India – Cyprus DTAA Negotiations

India – Cyprus DTAA Negotiations

PRESS RELEASE BY CBDT

New Delhi, 1st July, 2016.

Sub: Indo- Cyprus Double Taxation Avoidance Agreement

An official level meeting between India and Cyprus took place in New Delhi on 28 and 29 June, 2016, to finalize the new India Cyprus Double Taxation Avoidance Agreement, wherein all pending issues, including taxation of capital gains, were discussed, and in-principle agreement was reached on all pending issues. It was agreed to provide for source based taxation of capital gains on transfer of shares. However, a grandfathering clause would be provided for investments made prior to 1.4.2017, in respect of which capital gains would be taxed in the country of which taxpayer is a resident. These provisional agreements will now be placed before the Cabinet for its approval, subsequent to which the new tax treaty can be signed by the two countries.

Both sides also discussed the issue of notification of Cyprus under section 94A of Income-tax Act, 1961. It was agreed that India will consider rescinding the said notification with effect from 1st November, 2013, and will be initiating the process for the same. Both sides expressed satisfaction with the progress achieved in the meeting, and hoped that it would lead to resolution of all pending matters at the earliest.

Cyprus claims DTAA negotiations successfully concluded, Sec. 94A blacklisting to be retrospectively revoked

Source: Cyprus Ministry of Finance

Cyprus Govt. puts out statement claiming successful completion of DTAA negotiations with India; Cyprus says with agreement reached on all 'pending issues', CBDT to retrospectively revoke classification of Cyprus u/s 94A as 'Notified Jurisdictional Area'; Re-negotiated DTAA provides for source based taxation of gains from alienation of shares, however investments made prior to April 2017 to be grandfathered.

Note: CBDT, in November 2013 had notified Cyprus u/s 94A of the Income-tax Act for not providing information requested by Indian Income tax authorities under Exchange of Information provisions

Disclosure of Assets and Liabilities in the Income Tax Returns (ITR)

Disclosure of Assets and Liabilities in the Income Tax Returns (ITR)

The Central Board of Direct Taxes (CBDT) has notified the forms for filing the return of income for the AY 2016-17 (FY 2015-16). Apparently, the new form requires certain category of tax payers to furnish the details of the assets and liabilities.

The newly notified forms require mandatory disclosure of assets and liabilities of the taxpayer in Income Tax Return, provided the following conditions are satisfied:

1.      The assessee is an Individual or HUF, and

2.      The total Income of such assessee exceeds Rs. 50 Lakhs.

Details of all assets held by the taxpayer and corresponding liabilities are to be disclosed at ‘cost’ in Schedule AL of the relevant ITR form for the following categories of assets/liabilities.

Format for disclosure of assets and liabilities will vary based on the ITR applicable for the assessee:

In ITR – 1, ITR – 2A, ITR – 2 and ITR – 4S

Schedule AL		Asset and Liability at the end of the year (Applicable in a case where total income exceeds Rs. 50 lakh)
	A	Particulars of Asset			Amount (Cost) (Rs.)
DETAILS OF ASSET AND LIABILTY		1.	Immovable Asset
			a	Land	1a
			b	Building	1b
		2.	Movable Asset
			a	Cash in hand	2a
			B	Jewellery, bullion etc.	2b
			c	Vehicles, yachts, boats and aircrafts	2c
		3		Total	3	0
	B	Liability in relation to Assets at A			B

In ITR – 3 and ITR - 4

Schedule AL		Asset and Liability at the end of the year (other than those included in Part A – BS of the return of the Firm in which partner) (Applicable in a case where total income exceeds Rs. 50 lakh)
DETAILS OF ASSET AND LIABILTY	A	Particulars of Asset				Amount (Cost) (Rs.)
		1.	Immovable Asset
			a	Land		1a
			b	Building		1b
		2.	Movable Asset
			a	Financial Asset
				i	Deposits in Bank (including balance in any account)	2ai
				ii	Shares and securities	2aii
				iii	Insurance policies	2aiii
				iv	Loans and Advances given	2aiv
				v	Cash in hand	2av
			b	Jewellery, bullion etc.		2b
			c	Archaeological collections, drawings, painting, sculpture or any work of art		2c
			d	Vehicles, yachts, boats and aircrafts		2d
		3		Total		3	0
	B	Liability in relation to Assets at A				B