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Budget 2017-18 may turn out to be one of the most trend-setting Budgets to be presented by the National Democratic Alliance government. This is the first time that the Railway Budget has been merged with the Central Finance Budget and there is no distinction between Plan and nonPlan expenditure. This apart, the Budget would be presented on February 1, almost a month earlier than the usual date. Further, preceded by the historic move of demonetisation and expected to be followed by the path-breaking tax reform of goods and services tax (GST), this Budget carries high expectations for both consumers and business owners. With the conclusion of the GST Council’s last meeting, the tax reform’s journey towards realisation has progressed substantially. Resolution between the Centre and the states on the much-debated issue of sharing administrative control over taxpayers should also set the pace to reach the remaining milestones and for the government to roll out GST. The decision that ...

Fresh PoEM guidelines will affect pharma, energy, automobiles, manufacturing and software companies DILASHASETH New Delhi, 24 January The government on Tuesday issued guidelines to plug tax evasion by shell companies or foreign firms set by groups in India to retain income outside the country, dashing hopes of industry that implementation of these norms would be deferred to next year. The rules will affect companies in industries like pharmaceuticals, automobiles, energy, manufacturing and software. The guidelines have a few safeguards that were not present in draft norms issued in 2015 such as a collegium of officers to vet whether companies are to be taxed on the basis of their place of effective management (PoEM) and test of active business. However, experts warned even then there could be subjectivity in establishing PoEM. The rules outline companies incorporated overseas but with effective control of business and majority of board meeting in India will be considered a...

Just days ahead of the Union Budget, a high-powered panel headed by Andhra Pradesh Chief Minister N Chandrababu Naidu on Tuesday recommended imposing tax on cash transactions of at least Rs 50,000 through banks to discourage the excessive use of cash and promote digital payments. “To curb use of cash for large transactions, the ministry of finance should consider levy of banking cash transaction tax (BCTT) on transactions of Rs 50,000 and above,” the panel, constituted by Prime Minister Narendra Modi in November after demonetisation, said in its interim report. “We have submitted the recommendations to the Prime Minister today (Tuesday) and are fairly confident that some of these might be incorporated in the 2017-18 Union Budget,” Naidu later told reporters. The panel wants the Reserve Bank of India (RBI) and the finance ministry to not allow cash transactions above a threshold. However, some experts said that existing measures to curb high-value cash transactions were good e...

The income tax department has unveiled the final guidelines to determine if an entity can be considered an Indian resident and taxed here and has made them effective from April 1, 2016 (FY16), dashing the hopes of industry , which expected their implementation from the next financial year. Indian multinationals that have set up arms overseas to raise funds or expand business and foreign companies that outsource high-end critical functions in India to contribute to their global value chain will face tighter scrutiny if they are effectively managed in India. The Central Board of Direct Taxes released the 10-page final guidelines on Tuesday that will help determine the place of effective management (POEM) of companies, applicable from April 1 of the current financial year. The apex direct taxes body made it clear that the objective is to catch those avoiding taxes. “The intent is not to target Indian multinationals which are engaged in business activity outside India.The intent is to ...