………………………..Similarly the observation ……………………………………………….. that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available ………………………………………………..In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant’s claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably”. I will be superficial in my approach in case I donot examine the claim of the assessee on the basis of documents and affidavits filed by the assessee and overlook clear the unusual pattern in the documents filed by the assessee and pretend to be oblivious of the ground realities. As Hon’ble Supreme Court has observed, in the case of Durga Prasad More (supra), ………………………………………………..it is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents”. As a final fact finding authority, this Tribunal cannot be superficial in its assessment of genuineness of a transaction, and this call is to be taken not only in the light of the face value of the documents sighted before the Tribunal but also in the light of all the surrounding circumstances, preponderance of human probabilities and ground realties. Genuineness is a matter of perception but essentially a call on genuineness of a transaction is to be taken in the light of well settled legal principles. There may be difference in subjective perception on such issues, on the same set of facts, but that cannot be a reason enough for the fact finding authorities to avoid taking subjective calls on these aspects, and remain confined to the findings on the basis of irrefutable evidences. Hon’ble Supreme Court has, in the case of Durga Prasad More (supra), observed that “human minds may differ as to the reliability of a piece of evidence but in that sphere the decision of the final fact finding authority is made conclusive by law”. This faith in the Tribunal by Hon’ble Courts above makes the job of the Tribunal even more onerous and demanding and, in my considered view, it does require the Tribunal to take a holistic view of the matter, in the light of surrounding circumstances, preponderance of probabilities and ground realities, rather than being swayed by the not so convincing, but apparently in order, documents and examining them, in a pedantic manner, with the blinkers on. I may also add that the phenomenon of shell entities being subjected to deep scrutiny by tax and enforcement officials is rather recent, and that, till recently, little was known, outside the underbelly of financial world, about modus operendi of shell entities. There were, therefore, not many questions raised about genuineness of transactions in respect of shell entities. That is not the case any longer. Just because these issues were not raised in the past does not mean that these issues cannot be raised now as well, and, to that extent, the earlier judicial precedents cannot have blanket application in the current situation as well. As Hon’ble Supreme Court has observed in the case in Mumbai Kamgar Sabha v. Abdulbahi Faizullabhai AIR 1976 SC 1455 “It is trite, going by Anglophonic principles that a ruling of a superior court is binding law. It is not of scriptural sanctity but of ratio-wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. Beyond those walls and de hors the milieu we cannot impart eternal vernal value to the decisions, exalting the precedents into a prison house of bigotry, regardless of the varying circumstances and myriad developments. Realism dictates that a judgment has to be read, subject to the facts directly presented for consideration and not affecting the matters which may lurk in the dark”. Genuineness of transactions thus cannot be decided on the basis of inferences drawn from the judicial precedents in the cases in which genuineness did come up for examination in a very limited perspective and in the times when shell entities were virtually non-existent. As the things stand now, genuineness of transactions is to be examined in the light of the prevailing ground realities, and that is precisely what I have done. In my considered view, and for the detailed analysis set out earlier in this order, the alleged loan transactions of the assessee cannot be held to be genuine on the peculiar facts and circumstances of this case. As the genuineness of transactions stands rejected, it is not really necessary to deal with other aspects of the matter.
10. In the light of the above discussions, as also bearing in mind entirety of the case, I uphold the action of the authorities below in bringing the impugned alleged loan transactions of Rs 20 lakhs to tax, and, as a corollary thereto, in declining deduction in respect of interest of Rs 3,66,041 on these alleged borrowings
11. In the result, the appeal is dismissed.

Ashtavakra Gita : Peace

Ashtavakra Said:

18.81

The sage neither yearns for fulfillment
nor frets over non-attainment.
His mind is cool
and brimming with sweetness.

18.82

Detached from desire,
the sage neither praises peace
nor blames the wicked.
Equally content
in happiness and misery,
he would not change a thing.

18.83

The sage neither rejects the world
nor desires Self.
He is free of joy and sorrow.
He does not live
and cannot die.

18.84

The wise one lives without hope.
He has no attachment to his children, wife or anyone.
Pleasure means nothing to him.
His life is glorious.

18.85

The sage wanders about as he pleases
and lives on whatever may come.
Contentment ever dwells in his heart.
And when the sun sets,
he rests where he is.

18.86

Rooted in Being,
no thought of being born or reborn,
the great soul is indifferent
to the death or birth of his body.

18.87

The wise one stands alone,
caring for nothing,
bereft of possessions.
He goes where he will,
unhindered by opposites,
his doubts rent asunder.
He is truly blessed.

18.88

The wise one has no sense of “mine.”
To him earth, stone and gold are the same.
The knots of his heart have unraveled.
He knows neither ignorance nor sorrow.
He is excellent in every way.

18.89

The liberated soul
has no desire in his heart.
He is content and indifferent.
He has no equal.

18.90

Only one free of desire
knows nothing of knowing,
says nothing needs saying,
sees nothing to see.

Series continue….

GST: FAQs Series 16 (Time of Supply)

Time of Supply…Continue



Q 12. What is the time of supply, where supply is completed after to change in rate of tax?

Ans. In such cases time of supply will be

(i) where the payment is received after the change in rate of tax but the invoice has been issued prior to the change in rate of tax, the time of supply shall be the date of receipt of payment; or

(ii) where the invoice has been issued and the payment is received before the change in rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or

(iii) where the invoice has been issued after the change in rate of tax but the payment is received before the change in rate of tax, the time of supply shall be the date of issue of invoice


Q 13. Let’s say there was increase in tax rate from 18% to 20% w.e.f.1.6.2017. What is the tax rate applicable when services provided and invoice issued before change in rate in April 2017, but payment received after change in rate in June 2017?

Ans. The old rate of 18% shall be applicable as services are provided prior to 1.6.2017.


Q 14. Let’s say there was increase in tax rate from 18% to 20% w.e.f. 1.6.2017. What is the tax rate applicable when goods are supplied and invoice issued after change in rate in June 2017, but full advance payment was already received in April 2017?

Ans. The new rate of 20% shall be applicable as goods are supplied and invoice i s sued after 1.6.2017


Q 15. What is the time period within which invoice has to be issued for supply of Goods?

Ans. As per Section 28 of CGST/SGST Act a registered taxable person shall issue a tax invoice showing description, quantity and value of goods, tax charged thereon and other prescribed particulars, before or at the time of

(a) removal of goods for supply to the recipient, where supply involves movement of goods or

(b) delivery of goods or making available thereof to the recipient in other cases.


Q 16. What is the time period within which invoice has to be issued for supply of Services?

Ans. As per Section 28 of CGST/SGST Act a registered taxable person shall, before or after the provision of service, but within a period prescribed in this behalf, issue a tax invoice showing description, value of goods, tax payable thereon and other prescribed particulars.

Q 17. What is the time period within which invoice has to be issued in a case involving continuous supply of goods?

Ans. In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received.

Q 18. What is the time period within which invoice has to be issued in a case involving continuous supply of services?

Ans. In case of continuous supply of services,

(a) where the due date of payment is ascertainable from the contract, the invoice shall be issued before or after the payment is liable to be made by the recipient but within a period prescribed in this behalf whether or not any payment has been received by the supplier of the service;

(b) where the due date of payment is not ascertainable from the contract, the invoice shall
be issued before or after each such time when the supplier of service receives the payment but within a period prescribed in this behalf;

(c) where the payment is linked to the completion of an event, the invoice shall be issued before or after the time of completion of that event but within a period prescribed in this behalf.


Q 19. What is the time period within which invoice has to be issued where the goods being sent or taken on approval for sale?

Ans. The invoice in respect of goods sent or taken on approval for sale or return shall be issued before or at the time of supply or six months from the date of approval, whichever is earlier.

Disclaimer:

This FAQ on GST compiled by NACEN and vetted by the Source Trainers is based on the CGST/SGST/UTGST/IGSTAct(s). This FAQ is for training and academic purposes only.

The information in this blogger is reproduced from FAQ on GST publised by CBEC updated on 31 March 2017 and is not intended to be treated as legal ad vice or opinion. For greater details, you are requested to refer to the respective CGST/SGST/UTGST/IGST Acts.

The FAQs refer to CGST and SGST Acts as CGST/SGST as CGST Act and SGST Act are identical in most of the provisions. CGST Act has been introduced in the Parliament. The SGST Acts will be passed by respective state legislatures. A few provisions may be specific to state and may not be in CGST Act.

Tax Planning Series 4: Deductions under Income Tax Act, 1961 (Applicable for AY 2017-18)-Part 2

Deductions/allowances under Salary/House Property/PGBP/Income from other sources:

