BiyaniSir-Amendments For CAInter Tax - Nov20

EXCEL COMMERCE ACADEMY PRIVATE LIMITED,
JODHPUR
UPDATE FOR CA (Intermediate / IPC) for Nov, 2020
INDEX
Part Coverage Page No.
(A) - Amendments in DT for May 2020
A-1 Already discussed in Video Classes and included in my books 2 – 12
A-2 Not discussed in Video Classes and not included in my books 13 – 22
(B) - Amendments in IDT for May 2020
B-1 Already discussed in Video Classes and included in my books 23
B-2 Not discussed in Video Classes and not included in my books 24 – 35

(C) – How to attend Paper in Exam.
C How to attend Paper in Exam. 36
(D) – Amendments for Nov. 2020
D-1 Amendments relating to DT not discussed in Video Classes 37-38
D-2 Amendments relating to IDT not discussed in Video Classes 39-51
With Best Wishes – BM Biyani, B.Com, LLB, FCA, CS

For any query / suggestion / feedback, do feel free to contact
WhatsApp # 9414130248
Lectures of Biyani Sir 1 WhatsApp # 9414130248

PART “A-1”
COMPUTATION OF TOTAL INCOME OF INDIVIDUAL

Total Income is computed as under:
Taxable income from salary Section 15 to 17 XXX

Taxable income from House-Property Section 22 to 27 XXX
Taxable income from B/P/V Section 28 to 44DB XXX
Taxable income from Capital Gain Section 45 to 55A XXX
Taxable income from Other Sources Section 56 to 59 XXX
Gross Total Income XXX
Less: Deductions under Chapter VI-A Section 80C to 80U XXX
Total Income XXX
Rounded off (in the nearest multiple of Rs. 10/-) Section 288A XXX
While computing total income –
(i) Only those receipts / inflows which are covered within the definition of “income” u/s 2(24) shall be
included. Receipts / inflows which are not outside the definition of “income” shall not be included.
(ii) Only those incomes which fall within the “Scope of total income” u/s 5 to 9 shall be included. Incomes
which are outside the “Scope of total income” shall not be included.
(iii) Incomes which are exempted under Chapter III (i.e. section 10 to 13B) shall not be included.
(iv) Clubbable incomes shall be included under the respective heads as per section 60 to 65.
(v) Undisclosed incomes shall be aggregated under the respective heads as per section 68 to 69D, and
(vi) Losses shall be set off / carried forward as per section 70 to 80.
COMPUTATION OF TAX LIABILITY OF INDIVIDUAL

The tax liability shall be computed in 3 Steps –
(i) Step-1: Regular tax
(ii) Step-2: Alternate Minimum (AMT)
(iii) Step-3: Tax liability
Step – 1 : Regular Tax
Basic Tax on special incomes @ special rates XXX
Basic Tax on remaining income @ normal rates XXX
(Note - Agricultural income shall be considered for rate purpose)
Total Basic Tax XXX
Less: Rebate u/s 87A If allowable XXX
Add : Surcharge If applicable XXX
Less: Marginal relief of surcharge (MRS) If allowable XXX
Basic tax + Surcharge XXX

Add: Health & Education Cess XXX
Tax before Relief XXX
Less: Relief u/s 89 If allowable XXX
REGULAR TAX XXX
BASIC TAX ON SPECIAL INCOMES @ SPECIAL RATES:

Certain incomes are chargeable @ special rates. Such incomes and special rates are given below:
Section Assessee Special Income AY 2019-20 AY 2020-21
111A Any STCG on transfer of (i) 15% 15%
equity shares, or (ii)
equity oriented mutual
funds, or (iii) units of a
business trust which
has suffered STT
112 Any LTCG 10% / 20% 10% / 20%
(other than LTCG
covered u/s 112A)
112A Any LTCG on transfer of (i) First 1,00,000 – 0% First 1,00,000 – 0%
equity shares, or (ii) Extra – 10% Extra – 10%
funds, or (iii) units of
has suffered STT
115BB Any 7 incomes (i.e. casual 30% 30%
incomes)
115BBDA Specified persons Aggregate dividend 10% 10%
[i.e. any person other from one or more
domestic companies
than a domestic
covered u/s
company or a fund /
2(22)(a),(b),(c),(d) in
trust / institution excess of Rs. 10,00,000
covered u/s 10(23C) in one previous year
or 12AA]
115BBE Any Undisclosed income u/s 60% 60%
68 to 69D
BASIC TAX ON NORMAL INCOMES CHARGEABLE @ NORMAL RATES:

Incomes, other than special income taxable @ special rates, shall be taxable at the normal rates:
AY 2019-20 AY 2020-21
Assessee
Income Rate Income Rate
Normal individual– First 2,50,000 Nil First 2,50,000 Nil
(i.e. other than those individuals who 2,50,001 to 5,00,000 5% 2,50,001 to 5,00,000 5%
are covered under special categories 5,00,001 to 10,00,000 20% 5,00,001 to 10,00,000 20%
discussed below)
Balance 30% Balance 30%
Senior resident individual-- First 3,00,000 Nil First 3,00,000 Nil
(a resident aged 60 years or more but 3,00,001 to 5,00,000 5% 3,00,001 to 5,00,000 5%
less than 80 years at any time during 5,00,001 to 10,00,000 20% 5,00,001 to 10,00,000 20%
the previous year)
Very senior resident individual- First 5,00,000 Nil First 5,00,000 Nil
(a resident aged 80 years or more at 5,00,001 to 10,00,000 20% 5,00,001 to 10,00,000 20%
any time during the previous year)
REBATE U/S 87A:

AY 2019-20 AY 2020-21
 This rebate is allowed to a resident individual  This rebate is allowed to a resident
whose total income does not exceed Rs. individual whose total income does not
3,50,000/-. exceed Rs. 5,00,000/-.
 The amount of rebate shall be Rs. 2,500/- or  The amount of rebate shall be Rs. 12,500/- or
Basic tax on Total Income, whichever is less. Basic tax on Total Income, whichever is less.
In other words, the maximum amount of rebate In other words, the maximum amount of
shall be Rs. 2,500/-. rebate shall be Rs. 12,500/-.
 The rebate is not allowed against tax casual  The rebate is not allowed against tax casual
income covered u/s 115BB, dividend income income covered u/s 115BB, dividend income
covered u/s 115BBDA and undisclosed income covered u/s 115BBDA and undisclosed
covered u/s 115BBE and LTCG taxable u/s income covered u/s 115BBE and LTCG
112A. In short, the rebate shall be allowed taxable u/s 112A. In short, the rebate shall be
against tax on STCG u/s 111A, LTCG u/s 112 allowed against tax on STCG u/s 111A,
and Normal income. LTCG u/s 112 and Normal income.
SURCHARGE:
AY 2019-20 AY 2020-21
Total Income Rate Total Income Rate
Upto Rs. 50 lakh Nil Upto Rs. 50 lakh Nil
Exceeding Rs. 50 lakh but upto Rs. 1 Crore 10% Exceeding Rs. 50 lakh but upto Rs. 1 Crore 10%
Exceeding Rs. 1 crore but upto Rs. 2 Crore 15%
Exceeding Rs. 1 crore 15% Exceeding Rs. 2 crore but upto Rs. 5 Crore 25%
Exceeding Rs. 5 crore 37%
MARGINAL RELIEF OF SURCHARGE (MRS):

AY 2019-20 AY 2020-21
Marginal relief of surcharge (MRS) is allowed in Marginal relief of surcharge (MRS) is allowed in
appropriate situations. appropriate situations.
CESS:
AY 2019-20 AY 2020-21
Health & Education Cess shall be 4%. Health & Education Cess shall be 4%.
ALERT:
In the case of undisclosed income covered u/s 68 to 69D, the rate of basic tax shall be 60% u/s 115BBE
and the rate of surcharge shall be 25% for all assessees (the rates of surcharge discussed above shall
not apply). Hence the effective tax rate on undisclosed income shall be as under:
AY 2019-20 AY 2020-21
Effective tax rate shall be 60% + 25% surcharge + Effective tax rate shall be 60% + 25% surcharge +
4% cess = 78%. 4% cess = 78%.

Step – 2: Alternate Minimum Tax (AMT)
(a) Applicability –
AMT provision is applicable to an individual who has claimed Exemption u/s 10AA or Income-related
deduction u/s 80JJAA, 80QQB, 80RRB or Deduction u/s 35AD and the “adjusted total income”
exceeds Rs. 20 Lakh.
(b) How to compute “Adjusted Total Income” –

“Adjusted Total Income” = Total Income (+) Exemption u/s 10AA (+) Income-related deduction u/s
80JJAA, 80QQB, 80RRB (+) Deduction u/s 35AD (-) Depreciation allowable u/s 32 on the assets for which
deduction has been claimed u/s 35AD
(c) How to compute AMT –

AMT will be computed as follows—
Calculation Relevant provision Amount
Basic tax @ 18.50% of “Adjusted Total Income” 115JC XXX
Add: Surcharge If applicable XXX
Less: Marginal relief of surcharge (MRS) If allowable XXX
Add: Health & Education Cess @ 4% XXX
AMT XXX
Surcharge:
Surcharge is payable as under:
If the Adjusted Total Income is upto Rs. 50 lakh No surcharge
If the Adjusted Total Income exceeds Rs. 50 lakh but upto Rs. 1 Crore 10% of basic tax
If the Adjusted Total Income exceeds Rs. 1 crore but upto Rs. 2 Crore 15% of basic tax
If the Adjusted Total Income exceeds Rs. 2 crore but upto Rs. 5 Crore 25% of basic tax
If the Adjusted Total Income exceeds Rs. 5 crore 37% of basic tax
AMT CREDIT u/s 115JD

Section 115JD provides for a scheme of AMT credit. The provisions of this section are as follows—
(1) The credit shall arise in the year in which AMT exceeds Regular Tax. The amount of credit shall be
AMT (-) Regular Tax.
(2) The credit shall be allowed / utilised in the year in which Regular Tax exceeds AMT. The
maximum allowable credit shall be to the extent of Regular Tax (-) AMT.
The AMT credit can be carried forward to next 15 years after which the credit shall lapse.
Step – 3: Tax Liability
Tax liability [Higher of (i) Regular Tax or (ii) AMT] XXX
Less: Prepaid taxes Advance Tax, TDS, TCS, XXX
Self-assessment u/s 140A
Balance payable / Refundable XXX
Rounding off Section 288B XXX
The amount payable / refundable shall be rounded off
to the nearest multiple of ten rupees.

Example:
Mr. A provides following information. Compute his total income, tax liability and AMT Credit to be C/F:
Taxable Income from SEZ unit (before claiming exemption u/s 10AA) 40,00,000
Exemption allowable u/s 10AA 32,00,000
Profit of specified business covered u/s 35AD (before claiming deduction u/s 35AD) 1,05,00,000
Deduction allowable u/s 35AD 65,00,000
Depreciation allowable u/s 32 on assets of 35AD Business 6,50,000
Royalty income from books (before deduction u/s 80QQB) 1,00,000
Deduction allowable u/s 80QQB 30,000
Solution:
COMPUTATION OF TOTAL INCOME
Income from BP:
Taxable Income from SEZ unit (before exemption u/s 10AA) 40,00,000
Less: Exemption allowable u/s 10AA 32,00,000 8,00,000
Profit of specified business covered u/s 35AD (before deduction u/s 35AD) 1,05,00,000
Less: Deduction allowable u/s 35AD 65,00,000 40,00,000
Income from Other Sources:
Royalty income from books (before deduction u/s 80QQB) 1,00,000
GROSS TOTAL INCOME 49,00,000
Less: Deductions u/s 80QQB 30,000
TOTAL INCOME 48,70,000
COMPUTATION OF TAX LIABILITY

Step-1 – Regular Tax
Basic tax on 48,70,000 @ Slab rates 12,73,500
Add Health & Education Cess @ 4% 50,940
Regular Tax 13,24,440
Step-2 – AMT
Total Income 48,70,000
Add Exemption u/s 10AA 32,00,000
Add Deduction u/s 35AD 65,00,000
Less Depreciation u/s 32 on assets of 35AD Business 6,50,000
Add Deduction u/s 80QQB 30,000
Adjusted Total Income 1,39,50,000
Basic Tax @ 18.50% of 1,39,50,000 25,80,750
Add Surcharge @ 15% because adjusted total income exceeds Rs. 1 Crore 3,87,113
Less MRS Nil
29,67,863
Add Health & Education Cess @ 4% of 29,67,863/- 1,18,715
AMT 30,86,578
Step-3 – Tax liability

Regular Tax or AMT whichever is HIGHER [Higher of 13,24,440 or 30,86,578] 30,86,578
R/O u/s 288B 30,86,580
AMT credit to be C/F to next 15 Years

