Company Law

MCA Introduces ‘Easy Exit Scheme, 2010’ Under Section 560 of the Companies Act 

For defunct companies, for getting their names struck off from the Register of Companies, the Ministry of Corporate Affairs has decided to introduce a Scheme namely, ‘Easy Exit Scheme, 2010’ under Section 560 of the Companies Act, 1956. Scheme does not cover the listed companies, section 25 Co’s, vanishing companies, companies under inspectioninvestigation, Co’s against which prosecution is pending in court.

MCA introduces ‘Company Law Settlement Scheme, 2010’ for Defaulting Companies 

In order to give an opportunity to the defaulting companies to enable them to make their default good by filing belated documents and to become a regular compliant in future, the Ministry has introduced a Scheme namely, ‘Company Law Settlement Scheme, 2010,’ for condoning the delay in filing documents with the Registrar, granting immunity from prosecution and charging additional fee of 25 percent of actual additional fee payable for filing belated documents under the Companies Act, 1956 and the…

Income Tax

S. 50C does not apply to “rights” in land & building like tenancy rights 

The assessee, a tenant in a flat, sold tenancy rights for Rs. 30 lakhs and offered long-term capital gains on the basis that the said sum was the consideration. The AO took the view that as the market value adopted the Sub-Registrar was Rs. 33,11,200, the said market value had to be adopted as the consideration us 50C. This was confirmed by the CIT (A). On appeal by the assessee, HELD allowing the appeal:

ITD releases ITR 1- SARAL II E-Filing RPU for A.Y. 2010-11 for Individuals 

ITR-1-Saral II E-filing Return Preparation Software is applicable to Income from SalaryPension, Income from Other Sources (Excluding Wining from Lottery & Income from Race Horses), IncomeLoss from one House Property Click below to download ITR-1 Saral II E-filing Return Preparation Software For A.Y. 2010-11

ITD releases ITR-3 E-Filing RPU for A.Y. 2010-11 for Individuals 

ITD releases ITR -3 E-Filing Return Preparation utility for Asst Year 2010-11 for Individuals and HUF E-filing for ITR 3 has commenced. One can E-file AY 2010-11 returns now. Click below to download ITR-3 E-filing Return Preparation Software For A.Y. 2010-11

Fees for Technical Services, even if rendered outside India, are Taxable 

The assessee, an Indian company, entered into an agreement with a Chinese company for bauxite testing services in its laboratories (outside India) and for preparation of test reports. The AO took the view that the payments constituted “fees for technical services” us 9(1)(vii) and Article 12 of the DTAA and tax was required to be withheld at 10%. This was upheld by the CIT (A). The assessee appealed to the Tribunal. HELD dismissing the appeal:

ITD releases E-Filing RPU for A.Y. 2010-11 for ITR-2 for Individuals and HUF 

ITD releases E-Filing Return Preparation utility for Asst Year 2010-11 for ITR-2 for Individuals and HUF E-filing for ITR 1- SARAL II, ITR-2 has commenced. One can E-file AY 2010-11 returns now. Click below to download ITR-2 E-filing Return Preparation Software For A.Y. 2010-11

What is the Impact of increase in gratuity limit? 

The government notified the Payment of Gratuity (Amendment) Act, 2010 on May 18, 2010, which increases the limit of gratuity payment to employees in the specified sectors  establishments covered under the Payment of Gratuity Act, 1972 (“Gratuity Act”). After the amendment, these employees are eligible to receive gratuity up to Rs 10,00,000, which was earlier restricted to Rs 3,50,000. Thus, crores of workers will be benefited in establishments covered by the Gratuity Act.

House Rent allowance under the Income Tax Act 

House rent allowance, or HRA, is a major component of your salary. As a salaried employee you can claim a tax exemption on such an amount. But there are certain conditions that you need to understand to claim such exemptions. How is the exemption on HRA calculated? When can you claim exemption on HRA? Is your landlord an NRI? When can you enjoy the twin benefits of home loan and HRA?

What is the right form to file Tax Returns? 

Every individual whose total income before allowing deductions under Chapter VIA of the Income-tax Act, 1961 (the ‘Act’), exceeds the maximum amount, which is not chargeable to income tax, is obligated to furnish his return of income. For FY09-10, these limits are Rs 1.6 lakh for men, Rs 1.9 lakh for women and Rs 2.4 lakh for senior citizens, who are of the age of 65 years or more.