DEDUCTIONS/ALLOWANCES

Section
 Nature of deduction
Who can claim
Relevant Rule
(1)
(2)
(3)
(4)
Against ‘salaries’
16(ii)
Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000]
Government employees
16(iii)
Employment tax
Salaried assessees
Against ‘income from house properties’
23(1),first proviso
Taxes levied by local authority and borne by owner if paid in relevant previous year
All assessees
24(a)
Standard deduction [30% of the annual value (gross annual value less municipal taxes)]
All assessees
24(b)
Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions)
All assessees
25B2
Standard deduction of 30 per cent of arrears of rent received subsequently
All assessees realizing arrears of rent
Against ‘profits and gains of business or profession
A. Deductible items
30
Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises
All assessees
31
Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture
All assessees
32
Depreciation on buildings, machinery, plant or furniture, know-how, patents, copyrights, trade marks, licences, franchises, or any other business or commercial rights of similar nature, being intangible assets – Prescribed percentage on WDV in the case of any block of assets
All assessees
5, 5A
32AC
Investment in new plant and machinery (subject to certain conditions and limits)
A company engaged in manufacture or production of any article or thing
32AD
Deduction of 15% of actual cost of new asset acquired and installed in notified backward areas in the State of Andhra Pradesh or the State of Telengana or State of Bihar or State of West Bengal (subject to certain conditions) (upto assessment year 2020-21).
All assessees
33A
Development allowance – 50 per cent of actual cost of planting (subject to certain conditions and limits) (planting should have been completed before 1-4-1990)
Assessee engaged in business of growing and manufacturing tea in India
33AB
Tea/Coffee/Rubber Development Account – Amount deposited in account with National Bank (Special Account) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme or 40% of profits of business, whichever is less (subject to certain conditions)
Assessees engaged in business of growing and manufacturing tea/Coffee/Rubber in India
33ABA
Amount deposited in Special Account with SBI/Site Restoration Account or 20 per cent of profits, whichever is less (subject to certain conditions)
Assessee carrying on business of prospecting for, or extraction or production of, petroleum or natural gas or both in India
5AD
351
Expenditure on scientific research for certain specific purposes (subject to certain conditions)
All assessees
5C, 5D, 5E, 5F & 6
35A
Expenditure incurred before 1-4-1998 on acquisition of patent rights or copyrights [equal to appropriate fraction of expenditure on acquisition to be deducted in fourteen equal annual instalments beginning with previous year in which such expenditure has been incurred] (subject to certain conditions)
All assessees
35AB2
Lump sum payment made in any previous year relevant to assessment year commencing on or before 1-4-1998, for acquisition of technical know-how [consideration for acquisition to be deducted in six equal annual instalments (3 equal annual instalments where know-how is developed in certain laboratories, universities and institutions)] (subject to certain conditions)
All assessees
35ABB
Expenditure incurred for obtaining licence to operate telecommunication services either before commencement of such business or thereafter at any time during any previous year
All assessees
35AC
Expenditure by way of payment of any sum to a public sector company/local authority/approved association or institution for carrying out any eligible scheme or project (subject to certain conditions)
All assessees
11F to 11-O
35AD
Capital expenditure incurred, wholly and exclusively, for the purpose of any specified business [setting up and operating a cold chain facility; setting up and operating a warehousing facility for storage of agricultural produce; laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network; building and operating, anywhere in India, a hotel of two-star or above category as classified by the Central Government; building and operating, anywhere in India, a hospital with at least one hundred beds for patients; developing and building a notified housing project under a scheme for slum redevelopment or rehabilitation framed by the Government, as the case may be, in accordance with prescribed guidelines; developing and building a notified housing project under a scheme for affordable housing framed by the Government, as the case may be, in accordance with prescribed guidelines; production of fertilizer in India; setting up and operating an inland container depot or a container freight station which is approved/notified under the Customs Act, 1962; bee-keeping and production of honey and beeswax; setting up and operating a warehousing facility for storage of sugar, business of laying and operating a slurry pipeline for the transportation of iron ore and the business of setting up and operating a notified semi-conductor wafer fabrication manufacturing unit, carried on by the assessee during the previous year in which such expenditure is incurred (subject to certain conditions)
All assessees
11-OA 11-OB
35CCA
Payment to associations/institutions for carrying out rural development programmes (subject to certain conditions)
All assessees
35CCB
Expenditure incurred before 1-4-2002 by way of payment to approved associations/institutions for carrying out approved programmes of conservation of natural resources or afforestation (subject to certain conditions)
All assessees
35CCC
One and a half times of expenditure on notified agricultural extension project (subject to certain conditions)
All assessees
6AAD, 6AAE
35CCD
One and a half times of expenditure on notified skill development project (subject to certain conditions)
A company
6AAF to 6AAH
35D
Amortisation of certain preliminary expenses [deductible in 5 equal annual instalments] (subject to certain conditions)
Indian companies and resident non-corporate assessees
6AB
35DD
Amortisation of expenditure incurred after 31-3-1999 in case of amalgamation or demerger in the hands of an Indian company (one-fifth of such expenditure for 5 successive previous years) (subject to certain conditions)
Indian Company
35DDA
Amortisation of expenditure incurred under voluntary retirement scheme in 5 equal annual instalments starting with the year when the expenditure is incurred
All assessees
35E
Expenditure on prospecting, etc., for certain minerals [deductible in ten equal annual instalments] (subject to certain conditions)
Indian companies and resident non-corporate assessees engaged in prospecting, etc., for minerals
6AB
36(1)(i)
Insurance premium covering risk of damage or destruction of stocks/stores
All assessees
36(1)(ia)
Insurance premium covering life of cattle owned by a member of co-operative society engaged in supplying milk to federal milk co-operative society
Federal milk co-operative societies
36(1)(ib)
Medical insurance premium paid by any mode other than cash, to insure employee’s health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA
All assessees as employers
36(1)(ii)
Bonus or commission paid to em-ployees
All assessees
36(1)(iii)
Interest on borrowed capital
All assessees
36(1)(iiia)
Pro rata amount of discount on a zero coupon bond based on life of such bond and calculated in prescribed manner
All assessees
8B, 8C
36(1)(iv)
Contributions to recognised provident fund and approved superannuation fund [subject to certain limits and conditions]
All assessees as em-ployers
75, 87, 88
36(1)(iva)
Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed 10 per cent of the employee’s salary in the previous year.
All assessees as employers
36(1)(v)
Contributions to approved gratuity fund [subject to certain limits and conditions]
All assessees as em-ployers
103, 104
36(1)(va)
Contributions to any provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948 or any other fund for welfare of such employees, received from employees if the same are credited to the employee’s account in relevant fund or funds before due date
All assessees as employers
36(1)(vi)
Allowance in respect of animals which have died or become permanently useless [subject to certain conditions]
All assessees
36(1)(vii)
Bad debts which have been written off as irrecoverable [subject to limitation in the case of banks and financial institutions]
All assessees
36(1)(viia)
Provision for bad and doubtful debts
up to 7½ per cent of total income before making any deduction under this clause and Chapter VI-A, and up to 10 per cent of aggregate average advances made by its rural branches
Certain scheduled banks, non-scheduled banks (but other than foreign banks) and co-operative bank (other than primary agricultural credit society or primary co-operative agricultural and rural development bank)
6ABA
up to 5 per cent (10% in case of Public Financial Institutions, State Financial Corporations and State Industrial Investment Corporations in any of the two consecutive assessment years 2003-04 and 2004-05 – subject to certain conditions) of total income before making any deduction under this clause and Chapter VI-A
Foreign banks/Public financial institutions/State financial corporations/State industrial investment corporations and NBFCs (with effect from assessment year 2017-18)
36(1)(viii)
Amounts transferred to special reserve [subject to certain conditions and maxi-mum of 20 per cent of profits derived from eligible business]
Specified entities, namely, financial corporations/financial corporation which is a public sector company/banking company/co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank/housing finance company/any other financial corporation including a public company
6ABAA
36(1)(ix)
Expenditure for promoting family planning amongst employees (deductible in 5 equal annual instalments in case of capital expenditure)
Companies
36(1)(xi)
Expenditure incurred wholly and exclusively by the assessee on or after the 1st April, 1999 but before the 1st April, 2000 in respect of a non-Y2K compliant system, owned by the assessee and used for the purposes of his business or profession, so as to make such system Y2K compliant computer system
All assessees
6ABB
36(1)(xii)
Any expenditure (not being in the nature of capital expenditure) incurred by a notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act, for the objects and purposes authorised by the Act under which such corporation or body corporate was constituted or established
Notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act
36(1)(xiii)
Any banking cash transaction tax paid during the previous year on taxable banking transaction entered into by the assessee
All assessees
36(1)(xiv)
Contribution to notified credit guarantee trust fund for small industries
Public financial institution
36(1)(xv)
Securities Transaction Tax paid if corresponding income is included as income under the head ‘Profits and gains of business or profession’
All assessees
36(1)(xvi)
Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such transactions is included in the income computed under the head “Profits and gains of business or profession”
All assessees
36(1)(xvii)
Expenditure incurred by a co-operative society (engaged in the business of manufacture of sugar) for purchase of sugarcane at a price which is equal to (or less than) the price fixed or approved by the Government
Co-operative society
37(1)
Any other expenditure [not being personal or capital expenditure and expenditure mentioned in sections 30 to 36] laid out wholly and exclusively for purposes of business or profession
All assessees
B. Non-deductible items
37(2B)
Advertisement in souvenir, brochure, tract, pamphlet, etc., of political party
All assessees
40(a)(i)
Interest, royalty, fees for technical services or other chargeable sum payable outside India, or in India to a non-resident or foreign company, on which tax has not been paid/deducted during the previous year or in the subsequent year within time prescribed under section 200(1). Where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 200, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid
All assessees
40(a)(ia)
Thirty per cent of any sum payable to a resident, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139.
However, where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, thirty per cent of such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.
All assessees
40(a)(ib)
Any consideration paid or payable to a non-resident for a specified service on which equalisation levy is deductible under the provisions of Chapter VIII of the Finance Act, 2016, and such levy has not been deducted, or after deduction, has not been paid on or before the due date specified in section 139(1) (subject to certain conditions)
All assessees
40(a)(ic)
Any sum paid on account of fringe benefit tax
All assessees
40(a)(ii)
Rate or tax levied on the profits or gains of any business or profession
All assessees
40(a)(iia)
Wealth-tax paid
All assessees
40(a)(iib)
Amount paid by way of royalty, licence fee, service fee, privilege fee, service charge or any other fee or charge, by whatever name called, which is levied exclusively on, or any amount which is appropriated, whether directly or indirectly, from a State Government undertaking by the State Government
State Govt. undertakings
40(a)(iii)
Salaries payable outside India, or in India to a non-resident, on which tax has not been paid/deducted at source
All assessees as employers
40(a)(iv)
Payments to provident fund/other funds for employees’ benefit for which no effective arrangements are made to secure that tax is deducted at source on payments made from such funds which are chargeable to tax as ‘salaries’
All assessees as employers
40(a)(v)
Tax actually paid by an employer referred to in section 10(10CC)
All assessees as employers
40(b)
Interest, salary, bonus, commission or remuneration paid to partners (subject to certain conditions and limits)
Firms
40(ba)
Interest, salary, bonus, commission or remuneration paid to members (subject to certain conditions and limits)
Association of persons or body of individuals (except a company or a co-operative society, society registered under Societies Registration Act, etc.)
40A(2)
Expenditure involving payment to re-lative/director/partner/substantially interested person, etc., which, in the opinion of the Assessing Officer, is excessive or unreasonable
All assessees
40A(3)
100% of payments exceeding Rs. 20,000 (Rs. 35,000 in case of payment made for plying, hiring or leasing goods carriages) made to a person in a day otherwise than by account payee cheque/bank draft (subject to certain conditions)
All assessees
6DD
40A(7)
Any provision for payment of gratuity to employees, other than a provision made for purposes of contribution to approved gratuity fund or for payment of gratuity that has become payable during the year (subject to specified conditions)
All assessees as employers
40A(9)
Any sum paid for setting up or formation of, or as contribution to, any fund, trust, company, AOP, BOI, Society or other institution, other than recognised provident fund/approved superannuation fund/pension scheme referred to in section 80CCD/approved gratuity fund
All assessees as employers
C. Other deductible items
42(1)
In case of mineral oil concerns allowances specified in agreement entered into by Central Government with any person (subject to certain conditions and terms of agreement)
Assessees engaged in prospecting for or extraction or production of mineral oils
42(2)
In case of mineral oil concerns expenditure incurred remaining unallowed as reduced by proceeds of transfer
Assessee whose business consists of prospecting for or extraction or production of petroleum and natural gas and who transfers any interest in such business
43B
Any sum which is actually paid, relating to (i) tax/duty/cess/fee levied under any law, (ii) contribution to provident fund/superannuation fund/gratuity fund/any fund for employees’ welfare, (iii) bonus/commission to employees, (iv) interest on loan/borrowing from any public financial institution, State Financial Corporation or State Industrial Investment Corporation/interest payments to scheduled banks/Co-operative banks on loans or advances, and (v) sum payable by employers by way of leave encashment to employees.Deduction will not be allowed in year in which liability to pay is incurred unless actual payment is made in that year or before the due date of furnishing of return of income for that year
All assessees
44A
Expenditure in excess of subscription, etc., received from members (subject to certain conditions and limits)
Trade, professional or similar association
44C
Head office expenditure (subject to certain conditions and limits)
Non-resident
Against ‘capital gains’
48(i)
Expenditure incurred wholly and exclusively in connection with transfer of capital asset
All assessees
48(ii)
Cost of acquisition of capital asset and of any improvement thereto (indexed cost of acquisition and indexed cost of improvement, in case of long-term capi-tal assets)
All assessees
54
Long-term capital gains on sale of resi-dential house and land appurtenant thereto invested in purchase/construction of one residential house in India (subject to certain conditions and limits)
Individual/HUF
54B
Capital gains on transfer of land used for agricultural purposes, by an individual or his parents or a HUF, invested in other land for agricultural purposes (subject to certain conditions and limits)
Individual/HUF
54D
Capital gains on compulsory acquisition of land or building forming part of an industrial undertaking invested in purchase/construction of other land/building for shifting/re-establishing said undertaking or setting up new industrial undertaking (subject to certain conditions and limits)
Any assessee
54EA
Net consideration on transfer of long-term capital asset made before 1-4-2000 invested in specified bonds, debentures, shares of a public comp-any or units of notified mutual funds (subject to certain conditions and limits)
Any assessee
54EB
Long-term capital gains on transfer of any long-term capital asset made be-fore 1-4-2000 invested in specified long-term assets (subject to certain conditions and limits)
Any assessee
54EC
Long-term capital gains invested in long-term specified asset (bond redeemable after 3 years) (maximum investment is Rs. 50 lakhs : which includes total amount invested during financial year in which original asset is transferred and in subsequent financial year) issued by National Highways Authority of India; or by the Rural Electrification Corporation Limited (subject to certain conditions and limits)
Any assessee
54ED
Long-term capital gains on transfer before 1-4-2006 of certain listed securities or units invested in equity shares forming part of an eligible issue of capital (subject to certain conditions and limits)
Any assessee
54EE1
Long-term capital gains invested in long-term notified specified assets to finance start-ups
Any assessee
54F
Net consideration on transfer of long-term capital asset other than residential house invested in one residential house in India (subject to certain conditions and limits)
Individual/HUF
54G
Capital gain on transfer of machinery, plant, land or building used for the purposes of the business of an industrial undertaking situate in an urban area (transfer being effected for shifting the undertaking to a non-urban area) invested in new machinery, plant, building or land, in the said non-urban area, expenses on shifting, etc. (subject to certain conditions and limits)
Any assessee
54GA
Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone (subject to certain conditions and limits)
All assessees
54GB1
Exemption in respect of capital gain arising from the transfer of a long-term capital asset, being a residential property (a house or a plot of land), owned by the eligible assessee, and such assessee before the due date of furnishing of return of income under sub-section (1) of section 139 utilises the net consideration for subscription in the equity shares of an eligible company and such company has, within one year from the date of subscription in equity shares by the assessee, utilised this amount for purchase of specified new asset (subject to certain conditions and limits).
Individual/HUF
Against ‘income from other sources’
A. Deductible items
57(i)
Any reasonable sum paid by way of commission or remuneration for purpose of realising dividend (other than dividends referred to in section 115-O)
All assesses
57(i)
Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities
All assesses
57(ia)
Contributions to any provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948 or any other fund for welfare of employees, if the same are credited to employees’ accounts in relevant funds before due date
All assesses
57(ii)
Repairs, insurance, and depreciation of building, plant and machinery and furniture
Assessees engaged in business of letting out of machinery, plant and furniture and buildings on hire
57(iia)
In case of family pension, 331/3 per cent of such pension or Rs. 15,000, whichever is less
Assessees in receipt of family pension on death of employee being member of assessee’s family
57(iii)
Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income
All assesses
57(iv)
In case of interest received on compensation or on enhanced compensation referred to in section 145A(2), a deduction of 50 per cent of such income (subject to certain conditions)
All assessees
B. Non-deductible items
58(1)(a)(i)
Personal expenses
All assessees
58(1)(a)(ii)
Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at source
All assessees
58(1)(a)(iii)
‘Salaries’ payable outside India on which no tax is paid or deducted at source
All assessees
58(1A)
Wealth-tax
All assessees
58(2)
Expenditure of the nature specified in section 40A
All assessees
58(4)
Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or betting
All assessees

