98 the MANAGEMENT ACCOUNTANT MAY <strong>2015</strong> www.icmai.in
ECONOMY UPDATES Income Tax CBDT Notifies Revised Transport allowance exemption limit CBDT vide Notification No. 39/<strong>2015</strong>dated: 13th April <strong>2015</strong> has increased Transport allowance exemption limit for employees from Rs. 800 to Rs. 1,600 per month. In case the employee is blind or orthopaedically handicapped with disability of lower extremities the limit is increased from Rs. 1600 to Rs. 3200/- per Month. The revised exemption Limit is applicable from A.Y. 2016/17 /F.Y <strong>2015</strong>- 16. Providing of Roll Back in respect of Advance Pricing Agreement (APA) - Extension of time In exercise of the powers conferred by sub-sections (9) and (9A) of section 92CC read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes makes Income-tax (Fourth Amendment) Rules, <strong>2015</strong> further to amend the Income-tax Rules, 1962. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules), in rule 10MA, in sub-rule (5), for the first proviso and the second proviso, the following provisos shall be substituted, that in a case where an application has been filed on or before the 31st day of March, <strong>2015</strong>, Form No. 3CEDA along with proof of payment of additional fee may be filed at any time on or before the 30th day of June, <strong>2015</strong> or the date of entering into the agreement whichever is earlier: Provided further that in a case where an agreement has been entered into on or before the 31st day of March, <strong>2015</strong>, Form No. 3CEDA along with proof of payment of additional fee may be filed at any time on or before the 30th day of June, <strong>2015</strong> and, notwithstanding anything contained in rule 10Q, the agreement may be revised to provide for rollback provision in the said agreement in accordance with this rule.” Source: Notification No. 33/<strong>2015</strong>/ F.No.142 /14/2014-TPL dated: 1st April, <strong>2015</strong> Read more at: http://www.incometaxindia. gov.in/communications/notification/ notification33_<strong>2015</strong>.pdf Capital gains in respect of units of Mutual Funds under the fixed maturity Plans on extension of their term In case of mutual funds, the unit of a mutual fund constitutes a capital asset and any sale, exchange or relinquishment of such unit is a “transfer” under clause (47) of section 2 of the Act. The roll over in accordance with the aforesaid regulation will not amount to transfer as the scheme remains the same. Accordingly it is clarified that no capital gain will arise at the time of exercise of the option by the investor to continue in the same scheme. The capital gains will however arise at the time of redemption of the units or opting out of the scheme, as the case may be vide Circular No 6 of <strong>2015</strong> dated 9th April <strong>2015</strong>. Requirement of tax deduction at source in case of corporations whose income is exempted under Section I0 (268B8) of the Incometax Act, 1961 - Exemption thereof CBDT has decided that since the corporations covered under Section 10(26888) satisfy the two conditions of Circular No. 4/2002 i.e. unconditional exemption of income under Section 10 and no statutory liability to file return of income under Section 139, any corporation whose income is exempted under Section 10(26BBB) of the Act will also be entitled to the benefit of the said Circular. Hence there would be no requirement for tax deduction at source from the payments made to such corporations since their income is anyway exempted under the Act vide Circular No. 7 of <strong>2015</strong> dated April 23, <strong>2015</strong>. Computation of Income and Disclosure Standards u/s. 145 notified by Government w.e.f. 1st April, <strong>2015</strong> Government notified Computation of Income and Disclosure Standards for purpose of Section 145, w.e.f. 1st April, <strong>2015</strong>. This notification described detailed information about method of Accounting and Income Computation and Disclosure Standard-I relating to Accounting Policies. The Central Government hereby notifies the income computation and disclosure standards as specified in the Annexure to be followed by all assessees, following the mercantile system of accounting, for the purposes of computation of income chargeable to income-tax under the head “Profit and gains of business or profession” or “ Income from other sources”. This notification shall come into force with effect from 1st day of April, <strong>2015</strong>, and shall accordingly apply to the assessment year 2016-17 and subsequent assessment years vide Notification No. 32/<strong>2015</strong>, F. No. 134/48/2010-TPL dated: 31st March, <strong>2015</strong>. Foreign Trade Highlights: Foreign Trade Policy <strong>2015</strong> -2020 A. SIMPLIFICATION & MERGER OF REWARD SCHEMES Export from India Schemes: 1. Merchandise Exports from India Scheme (MEIS) (a) Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding www.icmai.in MAY <strong>2015</strong> the MANAGEMENT ACCOUNTANT 99