Budget ’10 – ’11 |
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Snap shot of proposed Direct Taxes Amendments |
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| Proposed Amendment, New Provision in Finance Budget 2010-11: Advance Taxes & TDS u/s 192 Disallowance for non deduction of TDS Gifts Received Deduction in respect of investment in LT Infra Bonds MAT Taxes Tax Audit Limit | |
Budget Speech by Pranab Mukherjee |
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| The Union Budget for 2010-11 was presented today by our Finance Minister Pranab Mukherjee. Click here to read the speech… | |
Tax Audit Limit Increased |
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| The Finance Minister has proposed to limit the Tax Audit limit as follows:- Businesses up to Rs 60 lakh to be exempted from auditing obligations of their accounts. Professionals up to Rs 15 lakh to be exempted from auditing obligations of their accounts. | |
Additional Deduction of Rs 20,000 on long-term Infrastructure Bonds |
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| Finance Minister Pranab Mukherjee in his budget speech on Friday said the government would allow a deduction of up to 20,000 rupees for investments in long-term infrastructure bonds. Additional deduction of Rs 20,000 allowed on long-term infrastructure bonds for income tax payers; will be above Rs 1 lakh on saving instruments allowed already. Section 80C allows a deduction for specific investment, contribution, deposits or payments made by the taxpayer during the tax year. | |
Income Tax |
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Transfer Pricing matters in Software Cos |
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| On September 26, 2008, the Bangalore Bench of the Tribunal delivered an important judgement in the area of transfer pricing . The Tribunal has dealt with the core transfer pricing issues relating to the trigger point for a Transfer Pricing Officer to conduct a comparability analysis, the use of ‘contemporaneous’ data by ‘specified date’, rejection of related party transactions, quantification of risk and working capital adjustments and confirmation of safe harbour provisions. | |
Debate between Tax Planning & Tax Evasion continues |
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| The Authority for Advance Rulings (AAR) delivered an important ruling on tax neutrality in relation to cross border mergers. The significance of ruling in the present context is attributable to tax administration’s ongoing stance that business restructuring is motivated for tax avoidance purposes and hence tax neutrality should be denied. The AAR reiterated well established judicial principle that as long as a transaction is commercially justifiable, the availability of a tax… | |
Make Advance-Tax Payments in full: I-T Dept |
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| The I-T department in Mumbai is summoning CEO’s and CFO’s of mid-size companies with the objective to communicate to them that anything less than the full payment of advance taxes will not be acceptable. I-T department sources said a face-to-face interaction helps in gauging the exact amount of tax payable by companies. | |
Withdrawal of Dividend Distribution Tax Case |
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| Every domestic company is liable to pay a Dividend Distribution Tax @15% on the amount declared, distributed or paid by such company by way of dividends. The effective rate of tax works out to16.995%. The proposed Direct-tax Code also contains similar provision. The only exception is when the dividend is received by a domestic company from its subsidiary. Dividends are generally paid by the companies out of their post tax profits. | |
Bad Debts need not be proven to be Irrecoverable u/s 36(1)(vii) |
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| The Supreme Court had to consider whether after the amendment to s. 36 (1) (vii) w.e.f. 1.4.1989, an assessee had to establish, as a matter of fact, that the debt advanced by the assessee had, in fact, become irrecoverable or whether writing off the debt as irrecoverable in the accounts was sufficient. HELD deciding in favour of the assesse. Click to view full Judgment……. | |
Re-Opening the Assessment did Not Justify the Exercise of the Power U/S 148 |
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| Validity of exercise of powers to re-open an assessment has to be decided with reference to reasons recorded while re-opening an assessment. Where the AO had no reason to believe that income had escaped assessment, reasons recorded while Re-Opening the Assessment did Not Justify the Exercise of the Power U/S 148 | |
Disclosure made Subsequent to Seizure cannot be called Voluntary |
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| Any disclosure made subsequent to seizure of incriminating material cannot be called voluntary. Merely because assessee cooperated in deciphering the seized documents would not mean that the revenue authorities could not have deciphered the same without voluntary assistance of assessee. | |
Enhancement of liability due to fluctuation in exchange rates: Sec 37(1) |
