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Showing posts from March 10, 2016

Investors get tax relief on investment gains

Once the income has been classified as either business income or capital gains, be consistent In a move that is likely to reduce litigations between investors and the income- tax department, the Central Board of Direct Taxes recently allowed investors to decide whether income from sale of securities is to be treated as business income or capital gains. Earlier, the assessing officer ( AO) was used to make this decision. So, if there were a large number of trades or profit- booking, the AO could classify it as business income and tax it at the highest rate of 30 per cent plus applicable cess. If the gain is classified as capital gains, there is no tax. Henceforth, if the assessee wants the income from sale of security after 12 months to be treated as capital gain, the assessing officer ( AO) cannot dispute it. An important caveat: Once an assessee has chosen a certain mode of tax treatment, he can’t change it in subsequent years. Says Suresh Surana, founder, RSM Astute Consulting Group: …

Lok Sabha passes Bill to amend Enemy Property Act

The Lok Sabha on Wednesday passed a Bill to amend a 48year- old law to guard against claims of succession or transfer of properties left by people who migrated to Pakistan and China after the wars. The Enemy Property (Amendment and Validation) Bill, 2016, which amends the Enemy Property Act, 1968, was passed by voice vote amid the governments assertion that the measure should not be seen from the prism of religion or caste. A demand by the Opposition for sending it to the Standing Committee of Parliament was also turned down. Business Standard, New Delhi, 10th March 2016

Ease exit for firms listed on regional SEs Bankers

Merchant bankers want the market regulator to ease exit of companies that were once listed on regional stock exchanges and have now been shifted to dissemination boards of national stock exchanges. The companies were moved from regional stock exchanges because the bourses had stopped operating or were on the point of shutting. A dissemination board is a trading mechanism on national stock exchanges for shareholders of companies that were once part of regional stock exchanges that have now been derecognised or shut. The market regulator has given firms on dissemination boards time till October to get properly listed on national stock exchanges. "We want the regulator to ease the process of exit for companies that are a part of the dissemination board by doing away with the mandatory reverse- book- building process," said amerchant banker. At present, firms with paid- up capital of not more than Rs.10 crore each, and net worth below Rs.25 crore each, as on the last day of the prev…

Revenue buoyancy in the GST

Even with less than ideal design features, the state VAT pushed up revenues. The GST, with an improved design and a fully integrated IT system for both the Centre and the states, will fare better, writes the author in the concluding part of the series Revenue uncertainties have dominated discussions about the goods and services tax ( GST). This has been especially pronounced among the states which see the movement towards the GST as a leap in the dark. What then are the reasons to assert that the implementation of GST will lead to revenue buoyancy? One can look for answers in the earlier experience of the states which implemented the value- added tax ( VAT) in 2004- 05 when there was a similar air of “ revenue pessimism”. The table alongside indicates the trends in state VAT collections for the period 2001- 02 to 200809 ( covering both the pre- VAT and postVAT periods). One can see from the trends that 2004- 05 ( the year the state VAT was implemented) was an inflexion point when revenue…

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1.Monetary appeal filing limit also applies to cross objections & references filed by dept. LETTER F.NO.279/MISC./M-142/2007-ITJ (PART)
2.CENVAT credit admissible on service tax on health care service expenses of factory staff. [M/s. ITC Ltd. vs. CCE (CESTAT Chennai)].
3.Cenvat Credit refund cannot be denied when utilisation not possible. [M/S. Pallav Textile Ltd. vs. Commissioner of Central Excise (CESTAT Chennai)].
4.Denial of refund of accumulated CENVAT credit to exporter on post-clearance services.[M/s. Handy Waterbase India (P) Ltd. vs. CCE (CESTAT Chennai)].
5.Cenavt Credit admissible for service tax paid by DTA on behalf of SEZ under reverse charge mechanism.[M/s. Carborundum Universal Ltd.vs. CCE, LTU (CESTAT Chennai)].
6.Discount known prior to clearance of goods must be deducted from transaction value. [M/s Biochem Pharmaceutical Industries vs. Commissioner of Central Excise (CESTAT Mumbai)].

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