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Online PF withdrawal: How to file claim for online provident fund withdrawal with EPFO EPFO has made it mandatory to make PF claims online for withdrawals of more than Rs 10 lakh. Here's a look at the PF withdrawal online process and how to check the PF online claim status following some simple steps.

Government makes ID-checks mandatory for cash transactions above Rs 50,000

The government has made it mandatory for banks and financial institutions to check the original identification documents of individuals dealing in cash above the Rs 50,000 threshold as part of the stepped up war against black money.

The Department of Revenue under the administrative control of the Finance Ministry has issued a notification making an amendment to the Prevention of Money-laundering (Maintenance of Records) Rules.

The new rule now requires the reporting entity to compare the copy of the officially valid identification document produced by the client with the original and record it on the copy. The Prevention of Money Laundering Act (PMLA) forms part of the legal framework put in place by the government to combat money laundering and generation of black money.

Notification of Income Tax Returns for Assessment Year 2016-17-
regarding

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 1st April, 2016

The Central Board of Direct Taxes has notified the forms for filing of Income-tax returns for Assessment Year 2016-17. These return forms, namely ITR-1 (Sahaj), ITR-2, ITR-2A, ITR-3, ITR-4, ITR-4S (Sugam), ITR-5, ITR-6, ITR-7 are available on the
official website of the Department, http://www.incometaxindia.gov.in.

With the passage of Finance Bill, 2015, wealth-tax is no longer leviable with effect from assessment year 2016-17. Taxpayers are, therefore, not required to file a wealth tax return from assessment year 2016-17 onwards. While abolishing the charge of Wealth-tax, the Finance Minister also announced that information which was required to be furnished in the return of wealth will now form a part of the Income-tax return.

Individuals and HUFs with income above a specified limit, filing returns in ITR-3 and ITR-4 are already required to furnish information of their assets and liabilities in their annual return of income. With Assessment Year 2016-17, individuals and HUFs filing their returns of income in ITR-1, ITR-2, ITR-2A and ITR-4S, having income exceeding Rs.50 lakh will now be required to furnish information regarding assets and liabilities in Schedule-AL of the relevant ITR form.

These changes in ITR forms are in tune with the announcement made in the Budget Speech 2015.

(Shefali Shah)
Pr. Commissioner of Income Tax
(Media and Technical Policy)
and Official Spokesperson, CBDT

Draft rules for granting relief or deduction of Income-tax under
section 90/ 90A/ 91 of the Income-tax Act – reg.

F.No. 142/24/2015-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(TPL Division)
New Delhi, dated 18th April, 2016

Clause (ha) of sub-section (2) of section 295 of the Income-tax Act, 1961 (the
Act) provides that the Central Board of Direct Taxes (CBDT) may prescribe rules
specifying the procedure for the granting of relief or deduction, as the case may be,
of any income-tax paid in any country or specified territory outside India, under
section 90 or section 90A or section 91, against the income-tax payable under the Act.

II. A Committee was set up by CBDT to suggest the methodology for grant of
Foreign Tax Credit (FTC) after examining the various issues related to it. After due
consideration of the issues raised by various stakeholders, the Committee submitted
its report. Taking into account, the report of the Committee and the provisions of the
Act the draft rules for grant of FTC are proposed as under:

(1) An assessee being a resident shall be allowed a credit for the amount of any
foreign tax paid by him in a country or specified territory outside India, by way of
deduction or otherwise, in the year in which the income corresponding to such tax
has been offered to tax or assessed to tax in India, in the manner and to the extent as
specified in this rule.

(2) The foreign tax shall mean,-
(a) in respect of a country or specified territory with which India has entered into
an agreement for avoidance of double taxation of income in terms of section
90 or 90A of the Act, the tax covered under the said agreement;
(b) in respect of any other country or specified territory, the tax payable under
the law in force in that country in the nature of income-tax referred to in
clause (iv) of the Explanation to section 91.

(3) The credit for foreign tax shall be available against the amount of tax, surcharge
and cess payable under the Act but not in respect of any sum payable by way of
interest, fee or penalty.