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| Tribunal was right in holding that the claim for depreciation on account of enhanced cost of depreciation due to fluctuation in foreign exchange rate was admissible for deduction under s. 37. Order dt. 28th Oct., 2009 stands recalled. Since relevant questions have been duly answered in subsequent judgments of this Court, the Special Leave Petition stands dismissed.” | |
Loss making industrial undertaking not eligible for deduction u/s 80-I |
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| Loss making industrial undertaking would not come into the picture at all for purpose of computing deduction u/s 80-I. The loss of one industrial undertaking cannot be set off against the profit of another such industrial undertaking to arrive at a computation of the quantum of deduction that is to be allowed to the assessee under section 80-I(1). | |
CBDT restores TDS Rules |
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| The Central Board of Direct Taxes has reinstated the TDS rules/ forms that were earlier discontinued with effect from April 1, 2009. This latest move, which would come into effect retrospectively from April 1, 2009, clearly indicates that the Income-Tax Department is not looking to implement the concept of UTN for sometime to come, say tax experts. | |
S.80-I deduction allowable without setting off loss |
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| The assessee had two units, namely, a steering unit and an axle unit, both of which were eligible u/s 80-I. While one unit was making profits, the other was incurring losses. The AO and CIT (A) took the view that deduction u/s 80-I on the profits of one unit could be allowed only after setting off the losses of the other unit. | |
Commission paid for sale of SIM card envisaged u/s 194H |
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| Commission paid for sale of SIM card, pre-paid or post-paid, is commission as envisaged under section 194H. Essence of post-paid and pre-paid services rendered by the Cellular company is the same and the relationship between the Cellular company and the customers is also the same, therefore, if post-paid scheme is subject to section 194H, it is quite unlikely that pre-paid system would be outside the purview of section 194H. | |
Income Tax – TDS |
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New TDS Rules Notified |
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| In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes has made the following rules further to amend the Income-tax Rules, 1962. To download Form No.16 click here…….. To download Form No.16A click here…….. To download Form No.16AA click here…… To download Form No. 27D click here…….. | |
Indirect Tax |
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Price Hike after Excise Duty Increase: Car Makers |
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| Major auto makers in the country today reacted to the government’s decision to increase the central excise duty to 10 per cent, by saying they will increase car prices — possibly by up to Rs 25,000. While the country’s largest car maker, Maruti Suzuki India (MSI), said its car will become costly by two per cent, Hyundai Motor India said it will result in a price rise of Rs 6,500-25,000 on average. | |
Government Increases Excise Duty By 2% |
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| The government increased excise duties by 2 per cent to 10 per cent on all non-oil products, as part of withdrawal of stimulus measures, with Finance Minister Pranab Mukherjee saying the economy was on the recovery path. Excise duty was cut by six per cent in two phases since December 2008, from a peak of 14 per cent earlier, to perk up the economy, which came under the impact of deepening financial crisis. | |
Excise Duty Hike for Cigarettes, TVs, ACs & Cars |
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| Consumers will have to pay more for petrol, diesel, cars, TVs, cigarettes, tobacco, air-conditioner, gold and silver as the government today announced hike in excise duty as part of a partial roll back of stimulus measures announced for reviving the economy. On the other hand, mobile accessories, medical equipment, energy efficient CFL lamps, set top boxes, compact disc, toys and books will be cheaper on account of some tax concessions offered on these items. | |
ICAI |
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Announcement relating to taxation papers for students appearing in May 2010 exam |
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| Fringe Benefit Tax is not applicable from A.Y. 2010-11 and hence, is not relevant for May 2010 examination. Consequential Notification of new perquisite rules on 18.12.2009 not to apply for May 2010 examination. Consequent to abolition of fringe benefit tax, certain benefits taxed earlier as fringe benefits in the hands of the employer would now be taxable as perquisites in the hands of the employees. | |
ICAI considering a proposal to penalise Offending Audit Firms |