Classification of services under GST (Heading, Group & Service Code)



GST Council announces classification of services under GST


PROPOSED NEW SCHEME OF CLASSIFICATION OF SERVICES


Heading & Group Service Code (Tariff) Service Description
Section 5 : Construction Services
Heading No.9954   Construction services
Group 99541   Construction services of buildings
  995411 Construction services of single dwelling or multi dewlling or multi-storied residential buildings
  995412 Construction services of other residential buildings such as old age homes, homeless shelters, hostels etc
  995413 Construction services of industrial buildings such as buildings used for production activities (used for assembly line activities), workshops, storage buildings and other similar industrial buildings
  995414 Construction services of commercial buildings such as office buildings, exhibition & marriage halls, malls, hotels, restaurants, airports, rail or road terminals, parking garages, petrol and service stations, theatres and other similar buildings.
  995415 Construction services of other non-residential buildings such as educational institutions, hospitals, clinics including vertinary clinics, religious establishments, courts, prisons, museums and other similar buildings
  995416 Construction Services of other buildings n.e.c
  995419 Services involving Repair, alterations, additions, replacements, renovation, maintenance or remodelling of the buildings covered above.
     
Group 99542   General construction services of civil engineering works
  995421 General construction services of highways, streets, roads, railways and airfield runways, bridges and tunnels
  995422 General construction services of harbours, waterways, dams, water mains and lines, irrigation and other waterworks
  995423 General construction services of long-distance underground/overland/submarine pipelines, communication and electric power lines (cables); pumping stations and related works; transformer stations and related works.
  995424 General construction services of local water & sewage pipelines, electricity and communication cables & related works
  995425 General construction services of mines and industrial plants
  995426 General Construction services of Power Plants and its related infrastructure
  995427 General construction services of outdoor sport and recreation facilities
  995428 General construction services of other civil engineering works n.e.c.
  995429 Services involving Repair, alterations, additions, replacements, renovation, maintenance or remodelling of the constructions covered above.
     
Group 99543   Site preparation services
  995431 Demolition services
  995432 Site formation and clearance services including preparation services to make sites ready for subsequent construction work, test drilling & boring & core extraction, digging of trenches.
  995433 Excavating and earthmoving services
  995434 Water well drilling services and septic system installation services
  995435 Other site preparation services n.e.c
  995439 Services involving Repair, alterations, additions, replacements, maintenance of the constructions covered above.
     
Group 99544   Assembly and erection of prefabricated constructions
  995441 Installation, assembly and erection services of prefabricated buildings
  995442 Installation, assembly and erection services of other prefabricated structures and constructions
  995443 Installation services of all types of street furniture (e.g., bus shelters, benches, telephone booths, public toilets, etc.)
  995444 Other assembly and erection services n.e.c.
  995449 Services involving Repair, alterations, additions, replacements, maintenance of the constructions covered above.
     
Group 99545   Special trade construction services
  995451 Pile driving and foundation services
  995452 Building framing & Roof Framing services
  995453 Roofing and waterproofing services
  995454 Concrete services
  995455 Structural steel erection services
  995456 Masonry services
  995457 Scaffolding services
  995458 Other special trade construction services n.e.c.
  995459 Services involving Repair, alterations, additions, replacements, maintenance of the constructions covered above.
     
Group 99546   Installation services
  995461 Electrical installation services including Electrical wiring & fitting services, fire alarm installation services, burglar alarm system installation services.
  995462 Water plumbing and drain laying services
  995463 Heating, ventilation and air conditioning equipment installation services
  995464 Gas fitting installation services
  995465 Insulation services
  995466 Lift and escalator installation services
  995468 Other installation services n.e.c.
  995469 Services involving Repair, alterations, additions, replacements, maintenance of the installations covered above.
     
Group 99547   Building completion and finishing services
  995471 Glazing services
  995472 Plastering services
  995473 Painting services
  995474 Floor and wall tiling services
  995475 Other floor laying, wall covering and wall papering services
  995476 Joinery and carpentry services
  995477 Fencing and railing services
  995478 Other building completion and finishing services n.e.c.
  995479 Services involving Repair, alterations, additions, replacements, maintenance of the completion/finishing works covered above.
     
Section 6 : Distributive Trade Services ; Accomodation, Food & Beverage Service; Transport Services; Gas & Electricity Distribution Services
     
Heading No. 9961   Services in wholesale trade
Group 99611    
  996111 Services provided for a fee/commission or contract basis on wholesale trade
     
Heading No. 9962   Services in retail trade
Group 99621    
  996211 Services provided for a fee/commission or contract basis on retail trade
     
Heading No. 9963   Accommodation, Food and beverage services
Group 99631   Accommodation services
  996311 Room or unit accommodation services provided by Hotels, INN, Guest House, Club etc
  996312 Camp site services
  996313 Recreational and vacation camp services
     
     
Group 99632   Other accommodation services
  996321 Room or unit accommodation services for students in student residences
  996322 Room or unit accommodation services provided by Hostels, Camps, Paying Guest etc
  996329 Other room or unit accommodation services n.e.c.
     
Group 99633   Food, edible preparations, alchoholic & non-alchocholic beverages serving services
  996331 Services provided by Restaurants, Cafes and similar eating facilities including takeaway services, Room services and door delivery of food.
  996332 Services provided by Hotels, INN, Guest House, Club etc including Room services, takeaway services and door delivery of food.
  996333 Services provided in Canteen and other similar establishments
  996334 Catering Services in Exhibition halls, Events, Marriage Halls and other outdoor/indoor functions.
  996335 Catering services in trains, flights etc.
  996336 Preparation and/or supply services of food, edible preparations, alchoholic & non-alchocholic beverages to airlines and other transportation operators
  996337 Other contract food services
  996339 Other food, edible preparations, alchoholic & non-alchocholic beverages serving services n.e.c.
     