AMT 30,86,580
Regular tax 13,24,440
AMT Credit to carried forward 17,62,140
SECTIONWISE AMENDMENTS
Section 9 Income deemed to accrue or arise in India
New law Income arising outside India, being any sum of money paid without consideration, by
an Indian resident person to a Foreign Company or a Non-resident Non-corporate
(FC / NRNC) on or after 05.07.2019, shall be deemed to accrue or arise in India if the
same is chargeable to tax u/s 56(2)(x) i.e. if the aggregate of such sum received by
the FC / NRNC exceeds Rs. 50,000.
Example Mr. Modi, goes to USA and gives a gift of Rs. 11,00,000 to Mr. Trump. Mr. Trump is
non-resident in India.
In this case, the gift of Rs. 11,00,000 shall be deemed to accrue or arise in India u/s
9. Hence Mr. Trump shall be taxable in India.
Section 10(12A) Exemption to withdrawal from NPS
Old law If an assessee withdraws amount from NPS on account of closure or opting out of
NPS A/c, 40% of receipt was exempted and remaining 60% portion was taxable.
New law 60% of receipt shall be exempted and remaining 40% portion shall be taxable.
Section 16 Standard deduction from Gross Salary
Old law Standard deduction was Gross Salary or Rs. 40,000, whichever is less.
New law Standard deduction shall be Gross Salary or Rs. 50,000, whichever is less.
Section 23(4) Nil annual value of SOP(Residence) or NOP
Old law If the assessee was having multiple houses for SOP(R) or NOP u/s 23(2), he could
select any one house u/s 23(2) and all other houses were deemed to be u/s 23(1).
New law If the assessee is having multiple houses for SOP(R) or NOP u/s 23(2), he could
select any two houses u/s 23(2) and all other houses shall be deemed to be u/s
23(1).
Example Mr. A is having 3 houses for SOP(R). He has following options:
(i) Option-1 : House 1 u/s 23(2) + House 2 u/s 23(2) + House 3 u/s 23(1)
(ii) Option-2 : House 1 u/s 23(2) + House 2 u/s 23(1) + House 3 u/s 23(2)
(iii) Option-3 : House 1 u/s 23(1) + House 2 u/s 23(2) + House 3 u/s 23(2)
Section 23(5) Nil annual value of House Property held as stock-in-trade
Old law Where the house property or part of the property is held as stock-in-trade and such
property or part of the property is not let during the whole or any part of the
previous year, the annual value of such property or part of the property for the
period upto 1 year from the end of the financial year in which the certificate of
completion of construction of property is obtained from the competent
authority, shall be taken to be Nil.
New law The time period has been extended from 1 year to 2 years.
Example A Ltd., a builder has constructed a house property, the construction of which was
completed on 15.12.2019. It has obtained a certificate of completion from the
competent authority on 06.05.2020. Discuss the treatment under Income from HP
head.
Answer:
In this case, section 23(5) shall apply and the treatment shall be as under:

(a) The annual value of the house property till 31.03.2023 (2 years from end of the
financial year in which the certificate of completion of construction of property
is obtained from the competent authority) shall be taken as Nil, provided the
house has not been let out.
(b) W.e.f. 01.04.2023, the house property shall be taxable u/s 23(1). The assessee
shall pay tax on Expected Rent (even if the property is not let out).
Section 24(b) Deduction of Interest
New law (1) The aggregate deduction of interest in respect of two houses treated as SOP(R)
or NOP u/s 23(2) shall not exceed the limit of Rs. 30,000 / Rs. 2,00,000.
(2) If the assessee has taken two loans for house properties treated u/s 23(2) out of
which one has limit of Rs. 30,000 and other has limit of Rs. 2,00,000; the
aggregate deduction shall not exceed Rs. 2,00,000.
Example Mr. A is owner of two house properties, both occupied for self-residence. The houses
were constructed on 03.08.2015 by taking loans from State Bank of India and the
interest for the previous year 2019-20 were Rs. 90,000 and Rs. 1,30,000 respectively
for 1st House and 2nd House.
In this case, the total interest is Rs. 90000 + Rs. 130000 = 220000 but the aggregate
deduction of interest allowable u/s 24(b) for SOP(R) shall be restricted to Rs. 200000.
Section 35AD Several provisions
Section 40A(3)
Section 40A(3A)
Section 43(1)
Section 43CA
Section 44AD
Section 50C
Section 56(2)(x)
Section 80JJAA
Old law These sections require payment / receipt through A/c Payee Cheque or A/c Payee
Draft or ECS.
New law In addition to A/c Payee Cheque or A/c Payee Draft or ECS, “such other electronic
mode as may be prescribed” has also been permitted.
Example Payment / receipt through new digital modes such as BHIM, UPI, Credit Cards, Debit
Cards, Net Banking, IMPS, RTGS and NEFT shall be permitted.
Section 40(a)(i) Disallowance due to TDS default
New law If there is a default in deduction or payment of TDS out of any sum payable outside
India or to a foreign company or to a non-resident non-corporate but the Payer is not
deemed to be in default u/s 201(1), then it shall be deemed that the Payer has
deducted and paid TDS on the date of furnishing of Return by the Payee.
Effect:
The relevant expenditure disallowed in earlier year, shall be re-allowed as deduction
to the payer in subsequent year (i.e. in the year in which the payee has furnished his
Return).
Please note Such provision is already existing in section 40(a)(ia).
Please note The amendment in section 40(a)(i) and 201(1) should be studied simultaneously.

Section 43B Deduction of certain expenses on payment basis
New law Interest on any loan or borrowing payable to a “Deposit taking Non-Banking Financial
Company (NBFC)” or a “Systematically important non-deposit taking Non-Banking
Financial Company (NBFC)”, shall be covered u/s 43B.
“Deposit taking NBFC” means a NBFC which is accepting or holding public

deposits and and is registered with the RBI.
“Systematically important non-deposit taking NBFC” means a NBFC which is not

accepting or holding public deposits but having total assets of at least 500 crore
rupees as per the last audited Balance-Sheet and is registered with RBI.
Special provision for conversion of unpaid interest into a new loan:

If the unpaid interest is converted into a new loan by the Deposit taking NBFC /
Systematically important non-deposit taking NBFC, such conversion into a new loan
shall not be treated as payment of interest and hence disallowance would be
attracted. However, subsequently as and when the new loan is paid, it shall be
deemed that the assessee has paid the due interest and deduction shall be allowed.
Section 10(34A), Capital gain on buy-back of shares
46A, 115QA
New law In the case of buy-back of shares by a company from its shareholders, the income-
tax treatment shall be as under:
Situation Taxability in the hands of Taxability in the hands of
company shareholder
If a domestic company The company shall be The shareholders shall be
buys back shares liable to pay Income- exempted u/s 10(34A).
Distribution Tax u/s 115QA
to 115QC.
If a foreign company buys No tax on company. The shareholder shall be
back shares liable to capital gain tax u/s
46A. The taxable gain
shall be computed as per
normal procedure of
section 48. The amount
received from company
shall be treated as FVC.
If a domestic company or - do - - do -
foreign company buys
back specified securities
(i.e. ESOPs or other
notified securities)
Section 48 Cost Inflation Index for Capital Gain
New law The cost inflation index for financial year 2019-20 shall be 289.
Section 54 Exemption for investment in residential house property
Old law The new investment can be made in only one residential house. If the assessee
makes investment in more than one residential house, the exemption shall be
restricted to one residential house (as per choice of assessee).

New law If the capital gain does not exceed Rs. 2 crore, the assessee has option to purchase
or construct two residential houses in India. If the assessee has once exercised this
option, he shall not be subsequently entitled to exercise this option for the same or
any other assessment year. In short, this option shall be allowed only once in the life
time of assessee.
Section 80C Deduction of certain investments
Old law Contribution to Tier-II Account of NPS is not eligible for deduction under any section.
New law Contribution made by a Central Govt. employee to additional account under NPS
[i.e. Tier-II Account of NPS] referred to in section 80CCD for a fixed period of not
less than 3 years, shall be eligible for deduction u/s 80C.
Section 80CCD(2) Deduction of NPS
Old law In the case of a salaried employee, the employer’s contribution to NPS is also eligible
for deduction u/s 80CCD. But the maximum limit is 10% of salary.
New law The maximum limit shall be:
(a) 14% of salary in case of contribution made by an employer which is Central
Govt.
(b) 10% of salary in case of contribution made by any other employer
Section 80EEA Deduction of interest on housing loan
New law The provisions of this section are as under:
Eligible assessee:
An Individual not eligible to claim deduction u/s 80EE.
Why deduction?
Interest payable on loan taken from a financial institution for acquisition of a
residential house property.
Here “financial institution” means a bank or a housing finance company.
Conditions:
 The loan must be sanctioned by the financial institution during 01.04.2019 to
31.03.2020 (i.e. PY 2019-20).
 The amount of loan – No condition.
 The stamp duty value of residential house property should not exceed Rs. 45
lakh.
 The assessee should not own any residential house property on the date of
sanction of loan.
How much deduction?
Maximum deduction shall be Rs. 1,50,000/-.
Extra points:
(1) Interest on house loan is deductible u/s 24(b) itself. Hence what is extra-utility of
section 80EEA?
Answer: It is true that section 80EEA is not useful in the case of a property
covered u/s 23(1) or 23(5) because the assessee can full deduction u/s 24(b)
itself. But the 80EEA shall be useful if the property is covered u/s 23(2), because
in the case of a property covered u/s 23(2), the maximum allowable deduction
u/s 24(b) is Rs. 2,00,000/- and the deduction upto Rs. 1,50,000/- u/s 80EEA
shall be over and above the deduction upto Rs. 2,00,000/- u/s 24(b). Hence the
assessee should first claim deduction u/s 24(b) upto Rs. 2,00,000/- and

thereafter the remaining interest, if any, should be claimed u/s 80EEA [upto a
maximum of Rs. 1,50,000/-]. In short, in the case of a property covered u/s
23(2), the assessee can claim deduction upto Rs. 3,50,000 [Maximum upto Rs.
2,00,000 u/s 24(b) + Maximum upto Rs. 1,50,000 u/s 80EEA], provided all
conditions of section 80EEA are satisfied.
(2) Care must be taken that the same amount is not doubly claimed, once u/s 24(b)
and again u/s 80EEA because it is specifically restricted in section 80EEA.
(3) Section 80EEA prescribes that the loan must be taken for “acquisition” of a
residential property. There is no definition of “acquisition”. Thus, although it is
very much clear that the section is not applicable if the loan is taken for repair or
renovation of property, yet a doubt arises as to whether the section 80EE shall
apply to purchase of house or construction as well. It appears that the intention
of Govt. is to apply section 80EEA only in case of purchase of a residential
house property and not in case of construction of a residential house property.
Please note Now we have two sections for deduction of interest on housing loan, viz. section
80EE and 80EEA. Hence we shall make a comparative analysis of these two
sections for a quick understanding.
Section 80EE Vs. Section 80EEA
Provision Section 80EE Section 80EEA
Condition – 1 Deduction allowed to an Deduction allowed to an
Individual Individual who is not eligible
to claim deduction u/s 80EE.
Condition – 2 The assessee must take loan for Same condition
acquisition of a residential house
property
Condition – 3 Loan must be taken from a Same condition
financial institution
Condition – 4 Loan must be sanctioned during 01.04.2019 to 31.03.2020
01.04.2016 to 31.03.2017
Condition – 5 Sanctioned loan should not No such condition
exceed Rs. 35 lakh
Condition – 6 Value of residential house should Stamp duty value of house
not exceed Rs. 50 lakh should not exceed 45 lakh.
Condition – 7 Assessee should not own any Same condition
residential house on the date of
sanction of loan
Maximum Rs. 50,000 Rs. 1,50,000
deduction
Please note Maximum deduction upto Rs. Maximum deduction upto Rs.
2,00,000 shall be claimed u/s 2,00,000 shall be claimed u/s
24(b). Thereafter, extra interest 24(b). Thereafter, extra
shall be claimed u/s 80EE. interest shall be claimed u/s
80EEA.
Effective Rs. 2,00,000 u/s 24(b) + Rs. 2,00,000 u/s 24(b) +
maximum Rs. 50,000 u/s 80EE Rs. 1,50,000 u/s 80EEA
deduction
= Rs. 2,50,000. = Rs. 3,50,000.

Section 80EEB Deduction of interest on loan taken for electric vehicle
New law The provisions of this section are as under:
Eligible assessee:
Individual
Why deduction?
Interest payable on loan taken from a financial institution for purchase of an electric
vehicle.
Here “financial institution” means a bank, a deposit-taking NBFC or a systematically
important non-deposit taking NBFC. Please refer section 43B for meaning of a
“deposit-taking NBFC” or a “systematically important non-deposit taking NBFC”.
Conditions:
The loan must be sanctioned by the financial institution during 01.04.2019 to
31.03.2023 (i.e. PY 2019-20 to 2022-23).
How much deduction?

Maximum deduction shall be Rs. 1,50,000/-.
Meaning of “electric vehicle”:

“Electric vehicle” means a vehicle which is powered exclusively by an electric motor
whose traction energy is supplied exclusively by traction battery installed in the
vehicle and has such electric regenerative braking system, which during braking
provides for the conversion of vehicle kinetic energy into electrical energy.