Are payments made abroad taxable if deal has links with India? 

The Income-tax department can tax even a payment made to a foreign entity outside India, if the transaction has a business connection within the country, according to a verdict passed last week by the Income Tax Appellate Tribunal, Mumbai. In this case, the ITAT gave an order favouring the I-T department’s decision to levy tax on $1 million (about Rs 4.5 crore) paid by an Indian company to a Chinese firm for services rendered in China.

Tests laid down to determine whether income from shares is Business income or Capital Gains 

The assessee, a director and shareholder in a company engaged in share trading, returned income of Rs. 78,89,499 earned by her on transfer of shares as a “short-term capital gain”. The AO took the view that as there were voluminous transactions, the assessee was engaged in share trading and the income was assessable as “business income”. This was upheld by the CIT (A). On appeal, HELD dismissing the appeal:

Is income from shares “business” income or “capital gains”? 

The assessee, engaged in management consultancy, offered profits of Rs. 1.03 crores earned by it on sale of shares as long-term and short-term “capital gains” depending on the period of holding. The AO took the view that as the assessee was regularly dealing in shares throughout the year, the assessee was engaged in the “business” of trading in shares and that the profits were assessable as “business income“. This was confirmed by the CIT (A). On appeal by the assessee, HELD allowing the…

ICAI

Retention Period for Engagement Documentation 

The Council of the ICAI had in August 2009 had amended the audit documentation retention period appearing as ten years in paragraph 83 of Standard on Quality Control 1 to seven years. As a consequence of the above decision of the Council, the audit documentation retention period appearing as ten years in paragraph A23 of the Standard on Auditing (SA) 230, shall also stand amended to seven years.

CA Institute submits final report in Satyam Scam to Corporate Affairs Ministry 

The CA Institute’s second and final report on the Satyam scam and the role of the company’s statutory auditor in that accounting fraud was submitted to the Corporate Affairs Ministry on Monday. While ICAI officials were tight-lipped about the contents of this report, indications are that the audit profession regulator has recommended strict punishment including imprisonment to auditors who are found to be associated with any accounting frauds.

Service Tax

Stay Granted on Service Tax on Renting 

Renting of Immovable Property: There shall be no recovery of service tax from the service provider in respect of renting of immovable property alone Prima facie renting of immovable property itself has been regarded as a service by virtue of the recent amendment made by Finance Act, 2010, even though this Court by virtue of its decision had categorically concluded that renting of immovable property by itself cannot be regarded as a service

DGT

States rejects compensation package for GST implementation 

The States have more or less refused to accept the 13th Finance Commission’s compensation package for implementation of the Goods and Services Tax. “States by and large differ with the Thirteenth Finance Commission on the GST compensation matter,” Dr Asim Dasgupta, Chairman of the Empowered Committee of State Finance Ministers, said here on Friday.

FM promises “robust compensation” to ensure timely roll out of GST 

Pranab Mukherjee reached out to his counterparts in state governments to energise talks on unified GST, promising “robust compensation” to ensure timely roll out of this crucial indirect tax reform. “He (Mr Mukherjee) communicated to us that he is prepared to go beyond the 13th Finance Commission recommendation of Rs 50,000 crore compensation over next five years,” said Asim Dasgupta, West Bengal FM & chairman of the empowered committee of state FM’s.

Effects of Real estate transactions under GST 

The real estate sector is a significant contributor to the gross domestic product (GST) and serves as a foundation for virtually all industrial and commercial activity. Further, housing constitutes a large chunk of the personal consumption expenditure, especially for middle and upper-income households. Excluding real estate from the scope of GST would thus result in considerable cascading of taxes and, at the same time, a major erosion of the tax base.

DTC

FinMin flooded with 10,000 + suggestions on Tax Code 

Redrafting the DTCode is proving to be an uphill task for the finance ministry, bombarded with comments from various stakeholders. “We have got approximately 10,000 suggestions in the form of emails, letters and presentations. Maximum queries are on Minimum Alternate Tax and the exempt-exempt-tax regime. Our officials have to go through all the suggestions,” said a ministry official on condition of anonymity.

Mitra assures issue of revised DTC draft in first week of June