(4) No credit shall be available in respect of any amount of foreign tax which is
disputed in any manner by the assessee.

(5) The credit of foreign tax shall be the aggregate of the amounts of credit computed
separately for each source of income arising from a particular country or specified
territory and given effect to in the following manner:
(i) the credit shall be the lower of the tax payable under the Act on such income
and the foreign tax paid on such income;
(ii) the credit shall be determined by conversion of the currency of payment of
foreign tax at the telegraphic transfer buying rate on the date on which such
tax has been paid or deducted.

(6) In a case where any tax is payable under the provisions of section 115JB or 115JC
of the Act, the credit of foreign tax shall be allowed against such tax in the same
manner as is allowable against any tax payable under the normal provisions of the
Act.

(7) Where the amount of foreign tax credit available against the tax payable under
the provisions of section 115JB or 115JC exceeds the amount of tax credit available
against the normal provisions, then while computing the amount of credit under
section 115JAA or section 115JD in respect of the taxes paid under section 115JB or
section 115JC, as the case may be, such excess shall be ignored.

(8) No credit of any foreign tax shall be allowed unless the following documents are
furnished by the assessee, namely:-
(i) certificate from the tax authority of a country or specified territory outside
India specifying the nature of income and the amount of tax deducted
therefrom or paid by the assessee. However, in a case where the foreign tax is
deducted at source, the assessee may furnish a certificate of tax deducted
from the person responsible for deduction of such tax;
(ii) acknowledgement of online tax payment or bank counter foil or slip or
challan for tax payment where the payment of foreign tax has been made by
the assessee; and
(iii) a declaration that amount of foreign tax in respect of which credit is being
claimed is not under any dispute.
III. The comments and suggestion of stakeholders and general public on the
above draft rules are invited. The comments and suggestions may be submitted by
02nd May, 2016 at the email address ([email protected]) or by post at the following
address with “Comments on draft rules for granting Foreign Tax Credit” written on
the envelope:

Director (Tax Policy & Legislation)-IV
Central Board of Direct Taxes,
Room No. 147-F,
North Block, New Delhi – 110 001