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| Hit hard by the Satyam scam and the damage it dealt to the auditing profession, regulator ICAI is considering a proposal to penalise audit firms while also looking at radical steps like rotation of audit firms every five years, a measure also favoured by the government. Sources said the ICAI that governs auditing profession in the country, has taken a serious view of repeated offending firms and is looking at fixing responsibility on them, as is done in countries like the US, Japan… | |
Extension of last date for receipt of May-2010 CA Exam Forms |
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| Owing to delay in making available Application Forms for May-2010 Chartered Accountants Examinations at some branches / Regional offices, the Competent Authority has decided to extend the last date for receipt of filled in Examination Forms till 5th March, 2010. Further to this, this is also to reiterate that no filled in examination form will be received after 5th March, 2010. | |
Announcement for Student willing to register for CPC |
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| Student who desires to register for CPC and become eligible for appearing in the ensuing Common Proficiency Test to be held on 20th June, 2010 are hereby advised to have the CPT registration application done. Application Form for Registration to CPT Course and duly filled in CPT registration application form to be submitted along with the documents for maintaining physical record at the Institute’s Regional Office. | |
Relaxation & Eligibility of IPCC EXAMINATION |
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| Students who have been registered for the erstwhile Intermediate under paragraph 2 or 2 A of schedule B to the Chartered Accountants Regulations 28 or who have been registered for the erstwhile Professional Education (Course-II) or who have been registered for the PCC are eligible for conversion to IPCC by paying the prescribed conversion fee along with the conversion application form to the concerned Regional Office on or before March 5, 2010 for becoming eligible to appear in the May, 2010… | |
IFRS |
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Fresh guidelines soon for switch to IFRS |
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| The Centre-appointed core committee, dealing with the transition from the IGAAP to IFRS, is expected to come out with fresh guidelines for implementing the new standards by the end of this month. Giving this information to media persons on the sidelines of a conference organised by the Indian Chamber of Commerce. | |
Service Tax |
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Standard Input and Output Norms for Service Tax and Excise |
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| The government proposes to come out with standard input and output norms for service tax and excise. Official sources said such norms form the benchmark of costing, which helps in working out the price of inputs required for manufacturing or producing a certain quantity of output. This is important, since most business entities or companies claim refund or get Cenvat credit for the value of inputs used in producing the output. | |
Service Tax payment over 10 lakh must File Return Electronically |
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| In the Service Tax Rules 1994 (hereinafter referred to as the said rules), in rule 6, in sub-rule (2), for the proviso, the following proviso, shall be substituted. “Provided that where an assessee has paid a total service tax of rupees ten lakh or more including the amount paid by utilisation of CENVAT credit, in the preceding financial year, he shall deposit the service tax liable to be paid by him electronically, through internet banking.” | |
GST |
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Govt decides to implement GST & DTC from April 11 |
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| The government exuded confidence of introducing major reforms on direct and indirect taxes front, in the form of Goods and Services Tax (GST) and Direct Tax Code (DTC) from April 1, 2011. “I am confident that the government will be in a position to implement DTC from April 2011… It will be my earnest endeavor to implement GST along with DTC next year,” Finance Minister Pranab Mukherjee said in his Budget speech. | |
FM confident of ruling out differences over GST soon |
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| The Centre today said it was confident of reaching an amicable solution with the states on the differences over the proposed GST, which is now certain to miss the April deadline for its rollout. “I am confident about the competence and efficiency of our people who are engaged in the discussion with the state governments to find an acceptable solution, so that we can arrive at a decision as early as possible,” Finance Minister said. | |
General |
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Various types of Tax In India: De-Tax your Brain |
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| Taxes come in various shapes and sizes, but primarily fit into two little slots. DIRECT TAX This is the Tax that you, I (and India Inc) directly pay to the government for our Income and Wealth. So Income Tax, Wealth Tax, and STT are all Direct Taxes. | |
Week 22nd to 27th Feb '10 Highlights
February 27th, 2010
