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Showing posts from May 25, 2016 News... News...

1.Publishing loan defaulter’s photos in newspapers is illegal. [Messrs Allianz Convergence Pvt. Ltd. & Ors. v/s The General Manager, State Bank of India & Anr].
2.Tax exemption can’t be denied for service fee designation in Rs. [Commissioner of Service Tax Vs. Balaji Telefilms Ltd. (CESTAT Mumbai)].
3.Change in rate of MVAT 5% to 5.5% W.e.f. 1st April 2016. Notification no. VAT. 1516/C.R. 31/Taxation-1
4.Furnishing of UID in Form 15G/15H for Q3 & Q4 of FY 2015-16. Circular No 18/2016-Income Tax dated 23/05/2016.
5.Changes in rules related payment of pension after death of member. Notification G.S.R. 533(E) dated 19/05/2016.

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Govt Plans to Hike EPFO Investments in Equity

The government plans to increase the share of provident fund corpus being invested in stocks despite prevailing low yield on equity investments in yet another move that could face strong resistance from central trade unions. “Equity investment is a long-term process and there is going to be an upward trend in investment in equity,“ labour minister Bandaru Dattatreya said on Tuesday while outlining his ministry's achievements in last two years of Narendra Modi government. “A complete report will be presented in the CBT (central board of trustees) meeting of EPFO (Employees Provident Fund Organisation) soon and a final decision will be taken,“ he said. The move will most probably put off trade unions. Last year, the government had bulldozed the voice of unions to implement its decision to invest 5% of annual inflows into retirement fund corpus in exchange-traded funds. EPFO, which functions under the labour ministry, incurred a loss of around Rs. 300 crore on its investment in stocks in…

RBI may Have to Go Back to Diaspora if Stress on Rupee Persists

FCNR deposits of 2013 are due for redemption in Sept, but rising commodity prices, Fed action may necessitate some kind of a rollover.
The rupee has touched almost three-month low, but there is no buzz about dollar selling by the Reserve Bank of India to rein in the value of the local currency . The rupee closed at 67.75 on Tuesday , near the levels of September 2013 that had made the central bank come out with a special scheme for banks to attract NRI funds with higher returns on foreign currency (or, FCNR) deposits.
Around $25 billion flowed into the scheme, pushing up the rupee 9% in a month. Now, that money has to be repaid. And in the run up to the maturity of these deposits, the rupee is gradually giving up the gains, raising the question how the $25-billion redemption would be handled.

Governor Raghuram Rajan has ruled out a rollover of the FCNR deposits that will mature in September ­ the month his term also ends. In a post-policy media meet, Rajan said the central bank is comfor…

Have GST Nos in RS: Govt

Parliamentary Affairs Minister M Venkaiah Naidu underlined that despite opposition attempts to disrupt the Rajya Sabha functioning, legislative work in Parliament has seen a remarkable jump since the NDA came to power and claimed that the Narendra Modi government now has the numbers to get the Goods and Services Tax (GST) Bill passed. In a press interaction to mark two years of NDA rule, Naidu said, “Finance Minister has over the last one year clarified the government's position on the Bill and the government has the numbers.“ NDA strength in the Rajya Sabha will increase only marginally by July this year but the dwindling numbers of the Congress has given the government hope of getting support of regional parties to get the GST Bill passed. Finance Minister Arun Jaitley has categorically said that the government is likely to bring the GST Bill for discussion and passage in the Rajya Sabha in the monsoon session even if the Congress is still not on board. The minister expressed con c…

Fair market value formula not that fair:Experts

Tax consultants and experts are seeing various irritants in the draft rules on calculation of fair market value ( FMV) for indirect share transfers. Although the draft adds some certainty to taxation of Vodafone- like transactions, these flaws could lead to anomalies, they say. One of the issues is the definition of the term ‘ book value of liabilities’. The draft prescribes the manner in which FMV of the foreign target company ( FTC) shares and the underlying India company ( IC) shares can be determined for the purpose of indirect transfer taxation. Any transaction where the value of Indian assets exceeds 50 per cent of the FTC would attract taxes in India. Explanation 6( b) requires such FMV to be determined without reduction of the company’s book value of liabilities. The term “ book value of the liabilities” has been defined to mean the value of liabilities as shown in the balance- sheet, excluding the paid- up capital in respect of equity shares/ members’ interest. Since the exc…

Cloud over draft rules

Tax consultantsand experts  have observed various irritants  in the draf trules on calculation of fair market value ( FMV) for indirect share transfers. Though the draft adds  some certainty to taxation of  Voda fone - like transactions, these flaws could lead to  anomalies,  they said.  One of the issues is the definition of  the term“ book value of liabilities”. The draft prescribes them anner in which FMV of  the foreign target company (FTC) shares and the underlying India company shares can be determined for the purpose of  indirect transfer taxation. Any transaction where the value of Indian assets exceeds 50 percent of the FTC would  attract taxes in India. Explanation6( b) requires such FMV to be determined without reduction of              the concerned company’s book value of liabilities. Business Standard New Delhi,25th May 2016

Asset value math may hit black money window

In what could deter people from declaring black money during the four- month window beginning next month, the tax liability on the declared asset will be on the appreciated value. Although the government has tried to balance it by extending the capital gains tax benefit when the asset is sold later, it may still create cash flow problems in paying the tax on the appreciated asset within two months of the scheme closing on September 30. The scheme requires declaration of undisclosed assets at their fair market value on the date of commencement of the scheme, which is June 1, and will be regarded as cost of acquisition of the asset for any subsequent transfer. For instance, if an asset was bought for ? 10 lakh a decade ago is valued at Rs. 1 crore on June 1, the declarant will have to pay Rs. 45 lakh as tax (Rs. 30 lakh), penalty (Rs. 7.5 lakh) and a cess (Rs.7.5 lakh). The person disclosing the asset may not have Rs. 45 lakh to pay. “The issue is when a person makes a declaration, he may no…