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Showing posts from March 4, 2016

Sebi upgrading surveillance for commodity exchanges

The Securities and Exchange Board of India ( Sebi) and the National Commodity & Derivatives Exchange ( NCDEX) are taking measures to improve improve surveillance after issuing restraining orders against 16 entities for manipulating castor seed futures.

Castor seed futures prices on the NCDEX fell sharply in January in comparison to the spot market. Players holding long positions as high as 62.5 per cent of the total open positions were trapped and were unable to pay mark- to- market margins.

To avoid systemic risk the NCDEX on January 27 suspended the contract and put the terminals of four brokers in square- off mode. On Wednesday, the Sebi restrained these four brokers and 12 of their clients, many of whom are big players in the oil seeds business, from acting in any form on any exchange in the securities market.

“Sebi is dealing the issue with from all angles — market integrity, governance, investor protection as well as systemic,” a source said.

Sebi initially focused on limiting …

RBI releases draft guidelines on account aggregators

The Reserve Bank of India (RBI) on Thursday said only non- banking financial companies (NBFCs) registered with the central bank could act as an account aggregator, which provides consolidated views of financial assets, such as savings bank deposits, fixed deposits, mutual funds, and insurance policies for the customer to choose from. In draft guidelines on account aggregator NBFCs, RBI said the net owned fund of such companies should not be less than Rs.2 crore and the company should not undertake any other business other than being an account aggregator. The business will be IT- driven and initially, only financial assets whose records are stored electronically and are under the regulation of the financial sector regulators, namely, RBI, Sebi, Insurance Regulatory and Development Authority of India and Pension Fund Regulatory and Development Authority shall be considered for aggregation.

Business Standard, New Delhi, 04 March 2016

Adhia: POEM postponed for accounting convenience

Revenue Secretary Hasmukh Adhia on Thursday said the rules for determining Place of Effective Management (POEM) of a company have been deferred till April 2017 so as to give companies sufficient time to prepare accounts according to their place of residency under the new norms.

He ruled out deferring the General Anti- Avoidance rules (GAAR) further beyond April 1, 2017.

POEM rules for determining the Place of Effective Management of a company, with a view to assess its tax liability, was to come into effect in the current financial year. However, the final guideline is yet to be put in place by the CBDT ( Central Board of Direct Taxes).

"Since this Finance Bill will get passed by middle of May, we should not ideally introduce POEM on the date which is not beginning of the year.

So, that is why we are postponing POEM," Adhia said at an event organised by IVCA, an organisation that works towards promotion of private equity and venture capital.

Adhia said stakeholders have raised co…

Dividends deluge to keep taxman at bay

To save promoters from 10% levy, 70 firms call board meetings on interim pay

In the three days since the Union Budget, at least 70 companies have called board meetings to declare interim dividends — in a bid to get the money to the shareholders before the tax on promoters’ dividends kicks in on April 1.

The Budget, presented on Monday, had proposed a 10 per cent tax on the dividends for those promoters with annual dividend income of Rs.10 lakh or more.

Now, about 70 firms — including Bajaj Auto, Sun TV Network, Piramal Enterprises, and Divi’s Laboratories — have called for board meetings to declare interim dividends, payable before April 1. Several of these firms have also fixed a record date.

These 70 firms had collectively paid dividends of about Rs.14,300 crore in FY15.

A similar trend was observed in 2007, after the Union Budget that year proposed raising the DDT to 15 per cent from 12.5 per cent.

Experts said to get a dividend of Rs.10 lakh now, one would have to own a portfolio of Rs.…

Effective corporate tax rate increases to 24.67% in FY15 from 23.22% in FY14

India's effective rate of corporate tax has inched up in the past one year closer to 25%, the proposed tax rate after phasing out exemptions. The effective rate went up to 24.67% in 2014-15 from 23.22% in 2013-14. 

Significantly, the effective rate is the highest for smaller companies that have a turnover of up to Rs 1 crore and lowest for those having turnover of more than Rs 500 crore. Smaller companies faced a rate of 29.37%, closer to the statutory rate, while their larger counterparts enjoyed a rate as low as 22.88% Statutory rate of income tax for companies having a turnover of Rs 10 crore is 33.84%, while for those with turnover of up to Rs 10 crore it comes to 32.44%. 

Budget documents have attributed the increase in effective rate to gradual phasing out of profit-linked deductions and levy of minimum alternate tax on companies. 

A tax official said a number deductions including one for special economic zones would have begun to come down in line with the framework. 

The sampl…

Government to provide clarity on GAAR before implementation: Hasmukh Adhia

Anti-avoidance framework in the form of GAAR will be effective from April next year, but the government is ready to give any guidance to provide more clarity, revenue secretary Hasmukh Adhia has said. He also said that the government cannot remove minimum alternate tax till corporate tax exemptions are in place.

"GAAR is definitely coming in from April 1, 2017. When we said in the Budget we are postponing implementation of PoEM (place of effective management rules) by one year we did not want you to get an impression that this government is also going to postpone GAAR," Adhia said on Thursday. 

Last year, finance minister Arun Jaitley had deferred applicability of General Anti-Avoidance Rules (GAAR) by two years. "GAAR implementation by the government ought to happen as scheduled as foreign institutional investors and other such portfolios have been escaping capital gains in one form or the other, keeping the domestic industry at disadvantages and, therefore, it should co… News... News...

1.Contributions made on or after the 1st day of April, 2016 by an employee participating in a recognised provident fund and superannuation fund, up to 40 % of the accumulated balance attributable to such contributions on withdrawal shall be exempt from tax.
2.Time Limit for completion of property acquired or constructed with the borrowed capital increase from 3 year to 5 years for getting exemption u/s 24(b) in respect of Self Occupied House Property
3.Increase in clean energy cess (Notification No. 1 & 2/2016 dated 29th Feb, 2016) applicable from 1st March, 2016.
4.MCA invite comments on Draft Companies (Revival And Rehabilitation Of Sick Companies) Rules, 2016, to be submitted latest by 14.03.16.
5.Last day to pay advance tax is 15th March for payment of 100% of income tax for FY 15-16.
6.New Form 35 for Appeal to the Commissioner of Income-tax (Appeals) introduced vide CBDT NOTIFICATION dated 01.03.16.

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