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    Exemption for HUF distributions may not apply where clubbing rules apply, affecting taxability of co parcener receipts.
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    Deduction for bad debts allowed where income recognised under ICDS but not recorded in accounts is later irrecoverable.
    Where a debt included in income on the basis of Income Computation and Disclosure Standards but not recorded in the accounts becomes irrecoverable, Finance Act, 2016 permits the debt (or part) to be allowed as a deduction in the year it becomes irrecoverable and deems that the debt has been written off in the accounts for the purposes of the deduction.
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    Applicability of ICDS: timing of TDS entries determines whether expenditure is disallowable under TDS disallowance provisions.
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    ICDS compliance: prepare ICDS-based financials and reconciliations to ensure taxable income computation aligns with disclosure standards.
    Differences between accounting under ICDS and other accounting frameworks can materially affect taxable income and subsequent years' computations; taxpayers should quantify divergences and account for consequential tax adjustments. Practically, maintain parallel ICDS-based profit and loss and balance sheet statements and prepare a detailed reconciliation with primary accounting records to ensure all ICDS adjustments are considered. Auditors must certify that computation of total income complies with ICDS, making transparent documentation of adjustments and reconciliations necessary for audit certification and tax compliance.
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    Reversal of input tax credit: sale of exempt by products triggers reversal under VAT/GST credit rules.
    Reversal of input tax credit is triggered by the sale of goods produced incidentally during manufacture, not by their status as by products. The statutory credit regime aims to prevent double taxation by granting input credit for inputs used in manufacture, but the legislature determines the extent and conditions of credit. A provision that uses the terms 'goods' and 'sale' does not distinguish by products from final products, so where the incidental output is marketable and sold for consideration, reversal rules apply.
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    Capital gain valuation under section 50C on transfer of contractual rights challenged as inappropriate and commercially onerous.
    Application of section 50C to a transfer of rights under a power of attorney, where no possession or control of the immovable property passed and no stamp authority value was adopted, was contested; the assessing officer's adoption of an enhanced valuation for computing short term capital gains was regarded as inappropriate and characterised as harassment, and that addition was reversed on appeal.
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    Accounting policy change disclosure required when future material effect is expected; disclose at adoption and when it first becomes material.
    Change in accounting policies that has no material effect in the current previous year but is reasonably expected to have material effect later must be disclosed: (a) in the previous year in which the change is adopted; and (b) in the previous year in which the change has material effect for the first time.
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    Change in accounting policy: permitted only for reasonable cause and where AS 5 requires it or improves financial presentation.
    A change in accounting policy will be treated as reasonable if it meets the criterion established by AS 5: the change is permissible only where it is required by statute, necessary for compliance with an accounting standard, or results in a more appropriate presentation of the enterprise's financial statements.
    ManualsIncome Tax
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    Mark-to-market loss recognition barred under ICDS, allowed only if another ICDS or tax law permits.
    Mark-to-market and expected losses are not recognised under ICDS I unless another ICDS permits such recognition; the Accounting Standards Committee held that because anticipated profits are not recognised, parity requires that expected or mark-to-market losses also be excluded, while established tax-law precedent allows deduction for exchange fluctuation losses arising on revenue-purpose borrowings.
    ManualsIncome Tax
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    Disclosure of fundamental accounting assumptions required when Going Concern, Consistency or Accrual are not followed in tax reporting.
    ICDS I requires that where the Going Concern, Consistency and Accrual assumptions are followed no specific disclosure is required, but any departure from these fundamental accounting assumptions must be disclosed; the revised tax audit reporting format provides columns to record such disclosures.
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    Going concern assumption affects income computation and disclosure, requiring a different measurement basis if materially impinged.
    Going concern is the assumption that an assessee will continue operations and has no intent or necessity to liquidate or materially curtail business; it underpins periodic income computation and financial statements and applies in the absence of contrary information. Material uncertainties that cast doubt on going concern may impinge this assumption. ICDS I does not specify computation methods when going concern is not met; absent such mandate an assessee may follow the Framework for the Preparation and Presentation of Financial Statements and prepare statements on a different basis, affecting recognition, measurement and disclosure.
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    ICDS disclosure requirements must be reported in tax audit reports and reflected in amended income tax return schedules.
    ICDS require disclosure of accounting policies and ICDS adjustments; the net effect must be disclosed in the Return of Income. Disclosures required under ICDS shall be made in the tax audit report in Form 3CD for taxpayers subject to tax audit, and no separate disclosure regime exists for those not liable to tax audit; return forms were amended to include a schedule ICDS.
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    ICDS supremacy - where ICDS conflicts with CBDT circulars or press releases, the ICDS treatment prevails.
    Where ICDS provisions conflict with earlier CBDT circulars or press releases, the later ICDS provisions prevail for the period after they take effect; CBDT circulars and press releases are interpretative guidance binding on tax officers but not on taxpayers.
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    DTAA supremacy: ICDS governs income computation when the treaty is silent, non-conflicting, or specifies only tax rate.
    ICDS apply to non-residents claiming DTAA benefits only where the DTAA is silent, where there is no conflict between ICDS computation and treaty treatment, where the income falls outside the DTAA's scope, or where the DTAA fixes a tax rate but does not prescribe the method of computing the income, in which case ICDS governs computation.
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    Recognition of provisions under ICDS X requires a present obligation, probable outflow of resources, and a reliable estimate.
    Recognition of a provision under ICDS X requires a present obligation from a past event, a reasonably certain outflow of resources to settle the obligation, and a reliable estimate of the obligation amount; routine future operating costs must not be recognised as provisions.

