Page 15 - Banking Finance September 2020

ROUNDUP

gate the distress caused by lockdown real estate, told : "I agree with the ITAT Charge), Development of North East-
due to COVID-19 by providing credit to view and it is a good decision. Years ern Region, MOS PMO, Personnel,
different sectors, especially micro, ago, in 1979, the Bombay high court Public Grievances, Pensions, Atomic
small and medium enterprises had held that when a part-payment Energy and Space.
(MSMEs). was made and a right was acquired, However, pensioners in the age group
The latest numbers on ECLGS, as re- this amounted to a capital asset, even of 80 years and above can submit life
leased by the finance ministry, com- though the transaction had not been certificate from October 1 to Decem-
prise disbursements by all 12 public completed. On the sale of the asset, ber 31, said an official release.
sector banks (PSBs), 24 private sector the surplus was to be treated as a capi- During this extended period, the pen-
banks and 31 non-banking financial tal gain. This high court order has been sion will continue to be paid uninter-
companies (NBFCs). the foundation for several other deci-
sions referred to in the recent ITAT rupted by the Pension Disbursing Au-
Benefit from scrapped flat order." thorities (PDAs).
The Centre has also asked pension-dis-
deal is capital gain In this case heard by ITAT, Mukesh
Sohanraj Vardhan, the taxpayer, had bursing banks to explore video-based
If a Mumbaikar books a flat, then can- treated the benefit of Rs 18.75 lakh customer identification process as a
cels the deal with the builder, and ben- received from the builder on cancella- consent-based alternative method to
efits by receiving a sum higher than the tion of his deal-flat booked in establish the customer's identity for
earnest amount paid, the excess will Vardhaman Heights, Byculla-as a long- obtaining a life certificate from the
not be treated as a tax-free income. term capital gain. He had invested a pensioner, to the extent permitted by
In tax parlance, it will not constitute a significantly higher amount in another the RBI guidelines, the release added.
capital receipt. The Income-Tax Appel- house property within the stipulated
late Tribunal's Mumbai bench, in a re- time and thus claimed the benefit of From Oct, 5% tax on for-
cent order, ruled that the excess con- Section 54. The I-T officer, though,
sideration received is in the nature of sought to treat the sum of Rs 18.75 eign fund transfer
'capital gains'. lakh as income from other sources-a Any amount sent abroad to buy foreign
In the absence of any contrary jurisdic- position the commissioner of income- tour packages, and every other foreign
tional order, this ITAT order will also tax (appeals) upheld. remittance made above Rs. 7 lakh, will
play a significant role in assessment of attract a tax-collected-at source (TCS)
cases outside Mumbai. Govt relaxes timeline for beginning 1 October unless tax is al-
ready deducted at source (TDS) on that
The ITAT view is more favourable than submission of life certifi-
the tax department's. An I-T officer, in amount.
the course of his assessment, had cate While the tax on foreign tour packages
treated the excess sum minus the book- The Centre has relaxed the existing will be 5% for any amount, for other
ing and earnest money as 'income from timeline for submission of life certifi- foreign remittances the tax will kick in
other sources'. cate for Central Government pension- only for the amount spent above Rs. 7
ers up to December 31. lakh.
Under Section 54 of the Income-Tax (I-
T) Act, if long-term capital gains aris- Central Government pensioners have For education-related foreign remit-
ing out of a house sale are invested in to submit a life certificate in Novem- tances funded by loans, though, the
another home in India within a stipu- ber for further continuation of their tax will be just 0.5% for the amount
lated period of time, then to the ex- pension. above Rs. 7 lakh, considering many
tent of such investment, the taxable Keeping in view of the vulnerability of Indian students take loans to pursue
component of capital gains is reduced. the elderly population to Covid, all education abroad.
This results in a lower tax outgo. Thus, Central Government pensioners can Under the Reserve Bank of India's lib-
if the entire amount of long-term capi- submit the certificate from November eralized remittances scheme, individu-
tal gains is invested, no tax is payable. 1 up to December 31, said Jitendra als can remit a maximum of $250,000
Anil Harish, an advocate specialising in Singh, Minister of State (Independent abroad every year. The provision to

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