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To boost demand for low- cost housing, the Reserve Bank of India (RBI) on Thursday reduced the risk weight for individual housing loans of up to Rs.75 lakh. The minimum risk weight for individual housing loans has been reduced from 50 per cent to 35 per cent. The risk weight for commercial real estate has been left unchanged at 100 per cent. For loans of up to Rs.30 lakh, the central bank increased the loan- to- value ( LTV) ratio to 90. LTV is the highest loan amount a bank can disburse, as a proportion of the property price. Now, banks will have to allocate less capital if risk weights are lower. Most banks have a sizeable portfolio of loans of up to Rs.75 lakh. As capital costs will come down due to lower risk weight, the move is expected to translate into lending rate cuts by banks. “This will be a boost for the low- ticket housing segment (up to Rs.30 lakh) … increasing the loan- to- value will encourage builders to focus on this segment. With the interest rates coming d...

“Tax is in the boardrooms. Tax is no longer in the offices of the CFOs, because your brand will suffer if you get a stigma of being atax avoider” The large taxpaying entities are part of the tax base but they understate their income, the Central Board of Direct Taxes ( CBDT) Chairperson Anita Kapur said, pointing towards the findings of a recent study on Thursday at a tax conference. “National Institute of Public Finance and Policy (NIPFP) study showed us our missing tax population which has an income of ? 4 lakh annually. We don’t have large taxpayers missing from our base; they are in the base but they are understating their income,” said Kapur, at the global tax conference organised by the Confederation of Indian Industry. The CBDT had asked thinktanks NIPFP and Indian Council for Research on International Economic Relations to identify the tax gap in the system. In line with the budget announcement, Kapur said that the CBDT is looking at removing exemptions to simplify ta...

Jaitley bats for automatic info exchange to tackle black money The finance ministry is proceeding with moves to curb legal tax avoidance by multinational companies ( MNCs). Revenue considerations apart, it has been buoyed by the recommendation that developing countries do so, from the Paris- based Organisation of Economic Co- operation and Development ( OECD). The latter body has made suggestions on an ‘ action plan’ in this regard, issued on Monday, on what is termed base erosion and profit shifting ( BEPS) between countries. It had formulated this at the request of G- 20 countries, a mix of developed and developing ones. The government is studying suggestions on checking instances of double non- taxation and ‘ treaty shopping’, the term for the practise of structuring a multinational business to take advantage of more favourable taxes in certain jurisdictions. It will ensure, say officials, that the proposed General AntiAvoidance Rule ( GAAR, on taxes), expected to come i...

With the high court here ruling in favour of Vodafone in a transfer pricing case, the Indian arm of the British telecom company has scored another victory against tax authorities. The case pertains to the sale of its call centre business to Hutchison’s India entity and assignment of call options to Vodafone International BV in 2007- 08. The authorities pursued with their tax demands under transfer pricing rules, despite the Supreme Court having ruled against similar cases earlier this year. In fact, Vodafone approached the high court after a fresh demand was made by the authorities this July. Fereshte D Sethna, senior partner at DMD, legal advisor to Vodafone, said: “ The verdict has reaffirmed justice for Vodafone and is an excellent signal for foreign investors. The high court has struck down the stand of the tax authorities premised inter alia on the fundamental position that tax exigibility of the transaction was already considered by the Supreme Court back in 2012. The tax o...

Growth seems to be easing off in most of the world’s major economies, including the United States and more notably in China, the Parisbased Organisation for Economic Co- operation and Development ( OECD) said on Thursday. The OECD said its monthly leading indicator, a synthetic measure that seeks to capture turning points in the economic climate, showed moderating growth generally. However, the euro zone was stable, with growth actually firming up in euro zone countries — France and Italy —and also in India. Taking an index reading of 100 as the long- term average, China slipped further, to 97.2 from 97.6 in its latest update, the OECD said. The US economy dropped to 99.2 from 99.5, Japan to 99.8 from 99.9 and the UK to 99.5 from 99.7. Among bright spots, the euro zone as a whole remained stable at 100.7, with Germany, its largest economy, also steady at 100.0. Business Standard, New Delhi, 9th Oct. 2015