Heading No. 9964   Passenger transport services
Group 99641   Local transport and sightseeing transportation services of passengers
  996411 Local land transport services of passengers by railways, metro, monorail, bus, tramway, autos, three wheelers, scooters and other motor vehicles
  996412 Taxi services including radio taxi & other similar services;
  996413 Non-scheduled local bus and coach charter services
  996414 Other land transportation services of passengers.
  996415 Local water transport services of passengers by ferries, cruises etc
  996416 Sightseeing transportation services by rail, land, water & air
  996419 Other local transportation services of passengers n.e.c.
     
Group 99642   Long-distance transport services of passengers
  996421 Long-distance transport services of passengers through Rail network by Railways, Metro etc
  996422 Long-distance transport services of passengers through Road by Bus, Car, non-scheduled long distance bus and coach services, stage carriage etc
  996423 Taxi services including radio taxi & other similar services
  996424 Coastal and transoceanic (overseas) water transport services of passengers by Ferries, Cruise Ships etc
  996425 Domestic/International Scheduled Air transport services of passengers
  996426 Domestic/international non-scheduled air transport services of Passengers
  996427 Space transport services of passengers
  996429 Other long-distance transportation services of passengers n.e.c.
     
Heading No. 9965   Goods Transport Services
Group 99651   Land transport services of Goods
  996511 Road transport services of Goods including letters, parcels, live animals, household & office furniture, containers etc by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles.
  996512 Railway transport services of Goods including letters, parcels, live animals, household & office furniture, intermodal containers, bulk cargo etc
  996513 Transport services of petroleum & natural gas, water, sewerage and other goods via pipeline
  996519 Other land transport services of goods n.e.c.
     
Group 99652   Water transport services of goods
  996521 Coastal and transoceanic (overseas) water transport services of goods by refrigerator vessels, tankers, bulk cargo vessels, container ships etc
  996522 Inland water transport services of goods by refrigerator vessels, tankers and other vessels.
     
Group 99653   Air and space transport services of goods
  996531 Air transport services of letters & parcels and other goods
  996532 Space transport services of freight
     
Heading No. 9966   Rental services of transport vehicles with or without operators
Group 99660   Rental services of transport vehicles with or without operators
  996601 Rental services of road vehicles including buses, coaches, cars, trucks and other motor vehicles, with or without operator
  996602 Rental services of water vessels including passenger vessels, freight vessels etc with or without operator
  996603 Rental services of aircraft including passenger aircrafts, freight aircrafts etc with or without operator
  996609 Rental services of other transport vehicles n.e.c. with or without operator
     
Heading No.9967   Supporting services in transport
Group 99671   Cargo handling services
  996711 Container handling services
  996712 Customs House Agent services
  996713 Clearing and forwarding services
  996719 Other cargo and baggage handling services
     
Group 99672   Storage and warehousing services
  996721 Refrigerated storage services
  996722 Bulk liquid or gas storage services
  996729 Other storage and warehousing services
     
Group 99673   Supporting services for railway transport
  996731 Railway pushing or towing services
  996739 Other supporting services for railway transport n.e.c.
     
Group 99674   Supporting services for road transport
  996741 Bus station services
  996742 Operation services of National Highways, State Highways, Expressways, Roads & streets; bridges and tunnel operation services.
  996743 Parking lot services
  996744 Towing services for commercial and private vehicles
  996749 Other supporting services for road transport n.e.c.
     
Group 99675   Supporting services for water transport (coastal, transoceanic and inland waterways)
  996751 Port and waterway operation services (excl. cargo handling) such as operation services of ports, docks, light houses, light ships etc
  996752 Pilotage and berthing services
  996753 Vessel salvage and refloating services
  996759 Other supporting services for water transport n.e.c.
     
Group 99676   Supporting services for air or space transport
  996761 Airport operation services (excl. cargo handling)
  996762 Air traffic control services
  996763 Other supporting services for air transport
  996764 Supporting services for space transport
     
Group 99679   Other supporting transport services
  996791 Goods transport agency services for road transport
  996792 Goods transport agency services for other modes of transport
  996793 Other goods transport services
  996799 Other supporting transport services n.e.c
     
Heading No. 9968   Postal and courier services
Group 99681   Postal and courier services
  996811 Postal services including post office counter services, mail box rental services.
  996812 Courier services
  996813 Local delivery services
  996819 Other Delivery Services n.e.c
     
Heading No. 9969   Electricity, gas, water and other distribution services
Group 99691   Electricity and gas distribution services
  996911 Electricity transmission services
  996912 Electricity distribution services
  996913 Gas distribution services
     
Group 99692   Water distribution and other services
  996921 Water distribution services
  996922 Services involving distribution of steam, hot water and air conditioning supply etc.
  996929 Other similar services.
     
Section 7: Financial and related services; real estate services; and rental and leasing services
     
Heading No. 9971   Financial and related services
Group 99711   Financial services (except investment banking, insurance services and pension services)
  997111 Central banking services
  997112 Deposit services
  997113 Credit-granting services including stand-by commitment, guarantees & securities
  997114 Financial leasing services
  997119 Other financial services (except investment banking, insurance services and pension services)
     
Group 99712   Investment banking services
  997120 Investment banking services
     
Group 99713   Insurance and pension services (excluding reinsurance services)
  997131 pension services
  997132 Life insurance services (excluding reinsurance services)
  997133 Accident and health insurance services
  997134 Motor vehicle insurance services
  997135 Marine, aviation, and other transport insurance services
  997136 Freight insurance services & Travel insurance services
  997137 Other property insurance services
  997139 Other non-life insurance services (excluding reinsurance services)
     
Group 99714   Reinsurance services
  997141 Life reinsurance services
  997142 Accident and health reinsurance services
  997143 Motor vehicle reinsurance services
  997144 Marine, aviation and other transport reinsurance ser
  997145 services
  997146 Freight reinsurance services
  997147 Other property reinsurance services
  997149 Other non-life reinsurance services
     
Group 99715   Services auxiliary to financial services (other than to insurance and pensions)
  997151 Services related to investment banking such as mergers & acquisition services, corporate finance & venture capital services
  997152 Brokerage and related securities and commodities services including commodity exchange services
  997153 Portfolio management services except pension funds
  997154 Trust and custody services
  997155 Services related to the administration of financial markets
  997156 Financial consultancy services
  997157 Foreign exchange services
  997158 Financial transactions processing and clearing house services
  997159 Other services auxiliary to financial services
     
Group 99716   Services auxillary to insurance and pensions
  997161 Insurance brokerage and agency services
  997162 Insurance claims adjustment services
  997163 Actuarial services
  997164 Pension fund management services
  997169 Other services auxiliary to insurance and pensions
     
Group 99717   Services of holding financial assets
  997171 Services of holding equity of subsidiary companies
  997172 Services of holding securities and other assets of trusts and funds and similar financial entities
     
Heading No.9972   Real estate services
Group 99721   Real estate services involving owned or leased property
  997211 Rental or leasing services involving own or leased residential property
  997212 Rental or leasing services involving own or leased non-residential property
  997213 Trade services of buildings
  997214 Trade services of time-share properties
  997215 Trade services of vacant and subdivided land
     
Group 99722   Real estate services on a fee/commission basis or contract basis
  997221 Property management services on a fee/commission basis or contract basis
  997222 Building sales on a fee/commission basis or contract basis
  997223 Land sales on a fee/commission basis or contract basis
  997224 Real estate appraisal services on a fee/commission basis or contract basis
     
Heading no.9973   Leasing or rental services with or without operator
Group 99731   Leasing or rental services concerning machinery and equipment with or without operator
  997311 Leasing or rental services concerning transport equipments including containers, with or without operator
  997312 Leasing or rental services concerning agricultural machinery and equipment with or without operator
  997313 Leasing or rental services concerning construction machinery and equipment with or without operator
  997314 Leasing or rental services concerning office machinery and equipment (except computers) with or without operator
  997315 Leasing or rental services concerning computers with or without operators
  997316 Leasing or rental services concerning telecommunications equipment with or without operator
  997319 Leasing or rental services concerning other machinery and equipments with or without operator
     
Group 99732   Leasing or rental services concerning other goods
  997321 Leasing or rental services concerning televisions, radios, video cassette recorders, projectors, audio systems and related equipment and accessories (Home entertainment equipment )
  997322 Leasing or rental services concerning video tapes and disks (Home entertainment equipment )
  997323 Leasing or rental services concerning furniture and other household appliances
  997324 Leasing or rental services concerning pleasure and leisure equipment.
  997325 Leasing or rental services concerning household linen.
  997326 Leasing or rental services concerning textiles, clothing and footwear.
  997327 Leasing or rental services concerning do-it-yourself machinery and equipment
  997329 Leasing or rental services concerning other goods
     
Group 99733   Licensing services for the right to use intellectual property and similar products
  997331 Licensing services for the right to use computer software and databases.
  997332 Licensing services for the right to broadcast and show original films, sound recordings, radio and television programme etc.
  997333 Licensing services for the right to reproduce original art works
  997334 Licensing services for the right to reprint and copy manuscripts, books, journals and periodicals.
  997335 Licensing services for the right to use R&D products
  997336 Licensing services for the right to use trademarks and franchises
  997337 Licensing services for the right to use minerals including its exploration and evaluation
  997338 Licensing services for right to use other natural resources including telecommunication spectrum
  997339 Licensing services for the right to use other intellectual property products and other rescources n.e.c
     
Section 8 : Business and Production Services
     
Heading no. 9981   Research and development services
Group 99811   Research and experimental development services in natural sciences and engineering.
  998111 Research and experimental development services in natural sciences
  998112 Research and experimental development services in engineering and technology
  998113 Research and experimental development services in medical sciences and pharmacy.
  998114 Research and experimental development services in agricultural sciences.
     
Group 99812   Research and experimental development services in social sciences and humanities.
  998121 Research and experimental development services in social sciences.
  998122 Research and experimental development services in humanities
     
Group 99813   Interdisciplinary research services.
  998130 Interdisciplinary research and experimental development services.
     
Group 99814   Research and development originals
  998141 Research and development originals in pharmaceuticals
  998142 Research and development originals in agriculture
  998143 Research and development originals in biotechnology
  998144 Research and development originals in computer related sciences
  998145 Research and development originals in other fields n.e.c.
     
Heading no. 9982   Legal and accounting services
Group 99821   Legal services
  998211 Legal advisory and representation services concerning criminal law.
  998212 Legal advisory and representation services concerning other fields of law.
  998213 Legal documentation and certification services concerning patents, copyrights and other intellectual property rights.
  998214 Legal documentation and certification services concerning other documents.
  998215 Arbitration and conciliation services
  998216 Other legal services n.e.c.
     