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      AMENDMENTS IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975

      3 February, 2020

      Contents
      Rules & Regulations
      Plus +
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      Budget 2020-21 + FINANCE BILL, 2020

      AMENDMENTS

      A.

      Tariff rate changes for Basic Customs Duty [to be effective from 02.02.2020] * [Clause 115 (a) of the Finance Bill, 2020]

      Rate of Duty

      S.No.

      Heading, sub-heading, tariff item

      Commodity

      From

      To

       

       

      Food processing

       

       

      1.

      0802 32 00

      Walnuts, shelled

      30%

      100%

       

       

      Chemicals

       

       

      2.

      3824 99 00

      Other Chemical products and preparations of the chemical or allied industries, not elsewhere specified

      10%

      17.5%

       

       

      Footwear

       

       

      3.

      6401, 6402,

      6403, 6404, 6405

      Footwear

      25%

      35%

      4.

      6406

      Parts of footwear

      15%

      20%

       

       

      Household Items

       

       

      5.

      6911 10, 6911 90 20, 6911 90 90

      Tableware, kitchenware, water filters (of a capacity not exceeding 40 litres) and other household articles, of porcelain of china.

      10%

      20%

      6.

      6912 00 10, 6912 00 20, 6912 00 40, 6912 00 90

      Ceramic tableware, kitchen-ware, clay articles and other household articles

      10%

      20%

      7.

      7013

      Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or Similar purposes (other than that of heading 7010 or 7018)

      10%

      20%

      8.

      7323

      Table kitchen or other household articles and parts thereof, of iron or steel, iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel, including pressure cookers pans utensils, misc articles such as iron & steel wool, polishing pads, gloves etc.

      10%

      20%

      9.

      7418 10

      Table, kitchen or other household articles and parts thereof, of copper; pot scourers and scouring or polishing pads, gloves and the like, of copper.

      10%

      20%

      10.

      7615 10

      Table, kitchen or other household articles and parts thereof, of aluminum; pot scourer and scouring or polishing pads, gloves and the like, of aluminum.

      10%

      20%

      11.

      8301

      Padlocks and locks (key, combination or electrically operated) of base metal; Clasps and frames with clasps, incorporating locks of base metals; keys for any of the foregoing articles, of base metals (Other than lock of a kind used for automobiles.)

      10%

      20%

      12.

      9603

      Brooms, brushes, hand operated mechanical floor sweepers, not motorized, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; Squeegees (other than roller squeegees).

      10%

      20%

      13.

      9604 00 00

      Hand sieves and hand riddles.

      10%

      20%

      14.

      9615

      Combs, hair-slides and the like, hairpins curling pins, curling grips, hair curlers and the like other than those of heading 8516 and parts thereof.

      10%

      20%

      15.

      9617

      Vacuum flasks and other vacuum vessels, complete with cases; parts thereof other than glass inners.

      10%

      20%

      16.

      8414 51 10

      Table Fans

      10%

      20%

      17.

      8414 51 20

      Ceiling Fans

      10%

      20%

      18.

      8414 51 30

      Pedestal Fans

      10%

      20%

      19.

      8414 59 20

      Blowers, Portable

      10%

      20%

      20.

      8509 40 10

      Food Grinders

      10%

      20%

      21.

      8509 40 90

      Other grinders and Mixer

      10%

      20%

      22.

      8509 80 00

      Other Appliances

      10%

      20%

      23.

      8510 10 00

      Shavers

      10%

      20%

      24.

      8510 20 00

      Hair Clippers

      10%

      20%

      25.

      8510 30 00

      Hair-removing appliances

      10%

      20%

      26.

      8516 10 00

      Water heaters and immersion heaters

      10%

      20%

      27.

      8516 21 00

      Storage heating radiators

      10%

      20%

      28.

      8516 29 00

      Other electrical space heating apparatus

      10%

      20%

      29.

      8516 31 00

      Hair Dryers

      10%

      20%

      30.

      8516 32 00

      Other hair dressing apparatus

      10%

      20%

      31.

      8516 33 00

      Hand Drying apparatus

      10%

      20%

      32.

      8516 40 00

      Electric smoothing irons

      10%

      20%

      33.

      8516 60 00

      Other ovens, cookers, cooking plates, boiling rings, grillers and roasters

      10%

      20%

      34.

      8516 71 00

      Coffee and Tea Makers

      10%

      20%

      35.

      8516 72 00

      Toasters

      10%

      20%

      36.

      8516 79 10

      Electro-thermic fluid heaters

      10%

      20%

      37.

      8516 79 20

      Electrical or electronic devices for repelling insects

      10%

      20%

      38.