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Import Procedures in India

Import trade refers to the purchase of goods from a foreign country. The procedure for import trade differs from country to country depending upon the import policy, statutory requirements and customs policies of different countries. In almost all countries of the world import trade is controlled by the government. The objectives of these controls are proper use of foreign exchange restrictions, protection of indigenous industries etc. The imports of goods have to follow a procedure. This procedure involves a number of steps.
The steps taken in import procedure are discussed as follows:
(i) Trade Enquiry:
The first stage in an import transaction, like any other transaction of purchase and sale relates to making trade enquiries. An enquiry is a written request from the intending buyer or his agent for information regarding the price and the terms on which the exporter will be able to supply goods.
The importer should mention in the enquiry all the details such as the goods required, their description, catalogue number or grade, size, weight and the quantity required. Similarly, the time and method of delivery, method of packing, terms and conditions in regard to payment should also be indicated.
In reply to this enquiry, the importer will receive a quotation from the exporter. The quotation contains the details as to the goods available, their quality etc., the price at which the goods will be supplied and the terms and conditions of the sale.
(ii) Procurement of Import Licence and Quota:
The import trade in India is controlled under the Imports and Exports (Control) Act, 1947. A person or a firm cannot import goods into India without a valid import licence. An import licence may be either general licence or specific licence. Under a general licence goods can be imported from any country, whereas a specific or individual licence authorises to import only from specific countries.
The Government of India declares its import policy in the Import Trade Control Policy Book called the Red Book. Every importer must first find out whether he can import the goods he wants or not, and how much of a certain class of goods he can import during the period covered by the relevant Red Book.
For the purpose of issuing licence, the importers are divided into three categories:
(a) Established importer,
(b) Actual users, and
(c) Registered exporters, i.e., those import under any of the export promotion schemes.
In order to obtain an import licence, the intending importer has to make an application in the prescribed form to the licensing authority. If the person imported goods of the class in which he is interested now during the basic period prescribed for such class, he is treated as an established importer.
An established importer can make an application to secure a Quota Certificate. The certificate specifies the quantity and value of goods which the importer can import. For this, he furnishes details of the goods imported in any one year in basic period prescribed for the goods together with documentary evidence for the same, including a certificate from a chartered accountant in the prescribed form certifying the c.i.f. value of the goods imported in the selected year.
The c.i.f. value includes the invoice price of the goods and the freight and insurance paid for the goods in transit. The quota certificate entitles the established importer to import upto the value indicated therein (called Quota) which is calculated on the basis of past imports. If the importer is an actual user, that is, he wants to import goods for his own use in industrial manufacturing process he has to obtain licence through the prescribed sponsoring authority.
The sponsoring authority certifies his requirements and recommends the grant of licence. In case of small industries having a capital of less than Rs. 5 lakhs, they have to apply for licences through the Director of Industries of the state where the industry is located or some other authority expressly prescribed by the Government.
Registered exporter importing against exports made under a scheme of export promotion and others have to obtain licence from the Chief Controller of Exports and Imports. The Government issues from time to time a list of commodities and products which can be imported by obtaining a general permission only. This is called as O.G.L. or Open General Licence list.
(iii) Obtaining Foreign Exchange:
After obtaining the licence (or quota, in case of an established importer), the importer has to make arrangement for obtaining necessary foreign exchange since the importer has to make payment for the imports in the currency of the exporting country.
The foreign exchange reserves in many countries are controlled by the Government and are released through its central bank. In India, the Exchange Control Department of the Reserve Bank of India deals with the foreign exchange. For this the importer has to submit an application in the prescribed form along-with the import licence to any exchange bank as per the provisions of Exchange Control Act.
The exchange bank endorses and forwards the applications to the Exchange Control Department of the Reserve Bank of India. The Reserve Bank of India sanctions the release of foreign exchange after scrutinizing the application on the basis of exchange policy of the Government of India in force at the time of application.
The importer gets the necessary foreign exchange from the exchange bank concerned. It is to be noted that whereas import licence is issued for a particular period, exchange is released only for a specific transaction. With liberalisation of economy, most of the restrictions have been removed as rupee has become convertible on current account.
(iv) Placing the Indent or Order:
After the initial formalities are over and the importer has obtained the licence quota and the necessary amount of foreign exchange, the next step in the import of goods is that of placing the order. This order is known as Indent. An indent is an order placed by an importer with an exporter for the supply of certain goods.
It contains the instructions from the importer as to the quantity and quality of goods required, method of forwarding them, nature of packing, mode of settling payment and the price etc. An indent is usually prepared in duplicate or triplicate. The indent may be of several types like open indent, closed indent and Confirmatory indent.
In open indent, all the necessary particulars of goods, price, etc. are not mentioned in the indent, the exporter has the discretion to complete the formalities, at his own end. On the other hand, if full particulars of goods, the price, the brand, packing, shipping, insurance etc. are mentioned clearly, it is called a closed indent. A confirmatory indent is one where an order is placed subject to the confirmation by the importer’s agent.
(v) Despatching a Letter of Credit:
Generally, foreign traders are not acquainted to each other and so the exporter before shipping the goods wants to be sure about the creditworthiness of the importer. The exporter wants to be sure that there is no risk of non-payment. Usually, for this purpose he asks the importers to send a letter of credit to him.
A letter of credit, popularly known as ‘L/C or ‘L.C is an undertaking by its issuer (usually importer’s bank) that the bills of exchange drawn by the foreign dealer, on the importer will be honoured on presentation upto a specified amount.
(vi) Obtaining Necessary Documents:
After despatching a letter of credit, the importer has not to do much. On receipt of the letter of credit, the exporter arranges for the shipment of goods and sends Advice Note to the importer immediately after the shipment of goods. An Advice Note is a document sent to a purchaser of goods to inform him that goods have been despatched. It may also indicate the probable date on which the ship is expected to reach the port of destination.
The exporter then draws a bill of exchange on the importer for the invoice value of goods. The shipping documents such as the bill of lading, invoice, insurance policy, certificate of origin, consumer invoice etc., are also attached to the bill of exchange. Such bill of exchange with all these attached documents is called Documentary Bill. Documentary bill of exchange is forwarded to the importer through a foreign exchange bank which has a branch or an agent in the importer’s country for collecting the payment of the bill.