Group 99822   Accounting, auditing and bookkeeping services
  998221 Financial auditing services
  998222 Accounting and bookkeeping services
  998223 Payroll services
  998224 Other similar services n.e.c
     
Group 99823   Tax consultancy and preparation services
  998231 Corporate tax consulting and preparation services
  998232 Individual tax preparation and planning services
     
Group 99824   Insolvency and receivership services
  998240 Insolvency and receivership services
     
Heading no. 9983   Other professional, technical and business services
Group 99831   Management consulting and management services; information technology services.
  998311 Management consulting and management services including financial, strategic, human resources, marketing, operations and supply chain management.
  998312 Business consulting services including pubic relations services
  998313 Information technology (IT) consulting and support services
  998314 Information technology (IT) design and development services
  998315 Hosting and information technology (IT) infrastructure provisioning services
  998316 IT infrastructure and network management services
  998319 Other information technology services n.e.c
     
Group 99832   Architectural services, urban and land planning and landscape architectural services
  998321 Architectural advisory services
  998322 Architectural services for residential building projects
  998323 Architectural services for non-residential building projects
  998324 Historical restoration architectural services
  998325 Urban planning services
  998326 Rural land planning services
  998327 Project site master planning services
  998328 Landscape architectural services and advisory services
     
Group 99833   Engineering services
  998331 Engineering advisory services
  998332 Engineering services for building projects
  998333 Engineering services for industrial and manufacturing projects
  998334 Engineering services for transportation projects
  998335 Engineering services for power projects
  998336 Engineering services for telecommunications and broadcasting projects
  998337 Engineering services for waste management projects (hazardous and non-hazardous), for water, sewerage and drainage projects.
  998338 Engineering services for other projects n.e.c.
  998339 Project management services for construction projects
     
Group 99834   Scientific and other technical services
  998341 Geological and geophysical consulting services
  998342 Subsurface surveying services
  998343 Mineral exploration and evaluation
  998344 Surface surveying and map-making services
  998345 Weather forecasting and meteorological services
  998346 Technical testing and analysis services
  998347 Certification of ships, aircraft, dams, etc.
  998348 Certification and authentication of works of art
  998349 Other technical and scientific services n.e.c.
     
Group 99835   Veterinary services
  998351 Veterinary services for pet animals
  998352 Veterinary services for livestock
  998359 Other veterinary services n.e.c.
     
Group 99836   Advertising services and provision of advertising space or time.
  998361 Advertising Services
  998362 Purchase or sale of advertising space or time, on commission
  998363 Sale of advertising space in print media (except on commission)
  998364 Sale of TV and radio advertising time
  998365 Sale of Internet advertising space
  998366 Sale of other advertising space or time (except on commission)
     
Group 99837   Market research and public opinion polling services
  998371 Market research services
  998372 Public opinion polling services
     
Group 99838   Photography & Videography and their processing services
  998381 Portrait photography services
  998382 Advertising and related photography services
  998383 Event photography and event videography services
  998384 Specialty photography services
  998385 Restoration and retouching services of photography
  998386 Photographic & videographic processing services
  998387 Other Photography & Videography and their processing services n.e.c.
     
Group 99839   Other professional, technical and business services.
  998391 Specialty design services including interior design, fashion design, industrial design and other specialty design services
  998392 Design originals
  998393 Scientific and technical consulting services
  998394 Original compilations of facts/information
  998395 Translation and interpretation services
  998396 Trademarks and franchises
  998397 Sponsorship Services & Brand Promotion Services
  998399 Other professional, technical and business services n.e.c.
     
Heading no. 9984   Telecommunications, broadcasting and information supply services
Group 99841   Telephony and other telecommunications services
  998411 Carrier services
  998412 Fixed telephony services
  998413 Mobile telecommunications services
  998414 Private network services
  998415 Data transmission services
  998419 Other telecommunications services including Fax services, Telex services n.e.c.
     
Group 99842   Internet telecommunications services
  998421 Internet backbone services
  998422 Internet access services in wired and wireless mode.
  998423 Fax, telephony over the Internet
  998424 Audio conferencing and video conferencing over the Internet
  998429 Other Internet telecommunications services n.e.c.
     
Group 99843   On-line content services
  998431 On-line text based information such as online books, newpapers, periodicals, directories etc
  998432 On-line audio content
  998433 On-line video content
  998434 Software downloads
  998439 Other on-line contents n.e.c.
     
Group 99844   News agency services
  998441 News agency services to newspapers and periodicals
  998442 Services of independent journalists and press photographers
  998443 News agency services to audiovisual media
     
Group 99845   Library and archive services
  998451 Library services
  998452 Operation services of public archives including digital archives
  998453 Operation services of historical archives including digital archives
     
Group 99846   Broadcasting, programming and programme distribution services
  998461 Radio broadcast originals
  998462 Television broadcast originals
  998463 Radio channel programmes
  998464 Television channel programmes
  998465 Broadcasting services
  998466 Home programme distribution services
     
Heading no. 9985   Support services
Group 99851   Employment services including personnel search/referral service & labour supply service
  998511 Executive/retained personnel search services
  998512 Permanent placement services, other than executive search services
  998513 Contract staffing services
  998514 Temporary staffing services
  998515 Long-term staffing (pay rolling) services
  998516 Temporary staffing-to-permanent placement services
  998517 Co-employment staffing services
  998519 Other employment & labour supply services n.e.c
     
Group 99852   Investigation and security services
  998521 Investigation services
  998522 Security consulting services
  998523 Security systems services
  998524 Armoured car services
  998525 Guard services
  998526 Training of guard dogs
  998527 Polygraph services
  998528 Fingerprinting services
  998529 Other security services n.e.c.
     
Group 99853   Cleaning services
  998531 Disinfecting and exterminating services
  998532 Window cleaning services
  998533 General cleaning services
  998534 Specialized cleaning services for reservoirs and tanks
  998535 Sterilization of objects or premises (operating rooms)
  998536 Furnace and chimney cleaning services
  998537 Exterior cleaning of buildings of all types
  998538 Cleaning of transportation equipment
  998539 Other cleaning services n.e.c.
     
Group 99854   Packaging services
  998540 Packaging services of goods for others
  998541 Parcel packing and gift wrapping
  998542 Coin and currency packing services
  998549 Other packaging services n.e.c
     
Group 99855   Travel arrangement, tour operator and related services
  998551 Reservation services for transportation
  998552 Reservation services for accommodation, cruises and package tours
  998553 Reservation services for convention centres, congress centres and exhibition halls
  998554 Reservation services for event tickets, cinema halls, entertainment and recreational services and other reservation services
  998555 Tour operator services
  998556 Tourist guide services
  998557 Tourism promotion and visitor information services
  998559 Other travel arrangement and related services n.e.c
     
Group 99859   Other support services
  998591 Credit reporting & rating services
  998592 Collection agency services
  998593 Telephone-based support services
  998594 Combined office administrative services
  998595 Specialized office support services such as duplicating services, mailing services, document preparation etc
  998596 Events, Exhibitions, Conventions and trade shows organisation and assistance services
  998597 Landscape care and maintenance services
  998598 Other information services n.e.c.
  998599 Other support services n.e.c.
     
Heading no.9986   Support services to agriculture, hunting, forestry, fishing, mining and utilities.
Group 99861   Support services to agriculture, hunting, forestry and fishing
  998611 Support services to crop production
  998612 Animal husbandry services
  998613 Support services to hunting
  998614 Support services to forestry and logging
  998615 Support services to fishing
  998619 Other support services to agriculture, hunting, forestry and fishing
     
Group 99862   Support services to mining
  998621 Support services to oil and gas extraction
  998622 Support services to other mining n.e.c.
     
Group 99863   Support services to electricity, gas and water distribution
  998631 Support services to electricity transmission and distribution
  998632 Support services to gas distribution
  998633 Support services to water distribution
  998634 Support services to Distribution services of steam, hot water and air-conditioning supply
     
Heading no. 9987   Maintenance, repair and installation (except construction) services
Group 99871   Maintenance and repair services of fabricated metal products, machinery and equipment
  998711 Maintenance and repair services of fabricated metal products, except machinery and equipment.
  998712 Maintenance and repair services of office and accounting machinery
  998713 Maintenance and repair services of computers and peripheral equipment
  998714 Maintenance and repair services of transport machinery and equipment
  998715 Maintenance and repair services of electrical household appliances
  998716 Maintenance and repair services of telecommunication equipments and apparatus
  998717 Maintenance and repair services of commercial and industrial machinery.
  998718 Maintenance and repair services of elevators and escalators
  998719 Maintenance and repair services of other machinery and equipments
     
Group 99872   Repair services of other goods
  998721 Repair services of footwear and leather goods
  998722 Repair services of watches, clocks and jewellery
  998723 Repair services of garments and household textiles
  998724 Repair services of furniture
  998725 Repair services of bicycles
  998726 Maintenance and repair services of musical instruments
  998727 Repair services for photographic equipment and cameras
  998729 Maintenance and repair services of other goods n.e.c.
     
Group 99873   Installation services (other than construction)
  998731 Installation services of fabricated metal products, except machinery and equipment.
  998732 Installation services of industrial, manufacturing and service industry machinery and equipment.
  998733 Installation services of office and accounting machinery and computers
  998734 Installation services of radio, television and communications equipment and apparatus.
  998735 Installation services of professional medical machinery and equipment, and precision and optical instruments.
  998736 Installation services of electrical machinery and apparatus n.e.c.
  998739 Installation services of other goods n.e.c.
     
Heading no. 9988   Manufacturing services on physical inputs (goods) owned by others
Group 99881   Food, beverage and tobacco manufacturing services
  998811 Meat processing services
  998812 Fish processing services
  998813 Fruit and vegetables processing services
  998814 Vegetable and animal oil and fat manufacturing services
  998815 Dairy product manufacturing services
  998816 Other food product manufacturing services
  998817 Prepared animal feeds manufacturing services
  998818 Beverage manufacturing services
  998819 Tobacco manufacturing services n.e.c.
     
