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Showing posts from April 11, 2016

Jaitley stays firm on excise duty on jewellers

Refusing to relent on excise duty levy on non-silver jewellery goods, Finance Minister Arun Jaitley on Sunday said a “luxury item” cannot remain out of tax ambit when taxes need to be paid on many essentials. A large section of jewellers and bullion traders have been on strike for over a month seeking withdrawal of one per cent excise duty on non-silver jewellery items. They are also opposing the  mandatory quoting of the personal account number by customers for transactions of Rs two lakh and above. "How can a luxury item remain out of tax when essential items like cement, cloth and many others have to pay manufacturing tax? If we do not bring the goods and services tax (GST) on gold, taxation on other items will have to be increased," Jaitley said at a media interaction at the Press Club here. He said there was no reason why luxury items should be exempted when the country was moving toward GST. Jaitley said the Centre has given a benefit that excise would be similar to value-…

Accounting for offshore accounts

The 'Panama Papers' puts the spotlight on how companies should manage the legal and regulatory issues around their foreign money Companies often need to open foreign currency accounts with banks outside India to make remittances for the purpose of business operations; mergers & acquisitions; and buying / selling real estate and financial assets abroad, among others. According to the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015, companies can remit up to 25 per cent of their net worth to meet specified business expenses. Further, Indian companies are allowed to hold and maintain foreign currency accounts abroad to make direct investment into foreign a joint venture, or a wholly-owned subsidiary on the condition that the amount received by way of dividend or any other entitlement from the subsidiary is repatriated to India within 30 days from the date of credit. However, a company set up by an individual, under the Lib…

Filing income-tax returns gets more complicated

Those with annual income of more than Rs 50 lakh will have to furnish a lot of additional details Filing income-tax returns is not a pleasant job for most, even for those who have no income to show other than salaries. And, the continuous changes in the income-tax returns form, often, makes the filing process more complicated. One has to be extremely careful about filling the various boxes in the Income Tax Return (ITR) form and ensure that it matches the details mentioned in the income certificates. And, with filing possible only online, there is no scope for any error, or else you can expect a notice from the income tax department. This year might be a challenge for those who earn more than Rs 50 lakh. In addition to details of salary and various exemptions, these individuals also have to disclose the value of the non-financial assets they own. This value has to be the cost or acquisition value. The disclosures include particulars of assets like land, buildings, cash in hand, jeweller…

Sebi rejects MF industry’s side pocket proposal

The capital markets regulator has rejected a mutual fund industry proposal to allow them to isolate risky assets from the rest of their holdings and cap redemption, saying that it will encourage fund managers to take unnecessary risks, three people directly familiar with the developments said. The Association of Mutual Funds of India (Amfi) in March approached the Securities and Exchange Board of India (Sebi) to set rules for the creation of a so-called side pocket when a specific investment faces a credit risk as a way to insulate the broader portfolio from redemption pressure. JP Morgan Asset Management (India) Pvt. Ltd pursued this approach last year even though there were no clear regulations in place. The asset manager restricted redemptions as investors demanded their money back after the net asset values of two of its schemes plunged following the downgrade of the credit rating of Amtek Auto Ltd’s bonds. JP Morgan had a Rs. 193 crore exposure to Amtek Auto. This prompted the mutual…

Panama probe may lead to changes in I-T Act

The government may have to amend the income tax laws or bring in a special ordinance to probe suspected tax evasion by Indian individuals named in the Panama Papers as maintaining offshore accounts. Around 500 Indians, including politicians, businessmen and filmstars, appear in a list of individuals who paid Panama law firm Mossack Fonseca to set up offshore entities in tax havens around the world. The names were made public by the International Consortium of Investigative Journalists (ICIJ), a coalition of media houses, which included the Indian Express, on April 4. Following the revelation, the government announced a committee comprising officers from the Central Board of Direct Taxes, Financial Intelligence Unit, foreign tax and tax research division and the Reserve Bank of India, to look into the leaks. According to section 148 of the Income Tax Act, past assessment of an Indian taxpayer can be undertaken only for six years, besides the scrutiny for the current year, whether oversea…

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1.Recovery proceedings initiation before stay application disposal is illegal. [ Khandelwal Laboratories Pvt. Ltd vs. DCIT ( Bombay HC)].
2.Technical services meaning – articulated by SC. [CIT vs. Kotak Securities Ltd].
3.Enduring benefits test cannot be applied mechanically on software expenses. [Indian Aluminum Company Ltd vs. CIT (Calcutta HC)].
4.Mere non -payment of duty is not equivalent to willful misstatement. [Quality Council of India vs. CC, ( CESTAT-New Delhi)].
5.Service tax on services to or from amalgamating companies after appointed date. [Usha International Ltd vs.CST (CESTAT-New Delhi)].

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