There are two types of documentary bills:
(a) D/P, D.P. (or Documents against payment) bills.
(b) D/A, D.A. (or Document against acceptance) bills.
If the bill of exchange is a D/P bill, then the documents of title of goods are delivered to the drawee (i.e., importer) only on the payment of the bill in full. D/P bill may be sight bill or usance bill. In case of sight bill, the payment has to be made immediately on the presentation of the bill. But usually a grace period of 24 hours is granted.
Usance bill is to be paid within a particular period after sight. If the bill is a D/A bill, then the documents of title of goods are released to the drawee on his acceptance of the bill and it is retained by the banker till the date of maturity. Usually 30 to 90 days are provided for the payment of the bill.
(vii) Customs Formalities and Clearing of Goods:
After receiving the documents of title of the goods, the importer’s only concern is to take delivery of the goods, when the ship arrives at the port and to bring them to his own place of business. The importer has to comply with many formalities for taking delivery of goods. Unless the following mentioned formalities are complied with, the goods lie in the custody of the Custom House.
(a) To obtain endorsement for delivery or delivery order:
When the ship carrying the goods arrives at the port, the importer, first of all, has to obtain the endorsement on the back of the bill of lading by the shipping company. Sometimes the shipping company, instead of endorsing the bill in his favour, issues a delivery order to him. This endorsement of delivery order will entitle the importer to take the delivery of the goods.
The shipping company makes this endorsement or issues the delivery order only after the payment of freight. If the exporter has not paid the freight, i.e., when the bill, of lading is marked freight forward, the importer has to pay the freight in order to get green signal for the delivery of goods.
(b) To pay Dock dues and obtain Port Trust Dues Receipts:
The importer has to submit two copies of a form known as ‘Application to import’ duly filled in to the ‘Lading and Shipping Dues Office’. This office levies a charge on all imported goods for services rendered by the dock authorities in connection with lading of goods. After paying the necessary charges, the importer receive back one copy of the application to import as a receipt ‘Port Trust Dues Receipt’.
(c) Bill of Entry:
The importer will then fill in form called Bill of Entry. This is a form supplied by the custom office and is to be filled in triplicate. The bill of entry contains the particulars regarding the name and address of the importer, the name of the ship, packages number, marks, quantity, value, description of goods, the name of the country wherefrom goods have been imported and custom duty payable.
The bill of entry forms are of three types and are printed in three colours-Black, Blue and Violet. A black form is used for non-dutiable or free goods, the blue form is used for goods to be sold within the country and the violet form is used for re-exportable goods, i.e., goods meant for re-export. The importer has to submit three forms of bill of entry along-with Port Trust Dues Receipt to the customs office.
(d) Bill of Sight:
If the importer is not is a position to supply the detailed particulars of goods because of insufficiency of information supplied to him by the exporter, he has to prepare a statement called a bill of sight. The bill of sight contains only the information possessed by the importer along-with a remark that he is not in a position to give complete information about the goods. The bill of sight enables him to open the package and examine the goods in the presence of custom officer so as to complete the bill of entry.
(e) To pay Customs or Import Duty:
There are three types of imported goods:
(i) Non dutiable or free goods,
(ii) Goods which are to be sold within the country or which are for home consumption, and
(iii) Re-exportable goods i.e. goods meant for re-export. If the goods are duty free, no import duty is to be paid at the custom office.
Custom authorities will permit the delivery of such goods after usual examination of the goods. But if the goods are liable for duty, the importer has to pay custom or import duty which may be based on weight or measurement of goods, called Specific Duty or on the value of imported goods Ad-valorem Ditty.
There are three types of import duties. On some goods quite low duties are levied and they are called revenue duties. On some others, quite high duties are charged to give protection to home industries against foreign competition. While goods imported from certain nations are given preferential treatment for the levy of import duties and in their case full protective duties are not charged.
(f) Bonded and Duty paid Warehouses:
The port trust and custom authorities maintain two types of warehouses-Bonded and Duty paid. These warehouses are situated near the dock and are very useful to importers who do not have godown of their own to store the imported goods or who, for business reasons, do not wish to carry them to their own godowns.
The goods on which the duty has already been paid by the importer can be kept in the duty paid warehouses for which a receipt called ‘warehouse receipt’ is issued to him. This receipt is a document of title and is transferable. The bonded warehouses are meant for goods on which duty has been paid by the importer. If the importer cannot pay the duty, he may keep the goods in Bonded warehouses for which he is issued a receipt, called ‘Dock Warrant’. Dock Warrant, also like warehouses receipt, is a document of title and is transferable.
The bonded warehouses are used by the importer when:
(i) He has no godown of his own.
(ii) He cannot pay the duty immediately.
(iii) He wants to re-export the goods and thereby does not want to pay the duty.
(iv) He wants to pay the duty in installments.
A nominal rent is charged for the use of these warehouses. One special advantage of these warehouses is that the importer can sell the goods and transfer the title of goods merely by endorsing warehouse receipt or dock-warrant. This will save the importer from the trouble and expenses of carrying the goods from the warehouses to his godown.
(g) Appointment of clearing Agents:
By now we understand that the importer has to fulfill many legal formalities before he can take delivery of goods. The importer may take the delivery of the goods himself at the port. But it involves much of time, expenses and difficulty. Thus, to save himself from the botheration of complying with all the complicated formalities, the importer may appoint clearing agents for taking the delivery of the goods for him. Clearing agents are the specialised persons engaged in the work of performing various formalities required for taking the delivery of goods on behalf of others. They charge some remuneration on performing these valuable services.
(viii) Making the Payment:
The mode and time of making payment is determined according to the terms and conditions as agreed to earlier between the importer and the exporter. In case of a D/P bill the documents of title are released to the importer only on the payment of the bill in full. If the bill is a D/A bill, the documents of title of the goods are released to the importer on his acceptance of the bill. The bill is retained by the banker till the date of maturity. Usually, 30 to 90 days are allowed to the importer for making the payment of such bills.
(ix) Closing the Transactions:
The last step in the import trade procedure is closing the transaction. If the goods are to the satisfaction of the importer, the transaction is closed. But if he is not satisfied with the quality of goods or if there is any shortage, he will write to the exporter and settle the matter. In case the goods have been damaged in transit, he will claim compensation from the insurance company. The insurance company will pay him the compensation under an advice to the exporter.