Group 99882   Textile, wearing apparel and leather manufacturing services
  998821 Textile manufacturing services
  998822 Wearing apparel manufacturing services
  998823 Leather and leather product manufacturing services
     
Group 99883   Wood and paper manufacturing services
  998831 Wood and wood product manufacturing services
  998832 Paper and paper product manufacturing services
     
Group 99884   Petroleum, chemical and pharmaceutical product manufacturing services
  998841 Coke and refined petroleum product manufacturing services
  998842 Chemical product manufacturing services
  998843 Pharmaceutical product manufacturing services
     
     
Group 99885   Rubber, plastic and other non-metallic mineral product manufacturing service
  998851 Rubber and plastic product manufacturing services
  998852 Plastic product manufacturing services
  998853 Other non-metallic mineral product manufacturing services
     
Group 99886   Basic metal manufacturing services
  998860 Basic metal manufacturing services
     
Group 99887   Fabricated metal product, machinery and equipment manufacturing services
  998871 Structural metal product, tank, reservoir and steam generator manufacturing services
  998872 Weapon and ammunition manufacturing services
  998873 Other fabricated metal product manufacturing and metal treatment services
  998874 Computer, electronic and optical product manufacturing services
  998875 Electrical equipment manufacturing services
  998876 General-purpose machinery manufacturing services n.e.c.
  998877 Special-purpose machinery manufacturing services
     
Group 99888   Transport equipment manufacturing services
  998881 Motor vehicle and trailer manufacturing services
  998882 Other transport equipment manufacturing services
     
Group 99889   Other manufacturing services
  998891 Furniture manufacturing services
  998892 Jewellery manufacturing services
  998893 Imitation jewellery manufacturing services
  998894 Musical instrument manufacturing services
  998895 Sports goods manufacturing services
  998896 Game and toy manufacturing services
  998897 Medical and dental instrument and supply manufacturing services
  998898 Other manufacturing services n.e.c.
     
Heading no. 9989   Other manufacturing services; publishing, printing and reproduction services; materials recovery services
Group 99891   Publishing, printing and reproduction services
  998911 Publishing, on a fee or contract basis
  998912 Printing and reproduction services of recorded media, on a fee or contract basis
     
Group 99892   Moulding, pressing, stamping, extruding and similar plastic manufacturing services
  998920 Moulding, pressing, stamping, extruding and similar plastic manufacturing services
     
Group 99893   Casting, forging, stamping and similar metal manufacturing services
  998931 Iron and steel casting services
  998932 Non-ferrous metal casting services
  998933 Metal forging, pressing, stamping, roll forming and powder metallurgy services
     
Group 99894   Materials recovery (recycling) services, on a fee or contract basis
  998941 Metal waste and scrap recovery (recycling) services, on a fee or contract basis
  998942 Non-metal waste and scrap recovery (recycling) services, on a fee or contract basis
     
Section 9 : Community, Social & Personal Services and other miscellaneous services
     
Heading No. 9991   Public administration and other services provided to the community as a whole; compulsory social security services
     
Group 99911   Administrative services of the government
  999111 Overall Government public services
  999112 Public administrative services related to the provision of educational, health care, cultural and other social services, excluding social security service.
  999113 Public administrative services related to the more efficient operation of business.
  999119 Other administrative services of the government n.e.c.
     
Group 99912   Public administrative services provided to the community as a whole
  999121 Public administrative services related to external affairs, diplomatic and consular services abroad.
  999122 Services related to foreign economic aid
  999123 Services related to foreign military aid
  999124 Military defence services
  999125 Civil defence services
  999126 Police and fire protection services
  999127 Public administrative services related to law courts
  999128 Administrative services related to the detention or rehabilitation of criminals.
  999129 Public administrative services related to other public order and safety affairs n.e.c.
     
Group 99913   Administrative services related to compulsory social security schemes.
  999131 Administrative services related to sickness, maternity or temporary disablement benefit schemes.
  999132 Administrative services related to government employee pension schemes; old-age disability or survivors’ benefit schemes, other than for government employees
  999133 Administrative services related to unemployment compensation benefit schemes
  999134 Administrative services related to family and child allowance programmes
     
Heading no. 9992   Education services
Group 99921   Pre-primary education services
  999210 Pre-primary education services
     
Group 99922   Primary education services
  999220 Primary education services
     
Group 99923   Secondary Education Services
  999231 Secondary education services, general
  999232 Secondary education services, technical and vocational.
     
Group 99924   Higher education services
  999241 Higher education services, general
  999242 Higher education services, technical
  999243 Higher education services, vocational
  999249 Other higher education services
     
Group 99925   Specialised education services
  999259 Specialised education services
     
Group 99929   Other education & training services and educational support services
  999291 Cultural education services
  999292 Sports and recreation education services
  999293 Commercial training and coaching services
  999294 Other education and training services n.e.c.
  999295 services involving conduct of examination for admission to educational institutions
  999299 Other Educational support services
     
Heading no. 9993   Human health and social care services
Group 99931   Human health services
  999311 Inpatient services
  999312 Medical and dental services
  999313 Childbirth and related services
  999314 Nursing and Physiotherapeutic services
  999315 Ambulance services
  999316 Medical Laboratory and Diagnostic-imaging services
  999317 Blood, sperm and organ bank services
  999319 Other human health services including homeopathy, unani, ayurveda, naturopathy, acupuncture etc.
     
Group 99932   Residential care services for the elderly and disabled
  999321 Residential health-care services other than by hospitals
  999322 Residential care services for the elderly and persons with disabilities
     
Group 99933   Other social services with accommodation
  999331 Residential care services for children suffering from mental retardation, mental health illnesses or substance abuse
  999332 Other social services with accommodation for children
  999333 Residential care services for adults suffering from mental retardation, mental health illnesses or substance abuse
  999334 Other social services with accommodation for adults
     
Group 99934   Social services without accommodation for the elderly and disabled
  999341 Vocational rehabilitation services
  999349 Other social services without accommodation for the elderly and disabled n.e.c.
     
Group 99935   Other social services without accommodation
  999351 Child day-care services
  999352 Guidance and counseling services n.e.c. related to children
  999353 Welfare services without accommodation
  999359 Other social services without accommodation n.e.c.
     
Heading no.9994   Sewage and waste collection, treatment and disposal and other environmental protection services
     
Group 99941   Sewerage, sewage treatment and septic tank cleaning services
  999411 Sewerage and sewage treatment services
  999412 Septic tank emptying and cleaning services
     
Group 99942   Waste collection services
  999421 Collection services of hazardous waste
  999422 Collection services of non-hazardous recyclable materials
  999423 General waste collection services, residential
  999424 General waste collection services, other n.e.c.
     
Group 99943   Waste treatment and disposal services
  999431 Waste preparation, consolidation and storage services
  999432 Hazardous waste treatment and disposal services
  999433 Non-hazardous waste treatment and disposal services
     
Group 99944   Remediation services
  999441 Site remediation and clean-up services
  999442 Containment, control and monitoring services and other site remediation services
  999443 Building remediation services
  999449 Other remediation services n.e.c.
     
Group 99945   Sanitation and similar services
  999451 Sweeping and snow removal services
  999459 Other sanitation services n.e.c.
     
Group 99949   Others
  999490 Other environmental protection services n.e.c.
     
Heading no.9995   Services of membership organizations
Group 99951   Services furnished by business, employers and professional organizations Services
  999511 Services furnished by business and employers organizations
  999512 Services furnished by professional organizations
     
Group 99952   Services furnished by trade unions
  999520 Services furnished by trade unions
     
Group 99959   Services furnished by other membership organizations
  999591 Religious services
  999592 Services furnished by political organizations
  999593 Services furnished by human rights organizations
  999594 Cultural and recreational associations
  999595 Services furnished by environmental advocacy groups
  999596 Services provided by youth associations
  999597 Other civic and social organizations
  999598 Home owners associations
  999599 Services provided by other membership organizations n.e.c.
     
Heading No.9996   Recreational, cultural and sporting services
Group 99961   Audiovisual and related services
  999611 Sound recording services
  999612 Motion picture, videotape, television and radio programme production services
  999613 Audiovisual post-production services
  999614 Motion picture, videotape and television programme distribution services
  999615 Motion picture projection services
     
Group 99962   Performing arts and other live entertainment event presentation and promotion services
  999621 Performing arts event promotion and organization services
  999622 Performing arts event production and presentation services
  999623 Performing arts facility operation services
  999629 Other performing arts and live entertainment services n.e.c.
     
Group 99963   Services of performing and other artists
  999631 Services of performing artists including actors, readers, musicians, singers, dancers, TV personalities, independent models etc
  999632 Services of authors, composers, sculptors and other artists, except performing artists
  999633 Original works of authors, composers and other artists except performing artists, painters and sculptors
     
Group 99964   Museum and preservation services
  999641 Museum and preservation services of historical sites and buildings
  999642 Botanical, zoological and nature reserve services
     
Group 99965   Sports and recreational sports services
  999651 Sports and recreational sports event promotion and organization services
  999652 Sports and recreational sports facility operation services
  999659 Other sports and recreational sports services n.e.c.
     
Group 99966   Services of athletes and related support services
  999661 Services of athletes
  999662 Support services related to sports and recreation
     
Group 99969   Other amusement and recreational services
  999691 Amusement park and similar attraction services
  999692 Gambling and betting services including similar online services
  999693 Coin-operated amusement machine services
  999694 Lottery services
  999699 Other recreation and amusement services n.e.c.
     
Heading No.9997   Other services
Group 99971   Washing, cleaning and dyeing services
  999711 Coin-operated laundry services
  999712 Dry-cleaning services (including fur product cleaning services)
  999713 Other textile cleaning services
  999714 Pressing services
  999715 Dyeing and colouring services
  999719 Other washing, cleaning and dyeing services n.e.c
     
Group 99972   Beauty and physical well-being services
  999721 Hairdressing and barbers services
  999722 Cosmetic treatment (including cosmetic/plastic surgery), manicuring and pedicuring services
  999723 Physical well-being services including health club & fitness centre
  999729 Other beauty treatment services n.e.c.
     
Group 99973   Funeral, cremation and undertaking services
  999731 Cemeteries and cremation services
  999732 Undertaking services
     
Group 99979   Other miscellaneous services
  999791 Services involving commercial use or exploitation of any event
  999792 Agreeing to do an act
  999793 Agreeing to refrain from doing an act
  999794 Agreeing to tolerate an act
  999795 Conduct of religious ceremonies/rituals by persons
  999799 Other services n.e.c.
     
Heading No. 9998   Domestic services
Group 99980   Domestic services
  999800 Domestic services both part time & full time
     
Heading No. 9999   Services provided by extraterritorial organizations and bodies.
Group 99990   Services provided by extraterritorial organizations and bodies.
  999900 Services provided by extraterritorial organizations and bodies

Ashtravakra Gita : Peace

Ashtavakra Said:

18.71

Rules of conduct, detachment,
renunciation, asceticism—
what are these to one
who sees the unreality of things,
who is the Light of Awareness?

18.72

How can there be joy or sorrow,
bondage or liberation,
for one who perceives non-existence
and lights the infinite?

18.73

Until Self-realization,
illusion prevails.
The sage lives without
thoughts of “I” or “mine.”
His connection to illusion is severed.