PART “A-2”
Surcharge Reduction in surcharge on STCG u/s 111A and LTCG u/s 112A
Background We have studied earlier that in the case of individuals, HUFs, AJPs, AOPs and BOIs,
the surcharge rates for AY 2020-21 have been increased substantially as under:
AY 2019-20 AY 2020-21
Upto Rs. 50 lakh Nil Upto Rs. 50 lakh Nil
Exceeding Rs. 50 lakh but 10% Exceeding Rs. 50 lakh but 10%
upto Rs. 1 Crore upto Rs. 1 Crore
Exceeding Rs. 1 crore but 15%
Exceeding Rs. 1 crore 15% upto Rs. 2 Crore
upto Rs. 5 Crore
Further Due to this “Kamartod increase”, there was a serious protest from public, particularly
amendment the stock markets of India. Hence the increased surcharge of 25% and 37% had
been withdrawn by Govt. on the STCG taxable u/s 111A and LTCG taxable u/s 112A.
In simple words, the surcharge @ 25% / 37% shall be applied on “Total Income
excluding the STCG u/s 111A and LTCG u/s 112A”.
Examples Components of Total Income Surcharge
STCG u/s LTCG u/s Other Total Income On STCG Surcharge
111A 111A income u/s 111A + on Normal
LTCG u/s Income
112A
1 20 lakh 15 lakh 10 lakh 45 lakh Nil Nil
2 30 lakh 25 lakh 40 lakh 95 lakh 10% 10%
Section 32 Depreciation
New law Depreciation rates have been increased on motor vehicles acquired during
23.08.2019 to 31.03.2020. Accordingly, the depreciation rates shall be as under:
Type of motor vehicle Acquired upto 23.08.2019 to
22.08.2019 31.03.2020 and put
to use upto
31.03.2020
Motor cars 15% 30%
Motor buses, motor lorries and 30% 45%
motor taxies used in a business of
running them on hire

Section 139(1) Compulsory filing of Return of Income
Old law Every person, being an individual, HUF, AOP, BOI or AJP, if his total income before
giving effect to Deductions under Chapter VI-A, exceeds the maximum amount
not chargeable to tax (MANCT), shall compulsorily submit his ITR or ITR of such
other person, in a prescribed form on or before due date.
New law Every person, being an individual, HUF, AOP, BOI or AJP, if his total income before
giving effect to Deductions under Chapter VI-A or Exemption u/s 54 to 54GB,
exceeds the maximum amount not chargeable to tax (MANCT), shall compulsorily
submit his ITR or ITR of such other person, in a prescribed form on or before due date.
Section 139(1) Compulsory filing of Return of Income
Old law We have discussed following 5 categories of persons who are required to file return of
income compulsorily:
Category Person
1 Company
2 Firm / LLP
3 Ordinary residents having assets located outside India
4 Individual, HUF, AJP, AOP or BOI whose total income before giving
effect to Deductions under Chapter VI-A or Exemption u/s 54 to
54GB, exceeds the maximum amount not chargeable to tax
(MANCT)
5 Every person (other than a person covered under any of the above
categories), if his total income or the total income of any other
person in respect of whom he is chargeable to tax, exceeds the
maximum amount not chargeable to tax (MANCT),
New law Now a new category (we may call “6th Category”) is also added according to which any
person who is not required to furnish a return any of the first 5 categories but who,
during the previous year,—
(i) has deposited an amount or aggregate of the amounts exceeding Rs. 1 Crore in
one or more current accounts maintained with a banking company or a co-
operative bank, or
(ii) has incurred expenditure of an amount or aggregate of the amounts exceeding
Rs. 2 lakh for himself or any other person for travel to a foreign country, or
(iii) has incurred expenditure of an amount or aggregate of the amounts exceeding
Rs. 1 lakh towards consumption of electricity, or
(iv) fulfills such other conditions as may be prescribed,
shall furnish ITR, in a prescribed form on or before due date.
Section 139A PAN
New law Certain amendments have been made for inter-changeability of PAN and Aadhar
Number, as under:
139A(5E):
Every person who is required to furnish / intimate / quote his PAN, may furnish /
intimate / quote his Aadhar Number if he -
(a) has not been allotted a PAN but possesses the Aadhaar Number and such person
shall be allotted a PAN in such manner as may be prescribed, or
(b) has been allotted a PAN and has intimated his Aadhaar Number to prescribed
authority in accordance with the requirement under section 139AA(2) [In other
words – the person has linked his Aadhar Number and PAN].

139(6A):
Every person entering into any such transaction as is prescribed, shall quote his PAN
or Aadhaar Number, in the documents pertaining to such transactions and also
authenticate such PAN or Aadhaar Number.
139A(6B):
Every person receiving any document relating to the transactions referred to in sub-
section (6A), shall ensure that PAN or Aadhaar Number, as the case may be, has been
duly quoted in such document and also ensure that such PAN or Aadhaar Number is
so authenticated.
Meaning “Authentication”:
“Authentication” means the process by which the PAN or Aadhaar Number alongwith
demographic information or biometric information of an individual is submitted to the
income-tax authority or such other authority or agency as may be prescribed for its
verification and such authority or agency verifies the correctness, or the lack thereof,
on the basis of information available with it.
Rule 114:
Following amendment have been made in Rule 114 in order to support the above
amendments in section 139A:
(a) Any person who has not been allotted a PAN but possesses the Aadhaar Number
and has furnished / intimated / quoted his Aadhaar Number in accordance with
section 139A(5E), shall be deemed to have applied for allotment of PAN and he
shall not be required to apply for PAN or submit any document for allotment of
PAN.
(b) Any person who has not been allotted a PAN but possesses the Aadhaar may
apply for allotment of PAN by intimating Aadhar Number and he shall not be
required to submit any document for allotment of PAN.
Section 139AA Intimating Aadhar Number
Old law Every person who has been allotted PAN as on 01.07.2017 and who is eligible to
obtain Aadhar Number, shall intimate his Aadhar Number to the prescribed authority of
Income-tax Department on or before 31.12.2019 (Practically … we say “linking of
Aadhar Number with PAN”).
If such person fails to intimate the Aadhar Number, the PAN allotted to him shall be
deemed to be invalid and other provisions of the Act shall apply, as if such person has
not applied for allotment of PAN.
New law Every person who has been allotted PAN as on 01.07.2017 and who is eligible to
Income-tax Department on or before 31.12.2019
If such person fails to intimate the Aadhar Number, the PAN allotted to him shall be
made inoperative after 31.12.2019.
Section 194A TDS out of interest other than interest on securities
New law The threshold limit of TDS has been increased from Rs. 10,000 to Rs. 40,000. The old
limits and new limits are given below:

Situation Old Limit New Limit
Where interest is paid / Normally the threshold Normally the threshold
credited by (i) a bank, (ii) a shall be Rs. 10,000/-. shall be Rs. 40,000/-.
co-operative bank, or (iii) However, if the payee is a However, if the payee is
Post Office senior resident, the a senior resident, the
threshold shall be Rs. threshold shall be Rs.
50,000. 50,000.
Where interest is paid on 50,000 50,000
compensation amount
awarded by the Motor
Accidents Claims Tribunal
(MACT)
Any other case 5,000 5,000
Section 194DA TDS out of payment under life insurance policy
Old law TDS rate was 1%.
New law TDS rate shall be 5%.
Memorandum to Finance Bill, 2019:
It is also clarified in the Memorandum to Finance Bill, 2019 that the TDS u/s 194DA
shall be on “income component” and not on “gross payment under policy”. Here
“income component” means “gross payment under insurance policy (-) total premium
paid by the policy holder.
Section 194-I TDS out of rent
Old law The threshold limit of TDS was Rs. 1,80,000 in a year.
New law The threshold limit of TDS shall be Rs. 2,40,000 in a year.
Section 194-IA TDS out of payment of consideration for purchase of immovable property
New law “Consideration for transfer of immovable property” shall include all charges of the
nature of club membership fee, car parking fee, electricity or water facility fee,
maintenance fee, advance fee or any other charges of similar nature, which are
incidental to transfer of the immovable property.
Example Mr. A purchases a flat from Arihant Ltd. for Rs. 54 lakh. He also pays following
amounts to Arihant Ltd.:
(a) Club membership fee – Rs. 2 lakh
(b) Car parking fee – Rs. 1 lakh
(c) Electricity and water facility fee – Rs. 1 lakh
(d) Maintenance fee – Rs. 1 lakh
In this case, Mr. A shall deduct TDS on Rs. 54 + 2 + 1 + 1 + 1 = 59 lakh.
Section 194M TDS out of certain payments by individual or HUF
New law This section has been inserted to introduce TDS out of certain payments made by an
individual or HUF. The provisions of this section are as under:
Nature of payment (i) Payment for carrying out any work (including supply of
labour for carrying out any work) in pursuance of a
contract or sub-contract, or
(ii) Commission / Brokerage, or
(iii) Fee for Professional Service

Definitions  “Work” shall have the same meaning as in section 194C.
 “Commission / Brokerage” shall have the same meaning
as in section 194H.
 “Fee for Professional Service” shall have the same
meaning as in section 194J.
Examples  Payment to a contractor for construction / repair /
renovation of building
 Payment to an interior decorator
 Payment to a doctor for treatment of cancer / neurological
disorder
 Payment to a contractor for catering service in a wedding
PRP (deductor) Individual or HUF (Other than those required to deduct TDS
u/s 194C, 194D, 194H, 194J)
Payee (deductee) Resident
Threshold limit for Rs. 50,00,000 during a financial year
no TDS
TDS Rate 5%
Time of deduction Credit to the A/c of Payee or Payment, whichever is earlier
Time for payment of As prescribed in section 200(1)
TDS to Govt. A/c
Certificate u/s 197 Yes allowed
Declaration u/s 197A Not allowed
Extra Points Section 203A shall not apply. Hence no need to obtain TAN.
Simplified procedure There shall be a single consolidated form (i.e. Form No. 26QD)
for filing of Return of for payment of TDS as well as furnishing of Return of TDS. This
TDS form is known as “Challan-cum-Statement”. The tax payment +
submission of Return shall be done through this single
consolidated form within 30 days from end of the month in which
deduction is made.
Example Refer Page No. 9.48 of ICAI Module
Section 194N TDS out of cash withdrawal from Bank
New law This section has been inserted to introduce TDS out of cash withdrawal from banks.
The provisions of this section are as under:
Nature of payment Withdrawal in cash
PRP (deductor) Bank / Co-operative Bank / Post Office
Payee (deductee) Any person
Threshold limit for Rs. 1 Crore in a financial year
no TDS
TDS Rate 2% of the withdrawal exceeding Rs. 1 Crore
Time of deduction Payment (in other words.. at the time of withdrawal)
Time for payment of As prescribed in section 200(1)
TDS to Govt. A/c

Certificate u/s 197 Not allowed
Declaration u/s 197A Not allowed
No TDS If the withdrawal is made by:
(i) Govt.
(ii) Bank or Co-operative Bank
(iii) Business Correspondent of a Bank or Co-operative
Bank
(iv) White Label ATM Operators (WLATMOs) of a Bank or
Co-operative Bank
(v) Notified persons
Following persons have been notified:
(a) Cash Replenishment Agencies (CRAs) or Franchise
Agents of WLATMOs maintaining a separate bank
account from which withdrawals are made only for the
purpose of replenishing cash in ATMs operated by
WLATMOs.
(b) Commission Agents / Traders operating under Agricultural
Produce Marketing Committee and Registered under any
law relating to Agricultural Produce Market of the
concerned State, who has intimated to the Bank / Co-
operative Bank / Post Office the account number from
which he wishes to withdraw cash exceeding Rs. 1 crore
alongwith his PAN and has certified to the Bank / Co-
operative Bank / Post Office that the withdrawals of cash
is for the purpose of making payments to farmers towards
purchase of agricultural produce.
(c) The dealers of foreign exchange authorized by RBI / their
franchise agents / sub-agents and Full Fledged Money
Changers licensed by RBI / their franchise agents,
provided they maintain a separate account from which
withdrawals are made only for the purpose of purchase of
foreign currency from foreign tourists or non-residents
visiting India or from resident Indians on their return to
India in cash or disbursement of inward remittances to the
recipient beneficiaries in India in cash under Money
Transfer Service Scheme of RBI. This exemption from
TDS shall be available only if the dealers of foreign
exchange authorized by RBI / their franchise agents / sub-
agents and Full Fledged Money Changers licensed by
RBI / their franchise agents furnishes a certificate to the
Bank that the withdrawals are made only for the specified
purposes.
Extra Points It the payee is maintained more than one accounts with the
PRP, the cash-withdrawals from all those accounts shall be
aggregated together.
Press Release dated Section 194N shall apply from 01.09.2019. Hence any cash
30.08.2019 withdrawal upto 31.08.2019 shall not attract TDS. However, it
may be noted that the threshold limit of Rs. 1 crore shall apply
for the whole financial year. Hence if a person has already
withdrawn Rs. 1 crore or more upto 31.08.2019, the TDS shall

apply on all subsequent withdrawals.
Rule 37BA read with This Rule has been amended to provide that the credit of TDS
section 199 shall be allowed to the person from whose account the TDS
has been deducted for the Assessment Year relevant to the
Previous Year in which TDS has been deducted.
Section 201(1) Relief to PRP
Old law The PRP shall not be deemed to be in default for non-deduction of tax at source out
of any sum credited / paid by him to a resident-payee provided following conditions
are satisfied –
 The payee has submitted his Return of income (ITR) u/s 139,
 The payee has included the relevant sum in computing his taxable income,
 The payee has paid the tax due on the income declared by him in the Return of
income (ITR), and
 The PRP submits a certificate of a CA in a prescribed form (Form No. 26A) to
Income-tax Department to the effect that all these conditions are satisfied.
New law The benefit of this provision has been extended in respect of all payees whether
resident or non-resident.
Please note The amendment in section 40(a)(i) and 201(1) should be studied simultaneously.
Section 201(3) Time-limit for deeming the PRP in default
Old law The order deeming the PRP in default for failure to deduct tax at source from any
person resident in India, shall be passed within 7 years from end of the financial
year in which payment of the relevant sum is made or credit is given to the account of
payee.
New law Such order can be passed within:
(i) 7 years from end of the financial year in which payment of the relevant sum is
made or credit is given to the account of payee, or
(ii) 2 years from end of the financial year in which the Correction Statement is filed
u/s 200(3),
whichever is later.
Section 206A Return of No TDS
Old law Following persons are required to furnish the “Return of No TDS” in Form No. 26QA/
26QAA:
 a Banking Company / Co-operative Bank who credits / pays interest u/s 194A not
exceeding Rs. 10,000 to a single payee in one financial year,
 a Housing Finance Company who credits / pays interest u/s 194A not exceeding
Rs. 5,000 to a single payee in one financial year.
New law Following persons shall be required to furnish the “Return of No TDS” in Form No.
26QA / 26QAA:
 a Banking Company / Co-operative Bank who credits / pays interest u/s 194A not
exceeding Rs. 40,000 to a single payee in one financial year,
 a Housing Finance Company who credits / pays interest u/s 194A not exceeding
Rs. 5,000 to a single payee in one financial year.
Further the PRP can submit a “Correction Statement” for rectification of any
mistake or to add, delete or update the information furnished in the “Return of No
TDS”.

