ICAI

ICAI President Amarjit Chopra’s Message – September 2010

Dear All, Let us recall when, about a year ago, the parents of Indian students studying in Australia were fear-stricken, as violence allegedly on the line of racial discrimination had been reported. Mass and media of our country had raised their voice against this violence. According to the UN, a ‘discrimination between human beings on …

Income Tax

Reopening beyond 4 years on basis of SC judgement not justified

Reopening beyond 4 years on basis of Supreme Court’s judgement not justified if assessee has not failed to disclose material facts CIT vs. Baer Shoes (Madras High Court)  The AO passed an order us 143(3) r.w.s 147 in which he allowed deduction us 80HHC though the assessee had suffered a loss in the export business …

Tax statement errors can delay refunds

If your tax refunds column in the income tax returns is indicating an amount, you may not necessarily get it back from the income-tax department. Just like Chirayu Sanghavi (name changed) was told. He had a pending refund claim of Rs6,543 for the assessment year 2009-10. However, upon not getting any mailer or refund, he …

SC asks tax dept to relook TDS deduction between telcos

The Supreme Court has directed the Income Tax department to freshly decide the issue on whether telecom operators Bharti Airtel and Vodafone would have to deduct TDS while paying BSNL for sharing network of the state-owned firm. A bench comprising Chief Justice S H Kapadia and Justice K S Radhakrishnan directed the IT department to …

Capital Gains tax on acquisitions made overseas

To plug the loopholes that led to the dispute between Vodafone and the Income Tax Department, the government proposed to impose capital gains tax on acquisitions made overseas if the acquired company holds over 50 per cent assets in Indian company. “It is strictly in the provisions of the Bill that where a transaction takes …

Though software is “goods”, its supply may be a “service” and not a “sale”

Infotech Software Dealers Association vs. UOI (Madras High Court) S. 65(105)(zzzze) of the Finance Act, 1995 inserted by the F (No. 2) Act, 2009 provides for the levy of service tax on “any service provided … to any person, by any other person in relation to information technology software for use in the course, or …

To save taxes rent a house

With the cascading cost of living, renting an accommodation is a major financial outflow for an individual. However, the same rented accommodation can help save some tax for salaried employees. In current salary packages, employees receive house rent allowance (HRA) to meet the cost of renting an accommodation. A salaried employee staying in a rented …

FM calls to recover Rs 38K cr in disputed tax arrears

Concerned over Rs 38,000 crore in tax revenue being locked up in legal disputes, Finance Minister Pranab Mukherjee asked the authorities to step up efforts to realise the taxes. “Rs 28,046 crore is blocked in appeal before CIT (Appeal) and Rs 10,010 crore before Income Tax Appellate Tribunal (ITAT),” Mukherjee said after meeting Revenue Department …

DTC

DTC: Increased exemption limits to benefit taxpayers

The proposed increase in exemption limits in the Direct Taxes Code (DTC) Bill will benefit an overwhelming 96 per cent of taxpayers, who earn less than Rs 5 lakh a year. The DTC Bill, which proposes to exempt income up to Rs 2 lakh from payment of income tax, compared to the existing limit of …

Proposed DTC: Women to lose special status

While senior citizens will continue to enjoy greater tax exemption, women tax payers will lose their special status under the proposed Direct Taxes Code. The Bill proposes to raise the tax exemption limit for senior citizens above 65 years to Rs 2,50,000 per annum from Rs 2,40,000 at present. The income tax exemption limit for …

Direct Tax Code Bill deferred by a year

The Direct Tax Code Bill has been delayed by a year in Parliament. The Bill will come into effect from April 2012. The government tabled the Bill in the Lok Sabha. The Bill proposed to raise the exemption limit on income tax from the current Rs 1,60,000 to Rs 200,000.