Export Procedures in India

Exporters should seriously consider having the freight forwarder handle the formidable amount of documentation that exporting requires; freight forwarders are specialists in this process. The following documents are commonly used in exporting; which of them are actually used in each case depends on the requirements of both our government and the government of the importing country.

1. Commercial invoice
2. Bill of lading
3. Consular invoice
4. Certificate of origin
5. Inspection certification
6. Dock receipt and warehouse receipt
7. Destination control statement
8. Insurance certificate
9. Export license
10. Export packing list

STEP - 1: Enquiry :

The starting point for any Export Transaction is an enquiry.
An enquiry for product should, inter alia, specify the following details or provide the following data
Size details - Std. or oversize or undersize
Drawing, if available
Sample, if possible
Quantity required
Delivery schedule
Is the price required on FOB or C& F or CIF basis
Mode of Dispatch - Sea, air or Sea/air
Mode of Packing
Terms of Payment that would be acceptable to the Buyer - If the buyer proposes to open any Letter of Credit, any specific requirement to be complied with by the Exporter
Is there any requirement of Pre-shipment inspection and if so, by which agency
Any Certificate of Origin required - If so, from what agency.

STEP - 2: - Proforma generation :

After studying the enquiry in detail, the exporter - be it Manufacturer Exporter or Merchant Exporter - will provide a Proforma Invoice to the Buyer.