Tax Rates for Non-Individuals
Note: We have only Tax Rates of Non-Individuals in our syllabus. We do not have
Computation of Total Income and Computation of Tax Liability of Non-Individuals. Hence
the students are required to remember only Tax Rates of Non-Individuals.
Rate of Basic Tax on Special Incomes:
Section Assessee Special Income AY 2019-20 AY 2020-21
111A Any STCG on transfer of (i) 15% 15%
equity shares, or (ii)
funds, or (iii) units of a
has suffered STT
112 Any LTCG (other than 10% / 20% 10% / 20%
LTCG covered u/s
112A)
112A Any LTCG on transfer of (i) First 1,00,000 – 0% First 1,00,000 – 0%
equity shares, or (ii) Extra – 10% Extra – 10%
funds, or (iii) units of
has suffered STT
115BB Any 7 incomes (i.e. casual 30% 30%
incomes)
115BBDA Specified persons Aggregate dividend 10% 10%
[i.e. any person other from one or more
domestic companies
than a domestic
covered u/s
company or a fund /
2(22)(a),(b),(c),(d) in
trust / institution excess of Rs.
covered u/s 10(23C) or 10,00,000 in one
12AA] previous year
115BBE Any Undisclosed income 60% 60%
u/s 68 to 69D
Rates of Basic Tax on Normal Incomes:

Assessee AY 2019-20 AY 2020-21
First 2,50,000 Nil First 2,50,000 Nil
2,50,001 to 5,00,000 5% 2,50,001 to 5,00,000 5%
HUF
5,00,001 to 10,00,000 20% 5,00,001 to 10,00,000 20%
First 2,50,000 Nil First 2,50,000 Nil
Artificial Juridical 2,50,001 to 5,00,000 5% 2,50,001 to 5,00,000 5%
Person (AJP) 5,00,001 to 10,00,000 20% 5,00,001 to 10,00,000 20%

If the
MMR MMR
situation
or or
is Any amount Any amount
Higher Higher
covered
Rate Rate
u/s 167B
AOP / BOI
If the Nil Nil Nil Nil
situation 250001 to 500000 5% 2,50,001 to 5,00,000 5%
is not 500001 to 1000000 20% 5,00,001 to 10,00,000 20%
covered Balance 30% Balance 30%
u/s 167B
First 10,000 10% First 10,000 10%
Co-operative Society 10,001 to 20,000 20% 10,001 to 20,000 20%
Partnership firm / LLP Any amount 30% Any amount 30%
Local authority Any amount 30% Any amount 30%
If the total turnover or gross If the total turnover or gross
receipts of company in the receipts of company in the
Domestic company 25% 25%
Previous Year 2016-17 did not Previous Year 2017-18 did
exceed Rs. 250 crore not exceed Rs. 400 crore
Other domestic company 30% Other domestic company 30%
Foreign company Any amount 40% Any amount 40%
Rate of Surcharge:
HUF, AJP, AOP, BOI Upto Rs. 50 lakh Nil Upto Rs. 50 lakh Nil
Exceeding Rs. 50 lakh but 10% Exceeding Rs. 50 lakh but 10%
upto Rs. 1 Crore upto Rs. 1 Crore
Exceeding Rs. 1 crore 15% upto Rs. 2 Crore
upto Rs. 5 Crore
Co-operative society, Upto 1 Crore 0% Upto 1 Crore 0%
Firm, LLP, Exceeding 1 Crore 12% Exceeding 1 Crore 12%
Local authority
Domestic company Upto 1 Crore 0% Upto 1 Crore 0%
Exceeding 1 Crore but upto 10 7% Exceeding 1 Crore but upto 7%
Crore 10 Crore
Exceeding 10 Crore 12% Exceeding 10 Crore 12%
Foreign company Upto 1 Crore 0% Upto 1 Crore 0%
Exceeding 1 Crore but upto 10 2% Exceeding 1 Crore but upto 2%
Crore 10 Crore
Exceeding 10 Crore 5% Exceeding 10 Crore 5%
Marginal Relief of Surcharge (MRS):

AY 2019-20 AY 2020-21
Marginal relief of surcharge (MRS) is allowed in Marginal relief of surcharge (MRS) is allowed in
appropriate situations. appropriate situations.

Cess:
AY 2019-20 AY 2020-21
Health & Education Cess shall be 4%. Health & Education Cess shall be 4%.
Alert:
n the case of undisclosed income covered u/s 68 to 69D, the rate of basic tax shall be 60% u/s 115BBE
and the rate of surcharge shall be 25% for all assessees (the rates of surcharge discussed above shall
not apply). Hence the effective tax rate on undisclosed income shall be as under:
AY 2019-20 AY 2020-21
Effective tax rate shall be 60% + 25% surcharge + Effective tax rate shall be 60% + 25%
4% cess = 78%. surcharge + 4% cess = 78%.
Section 40(b) – Question No. 9 in Mock Test Series – II for May, 2019 Exam
Following question was set out in Mock Test Series. This is a tricky question, suitable to CA Final level.
However, since it has been set out in Mock Test, we step to understand:
Question:
M/s ABC & Co., a firm carrying on business, furnishes the following particulars for the PY 2018-19:
Book Profits (before setting of unabsorbed depreciation and brought forward business loss) 2,50,000
Unabsorbed depreciation of PY 2012-13 1,20,000
Brought forward business loss of PY 2017-18 2,00,000
Compute the amount of remuneration allowable u/s 40(b) from the book profit:
(a) Rs. 2,25,000 (b) Rs. 1,80,000 (c) Rs. 1,50,000 (d) Rs. 1,17,000
Solution:
Related provisions of Income-tax Act, 1961:
(i) The maximum allowable remuneration u/s 40(b) is linked with “Book-Profit”.
(ii) “Book-Profit” means “Income u/s 28 (Income under BP head) before deducting remuneration to
partners”
(iii) Unabsorbed depreciation of earlier year is brought forward u/s 32(2).
(iv) Brought forward business loss of earlier year is set off u/s 72.
(v) The “Sequence of set off” prescribed in Income-tax Act, 1961 is:
(a) First set off – Brought forward business loss
(b) Then set off – Unabsorbed depreciation
(vi) The conclusion is – While computing “Book-Profit”, we have to adjust “unabsorbed depreciation”.
but not “Brought forward business loss”. However, we have to apply “Sequence of set off”.
Keeping in mind above provisions, the computation of “Book-Profit” shall be as under:
Book Profits given in question 2,50,000
(before setting of unabsorbed depreciation and brought forward business loss)
Less: B/F business loss of PY 2017-18 – deducted for the limited purpose to maintain the 2,00,000
requirement of sequence of set off prescribed in section 72
50,000
Less: B/F depreciation of PY 2012-13 – Rs. 1,20,000 but maximum possible set off is Rs. 50,000
50,000
Nil
Add: B/F business loss of PY 2017-18 not to be set off as per definition of “Book-Profit” 2,00,000
Book Profit 2,00,000
Maximum allowable remuneration shall be – 1,80,000
Rs. 1,50,000 or 90% of Rs. 2,00,000, whichever is Higher
Correct option (b)

PART “B-1”
All amendments as discussed in “Amendment Class held for Nov.

2019 exam.” have already been studied in our regular classes for
May 2020 exam. and also included in our book for May, 2020
exam.

PART “B-2”
Chapter 2 – Definitions and Concept of Supply

Section 7(2)(b) Concept of Supply
Background Section 7(2)(b) prescribes that the activities or transactions undertaken by the Central
Government, a State Government or any local authority in which they are engaged as
public authorities, as may be notified by the Government, shall be treated neither as
Supply of Goods nor as Supply of Service.
New law Notification No. 25 / 2019 CT(R) dated 30.09.2019 / IT(R) dated 30.09.2019:
In terms of section 7(2)(b), it has been notified that the following activity or transaction
shall be treated neither as a Supply of Goods nor a Supply of Service:
“Service by way of grant of alcoholic liquor licence, against consideration in the form of
licence fee or application fee or by whatever name it is called”.
Please note This exclusion is applicable to grant of alcoholic licence only. This does not apply to
grant of other licences.
Example Govt. of Rajasthan grants an alcoholic liquor licence to M/s Rajasthan Wines and
receives an application fee of Rs. 15,000 and licence fee of Rs. 2,50,000. No GST
shall be payable on these receipts since they are excluded from supply u/s 7(2)(b).
Example Govt. of Gujrat grants privileges, licences, mining rights, natural resources, spectrum,
etc. (other than alcoholic licence) to business entities against payment of
consideration in the form of fee or royalty. These receipts shall be taxable under GST.
Section 7(1) Concept of Supply
New law Circular No. 116 / 35 / 2019 GST dated 11.10.2019:
Individual donors provide financial help in the form of donation / gift to religious or
charitable institutions, schools, hospitals, orphanages, old age homes etc. The
recipient institutions place a name plate or similar acknowledgement in their premises
to express the gratitude towards donor. When the name of the donor is displayed in
the premise of recipient institution in a manner which can be said to be an expression
of gratitude and public recognition of donor’s act of philanthropy and is not aimed at
giving publicity to the donor in a manner of advertising or promotion of his business,
then it can be said that there is no supply of service because there is no obligation
(quid pro quo) on the part of recipient institutions to do any activity. Hence GST is not
leviable. Accordingly, it is clarified that where all of the 3 conditions are satisfied, viz.
(i) the donation / gift is made to a charitable organization, etc. (ii) the payment bears
the character of donation / gift, (iii) the purpose is philanthropic and not advertisement
or commercial gain, GST is not leviable.
Examples:
(a) “Good wishes from Mr. Rajesh” printed underneath a digital blackboard donated
by Mr. Rajesh to a charitable institution.
(b) “Donated by Smt. Malati Devi in the memory of her father” written on the door or
floor of a room or any part of a temple complex which was constructed from
such donation.

Chapter 3 – Charge of tax
Section 10(2) Composition Scheme
N/N – 2 / 2019 6% Concessional Scheme
Old law The manufacturers of (i) Ice cream, (ii) Pan masala and (iii) Tobacco are not eligible
to claim Composition Scheme.
Further, the suppliers of (i) Ice cream, (ii) Pan masala and (iii) Tobacco are not
eligible to claim 6% Concessional Scheme.
New law Now the manufacturers of “aerated water” shall also be not eligible to claim
Composition Scheme.
Further, the suppliers of “aerated water” shall also be not eligible to claim 6%
Concessional Scheme.
Section 9(3) / RCM
Section 5(3)
Old law Supply of service BY an author, music composer, photographer, artist or the like by
way of transfer or permitting the use of enjoyment of a copyright covered u/s 13 of
Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works TO
a publisher, music company, producer or the like located in taxable territory is
covered under RCM.
New law The above entry has been split in two parts as under:
(1) Supply of service BY a music composer, photographer, artist or the like by way of
transfer or permitting the use of enjoyment of a copyright covered u/s 13 of
Copyright Act, 1957 relating to original dramatic, musical or artistic works TO a
music company, producer or the like located in taxable territory shall be covered
under RCM.
(2) Supply of service BY an author by way of transfer or permitting the use of
enjoyment of a copyright covered u/s 13 of Copyright Act, 1957 relating to original
literary works TO a publisher located in taxable territory shall be covered under
RCM.
However, an author can choose to pay tax under Forward Charge if:
(a) He has taken registration under CGST Act and files a declaration in a
prescribed form that he exercises option to pay GST under Forward Charge
and comply with all provisions of GST laws and that he shall not withdraw this
option for a period of 1 year from the date of exercising option.
(b) He makes a declaration on the invoices issued by him in prescribed manner
to the supplier.
Section 9(3)/ RCM
Section 5(3)
New law Following new services have been added in RCM:
Category of supply of Supplier Recipient
service
1 Services provided by Any person other than a body A body corporate

way of renting of a corporate who is paying located in taxable
motor vehicle CGST @ 2.50% + SGST @ territory

provided TO a body 2.50% or IGST @ 5% on
corporate located in renting of motor vehicles with
taxable territory ITC only of input services in
the same line of business
2 Services by way of Securities-Lender Securities-Borrower
lending of securities
under Securities
Lending Scheme,
1997 of SEBI
Chapter 4 – Exemptions
Section 11 Exemptions
Entry Old law New law
7 Services provided by the Central Services provided by the Central
Govt., State Govt., Union Territory or Govt., State Govt., Union Territory or
Local authority to a business entity Local authority to a business entity
with an Aggregate Turnover upto Rs. with an Aggregate Turnover upto
20 lakh (Rs. 10 lakh in case of a such amount in the preceding
Special Category States) in the Financial Year as makes it eligible for
preceding Financial Year [i.e. a small exemption from registration under
business entity]. CGST Act [i.e. a small business
entity].
This exemption is not allowed to This exemption is not allowed to

following services: following services:
(i) Services covered in Sub-entry (i) Services covered in Sub-entry
No. (a), (b) and (c) of Entry No. No. (a), (b) and (c) of Entry No.
6. 6.
(ii) Services by way of renting of (ii) Services by way of renting of
immovable property immovable property
45 (a) Service provided by an “arbitral (a) Service provided by an “arbitral

tribunal” to - tribunal” to -
(i) Central Govt., State Govt., (i) Central Govt., State Govt.,
UT Govt., Local authority, UT Govt., Local authority,
Governmental authority or Governmental authority or
Govt. entity Govt. entity
(ii) any person other than a (ii) any person other than a
business entity; or business entity; or
(iii) a business entity with an (iii) a business entity with an
aggregate turnover up to Rs. aggregate turnover up to
20 lakh (Rs. 10 lakh in case such amount in the
of Special Category States) preceding Financial Year as
in the preceding financial makes it eligible for
year [i.e. a small business exemption from registration
entity]. under CGST Act [i.e. a
small business entity].