Proposal of 5% dividend distribution tax

Individual taxpayers may see a slight dent in their profits earned on investments in mutual funds or life insurers’ investment offering. The Direct Taxes Code (DTC) Bill, which was tabled in Parliament, proposes to impose a five per cent dividend distribution tax (DDT) on mutual fund houses and life insurers on income distributed by them. …

Pros & crons of the Direct Taxes Code Bill

PricewaterhouseCoopers analyses the taxes code in the light of significant proposals made in the Bill tabled in Parliament. The following proposals contained in the Direct Taxes Code Bill, 2010, merit attention: PERSONAL TAXES RESIDENCY AND SCOPE OF TAXATION: The definition of residential status has been amended to cover only two categories, ‘Resident’ and ‘Non Resident’. …

LTA may get tax exemption under new DTC

The government may allow the Leave Travel Allowance (LTA) to be exempted from taxation once the Direct Tax Code (DTC) comes into effect. The directive to this extent will figure in the rules to be framed by the finance ministry after the DTC is passed by Parliament. A senior finance ministry official, who is involved …

GST

FM: Goods & services tax roll-out may miss April 2011 target

“Since we could not place the Bill in the last session, it may not be possible to introduce GST from April 1, 2011.” – Mr Pranab Mukherjee It is official now. The country may miss the April 1, 2011 deadline for adopting a dual goods and services tax (GST) system. The Finance Minister, Mr Pranab …

Need to change GST model to get over constitutional impasse

Even with all the compromises and exhortations from the Finance Minister, there is a situation in regard to GST which has all the elements of a cul de sac. The more the FM concedes, the more demands are coming for concessions from the States. They basically ask for more power to themselves to alter the …

SEBI

Market cheers SEBI move on Power of Attorney

SEBI has issued clarifications on the order regarding execution of power of attorney (PoA) by the client in favour of the stockbroker or stockbroker-cum-depository participant passed on April 23. The regulator stated that no broker could deny services to a client, if the client does not sign the POA. This is exempt for Internet based …

Panel supports SEBI’s powers to seek end-investor details in P-Notes

IT firms today said the proposal of the Direct taxes Code (DTC) bill to impose 20 per cent Minimum Alternate Tax (MAT) might prove to be “a dampener for the sector”, especially if extended to special economic zones (SEZ). MAT is imposed on profit making companies, which do not fall under the tax net because …

BSE Brokers’ forum submits white paper on unauthorised trades to SEBI

The BSE Brokers’ Forum has submitted a white paper on unauthorised trades in the securities market to market regulator, Securities and Exchange Board of India (Sebi). The objective of the paper is to apprise the regulator of the difficulties faced by brokers - small and medium sized - while dealing with trading-related problems and to find a …

Procedure on Corporate Take over

SEBI Committee Suggests Compulsory Open Offer of 100 Per Cent Shares of Target Company SEBI had constituted a Committee called the “Takeover Regulations Advisory Committee (TRAC)” which has recommended amendments to the procedure for corporate acquisitions. The mandate of the committee was to examine and review SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 …

Company Law

Bill enabling NRIs to vote approved

Non-Resident Indians can hope to cast votes in their home country as the Rajya Sabha on passed a bill to provide them voting rights. “We are not doing them any charity,” Law Minister M Veerappa Moily said, while replying to a brief debate on a bill that seeks to amend the Representation of Peoples Act. …

General

On Day one IRDA clears 51 unit-linked plans

Two pension products also cleared on day one of the new Ulip regime. The Insurance Regulatory and Development Authority (IRDA) had approved a minimum of two products per company filed in accordance with new unit-linked insurance plans (Ulips) norms, IRDA Chairman J Hari Narayan said in a press conference. To comply with the new norms, …

Policyholders to benefit from new ULIP norms effective Sep 1

For one, insurers will have to offer a minimum prescribed return. Starting policyholders will get a much fairer deal if they invest in unit-linked insurance plans (Ulips). The new rules of the Insurance Regulatory and Development Authority (Irda) take effect from September 1. Ulips, which contributed 80 per cent of the total premium collected by …

EPFO trustees likely to fix rate at 8.5%

For the sixth year in a row, over 4.7 crore (47 million) subscribers of retirement fund manager EPFO are likely to get 8.5 per cent interest on their deposits in the current fiscal. “EPFO’s apex decision-making body, the Central Board of Trustees (CBT), is likely to fix 8.5 per cent interest for subscribers at its …