STEP - 3: Order placement :

If the offer is acceptable to the Buyer in terms of price, delivery and payment terms, the Buyer will then place an order on the Exporter, giving as much data as possible in terms of specifications, Part No. Quantity etc. (No standard format is required for such a purchase order)

STEP - 4: Order acceptance :

It is advisable that the Exporter immediately acknowledges receipt of the order, giving a schedule for the delivery committed.

STEP - 5: Goods readiness & documentation :

Once the goods are ready duly packed in Export worthy cases/cartons (depending upon the mode of despatch), the Invoice is prepared by the Exporter.
If the number of packages is more than one, a packing list is a must.
Even If the goods to be exported are excisable, no excise duty need be charged at the time of Export, as export goods are exempt from Central Excise, but the AR4 procedure is to be followed for claiming such an exemption.
Similarly, no Sales Tax also is payable for export of goods.

STEP - 6: Goods removal from works :

There are different procedures for removing Export consignments to the Port, following the AR4 procedure, but it would be advisable to get the consignment sealed by the Central Excise authorities at the factory premises itself, so that open inspection by Customs authorities at the Port can be avoided.
If export consignments are removed from the factory of manufacture, following the AR4 procedure, claiming exemption of excise duty, there is an obligation cast on the exporter to provide proof of export to the Central Excise authorities

STEP - 7: Documents for C & F agent :

The Exporter is expected to provide the following documents to the Clearing & Forwarding Agents, who are entrusted with the task of shipping the consignments, either by air or by sea.
Invoice
Packing List
Declaration in Form SDF (to meet the requirements as per FERA) in duplicate.
AR4 - first and the second copy
Any other declarations, as required by Customs
On account of the introduction of Electronic Data Interchange (EDI) system for processing shipping bills electronically at most of the locations - both for air or sea consignments - the C&F Agents are required to file with Customs the shipping documents, through a particular format, which will vary depending on the nature of the shipment. Broad categories of export shipments are:
Under claim of Drawback of duty
Without claim of Drawback
Export by a 100% EOU
Under DEPB Scheme

STEP 8: Customs Clearance :

After assessment of the shipping bill and examination of the cargo by Customs (where required), the export consignments are permitted by Customs for ultimate Export. This is what the concerned Customs officials call the ‘LET EXPORT’ endorsement on the shipping bill.

STEP - 9: Document Forwarding :

After completing the shipment formalities, the C & F Agents are expected to forward to the Exporter the following documents:
Customs signed Export Invoice & Packing List
Duplicate of Form SDF
Exchange control copy of the Shipping Bill, processed electronically
AR4 (original duplicate) duly endorsed by Customs for having effected the Export
Bill of Lading or Airway bill, as the case may be.
STEP 10: Bills negotiation :
With these authenticated shipping documents, the Exporter will have to negotiate the relevant export bill through authorized dealers of Reserve Bank, viz., Banks.
Under the Generalized System of Preference, imports from developing countries enjoy certain duty concessions, for which the exporters in the developing countries are expected to furnish the GSP Certificate of Origin to the Bankers, along with other shipping documents.
Broadly, payment terms can be:
DP Terms
DA Terms
Letter of Credit, payable at sight or payable at... days.

Step - 11: Bank to bank documents forwarding :

The negotiating Bank will scrutinize the shipping documents and forward them to the Banker of the importer, to enable him clear the consignment.
It is expected of such authorized dealers of Reserve Bank to ensure receipt of export proceeds, which factor has to be intimated to the Reserve Bank by means of periodical Returns.

STEP - 12: Customs obligation discharge :

As indicated above, Exporters are also expected to provide proof of export to the Central Excise authorities, on the basis of the Customs endorsements made on the reverse of AR4s and get their obligation, on this score, discharged.

STEP - 13: Receipt of Bank certificate :

Authorized dealers will issue Bank Certificates to the exporter, once the payment is received and only with the issuance of the Bank Certificate, the export transaction becomes complete.

It is mandatory on the part of the Exporters to negotiate the shipping documents only through authorized dealers of Reserve Bank, as only through such a system Reserve Bank can ensure receipt of export proceeds for goods shipped out of this country.