(b) Legal service provided by an “an (b) Legal service provided by an “an
individual advocate or a individual advocate or a
partnership firm of advocates partnership firm of advocates
(other than a senior advocate)” (other than a senior advocate)”
to – to –
(ii) any person other than a (ii) any person other than a
business entity; business entity;
aggregate turnover up to aggregate turnover up to
Rs.20 lakh (Rs.10 lakh in such amount in the
case of Special Category preceding Financial Year as
States) in the preceding makes it eligible for
financial year [i.e. a small exemption from registration
business entity]; or under CGST Act [i.e. a
small business entity]; or
(iv) an advocate or partnership (iv) an advocate or partnership
firm of advocates providing firm of advocates providing
legal service. legal service.
(c) Legal service provided by a (c) Legal service provided by a

“senior advocate” to – “senior advocate” to –
(ii) a person other than a (ii) a person other than a
business entity; or business entity; or
aggregate turnover up to Rs. aggregate turnover up to
20 lakh (Rs.10 lakh in case of such amount in the
Special Category States) in preceding Financial Year as
the preceding financial year makes it eligible for
[i.e. a small business exemption from registration
entity]. under CGST Act [i.e. a
small business entity].
9AA X Services provided BY and TO

Federation Internationale de
Football Association (FIFA) and
its subsidiaries, related to any of the
events under FIFA U-17 Women’s
World Cup 2020 to be hosted in
India
14 Services by a hotel, inn, guest Services by a hotel, inn, guest
house, club or campsite (by house, club or campsite (by
whatever name called) for whatever name called) for
residential or lodging purposes, residential or lodging purposes,

having declared tariff of a unit of having value of supply of a unit of
accommodation below Rs. 1,000 accommodation below or equal
per day. to Rs. 1,000 per day.
“Declared tariff” includes charges

for all amenities provided in the unit
of accommodation (given on rent for
stay) like furniture, air-conditioner,
refrigerators or any other amenities,
but without excluding any discount
offered on the published charges for
such unit.
22 Services by way of giving on hire – Services by way of giving on hire –

(a) to a State Transport (a) to a State Transport Undertaking
Undertaking (STU), a motor (STU), a motor vehicle meant to
vehicle meant to carry more carry more than 12
than 12 passengers, or passengers, or
(aa) to a local authority, an
Electrically Operated Vehicle
meant to carry more than 12
passengers, or
(b) to a Goods Transport Agency (b) to a Goods Transport Agency
(GTA), a means of (GTA), a means of
transportation of goods, or transportation of goods, or
(c) motor vehicle for transport of (c) motor vehicle for transport of
students, faculty and staff, to a students, faculty and staff, to a
person providing services of person providing services of
transportation of students, transportation of students,
faculty and staff to an faculty and staff to an
educational institution providing educational institution providing
services by way of pre-school services by way of pre-school
education and education upto education and education upto
higher secondary school or higher secondary school or
equivalent. equivalent.
24B X Services by way of storage /

warehousing of cereals, pulses,
fruits, nuts, vegetables, spices,
copra, sugarcane, jaggery, raw
vegetable fibres such as cotton,
flax, jute etc., indigo,
unmanufactured tobacco, betel
leaves, tendu leaves, coffee and
tea.
29B X Services of life insurance provided
by the Central Armed Police Forces
Group Insurance Funds to their
members under group insurance
schemes

35 Services of general insurance A new scheme “Bangla Shasya
business provided under certain Scheme” has also been specified.
specified schemes.
There is a long list of specified
schemes, which is not given here (If
interested, please refer your Study
Material). However, some important
schemes are:
(a) Pradhan Mantri Suraksha Bima
Yojna.
(b) Niramaya Health Insurance
Scheme.
(c) Restructured Weather based
Crop Insurance Scheme
(RWCIS).
(d) Pradhan Mantri Fasal Bima
Yojana (PMFBY)
82A X Services by way of right to
admission to the events organized
under FIFA U-17 Women’s World
Cup 2020 to be hosted in India
Section 11 Circular No. 102 / 21 / 2019 GST dated 28.06.2019
Issue:
An Equated Monthly Installment (EMI) is a monthly fixed amount paid by a person to
another which has two components, viz. (i) Principal, and (ii) Interest. Further, if the
EMI is not paid in time, additional / penal interest is also charged. In practical life,
different strategies of EMI transactions are being adopted. Hence there arises doubts
regarding taxability under GST.
Reply:
There are two provisions in GST laws to deal with interest:
(i) Section 15 of CGST Act prescribes that the value of supply shall include interest,
late fee or penalty for delayed payment of any consideration for any supply
charged by Supplier. Therefore, GST is leviable on such interest.
(ii) Entry 27 of Exemption u/s 11 prescribes that services by way of extending
deposits, loans or advances in so far as the consideration is represented by way
of interest or discount, shall be exempt from GST. Therefore, GST is
exempted on such interest.
For this purpose, “Interest” means interest payable in any manner in respect of
any moneys borrowed or debt incurred (including a deposit, claim or other similar
right or obligation) but does not include any service fee or other charge in respect
of the money borrowed or debt incurred or in respect of any credit facility which
has not been utilized.
Based on these legal provisions, the following clarifications have been issued by Govt.:

Case-1
X sells a mobile phone to Y. The cost of mobile In this case, irrespective of the
phone is Rs. 40,000/-. However, X gives Y an method of invoicing, the interest of
option to pay in installments, Rs 11,000/- every Rs. 4,000 and additional / penal
month before 10th day of the following month, interest, if any, shall be included in
over next 4 months (Rs 11,000/- *4 = Rs. the value of supply of mobile phone
44,000/- ). Further, as per the contract, if there u/s 15 and GST shall be charged on
is any delay in payment by Y beyond the Rs. 40,000 + 4,000 + Additional /
scheduled date, Y would be liable to pay Penal interest, if any.
additional / penal interest amounting to Rs.
500/- per month for the delay.
In this case, an alternative pattern of invoicing
could be such that Mr. X is charges Rs.
40,000/- for the mobile in a separate invoice +
interest @ 2.5% per month in a separate
invoice. Further, he also charges an additional /
penal interest amounting to Rs. 500/- per
month for delay in payment through a separate
invoice.
Case-2
X sells a mobile phone to Y. The cost of mobile In this case, the interest of Rs.
phone is Rs 40,000/-. Y has the option to avail 4,000 and additional / penal
a loan at interest of 2.5% per month from M/s interest, if any, is charged for a
ABC Ltd. for purchasing the mobile. The terms transaction between Y and M/s
of the loan from M/s ABC Ltd. allows Y a period ABC Ltd., and the same would be
of 4 months to repay the loan and an additional exempted under Entry No. 27 of
/ penal interest @ 1.25% per month for any Exemption.
delay in payment.
The value of supply of mobile by X
to Y would be Rs. 40,000/- and
GST shall be levied on Rs. 40,000/-
only.
Section 11 Circular No. 109 / 28 / 2019 dated 22.07.2019
Issue Clarification
1 Are the maintenance charges paid by Entry No. 77 gives exemption to the
residents to the Resident Welfare services provided by an
Association (RWA) exempt from GST? unincorporated body or 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; or
(b) for the provision of carrying out
any activity which is exempt from
levy of GST; or
(c) upto an amount of Rs. 7,500 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.
The maintenance charges paid by
residents to the Resident Welfare
Association (RWA) shall be exempt
upto Rs. 7,500/- per month per
member under Point No. (c).
2 What will happen if the monthly charges GST shall be payable on full amount
exceed Rs. 7,500/-? and not on excess amount.
Example:
If monthly charges are Rs. 9,000/-,
the exemption of Rs. 7,500 shall not
be allowed. GST shall be payable on
Rs. 9,000/- and not on 1,500/-.
3 If a person owns two or more apartments / The exemption of Rs. 7,500 shall be
flats in a housing society, whether the allowed per apartment / flat and not
exemption of Rs. 7,500 shall be allowed per person.
per apartment / flat or per person?
4 If the Aggregate Turnover of RWA does RWA shall be required to obtain
not exceed the registration-limit of Rs. 20 registration only if the Aggregate
lakh / 10 lakh as specified in section 22, Turnover exceeds Rs. 20 lakh / 10
would the RWA be required to pay tax if lakh. If the Aggregate Turnover does
the monthly charges exceed Rs. 7,500? not exceed limit, no registration is
required and therefore no GST is
payable even if the monthly charges
exceed Rs. 7,500.
Thus, the position can be
summarized as under:
Aggregate Monthly Monthly
Turnover of charges charges
RWA exceed upto Rs.
Rs. 7,500/-
7,500/-
Exceeding Fully No GST
Rs. 20 lakh Taxable
/ 10 lakh
Upto Rs. No GST No GST
20 lakh / 10
lakh
5 Is RWA entitled to take ITC on capital Yes
goods (such as generator, furniture, water
pump etc.), inputs (taps, pipes, other
sanitary fittings, etc.) and input services
(repairs and maintenance services etc.)
and utilize against the output tax payable
on the monthly charges exceeding Rs.
7,500/-?

Section 11 Circular No. 117 / 36 / 2019 GST dated 11.10.2019
Under Entry 66(a), the services provided by an “educational institution” to its
students, faculty and staff, are exempted. For this purpose “Educational
institution” means an institution providing services by way of:
(a) pre-school education [for example – Nursery and KG] and education upto higher
secondary school [“Higher secondary” means 12th standard];
(b) education as a part of a curriculum for obtaining a qualification recognised by any
law [for example – Conduct of degree courses by colleges, universities, ICAI,
Indian Institute of Managements (IIMs)];
(c) education as a part of an approved vocational education course.
New clarification:
Now it is clarified that the Maritime Training Institutes and their training courses
are approved by the Director General of Shipping under the provisions of Merchant
Shipping Act, 1958. Therefore, the courses conducted by them are exempt under Entry
No. 66(a).
Chapter 7 – ITC
Section 16(2) Availing ITC
Background We are aware that GSTR-1, 2A and 3B are active but the GSTR-2 and 3 are deferred.
Further, GSTR-3B is a summarized Return and independent Return not having any link
with the GSTR-1 filed by the suppliers. Hence many Recipients have started claiming
wrong / excess ITC in GSTR-3B. In order to provide a check over wrong / excess ITC,
Rule 36(4) has been introduced w.e.f. 09.10.2019.
New law The new Rule 36(4) prescribes the quantum of ITC which can be claimed by the
Recipient against the Invoices / Debit Notes uploaded and not uploaded by the
Suppliers in GSTR-1.
As per this Rule, the ITC to be availed by the Recipient against the Invoices / Debit
Notes, the details of which have not been uploaded by the Suppliers in GSTR-1,
cannot exceed 20% of the “eligible ITC available in respect of the Invoices / Debit
Notes uploaded by the Suppliers in GSTR-1”.
The effect of Rule 36(4) can be understood as under:
Situation Amount of ITC which can be
claimed by the Recipient
ITC of Invoices / Debit Notes uploaded by Full ITC shall be available.

Suppliers in GSTR-1
ITC of Invoices / Debit Notes not uploaded by Maximum 20% of “Eligible ITC”
Suppliers in GSTR-1 available in respect of Invoices /
Debit Notes uploaded in GSTR-1 can
be availed.
Example During the month of Oct. 2019, Mr. A receives 100 purchase invoices involving GST of
Rs. 10 lakh, from various suppliers. Compute the ITC that can be availed by Mr. A in
GSTR-3B for the month of Oct. 2019 to be filed by 20/11/2019 assuming that the GST
of Rs. 10 lakh is otherwise eligible for ITC:
(1) Out of 100 invoices, 80 invoices involving ITC of Rs. 6 lakh were uploaded by the
suppliers in GSTR-1 and 20 invoices involving ITC of Rs. 4 lakh were not uploaded.