18.74

What is knowledge?
What is the universe?
What are thoughts like
“I am the body,” or “the body is mine”?
The sage is imperishable and sorrowless.
He is Self alone.

18.75

When a weak man gives up meditation
he falls prey to whims and desires.

18.76

Even hearing Truth,
the man of dull intellect
holds on to illusion.
Through effort and suppression
he may appear outwardly composed,
but inside he craves the world.

18.77

Though others may see him working,
the sage does nothing.
Knowledge has banished effort.
He finds no reason to do or say.

18.78

The sage is fearless, unassailable.
No darkness, no light, nothing to lose.
Nothing.

18.79

Patience, discrimination,
even fearlessness—
What use are these to the yogi?
His nature cannot be described.
He is not a person.

18.80

No heaven, no hell,
no liberation for the living.
In short, Consciousness is Void.
What more can be said?

Series continue….

Tax Planning Series 3: Deductions under Income Tax Act, 1961 (Applicable for AY 2017-18)-Part 1

Deductions under Income Tax Act, 1961 (Applicable for AY 2017-18)

Section
 Nature of deduction
Who can claim
Relevant Rule
(1)
(2)
(3)
(4)
For certain payments
80C
Life insurance premium for policy :
Individual/HUF
in case of individual, on life of assessee, assessee’s spouse and any child of assessee
in case of HUF, on life of any member of the HUF
Sum paid under a contract for a deferred annuity :
in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)
Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]
Contributions by an individual made under Employees’ Provident Fund Scheme
Contribution to Public Provident Fund Account in the name of:
in case of individual, such individual or his spouse or any child of such individual
Contribution by an employee to a recognised provident fund
Contribution by an employee to an approved superannuation fund
Subscription to any notified security or notified deposit scheme (Sukanya Samriddhi Account Scheme) of the Central Government in the case of an individual, in the name of individual, or any girl child of that individual, or any girl child for whom such person is the legal guardian, if the scheme so specifies. (Scheme does not allow deposit in the name of individual)
Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
Contribution for participation in unit-linked Insurance Plan of UTI :
in case of an individual, in the name of the individual, his spouse or any child of such individual
in case of a HUF, in the name of any member thereof
Contribution to notified unit-linked insurance plan of LIC Mutual Fund [Dhanaraksha 1989]
in the case of an individual, in the name of the individual, his spouse or any child of such individual
in the case of a HUF, in the name of any member thereof
Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children
Certain payments for purchase/construction of residential house property
Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes or (b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both
Sum paid towards notified annuity plan of LIC (New Jeevan Dhara/New Jeevan Dhara-I/New Jeevan Akshay/New Jeevan Akshay-I/New Jeevan Akshay-II/Jeewan Akshay-III plan of LIC) or other insurer
Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
20
Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above.
20A
Term deposits for a fixed period of not less than 5 years with a sche-duled bank, and which is in accordance with a scheme1 framed and notified.
Subscription to notified bonds issued by the NABARD.
Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)
Notes:
1.
Deduction is limited to whole of the amount paid or deposited subject to a maximum of Rs. 1,50,000. This maximum limit of Rs. 1,50,000 is the aggregate of the deduction that may be claimed under sections 80C, 80CCC and 80CCD.
2.
The sums paid or deposited need not be out of income chargeable to tax of the previous year. Amount may be paid or deposited any time during the previous year, but the deduction shall be available on so much of the aggregate of sums as do not exceed the total income chargeable to tax during the previous year.
3.
Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80C. Payment of premium which is in excess of 10 per cent (if policy is issued on or after 1-4-2013, 15% in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80DDB/rule 11DD) of actual capital sum assured shall not be included in gross qualifying amount. The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise, over and above the sum actually assured, which is to be or may be received under the policy by any person, shall not be taken into account for the purpose of calculating the actual capital sum assured.
The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
‘Actual capital sum assured’ in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account—
(i)
the value of any premium agreed to be returned; or
(ii)
any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.
4.
Where, in any previous year, an assessee—
(i)
terminates his contract of insurance, by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,—
(a)
in case of any single premium policy, within two years after the date of commencement of insurance; or
(b)
in any other case, before premiums have been paid for two years; or
(ii)
terminates his participation in any unit-linked insurance plan (ULIP), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or
(iii)
transfers the house property before the expiry of five years from the end of the financial year in which possession of such property is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause,
then,—
(a)
no deduction shall be allowed to the assessee with reference to any of such sums, paid in such previous year; and
(b)
the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.
If any equity shares or debentures, with reference to the cost of which a deduction is allowed, are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.
A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.
5.
If any amount, including interest accrued thereon, is withdrawn by the assessee from his deposit account made under (a) Senior Citizen Saving Scheme or (b) Post Office Time Deposit Rules, before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year.
The amount liable to tax shall not include the following amounts, namely:—
(i)
any amount of interest, relating to deposits referred to above, which has been included in the total income of the assessee of the previous year or years preceding such previous year; and
(ii)
any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year.
Section
 Nature of deduction
Who can claim
Relevant Rule
(1)
(2)
(3)
(4)
80CCC
Contributions to certain pension funds of LIC or any other insurer (up to Rs. 1,50,000 from assessment year 2016-17) (Rs. 1,00,000 for assessment year 2015-16) (subject to certain conditions)
Individual
80CCD
Contribution to pension scheme notified by Central Government up to 10% of salary (subject to certain conditions and limits)
Individual
80CCF
Amount up to Rs. 20,000, paid or deposited, during the previous year relevant to assessment year 2011-12 or 2012-13, as subscription to notified long-term infrastructure bonds
Individual/HUF
80CCG
50 per cent of amount invested by specified resident individuals in notified equity savings scheme(subject to certain conditions and limits) (maximum deduction : Rs. 25,000)
Specified resident individuals (new retail investors)
80D
Medical insurance premia paid by any mode other than cash to LIC or any other insurer up to specified limits(subject to certain conditions)
Individual/HUF
80DD
Deduction of Rs. 50,000 (Rs. 1,00,000 in case of severe disability) (with effect from assessment year 2016-17 deduction is Rs. 75,000 and Rs. 1,25,000 in case of severe disability) to a resident individual/HUF where (a) any expenditure has been incurred for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] including autism, cerebral palsy and multiple disability as referred to in National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999), or (b) any amount is paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company [as referred to in UTI (Transfer of Undertaking & Repeal) Act, 2002] for the maintenance of a dependent, being a person with disability (subject to certain conditions)
Resident Indivi- dual/HUF
11A
80DDB
Expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions
Resident Individual/HUF
11DD
80E
Amount paid out of income chargeable to tax by way of payment of interest on loan taken from financial institution/approved charitable institution for pursuing higher education (subject to certain conditions) (maximum period : 8 years)
Individual
80EE
Interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property (subject to certain conditions and limits) (maximum deduction : Rs. 1,00,000)
Individual
80G
Donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, etc. [amount of deduction is 50 per cent of net qualifying amount]. 100 per cent of qualifying donations to National Defence Fund, Prime Minister’s National Relief Fund, Prime Minister’s Armenia Earthquake Relief Fund, Africa (Public Contributions – India) Fund, National Children’s Fund, Government or approved association for promoting family planning, universities and approved educational institutions of national eminence, National Foundation for Communal Harmony, Chief Minister’s Earthquake Relief Fund (Maharashtra), Zila Saksharta Samitis, National or State Blood Transfusion Council, Fund set up by State Government to provide medical relief to the poor, Army Central Welfare Fund, Indian Naval Benevolent Fund and Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, National Illness Assistance Fund, Chief Minister’s Relief Fund or the Lt. Governor’s Relief Fund in respect of any State or Union Territory, National Sports Fund, National Cultural Fund, Fund for Technology Development and Application, Indian Olympic Association, etc., fund set up by State Government of Gujarat exclusively for providing relief to victims of earthquake in Gujarat, National Trust for Welfare of Persons with Autism, Cerebral palsy, Mental retardation and Multiple Disabilities, the Swachh Bharat Kosh and the Clean Ganga Fund and National Fund for Control of Drug Abuse (from assessment year 2016-17) [subject to certain conditions and limits]
All assessees
18AAAA,18AAAAA
80GG
Rent paid in excess of 10% of total income for furnished/unfurnished resi-dential accommodation (subject to maximum of Rs. 2,000 p.m. or 25% of total income, whichever is less) (subject to certain conditions)
Individuals not receiving any house rent allowance
11B
80GGA
Certain donations for scientific, social or statistical research or rural development programme or for carrying out an eligible project or scheme or National Urban Poverty Eradication Fund (subject to certain conditions)
All assessees not having any income chargeable under the head ‘Profits and gains of business or profession’
80GGB
Sum contributed to any political party/electoral trust
Indian company
80GGC
Sum contributed to any political party/electoral trust
All assessees, other than local authority and artificial juridical person wholly or partly funded by Government
For certain incomes
80-IA
Profits and gains from industrial undertakings engaged in infrastructure facility, telecommunication services, industrial park, development of Special Economic Zone, power undertakings, etc. (subject to certain conditions and limits)
All assessees
18BBB,18BBD, 18BBE,18C
80-IAB
Profits and gains derived by undertaking/enterprise from business of developing a Special Economic Zone notified on or after 1-4-2005 (subject to certain conditions and limits)
Assessee being Developer of SEZ
80-IB
Profits and gains from industrial undertakings, cold storage plant, hotel, scientific research & development, mineral oil concern, housing projects, cold chain facility, multiplex theatres, convention centres, ships, etc. (subject to certain conditions and limits)
All assessees
11EA,18BBB, 18BBC, 18D,18DA, 18DB, 18DC, 18DD, 18DDA
80-IC
Profits and gains derived by an undertaking or an enterprise in special category States (Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura) (subject to certain limits, time limits and conditions),
All assessees
18BBB
(a)which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the specified period.
(b)which has begun or begins to manufacture or produce any article or thing specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the specified period
80-ID
Profits and gains from business of hotels and convention centres in specified areas (subject to certain conditions).
All assessees
18DE
80-IE
Deduction in respect of certain undertakings in North Eastern States.
All assessees
80JJA
Entire income from business of collecting and processing or treating of bio-degradable waste for generating power, or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas, making pellets or briquettes for fuel or organic manure (for 5 consecutive assessment years)
All assessees
80JJAA
30 per cent of additional wages paid to new regular workmen employed in the previous year for 3 assessment years including the assessment year relevant to the previous year in which such employment is provided (subject to certain conditions)
All assessees having profits and gains derived from manufacture of goods in factory
19AB
80LA
Certain incomes of Scheduled banks/banks incorporated outside India having Offshore Banking Units in a Special Economic Zone/Units of International Financial Services Centre (subject to certain conditions and limits)
Scheduled Banks/banks incorporated outside India/Units of International Financial Services Centre
19AE
80P
Specified incomes [subject to varying limits specified in sub-section (2)]
Co-operative societies
80QQB
Royalty income of author of certain specified category of books (up to Rs. 3,00,000) (subject to certain conditions)
Resident Individual – Author
19AC, 29A
80RRB
Royalty on patents up to Rs. 3,00,000 in the case of a resident individual who is a patentee and is in receipt of income by way of royalty in respect of a patent registered on or after 1-4-2003 (subject to certain conditions).
Resident individuals
19AD,29A
80TTA
Interest on deposits in savings bank accounts (up to Rs. 10,000 per year)
Individuals/HUFs
80U
Deduction of Rs. 75,000 (from assessment year 2016-17) to a resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] [including autism, cerebral palsy, and multiple disabilities as defined under National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999] [in the case of a person with severe disability, allowable deduction is Rs. 1,25,000] (from assessment year 2016-17) (subject to certain conditions).
Resident individuals
11A
Rebates
87A
Tax rebate in case of individual resident in India, whose total income does not exceed five hundred thousand rupees; quantum of rebate shall be an amount equal to hundred per cent of such income-tax or an amount of Five thousand rupees, whichever is less.
Individual

