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Showing posts from August 4, 2017

Government may double minimum wage, revise formula

India may see a doubling of minimum wage nationally to about Rs 18,000 per month as the labour ministry is set to relook at the formula currently used to determine the floor level.  The ministry is expected to take into consideration a proposal to double the units or individuals considered per family to six from three at present by including dependent parents as well as considering each child as one unit.  Currently, husband, wife and two children in a family are considered three units, based on which minimum wage is determined for agriculture and non-agriculture workers under the Minimum Wages Act, 1948. The Act is applicable to 47 central sector establishments and includes both agriculture and non-agriculture workers in the country.  Labour minister Bandaru Dattatreya on Thursday said that a committee will be constituted to relook at the norms of fixation of minimum wages in the country. A decision to this effect was taken at the first meeting of the minimum wage central advisory board…

Don’t ignore paying tax on rental income from foreign property

Even if you have kept the house for your own use and not let it out, estimate the deemed rental income from it and pay tax on it Many high net worth individuals who own houses abroad have in recent times been questioned by income tax officials for not having paid tax on the “deemed rental income” from those properties. It, therefore, becomes important for owners of foreign properties to understand the concept of deemed rental income and their tax liability on it. For tax purposes, one house (in India or abroad) is treated as self-occupied. The owner has to pay tax on rental income on the other house (or houses). If the other house is not rented out, he has to arrive at a deemed or notional rental income and pay tax on it. “A person resident in India is liable to pay tax in India on his global income. Hence, rental income from house property — let out or on deemed basis — situated abroad is taxable in India. The income tax law does not make any distinction between house properties situat…

I-T dept unearths Rs 1,000-cr scam at credit societies

The income-tax (I-T) department has unearthed a scam involving officials and members of cooperative credit societies who deposited large amounts of cash in banks during demonetisation.  Initial estimates by the agency has pegged tax evasion of Rs 1,000 crore in November and December of 2016 Several credit societies’ bank accounts saw a sudden surge of cash deposits, which raised a red flag in the system, said an I-T official. The scam surfaced during the scanning of databases received from scheduled commercial banks, which had on January 31 filed statements of financial transactions (SFTs) for 50 days after demonetisation. Based on the information and data, the I-T department searched and surveyed more than two dozen cooperative credit societies, including members and depositors across the country, but mostly in Maharashtra, Delhi, Gujarat and West Bengal, in search of the source of income of members who had deposited large sums of cash during the period. According to I-T sources, the hug…

Sale of scrips under export promotion schemes to attract 12% GST

Exporters will now have to shell out the goods and services tax (GST) at 12 per cent when selling scrips of export incentive schemes such as the Merchandise Export from India Scheme (MEIS). The government on Thursday clarified that scrips received by exporters under the Services Exports from India Scheme and the Incremental Export Incentivization Scheme, apart from the MEIS, will be taxed. Exporters earn duty credits through the form of scrips at fixed rates of 2 per cent, 3 per cent, and 5 per cent, depending upon the product and country. The earned scrips can be freely transferred to others or sold. Exporters have continued to maintain that more government help is needed to sustain India´s falling outbound trade. “MEIS etc fall under heading 4907 and attract 12 per cent GST,” the Central Board of Excise and Customs (CBEC) said in its frequently asked questions on the GST. The GST is based onacategory of goods and services based on the harmonised system number (HSN) codes. HSN 4907 relates …

Debtors can´t be allowed to paralyse banking system, says Jaitley

Finance Minister Arun Jaitley on Thursday said public sector banks needed the Banking Regulations Ordinance in order to be able to take decisions without fear of being subjected to investigation later. Replying to a debate on amendments to the Banking Regulations Act, Jaitley, who also holds the defence and corporate affairs portfolios, said the decision to take defaulters through the bankruptcy process was not a political one, and that such a move was necessary to start clearing the Rs 7 lakh crore toxic assets in the banking system. The amendments were passed by Lok Sabha and the Bill will now move to the Upper House of Parliament. The Insolvency and Bankruptcy Code (IBC) allows creditors to file insolvency cases against defaulters, which are given 180 days for restructuring. The National Company Law Tribunal (NCLT) can offer a company an extension of 90 days but if are solution plan is not finalised by then, its assets will be liquidated. All financial creditors will receive their share…

Chocolate mithais to attract 5% GST, Centre clarifies

Sandesh, with or without chocolate, will be taxed at 5 per cent, the government clarified on Thursday along with the goods and services tax (GST) rates for other items, including rakhis, idlidosa batter and kulfi. However, ambiguity persisted over whether the tax for plastic furniture would be 28 per cent as furniture or 18 per cent as plastic items. The sharp jump in tax on car leasing is also expected to be taken up in the GST Council meeting on Saturday. “Sandesh, whether or not containing chocolate, will attract 5 per cent GST,” the government clarified on Thursday. The clarification comes amid reports that sweet shops have discontinued chocolate barfis and chocolate sandesh. The GST rate on chocolates is 28 per cent Indian sweets are at 5 per cent. Although milk is exempt in the khoya, or milk, 5 per cent GST. “Sweet shops in Kolkata were in panic over different GST rates based on the types of sweets and ingredients. Now the government has clarified that the GST rate on all Indian swee…