(2) Out of 100 invoices, 75 invoices involving ITC of Rs. 8.50 lakh were uploaded by
the suppliers in GSTR-1 and 25 invoices involving ITC of Rs. 1.50 lakh were not
uploaded.
Answer:
As per Rule 36(4), the ITC to be availed by a registered person in respect of invoices /
debit notes, of which details have not been uploaded by the suppliers in their GSTR-1,
Based on this provision, the ITC to be availed by Mr. A in GSTR-3B for the month of
Oct, 2019 shall be computed as follows:
Invoices ITC ITC which can be
involved availed by Mr. A in
GSTR-3B
Case – 1
80 Invoices uploaded by suppliers in GSTR-1 6 lakh Full ITC = 6 lakh
20 Invoices not uploaded by suppliers in 4 lakh 20% of 6 lakh = 1.20

GSTR-1 lakh
Total 10 lakh 7.20 lakh
Case – 2
75 Invoices uploaded by suppliers in GSTR-1 8.5 lakh Full ITC = 8.50 lakh
25 Invoices not uploaded by suppliers in 1.5 lakh 20% of 8.50 lakh =

GSTR-1 1.70 lakh, but the
actual ITC is Rs. 1.50
lakh. Hence 1.50 lakh.
Total 10 lakh 10 lakh
Notes:
1) Full ITC is availed in respect of invoices / debit notes uploaded by the suppliers in
GSTR-1.
2) The ITC in respect of invoices / debit notes not uploaded by the suppliers in GSTR-
1 has been restricted to 20% of the eligible ITC available in respect of the Invoices /
Debit Notes uploaded by the Suppliers in GSTR-1”.
Chapter 9 – Registration
Section 25 Procedure for Registration
New law While filing application for registration, a person is required to submit the details of his
Bank A/c.
Now Rule 10A has been introduced to relax this requirement. Hence a person has
option to submit details of his Bank A/c after obtaining registration, within 45 days of
grant of registration or due date for furnishing of Return u/s 39, whichever is earlier.
This relaxation is not allowed to the persons seeking registration as TDS deductor /
TCS Collector under Rule 12 or who are granted suo motu registration (also called
“temporary registration) by Proper Officer under Rule 16.

Section 29 Cancellation of registration
New law Rule 21 has been amended to provide that if a person violates Rule 10A (i.e. does not
submit details of his Bank A/c after obtaining registration, within 45 days of grant of
registration or due date for furnishing of Return u/s 39, whichever is earlier), his
registration shall be liable to be cancelled.
Section 29 Suspension of Registration
Old law A registered person, whose registration has been suspended, -
(a) shall not make any taxable supply during the period of suspension, and
(b) shall not be required to furnish any Return u/s 39
New law (i) The expression “shall not make any taxable supply” shall mean that the
registered person shall not issue a Tax Invoice and, accordingly, not charge tax
on supplies made by him during the period of suspension.
(ii) Where any order having the effect of revocation of suspension has been passed,
the provision of section 31(3)(a) [i.e. Revised Invoice] and section 40 [First
Return] shall apply in respect of supplies made during the period of suspension.
Chapter 10 - Tax Invoice, Credit Note and Debit Note

Section Daily Consolidated Invoice
31(3)(b)
Old law A registered person may not issue a “Tax Invoice” if all of the following conditions
are satisfied –
(i) the value of goods/services/both supplied is less than Rs. 200,
(ii) the recipient is unregistered, and
(iii) the recipient does not require Tax Invoice.
However, in such a case, the registered person shall have to issue a consolidated tax
invoice for such supplies at the close of each day in respect of all such supplies.
New law This option shall not be available to a supplier engaged in making supply of services
by way of admission to exhibition of cinematograph films in multiplex screens.
Rule 54 Any other document in lieu of invoice

New law A supplier engaged in making supply of services by way of admission to exhibition of
cinematograph films in multiplex screens, shall be required to issue an electronic ticket
and the said electronic ticket shall be deemed to be a tax invoice for all purposes of the
Act, even if such ticket does not contain the details of the recipient of service but
contains the other information as mentioned under rule 46.
It is further prescribed that the supplier of such service in a screen other than multiplex
screens may, at his option, follow this procedure.
Section 68 Rule 138(10) - Validity period of E-Way Bill
Rule 138(10) has been amended to provide also for validity period of E-Way Bill in
New law
case of Multimodal Shipment (MMS) in which at least one leg involves transport by
ship. The validity period of E-Way Bill in case of MMS shall be same as in Over
Dimensional Cargo (ODC).

Summary Table of Validity Period of E-Way Bill
Sl. Distance within country Validity period from “Relevant
date”
In the case of ODC or MMS

1 Upto 20 Km 1 day
2 For every 20 Km or part thereof 1 additional day
thereafter
In the case of any cargo other than ODC and MMS

1 Upto 100 Km 1 day
2 Every 100 Km or part thereof 1 additional day
thereafter
Section 68 Rule 138(10) - Extension of validity period of E-Way Bill
Old law If, due to exceptional circumstances, the goods cannot be transported within the
validity period of the E-Way Bill, the transporter may extend the validity period after
updating the details in Part B, if required. The transporter can extend the validity of the
E-Way Bill only if the consignment has not reached destination within the validity period
of E-Way due to exceptional circumstances like natural calamity, law and order issues,
trans-shipment delays, accidence of vehicle, etc. He needs to explain the reasons
while extending the validity period.
It may be noted that there is no time-limit prescribed in Rule 138(10) within which the
validity period should be extended. However, based on clarification mentioned in FAQ
on E-Way Bill Portal, the option for extension shall be available before 8 hours and
after 8 hours of expiry of validity.
New law Now Rule 138(10) has been amended and it is provided that the validity of E-Way Bill
can be extended within 8 hours of expiry of validity.
Chapter 12 – Return
Section 39 Rule 61(5) - GSTR-3B
Background We are aware that GSTR-3 has been suspended. Currently we are filing GSTR-3B.
Still there is a gross confusion as to the exact nature of GSTR-3B.
Whether GSTR-3B is a Return u/s 39(1) or not? Whether, despite filing GSTR-3B, in
future the Govt. shall require the person to furnish GSTR-3 or not?
New law Rule 61(5) has been amended retrospectively w.e.f. 01.07.2017 to provide that GSTR-
3B is a Return u/s 39(1) and where a person has furnished GSTR-3B, he shall not be
required to furnish GSTR-3.
Section 44 Annual Return
New law Notification No. 47 / 2019 dated 09.10.2019:
Filing of Annual Return is a tough task. Hence filing of Annual Return for the Financial
Year 2017-18 and 2018-19 has been made optional for the registered person whose
turnover is less than Rs. 2 crore. In such a case, the Annual Return shall be deemed to
have been filed if the person does not file.

PART “C” – How to attend Paper in Exam?
 Rule 1 – Don’t panic

Remember that you are not required to score 90% or above (this is not CBSE exam). Even if you do
not know any question or part of question, just relax. Do not panic at all.
 Rule 2 – Attempt all questions

Never leave any question unanswered. Attempt all question. Be cautious of time-management.
 Rule 3 - Read carefully

- Read carefully the exact requirement of question?
- Answer what is required by question.
- Do not answer what is not required by question.
- If the question has multiple requirements – answer all those requirements.
 Rule 4 – Write carefully

(i) How to answer Practical Question?
Use following format:
COMPUTATION OF TOTAL INCOME / TAX LIABILITY / GST LIABILITY

Particulars Working Note No. Amount
1
2
Working Notes:
(1) __________________
(2) __________________
Please be aware that - Working Notes have substantial marks. If you do not give Working Notes,
there would be a big loss of marks. Mention brief working notes / assumptions. It’s better to
mention working notes separately under the heading “Working Notes”. Don’t include Working
Notes in the Main Answer.
(ii) How to answer General Theory Question / Narrative Question?

(a) Write the opening paragraph (It is very easy. You can extract from the language of
question)
(b) Narrate / Explain the provision of law
(iii) How to answer Case-Study/True-False/State with reasons/Statement Validity Question?

(a) Facts -- Write the facts (This is very easy. You have to reproduce the language of question
itself in your own style)
(b) Issue - Write the issue involved (This is also very easy. You have to reproduce the
language of question itself in your own style)
(c) Law - Write the relevant provision of law
(d) Application - Apply the provision of law to the Issue involved
(e) Conclusion -- Write your conclusion (like the Statement is True - False / Valid - Invalid)
Note: Please try to write keywords of law

PART “D-1”
Chapter-1 Reduction in surcharge on STCG u/s 111A and LTCG u/s 112A
We have already discussed.
Section 32 Higher depreciation rates on new motor vehicles
Section 40A(3) Payments otherwise than A/c Payee Cheque / A/c Payee Draft / ECS / Other
prescribed mode
Old law We are aware that Rule 6DD prescribes several exceptions in which payment
exceeding Rs. 10,000 made otherwise than by way of A/c Payee Cheque / A/c Payee
Draft / ECS / Other prescribed mode, is not disallowed in computing taxable income of
BP head. One such exception is - If the payment is required to be made on a day on
which banks are closed due to holding or strike.
New law The exception of making payment on a day on which banks are closed due to holding
or strike has been withdrawn w.e.f. 29.01.2020. Hence, w.e.f. 29.01.2020, payment
required to be made on a day on which the banks are closed due to holiday or strike
shall also attract disallowance u/s 40A(3).
Section 48 Cost Inflation Index for Capital Gain head
Section Receipt without consideration or for inadequate consideration
56(2)(x)
Old law We are aware that if a person receives money / immovable property / specified
movable property without consideration or for inadequate consideration exceeding the
limit of Rs. 50,000, it is taxable as Income from Other Sources.
However, in following Exempted Situations, the receipt is not taxable:
(i) Receipt from any relative; or
(ii) Receipt on the occasion of the marriage of the individual; or
(iii) Receipt under a will or by way of inheritance; or
(iv) Receipt in contemplation of death of the payer, or
(v) Receipt from any local authority as defined in section 10(20), or
(vi) Receipt from or by any fund/institution referred to in section 10(23C), or
(vii) Receipt from or by any trust or institution registered u/s 12AA.
(viii) Receipt from an individual by a trust created or established solely for the benefit
of relative of the individual.
(ix) any receipt by way of a transaction excluded from transfer u/s 47(i), 47(iv),
47(v), 47(vi), 47(via), 47(viaa), 47(vib), 47(vic), 47(vica), 47(vicb), 47(vid) or
47(vii).
(x) Receipt from such class of persons and subject to such conditions, as may be
prescribed.
New law Now, under the authority of above Point No. (x), the Govt. has prescribed a new Rule
11UAC, according to which section 56(2)(x) shall NOT apply if any immovable
property is received by a resident of an unauthorized colony in the National Capital
Territory of Delhi, where the Central Govt. has regularized the transaction of such
immovable property based on the latest Power of Attorney, Agreement to Sale, Will,
Possession-Letter or any other document.

For this purpose:
(a) “Resident” means a person having physical possession of property on the basis of
a registered Sale-deed or latest set of Power of Attorney, Agreement to Sale, Will,
Possession-Letter and other documents including documents evidencing payment
of consideration in respect of a property in unauthorised colonies and includes
their legal heirs but does not include tenant, licensee or permissive user;
(b) “Unauthorised colony” shall have the same meaning as prescribed in section 2(b)
of the National Capital Territory of Delhi (Recognition of Property Rights of
Residents in Unauthorised Colonies) Act, 2019.
Section 35AD “Other prescribed mode” is allowed alongwith A/c Payee Cheque / A/c Payee
Section 40A(3) Draft / ECS
Section 40A(3A)
Section 43(1)
Section 43CA
Section 44AD
Section 50C
Section
56(2)(x)
Section 80JJAA
Section 194N TDS out of cash withdrawals from Banks
Section 194M TDS out of certain payments made by individual or HUF
Section 139A PAN
Section 139AA Intimating Aadhar Number
Old law Every person who has been allotted PAN as on 01.07.2017 and who is eligible to
Income-tax Department on or before 31.12.2019 (Practically … we say “linking of
Aadhar Number with PAN”). If such person fails to intimate the Aadhar Number, the
PAN allotted to him shall be made inoperative.
New law The last date was further extended from 31.12.2019 to 31.03.2020. Subsequently, due
to Covid-19, the last date has again been extended to 31.03.2021. Hence, now the last
date for linking of Aadhar Number with PAN is 31.03.2021.
However, it should be clearly noted that notwithstanding that the last date for linking
has been extended to 31.03.2021, it is mandatory to link Aadhar Number with PAN, if
the person wants to furnish the Return of Income.