Service tax rates approved by GST Council on 19 May 2017


SCHEDULE OF GST RATES FOR SERVICES AS APPROVED BY GST COUNCIL

The fitment of rates of services were discussed on 19 May 2017 during the 14th GST Council meeting held at Srinagar, Jammu & Kashmir. The Council has broadly approved the GST rates for services at Nil, 5%, 12%, 18% and 28% as listed below. The information is being uploaded immediately after the GST Council’s decision and it will be subject to further vetting during which the list may undergo some changes. The decisions of the GST Council are being communicated for general information and will be given effect to through gazette notifications which shall have force of law.
51. No.
DESCRIPTION OF SERVICES
GST RATE
1.
Transport of goods by rail
5%
with ITC of input
services
2.
Transport of passengers by rail (other than sleeper class)
5%
with ITC of input
services
3.
Services of goods transport agency (GTA) in relation to transportation of goods [other than used household goods for personal use]
5%
No ITC
4.
Services of goods transport agency in relation to transportation of used household goods for personal use.
5%
No ITC
5.
Transport of goods in a vessel including services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India
5%
with ITC of input
services
6.
Renting of motor cab
(If fuel cost is borne by the service recipient, then 18% GST will apply)
5%
No ITC
7.
Transport of passengers, by-
(i) Air conditioned contract/ stage carriage other than motor cab;
(ii) a radio taxi.
5%
No ITC
8.
Transport of passengers by air in economy class
5%
with ITC of input
services
9.
Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport.
5%
with ITC of input services
10.
Supply of tour operators’ services
5%
No ITC
11.
Leasing of aircraft under Schedule II [5 (1)] by a scheduled airlines for scheduled operations
5%
with ITC of input
services
12.
Selling of space for advertisement in print media
5%
With Full ITC
13.
Services by way of job work in relation to printing of newspapers;
5%
With Full ITC
14.
Transport of goods in containers by rail by any person other than Indian Railways
12%
With Full ITC
15.
Transport of passengers by air in other than economy class
12%
With Full ITC
16.
Supply of Food/ drinks in restaurant not having facility of air-conditioning or central heating at any time during the year and not having license to serve liquor.
12%
With Full ITC
17.
Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having room tariff Rs.1000 and above but less than Rs.2500 per room per day
12%
With Full ITC
18.
Services provided by foreman of chit fund in relation to chit
12%
with ITC of input
services
19.
Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly.
[The value of land is included in the amount charged from the service recipient]
12%
With Full ITC
but no refund of
overflow of ITC
20.
Temporary transfer or permitting the use or enjoyment of any Intellectual Property (IP) to attract the same rate as in respect of permanent transfer of IP;
12%
with full ITC
21.
Supply of Food/ drinks in restaurant having license to serve liquor
18%
With Full ITC
22.
Supply of Food/ drinks in restaurant having facility of air-conditioning or central heating at any time during the year
18%
With Full ITC
23.
Supply of Food/ drinks in outdoor catering
18%
With Full ITC
24.
Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes where room tariff of Rs 2500/ and above but less than Rs 5000/- per room per day
18%
With Full ITC
25.
Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises
18%
With Full ITC
26.
Services by way of admission or access to circus, Indian classical dance including folk dance, theatrical performance, drama
18%
With Full ITC
27.
Composite supply of Works contract as defined in clause 119 of section 2 of CGST Act
18%
With Full ITC
28.
Services by way of admission to entertainment events or access to amusement facilities including exhibition of cinematography films, theme parks, water parks, joy rides, merry-go rounds, go-carting, casinos, race-course, ballet, any sporting event such as IPL and the like;
28%
With Full ITC
29.
Services provided by a race club by way of totalizator or a licensed bookmaker in such club;
28%
With Full ITC
30.
Gambling;
28%
With Full ITC
31.
Supply of Food/ drinks in air-conditioned restaurant in 5-star or above rated Hotel
28%
With Full ITC
32.
Accommodation in hotels including 5 star and above rated hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, where room rent is Rs 5000/- and above per night per room
28%
With Full ITC
33.
Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration (supply of service) to attract the same GST rate and compensation cess as applicable on supply of similar goods which involves any transfer of title in goods (supply of goods)
Same rate of GST
and  compensation
cess as on supply of similar goods
34.
Any transfer of right in goods or of undivided share in goods without the transfer of title thereof (supply of services) to attract the same GST rate and compensation cess as applicable on supply of similar goods which involves any transfer of title in goods (supply of goods).
Same rate of GST
and compensation
cess as on supply
of similar goods
35.
Supply consisting of transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed (supply of goods): value of leasing services shall be included in the value of goods supplied.
GST and
compensation
cess as on supply
of similar goods
36.
All other services not specified elsewhere
18%
With Full ITC
Service Tax Exemptions to be continued in GST as decided by GST Council
Sl. No.
Services
1.
Services by Government or a local authority excluding the following services‑
(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;
(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) transport of goods or passengers; or
(iv) any service, other than services covered under clauses (i) to (iii) above, provided to business entities.
2.
Services by the Reserve Bank of India
3.
Services by a foreign diplomatic mission located in India
4.
Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fiber, fuel, raw material or other similar products or agricultural produce by way of—(I) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing or
(ii) supply of farm labor;
(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market;
(iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;
(v) loading, unloading, packing, storage or warehousing of agricultural produce;
(vi) agricultural extension services;
(vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce.
5.
Service by way of access to a road or a bridge on payment of toll charges
6.
Transmission or distribution of electricity by an electricity transmission or distribution utility
7.
Services by way of renting of residential dwelling for use as residence
8.
Services by way of‑
(i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services);
(ii) inter se sale or purchase of foreign currency among st banks or authorized dealers of foreign exchange or among st banks and such dealers;
9.
Services by way of transportation of goods
(i) by road except the services of
(A) a goods transportation agency; or
(B) a courier agency;
(ii) by inland waterways;
10.
Services provided to the United Nations or a specified international organization.
Exemption may be notified by way of issuing notification under section 55 of CGST/ SGST Act.
11.
Services provided by operators of the Common Bio-medical Waste Treatment Facility to a clinical establishment by way of treatment or disposal of bio-medical waste or the processes incidental thereto;
12.
Services by a veterinary clinic in relation to health care of animals or birds;
13.
Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities;[Charitable activities may be defined as presently in notification No 25/2012-ST.
14.
Services by a specified organization in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement;
15.
Services provided by‑
(a) an arbitral tribunal to ‑
(i) any person other than a business entity; or
(ii) a business entity with a turnover up to rupees twenty lakh (ten lakh rupees in a special category state) in the preceding financial year;
(b) a partnership firm of advocates or an individual as an advocate other than a senior advocate, by way of legal services to‑
(i) an advocate or partnership firm of advocates providing legal services;
(ii) any person other than a business entity; or
(iii) a business entity with a turnover up to rupees twenty lakh (ten lakh rupees in a special category state) in the preceding financial year; or
(c) a senior advocate by way of legal services to‑
(i) any person other than a business entity; or
(ii) a business entity up to rupees twenty lakh (ten lakh rupees in a special category state) in the preceding financial year;
16.
Services provided,‑
(a) by an educational institution to its students, faculty and staff;
(b) to an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by the Government;
(iii) security or cleaning or house-keeping services performed in such educational institution;
(iv)services relating to admission to, or conduct of examination by, such institution;
up to higher secondary.
Provided that nothing contained in clause (b) of this entry shall apply to an educational institution other than an institution providing services by way of pre- school education and education up to higher secondary school or equivalent
17.
Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme, ‑
(a) two year full time residential Post Graduate Programmes in Management for the Post Graduate
Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT), conducted by Indian Institute of Management;
(b) fellow programme in Management;
(c) five year integrated programme in Management.
18.
Services provided to a recognized sports body by‑
(a) an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body;
(b) another recognized sports body;
19.
Services by an artist by way of a performance in folk or classical art forms of (i) music, or (ii) dance, or (iii) theater, if the consideration charged for such performance is not more than one lakh and fifty thousand rupees:
Provided that the exemption shall not apply to service provided by such artist as a brand ambassador;
20.
Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India;
21.
Services by way of giving on hire ‑
(a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or
(b) to a goods transport agency, a means of transportation of goods;
22.
Transport of passengers, with or without accompanied belongings, by ‑
(a) air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal;
(b) non- air conditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; or
(c) stage carriage other than air-conditioned stage carriage
23.
Services of life insurance business provided by way of annuity under the National Pension System regulated by Pension Fund Regulatory and Development Authority of India (PFRDA) under the Pension Fund Regulatory And Development Authority Act, 2013 (23 of 2013)
24.
Services of life insurance business provided or agreed to be provided by the Army, Naval and Air Force Group Insurance Funds to members of the Army, Navy and Air Force, respectively, under the Group Insurance Schemes of the Central Government
25.
Services provided by an incubatee up to a total turnover of fifty lakh rupees in a financial year subject to the following conditions, namely:‑
(a) the total turnover had not exceeded fifty lakh rupees during the preceding financial year; and
(b) a period of three years has not been elapsed from the date of entering into an agreement as an incubatee;
26.
Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution ‑
(a) as a trade union;
(b) for the provision of carrying out any activity which is exempt from the levy of GST; or (c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex;
27.
Services by an organizer to any person in respect of a business exhibition held outside India;
28.
Services by way of slaughtering of animals;
29.
Services received from a provider of service located in a non- taxable territory by ‑
(a) Government, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession;
(b) an entity registered under section 12AA of the