      8516 79 90

      Other electro-thermic appliances used for domestic purposes

      10%

      20%

      39.

      8516 80 00

      Electric heating resistors

      10%

      20%

       

       

      Precious Metals

       

       

      40.

      7118

      Coin

      10%

      20%

       

       

      Machinery

       

       

      41.

      8414 51 40

      Railway Carriage fans

      7.5%

      10%

      42.

      8414 51 90

      Other fans with a self-contained electric motor not exceeding 125W

      7.5%

      20%

      43.

      8414 59 10

      Air Circulator

      7.5%

      10%

      44.

      8414 59 30

      Industrial fans blowers and similar blowers

      7.5%

      10%

      45.

      8414 59 9

      Other industrial fans

      7.5%

      10%

      46.

      8414 30 00, 8414 80 11

      Compressor of Refrigerator and Air conditioner

      10%

      12.5%

      47.

      8419 89 10

      Pressure vessels

      7.5%

      10%

      48.

      8418 10 10

      Commercial type combined refrigerator freezers, fitted separate external doors

      7.5%

      15%

      49.

      8418 30 10

      Commercial freezer of chest type, not exceeding 800 litre capacity

      7.5%

      15%

      50.

      8418 30 90

      Other chest type freezers

      10%

      15%

      51.

      8418 40 10

      Electrical freezers of upright type, not exceeding 800 litre capacity

      7.5%

      15%

      52.

      8418 40 90

      Other freezers of upright type, not exceeding 800 litre capacity

      7.5%

      15%

      53.

      8418 50 00

      Refrigerating or freezing display counters, cabinets, Show-cases and the like

      7.5%

      15%

      54.

      8418 61 00

      Heat pumps other than air conditioning machines

      7.5%

      15%

      55.

      8418 69 10

      Ice making machinery

      7.5%

      15%

      56.

      8418 69 20

      Water cooler

      10%

      15%

      57.

      8418 69 30

      Vending machine, other than automatic

      10%

      15%

      58.

      8418 69 40

      Refrigerating equipment/devices used in leather industry

      7.5%

      15%

      59.

      8418 69 50

      Refrigerated farm tanks, industrial ice cream freezer

      7.5%

      15%

      60.

      8418 69 90

      Others (like freezers of capacity 800 litres and more etc.]

      7.5%

      15%

      61.

      8515 (except 8515 90 00)

      Welding and Plasma cutting machines

      7.5%

      15%

       

       

      Other Electronic goods

       

       

      62.

      8504 40 (except 8404 40 21)

      Static Converters

      15%

      20%

      63.

      8504 40 21

      Dip bridge rectifier

      10%

      20%

      64.

      8517 70 10

      Populated, loaded or stuffed printed circuit boards

      10%

      20%

       

       

      Automobile and automobile parts

       

       

      65.

      8421 39 20, 8421 39 90

      Catalytic Convertor

      10%

      15%

       

       

      Furniture Goods

       

       

      66.

      9401

      Seats and parts of seats (other than aircraft seats and their parts)

      20%

      25%

      67.

      9403

      Other Furniture and parts thereof

      20%

      25%

      68.

      9404

      Mattress supports: Articles of bedding and similar furnishing

      20%

      25%

      69.

      9405

      Lamps and lighting fittings including searchlights and spotlights and pads thereof; Illuminated signs, illuminated name plates and the like, having a permanently fixed light source, and parts thereof (except solar lantern and solar lamps).

      20%

      25%

       

       

      Toys

       

       

      70.

      9503

      Tricycles, scooters, pedal-cars and similar wheeled-toys; dolls' carriages; dolls; other toys; reduced-Size (“scale”) models and similar recreational models, working or not; puzzles of all kinds

      20%

      60%

       

       

      Stationary items

       

       

      71.

      8304 00 00

      Filing, cabinets. card-index cabinets, paper-trays, paper rests, pen trays, office-stamp stands and similar office or desk equipment of base metal, Other than office furniture of heading 9403

      10%

      20%

      72.

      8305

      Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal

      10%

      20%

      73.

      8310

      Sign-plates, name-plates, address-plates and similar plates, numbers, letters and other symbols, of base metal, excluding those of heading 9405

      10%

      20%

       

       

      Miscellaneous

       

       

      74.

      6702

      Artificial Flowers

      10%

      20%

      75.

      7018 10 20

      Glass Beads

      10%

      20%

      76.

      8306

      Bells, gongs, statuettes, trophies and like, non-electric of base metal; statuettes and other ornaments of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal.

      10%

      20%

      B.

      New entries added to the First Schedule [to be effective from 02.02.2020] * [Clause 115(b) of the Finance Bill, 2020]

      S. No

      Tariff Item

      Description

      Tariff Rate

      Effective rate

      1.

      8414 51 50

      Wall fans

      20%

      20%

      2.

      8529 90 30

      Open cell for television set

      15%

      0%

      3.

      8541 40 11

      Solar cells, not assembled

      20%

      0%

      4.

      8541 40 12

      Solar cells, assembled in modules or made up in panels

      20%

      0%

      *Will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

       


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      Budget 2020-21 + FINANCE BILL, 2020

      Topics

      ActsIncome Tax