PART “D-2”
Chapter 2 – Definitions and Concept of Supply

Section 7(2)(b) Notification No. 25 / 2019 CT(R) / IT(R) dated 30.09.2019 - Service by way of grant
of alcoholic liquor licence, against consideration in the form of licence fee or
application fee, is neither a supply of goods nor a supply of service
Section 7(1) Circular No. 116 / 35 / 2019 GST dated 11.10.2019 - Levy of GST on display of
the names of the donors in the premise of charitable organisations receiving
donations from individual donors
Chapter 3 – Charge of tax
Section 10(2) Composition Scheme and 6% Concessional Scheme not allowed to “aerated
water”
Section 9(3) / RCM – Amendments in RCM on supply of service BY an author, music
Section 5(3) composer, photographer, artist or the like, etc.
Section 9(3)/ RCM
Section 5(3)
Old law We have discussed that following services are covered under RCM:
service

way of renting of a corporate who is paying located in taxable
motor vehicle CGST @ 2.50% + SGST @ territory
provided TO a body 2.50% or IGST @ 5% on
corporate located in renting of motor vehicles with
taxable territory ITC only of input services in
the same line of business
2 Services by way of Securities-Lender Securities-Borrower
lending of securities
under Securities
Lending Scheme,
1997 of SEBI
New law There arose some confusion regarding the language of above Point No. 1. Hence the
language of Point No. 1 has been further amended as under (There is no amendment
in the language of Point No. 2):

service

way of renting of a corporate, who supplies such located in taxable
motor vehicle service without issuing an territory
designed to carry invoice charging CGST @
passengers where 6% + SGST @ 6% or IGST
the cost of fuel is @ 12%
included in the
consideration
charged from the
service recipient,
provided TO a body
corporate located in
taxable territory
Under GST laws, services provided by way of renting of motor vehicle designed to
Interpretation carry passengers where the cost of fuel is included in the consideration charged from
the service recipient, are taxable at two rates, viz. (i) 5% IGST (i.e. 2.50% CGST +
2.50% SGST / UTGST) with limited ITC (i.e. the supplier takes credit of input service
only), or (ii) 12% IGST (i.e. 6% CGST + 6% SGST / UTGST) with full ITC benefit.
Hence it can be concluded that if the supplier has opted for 5% IGST (i.e. 2.50% CGST
+ 2.50% SGST / UTGST), RCM shall apply. But if the supplier has opted for 12% IGST
(i.e. 6% CGST + 6% SGST / UTGST), Forward Charge shall apply.
This is similar to GTA.
Chapter 4 – Exemptions
Section 11 Exemptions
Entry Old law New law
7 We have already discussed
9AA We have already discussed
24B We have already discussed
29B We have already discussed
82A We have already discussed
41 Upfront amount (called as premium, Upfront amount (called as premium,
salami, cost, price, development salami, cost, price, development
charges or by any other name) charges or by any other name)
payable in respect of service by way payable in respect of service by way
of granting of long term lease (30 of granting of long term lease (30

years or more) lease of industrial years or more) lease of industrial
plots or plots for development of plots or plots for development of
infrastructure for financial business, infrastructure for financial business,
provided by the State Govt. Industrial provided by the State Govt. Industrial
Development Corporations or State Development Corporations or State
Govt. Industrial Undertakings or by Govt. Industrial Undertakings or by
any other entity having 50% or more any other entity having 20% or more
ownership of Central Government, ownership of Central Government,
State Government or Union territory State Government or Union territory
to the industrial units or the to the industrial units or the
developers in any industrial or developers in any industrial or
financial business area. financial business area.
This exemption is subject to following

conditions and restrictions:
(i) The leased plots must be used
for the purpose for which they
are allotted, that is, for industrial
or financial activity in an
industrial or financial business
area,
(ii) The State Govt. shall monitor &
enforce the above condition (i),
(iii) In case of any violation or
subsequent change of land use,
due to any reason whatsoever,
the original lessor / original
lessee as well as subsequent
lessee / buyer / owner shall be
jointly and severally liable to pay
the GST payable on the upfront
charges along with interest and
penalty.
(iv) The lease-agreement entered
into the by the original lessor
with the original lessee /
subsequent lessee / sub-lessee
as well as any subsequent lease
or sale agreements, for lease or
sale of such plots to subsequent
lessees / buyers / owners shall
incorporate in the terms and
conditions, the fact that the GST
was exempted on the long-term
lease of the plots by the original
lessor to the original lessee
subject to the above conditions
and that the parties to the said
agreements undertake to
comply with the same.

Section 11 Circular No. 102 / 21 / 2019 GST dated 28.06.2019 – Clarification regarding GST
on delayed payment of EMI
Section 11 Circular No. 109 / 28 / 2019 dated 22.07.2019 – Clarification regarding GST on
monthly subscription received by Housing Societies (RWAs)
Section 11 Circular No. 117 / 36 / 2019 GST dated 11.10.2019 – Clarification regarding GST
on courses conducted by Maritime Training Institutes and their training courses
Section 11(3) Circular No. 120 / 39 / 2019 GST dated 11.10.2019
Old law This section prescribes that the Government may, if it considers necessary or
expedient so to do for the purpose of clarifying the scope or applicability of any
notification issued u/s 11(1) or order issued u/s 11(2), insert an Explanation in such
notification / order, as the case may be, by notification at any time within 1 year of issue
of the notification / order, and every such explanation shall have effect as if it had
always been the part of the first such notification / order, as the case may be.
Clarification To remove any doubt, it is clarified that the Explanation inserted in the notification /
order shall have effect from the very inception of the relevant Entry of the exemption
and not from the date on which the Notification (which inserted the said Explanation)
becomes effective.
Example Notification No. 11 / 2017 CT(R) dated 28.06.2017 came into force from 01.07.2017.
Thereafter, a new Entry No. 3(vi) was inserted w.e.f. 21.09.2017. Subsequently, an
Explanation is inserted on 26.07.2018 with respect to the Entry No. 3(vi).
In this case, although the effective date mentioned in the Notification which inserted the
Explanation is 27.07.2018, yet the Explanation shall be effective from the very
inception of Entry No. 3(vi) i.e. from 21.09.2017 and not from 27.07.2018.
Chapter 7 – ITC
Section 16(2) Restriction on ITC further tightened (Permissible limit reduced from 20% to 10%)
Old law We have earlier studied that the new Rule 36(4), as applicable from 09.10.2019,
prescribes the maximum limit of ITC which can be claimed by the Recipient against the
Invoices / Debit Notes uploaded and not uploaded by the Suppliers in GSTR-1.
As per this Rule, the ITC to be availed by the Recipient against the Invoices / Debit
Notes, the details of which have not been uploaded by the Suppliers in GSTR-1,
With effect from 01.01.2020, the maximum limit of 20% is further reduced to 10% (Very
bad … What a “New Year Gift” by Govt. to taxpayers).
Thus, there are three limits as under:

(i) No limit upto 08.10.2019,
(ii) 20% limit during the period 09.10.2019 to 31.12.2019, and
(iii) 10% limit from 01.01.2020 onwards.
We have earlier discussed the impact of 20% limit with one example. Now, we
discuss the impact of 10% limit.

New limit – 10%
The 10% limit shall apply as under:
Situation Amount of ITC which can be
claimed by the Recipient
ITC of Invoices / Debit Notes uploaded by Full ITC shall be available.

Suppliers in GSTR-1
ITC of Invoices / Debit Notes not uploaded by Maximum 10% of “Eligible ITC”
Suppliers in GSTR-1 available in respect of Invoices /
Debit Notes uploaded in GSTR-1 can
be availed.
Example During the month of Jan., Mr. A receives 100 purchase invoices involving GST of Rs.
10 lakh, from various suppliers. Compute the ITC that can be availed by Mr. A in
GSTR-3B for the month of Jan. to be filed by 20th Feb assuming that the GST of Rs. 10
lakh is otherwise eligible for ITC:
(1) Out of 100 invoices, 80 invoices involving ITC of Rs. 6 lakh were uploaded by the
suppliers in GSTR-1 and 20 invoices involving ITC of Rs. 4 lakh were not uploaded.
(2) Out of 100 invoices, 85 invoices involving ITC of Rs. 9.50 lakh were uploaded by
the suppliers in GSTR-1 and 15 invoices involving ITC of Rs. 0.50 lakh were not
uploaded.
Answer:
As per Rule 36(4), the ITC to be availed by a registered person in respect of invoices /
debit notes, of which details have not been uploaded by the suppliers in their GSTR-1,
Based on this provision, the ITC to be availed by Mr. A in GSTR-3B for the month of
Jan shall be computed as follows:
Invoices ITC ITC which can be
involved availed by Mr. A in
GSTR-3B
Case – 1
80 Invoices uploaded by suppliers in GSTR-1 6 lakh Full ITC = 6 lakh
20 Invoices not uploaded by suppliers in 4 lakh 10% of 6 lakh = 0.60

GSTR-1 lakh
Total 10 lakh 6.60 lakh
Case – 2
85 Invoices uploaded by suppliers in GSTR-1 9.5 lakh Full ITC = 9.50 lakh
15 Invoices not uploaded by suppliers in 0.50 lakh 10% of 9.50 lakh =

GSTR-1 0.95 lakh, but the
actual ITC is Rs. 0.50
lakh. Hence 0.50 lakh.
Total 10 lakh 10 lakh

Notes:
(i) Full ITC is available in respect of invoices / debit notes uploaded by the suppliers in
GSTR-1.
(ii) The ITC in respect of invoices / debit notes not uploaded by the suppliers in GSTR-
1 has been restricted to 10% of the eligible ITC available in respect of the Invoices /
Debit Notes uploaded by the Suppliers in GSTR-1”.
Circular Circular No. 123 / 42 / 2019 GST dated 11.11.2019

Clarifications Following clarifications have also been issued with regard to the 20% / 10% limit:
(1) The restriction is not imposed by Common Portal. It is the responsibility of
taxpayer to apply restriction while availing ITC on self-assessment basis.
(2) The restriction shall be applied only on the invoices / debit notes, details of which
are required to be uploaded by the supplier u/s 37(1). In other words, the
restriction shall not apply for availing other ITC.
Example: The restriction shall not apply in respect of GST paid on (i) imports and
(ii) RCM. Therefore, the taxpayer can claim full ITC of GST paid on imports and
RCM.
(3) The restriction shall be calculated on total eligible ITC from all suppliers i.e. on
aggregate basis. The restriction shall not be applied separately for each supplier.
(4) The calculation shall be based only on those invoices for which ITC is available.
Hence, the invoices for which ITC is not available [For example – ITC is blocked
u/s 17(5)] would not be considered for calculation of 20% / 10% limit.
(5) The restriction of 20% / 10% shall be checked in respect of invoices / debit notes
which have been uploaded by the supplier u/s 37(1) as on the due date of filing
of GSTR-1 and not on actual date of filing of GSTR-1. This can be ascertained
from GSTR-2A.
Example: The due date for filing of GSTR-1 for January 2020 is 11.02.2020.
Hence the ITC in respect of invoices / debit notes which have not been uploaded
by supplier shall be maximum 20% / 10% of the total ITC reflected in GSTR-2A of
recipient as on 11.02.2020.
Rule 86A Restriction on utilization of ITC
New law This new Rule empowers the Commissioner (or any officer authorized by him, not
below the rank of an Assistant Commissioner) to impose restrictions on utilization of
ITC available in the ECrL, where he has reason to believe that such ITC has been
fraudulently availed or is ineligible due to any of the following reasons:
(i) the ITC has been availed –
(a) on the basis of Tax Invoice / Debit Note / Any other document issued by a
registered person who has been found non-existent or not to be conducting any
business from any place for which registration has been obtained (i.e. Farji
Supplier); or
(b) without receipt of goods or services or both (i.e. Farji Invoice); or
(c) the tax charged in respect of which has not been paid to the Govt.; or
(ii) the registered person availing the ITC has been found non-existent or not to be
conducting any business from any place for which registration has been obtained
((i.e. Farji Recipient); or
(iii) the registered person availing the ITC is not in possession of Tax Invoice / Debit
Note / any other document

Type of restriction:
In such a case, the Commissioner / Authorised Officer may, for reasons to be recorded
in writing, not allow debit of an amount equivalent to such ITC available in ECrL for
discharge of any liability u/s 49 or not allow the claim of refund of any unutilised amount
of such ITC.
Validity period of restriction:

Such restriction shall cease to have effect after the expiry of a period of 1 year from the
date of imposing such restriction.
Withdrawal of restriction:
The Commissioner / Authorised Officer can withdraw restriction, if he is satisfied that
the conditions for imposing the restrictions no longer exist.
Rule 43 Manner of apportionment of ITC of Capital Goods and Reversal thereof
Certain Steps have been amended:

Step Old law New law
1 Identify the ITC on capital goods

intended to be used “exclusively for No change
T-1 non-business purposes”
- This amount shall be determined and
declared at Invoice Level in Form
GSTR-2 / Summary level in Form
GSTR-3B and not credited to
Electronic Credit Ledger (ECrL).
2 Identify the ITC on capital goods

intended to be used “exclusively for No change
T-2 effecting exempt supplies”
- This amount shall be determined and
3 Identify the ITC on capital goods which

are “not eligible for credit u/s 17(5) [i.e. No change
T-3 blocked credit]”
-This amount shall be determined and
4 ITC on capital goods that are intended

to be used “exclusively for taxable No change
T-4 supplies including zero-rated supplies”
-This amount shall be determined and
declared in Form GSTR-2 / Form
GSTR-3B and credited to Electronic
Credit Ledger (ECrL).

