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Recommendations of RV Easwar Committee on simplification of the provisions of IT Act, 1961

Expert Committee to simplify income tax laws headed by Justice (retired) R.V. Easwar has submitted its report to Union Finance Ministry.

The 10 member committee has recommended simplifying provisions related to tax deduction at source (TDS), tax refunds and claims of expenditure for deduction from taxable income.

It also has suggested several taxpayer-friendly measures to improve the ease of doing business in the country, accelerate process of tax dispute resolutions and reduce litigation.

Key recommendations are

  • Deferring the contentious Income Computation and Disclosure Standards (ICDS) provisions and making the process of tax refunds faster.
  • Deletion of a clause in IT Act, 1961 that allows the IT department to delay tax refund due beyond six months. In case of delay in refunds levying higher interest.
  • IT department should stop the practice of adjusting tax demand of a taxpayer against legitimate refunds due whose tax return is under assessment.
  • Treat stock trading gains of up to 5 lakh rupees as capital gains and not business income.
  • TDS rates for individuals must be reduced to 5 per cent from current 10 per cent. Dividend income should be treated as part of total income.
  • Exempting non-residents not having a Permanent Account Number (PAN), but seeking to provide their Tax Identification Number (TIN) for the applicability of TDS at a higher rate.
  • Most of the working processes of the IT departments should be conducted electronically in order to minimize direct human interface.
  • Eligibility criteria under the presumptive tax scheme to be increased to 2 crore rupees from 1 crore rupees to make it easy for small businesses. Such scheme should be also for professionals.

Background

Union Government had constituted this committee in October 2015 by following up on a promise to provide a fair and predictable tax regime.

The committee was tasked to suggest recommendations to overhaul the IT Act, 1961 to remove ambiguities that cause unnecessary litigation and update the laws based on various judgements.

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eMudhra launches eSign Services

eMudhra Limited, a leading certifying firm in the country for digital signatures launched first of its kind eSign services in the country as part of the Digital India Vision.

eSign is an online electronic signature service legally valid and secure under the Information Technology Act, 2000. It will facilitate an Aadhaar holder to digitally sign a document within seconds.

It seeks to pave the way for a digital transformation into a paperless environment by revolutionising the way of business and governance conducted in the country.

eMudhra Limited  also launched eMlocker which facilitates a person to store important documents such as Aadhaar cards, PAN cards, electricity bills or any other documents electronically.

About eMudhra

  • eMudhra Limited is a statutory licensed Certifying Authority of India to issue digital signature certificates.
  • Established: in 2008 under the Information Technology (IT) Act, 2000.
  • eMudhra offers variety of other services including Tax filing Services, Digital Signing Solutions, PAN Card Online applications. Digital Certificate Authentication System and Trusted Time Stamping etc.
  • Its clients are corporates, Banks, government organizations, individuals and several small and medium businesses.

Digital Signature: It is an electronic signature used to authenticate the identity of the sender and signer of a message or document. It ensures that original content of the message or document remains unchanged or tapered after it is send.

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Section 66 A of IT Act unconstitutional and untenable: Supreme Court

The Supreme Court (SC) on 24 March 2015 struck down the Section 66A of the Information and Technology Act 2000 calling it unconstitutional and untenable.

SC in its ruling held that Section 66A interferes with freedom of speech and expression envisaged under Article 19 of Constitution of India and also hit the root of two cardinal pillars of democracy liberty and freedom of expression.

This verdict was given by SC bench comprising of Justices J. Chelameswar and R.F. Nariman on bunch of petitions filed in the wake of misuse of the penal provision by government authorities.

Supreme Court held that

  • Section 66 A is unconstitutional because it failed two major tests, the clear and present danger test and the tendency to create public disorder test.
  • Language used in this section is vague and nebulous does not properly define words like offensive or even persistent.

SC also rejected the assurance given by NDA government during the hearing defending certain procedures of the law so it cannot be question and abused.

However in this ruling SC did not strike down two other provisions in sections 69A and 79 of the IT Act and mentioned that they can remain enforced with certain restrictions.

Background

  • The first petition in this regard was filed in 2012 by a law student Shreya Singhal who had challenged the Section after two young women were arrested for posting comments Facebook in Thane district.
  • In the comments they had criticized shutdown in Mumbai following Shiv Sena leader Bal Thackray’s death.

About Section 66A of IT Act 2000

  • It gives power to government authorities to issue directions to block public access of any information through any computer resource.
  • It also allows authorities to arrest a person for posting allegedly offensive content on websites and imprisonment for a term which may extend to three years and with fine.

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