5 Identify ITC on capital goods not Identify ITC on capital goods not
covered under above -- i.e. identify the covered under above -- i.e. identify
ITC of capital goods which are used or the ITC of capital goods which are
A intended to be used commonly for used or intended to be used
business and non-business purposes commonly for business and non-
and for making taxable supplies as business purposes and for making
well as exempt supplies]. This amount taxable supplies as well as exempt
shall be called “A” - It shall be credited supplies]. This amount shall be called
to Electronic Credited Ledger (ECrL). “A” - It shall be credited to Electronic
The useful life of such capital goods Credited Ledger (ECrL). The useful
shall be taken as 5 years from the date life of such capital goods shall be
of invoice. taken as 5 years from the date of
invoice.
Note: Note:
Shifting from “non-eligible use” to Shifting from “non-eligible use” to
“common use”: “common use”:
If the capital goods earlier covered If the capital goods earlier covered
under (1) or (2) is subsequently shifted under (1) or (2) is subsequently
to “Common for business and non- shifted to “Common for business and
business purposes and for making non-business purposes and for
taxable supplies as well as exempt making taxable supplies as well as
supplies”, the value of “A” shall be exempt supplies”, the value of “A”
computed by reducing ITC @ 5% shall be the amount of Full ITC of
points for every quarter or part of a such goods and such “A” shall be
quarter – The “A” computed so, credited to Electronic Credit
shall be credited to Electronic Ledger (ECrL), subject to the
Credit Ledger (ECrL). condition that the ITC attributable
to the period during which such
capital goods were earlier covered
under (1) or (2), denoted as “Tie”
shall be calculated @ 5% points
for every quarter or part thereof
and added to the Output Tax
liability in Form GSTR – 3B, of the
tax period in which such credit is
claimed.
Example: Example:
On 01.10.2020, A Ltd. purchases a On 01.10.2020, A Ltd. purchases a
Machine-1 to be used for manufacture Machine-1 to be used for
of item X (taxable) and Y (exempted). manufacture of item X (taxable) and
Cost is Rs. 1 Crore + GST 12%. In this Y (exempted). Cost is Rs. 1 Crore +
case, the ITC of Rs. 12,00,000 shall be GST 12%. In this case, the ITC of
denoted as “A” and allowed fully in Rs. 12,00,000 shall be denoted as
ECrL. The useful life of machine shall “A” and allowed fully in ECrL. The
be upto 30.09.2025. useful life of machine shall be upto
30.09.2025.

Further, on 01.10.2020, A Ltd. started Further, on 01.10.2020, A Ltd.
using an old Machine-2 for started using an old Machine-2 for
manufacture of item X (taxable) and Y manufacture of item X (taxable) and
(exempted). This Machine was Y (exempted). This Machine was
purchased on 01.10.2018 for Rs. 60 purchased on 01.10.2018 for Rs. 60
lakh + GST @12% and was being lakh + GST @12% and was being
used for Y (exempted goods) only. In used for Y (exempted goods) only. In
this case, the value of “A” shall be Rs. this case, the value of “A” shall be
7,20,000 (-) 40% of 7,20,000 [5% X 8 Rs. 7,20,000 [i.e. full ITC]. Hence Rs.
Quarters] = Rs. 4,32,000. Hence 7,20,000 shall be credited to ECrL
4,32,000 shall be credited to EcrL. and simultaneously Rs. 2,88,000
[being ineligible credit = 5% X 8
Quarters = 40% of 7,20,000] shall be
added to output tax liability of Oct,
2020 in GSTR-3B.
6 The aggregate of the amounts of “A” The aggregate of the amounts of “A”
credited to the Electronic Credit Ledger credited to the Electronic Credit
(ECrL) under 5, shall be the “Common Ledger (ECrL) under 5 in respect of
Tc credit” in respect of capital goods for a common capital goods whose
tax period and such “Common credit” useful life remains during the tax
shall be denoted as “Tc” period, shall be the “Common credit”
in respect of capital goods for a tax
period and such “Common credit”
shall be denoted as “Tc”
In the example, Tc shall be Rs. In the example, Tc shall be Rs.

16,32,000 [Rs. 12,00,000 for Machine- 19,20,000 [Rs. 12,00,000 for
1 + Rs. 4,32,000 for Machine-2]. Machine-1 + Rs. 7,20,000 for
Machine-2].
Note: Note:
Shifting from “eligible use” to “common Shifting from “eligible use” to
use”: “common use”:
If the capital goods earlier covered If the capital goods earlier covered
under (4) is subsequently shifted to under (4) is subsequently shifted to
Common use, the value of “A” Common use, the ITC claimed in
arrived at by reducing the ITC @5% respect of such capital goods
points for every quarter or part of a shall be added to “Tc”.
quarter shall be added to “Tc”.
Example: Example:
Further, on 01.10.2020, A Ltd. started Further, on 01.10.2020, A Ltd.
using an old Machine-3 for started using an old Machine-3 for
manufacture of item X (taxable) and Y manufacture of item X (taxable) and
(exempted). This Machine was Y (exempted). This Machine was
purchased on 01.10.2018 for Rs. 2 purchased on 01.10.2018 for Rs. 2
Crore + GST @12% and was being Crore + GST @12% and was being
used for X (Taxable goods) only. In Rs. used for X (Taxable goods) only. In
24,00,000 (-) 40% of 24,00,000 [5% X this case, Rs. 24,00,000 shall be

8 Quarters] = Rs. 14,40,000 shall be added to Tc. Hence the Tc for all
added to Tc. Hence the Tc for all three three machines shall be 12,00,000 +
machines shall be Rs. 12,00,000 + 7,20,000 + 24,00,000 =43,20,000.
4,32,000 + 14,40,000 = 30,72,000.
7 The amount of ITC attributable to a The amount of ITC attributable to a

“tax period” on common capital goods “tax period” on common capital
during their useful life, shall be goods during their useful life, shall be
denoted as Tm and computing by denoted as Tm and computing by
Tm applying this formula-- applying this formula--
Tm = Tc Tm = Tc
60 60
Explanation.- For the removal of

doubt, it is clarified that useful life
of any capital goods shall be
considered as 5 years from the
date of invoice and the said
formula shall be applicable during
the useful life of the said capital
goods.
Example: Example:
Tm shall be = Rs. 30,72,000 / 60 = Rs. Tm shall be = Rs. 43,20,000 / 60 =
5,12,000. 72,000.
8 The amount of ITC, at the beginning of This Step is totally removed.

a tax period, on all common capital
Tr goods whose useful life remains during
the tax period, be denoted as Tr and
shall be the aggregate of Tm for all
such capital goods.
Here Tr = Aggregate of Tm for all

common capital goods whose useful
life remains during the tax period
9 Compute the portion of common credit There is an unintended mistake on

attributable to “Exempt supplies”: the part of law-makers. Now they
Te should amend this Step and mention
Apply formula: “Tm” in place of “Tr”
Te = Tr X E
F
Please note that Te is “ineligible

credit”.

Chapter 9 – Registration
Section 25 Rule 10A – Details of Bank A/c can be filed within 45 days after grant of
registration
New law We have already discussed.
Section 29 Rule 21 - Cancellation of registration if the details of Bank A/c is not filed within
45 days after grant of registration
Section 29 Amendments relating to “Suspension of Registration”

Section 25 Aadhar Authentication mandatory for grant of registration
New law Section 139AA of Income-tax Act contains a requirement of “Linking Aadhar with
PAN”. Now a system of “Linking Aadhar with GSTN” is being introduced in GST
laws.
Accordingly, Section 25, Rule 8, Rule 9 and Rule 25 have been amended to prescribe
following provisions:
(1) Every registered person (may be individual or non-individual) shall undergo
authentication (furnishing proof of possession) of Aadhar Number in a prescribed
form and prescribed manner, within a prescribed time.
However, if the person fails to undergo authentication of Aadhar Number, the
registration shall be deemed to be invalid.
(2) Every Individual, authorized signatories of all types, managing and authorized
partners a firm and KARTA of HUF shall, while submitting the application for
registration, undergo authentication (furnish proof of possession) of Aadhar Number
in a prescribed manner to be eligible for grant of registration.
However, if the person fails to undergo authentication of Aadhar Number, the
registration shall be granted only after physical verification of the principal place of
business in presence of the said person, not later than 60 days from the date of
application. During physical verification, site survey shall be done, document shall
be verified and the verification report shall be prepared. The verification report
alongwith photographs shall be uploaded in the prescribed form on the Common
Portal within a period of 15 working days following the date of verification. Only
Then only registration shall be granted.
Chapter 10 - Tax Invoice, Credit Note and Debit Note

Section Daily Consolidated Invoice not allowed to a supplier engaged in making supply
31(3)(b) of services by way of admission to exhibition of cinematograph films in multiplex
screens.
Rule 54 Electronic Ticket to be issued by a supplier engaged in making supply of
services by way of admission to exhibition of cinematograph films in multiplex
screens

Section 68 Rule 138(10) - Validity period of E-Way Bill
Section 68 Rule 138E - Restriction on issuance of E-Way Bill in respect of defaulters
No person (including a consignor, consignee, transporter, e-commerce operator or a

New law
courier agency) shall be allowed to furnish the information in Part-A of Form GST
EWB-01 in respect of following registered persons (whether as a supplier or recipient):
(i) a person paying tax under Composition Scheme or 6% Concessional Scheme,
who has not furnished the Quarterly Statement of Tax Payment for 2
consecutive quarters; or
(ii) a person paying tax under Regular Scheme who has not furnished the Returns
for 2 consecutive months; or
(iii) a person paying tax under Regular Scheme who has not furnished GSTR-1 for
any 2 months / quarters, as the case may be.
In simple words, E-Way Bill cannot be generated in respect of these 3 categories

of defaulters.
Special Power of Jurisdictional Commissioner to allow generation of E-Way Bill:

(a) The Jurisdictional Commissioner may, on receipt of an application from a
registered person in a prescribed form, on sufficient cause being shown and for
reasons to be recorded in writing, by order in a prescribed form, allow
furnishing of the said information in PART A of FORM GST EWB 01, subject to
such conditions and restrictions as may be specified by him.
(b) An order rejecting the said request shall not be passed without affording a
reasonable opportunity of hearing to the said person.
(c) The permission granted or rejected by the Commissioner of State tax or

Commissioner of UT Tax shall be deemed to be granted or rejected by the
Commissioner.
Rule 48(4) Issuance of E-Invoice
This Rule prescribes that the E-Invoice shall be prepared by notified class of registered
New law
persons by including such particulars contained in Form GST Inv-01 after obtaining an
IRN (Invoice Reference Number) by uploading the information contained therein, on
the Common GST Electronic Portal in a prescribed manner.
Following Points should also be noted:

(a) Every invoice, issued by said persons, in any manner other than the manner
specified in Rule 48(4) shall not be treated as an invoice.
(b) The requirement of preparing invoices in duplicate and triplicate shall not apply to
such E-Invoices.
(c) The Govt. is also empowered to specify that the E-Invoices shall have Quick
Response (QR) Codes.

Note:
Following Invoice Registration Portals (IRPs) have been notified as Common GST
Electronic Portal for the purpose of E-Invoices:
(i) www.einvoice1.gst.gov.in
(ii) www.einvoice2.gst.gov.in
(iii) www.einvoice3.gst.gov.in
(iv) www.einvoice4.gst.gov.in
(v) www.einvoice5.gst.gov.in
(vi) www.einvoice6.gst.gov.in
(vii) www.einvoice7.gst.gov.in
(viii) www.einvoice8.gst.gov.in
(ix) www.einvoice9.gst.gov.in
(x) www.einvoice10.gst.gov.in
Chapter 12 – Return
Section 39 Rule 61(5) - GSTR-3B is a Return u/s 39(1) and the person who has furnished
GSTR-3B shall not be required to furnish GSTR-3
Best of luck ..
God bless you ..
for any doubt / clarification, please Whatsapp # 9414130248 …

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EXCEL COMMERCE ACADEMY PRIVATE LIMITED,

UPDATE FOR CA (Intermediate / IPC) for Nov, 2020

B-2 Not discussed in Video Classes and not included in my books 24 – 35

With Best Wishes – BM Biyani, B.Com, LLB, FCA, CS

Lectures of Biyani Sir 1 WhatsApp # 9414130248

COMPUTATION OF TOTAL INCOME OF INDIVIDUAL

Taxable income from salary Section 15 to 17 XXX

COMPUTATION OF TAX LIABILITY OF INDIVIDUAL

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BASIC TAX ON SPECIAL INCOMES @ SPECIAL RATES:

BASIC TAX ON NORMAL INCOMES CHARGEABLE @ NORMAL RATES:

REBATE U/S 87A:

MARGINAL RELIEF OF SURCHARGE (MRS):

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(b) How to compute “Adjusted Total Income” –

(c) How to compute AMT –

AMT CREDIT u/s 115JD

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COMPUTATION OF TAX LIABILITY

Step-3 – Tax liability

AMT credit to be C/F to next 15 Years

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“Deposit taking NBFC” means a NBFC which is accepting or holding public

“Systematically important non-deposit taking NBFC” means a NBFC which is not

Special provision for conversion of unpaid interest into a new loan:

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How much deduction?

Meaning of “electric vehicle”:

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Rates of Basic Tax on Normal Incomes:

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Marginal Relief of Surcharge (MRS):

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All amendments as discussed in “Amendment Class held for Nov.

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Chapter 2 – Definitions and Concept of Supply

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1 Services provided by Any person other than a body A body corporate

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This exemption is not allowed to This exemption is not allowed to

45 (a) Service provided by an “arbitral (a) Service provided by an “arbitral

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(c) Legal service provided by a (c) Legal service provided by a

9AA X Services provided BY and TO

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“Declared tariff” includes charges

22 Services by way of giving on hire – Services by way of giving on hire –

24B X Services by way of storage /

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