Updates Of the Day 1.The Central Government and financial institutions suffered a setback when the Supreme Court declined to modify its order restricting Aadhaar Card. 2.MCA has revised the versions of E-forms AOC - 4 (Non-XBRL), MGT- 7, INC - 29 and MGT - 15 w.e.f 8th October, 2015. Only new version of the E-form will be acceptable. 3.Unspent amount of subsidy received from holding company cannot be treated as income. [CIT v Canon India Private Limited) (Delhi High Court). 4.Search & Seizure Proceeding against a person without issue of search warrant is bad in Law. Delhi High Court [CIT v Smt. Priyanka Singhania] 5.CBDT issued Circular No.17 dated 6-10-2015 on Agricultural Land as Finance Act, 2013 amendment for computing distance ‘aerially’ for the purposes of ‘agricultural land’ under section 2(14)(iii)(b) is prospective in nature. For more News Like us on https://www.facebook.com/caonlineofficial Or Subscribe on mail visit : www.caonline.in

Updates Of the Day 1.NIRC of ICAI is organizing seminar on Income Tax & GST Jointly with Rohini CPE Study Circle on 9.10. 2015 from 5PM–9.30PM at Hotel Oasis, Pitampura, Delhi. Fees Rs.500/- 2.ICAI hosted admit cards in respect of candidates admitted to the IPCC and Final Exam in Nov 2015. 3.RBI has modified the directions issued to the NBFC - Micro Finance Institutions w.r.t pricing of credit by MFIs. 4.MCA has constituted a High Level Committee to suggest the measure for improved monitoring of CSR. 5.Tax obligations for October 2015 prepared by Advocate Sanjay Sharma are available. If u need, send us email. 6.No Excise duty Price-escalation not contemplated at or before time of removal: [CCE vs. Hitkari Fibres Ltd. (Supreme Court)] 7.Cost of purchase from outside Delhi will be costlier now - Trucks entering Delhi are now required to pay environmental tax in addition to toll tax: Order by National Green Tribunal. 8.Reimbursement of own share of cost of software which is a...

Move may spell trouble for exporters, who will lose access to duty-free imported inputs and will have to make upfront payment of GST that will be refunded later International travellers buying goods in India will be able to claim tax refunds in the proposed goods and services tax regime, which seeks to replace a plethora of state and central government taxes with a single levy. That's among the proposals of panels set up by the empowered committee of state finance ministers which submitted their reports on the business process for GST. The three reports dealing with refunds, registration and payment processes have been put up for stakeholder consultations, clearly indicating the government's intent to go full throttle with preparations for a rollout of the tax from 2016. “It is encouraging to see that the government has issued these reports for public feedback even while the Constitutional amendment bill is yet to be passed by the Rajya Sabha. This does indicate that th...

The central government and financial institutions suffered a setback on Wednesday, when the Supreme Court declined to modify its order restricting Aadhaar card use only for public distribution system ( PDS) benefits. The issue would now go before a larger bench to be set up by the Chief Justice of India. The central and some state governments, along with Securities and Exchange Board of India ( Sebi), Reserve Bank of India( RBI), banks and other public institutions were vehemently arguing that the court order of August 11, restricting the use of AadhAar cards only to essential items, has stalled their functioning. They had contended that those who voluntarily come forward to register for the identity card should be allowed to do so. Sebi and the banks argued that the use of the card would allow them to track black money operations. However, a three- judge bench headed by J Chelameswar did not change the order and stated in its order that it would be better that the issue be decid...

Otherwise, EPFO can freeze your account. But seek detailed calculation to verify the numbers Employees are always advised to try and not dip into their provident fund ( PF) corpus because it is the most important portion of their retirement corpus. Even if a company closes down, employees will get at least some part of their PF. Both the employee and employer contribute 12 per cent each of the basic salary towards employees’ provident fund ( EPF). For 2015- 16, the government has fixed the EPF rate at 8.7 per cent. Most employees are used to getting money from the Employees Provident Fund Organisation ( EPFO) and no one is prepared for a letter from their earlier company asking to repay some amount to the EPFO. But a media company employee received such a letter, because an excess amount was paid to him. According to the letter, the EPFO has sought repayment otherwise it had threatened to freeze the account. He was asked to repay the excess amount by cheque to the Regional PF Com...

A day after Prime Minister Narendra Modi expressed the hope on a national roll- out of goods and services tax ( GST) from 2016- 17, the finance ministry on Wednesday released three reports on the processes for the new indirect tax regime. These suggested that the Reserve Bank of India ( RBI) can act as the aggregator of payments, and businesses will have to mandatorily register with the goods and services tax network (GSTN) portal to avail of benefits of the new tax system. The reports, prepared by joint sub- committees of the Union finance ministry and the empowered committee of state finance ministers, relate to registration, refunds and processes. “A legal person without GST registration can neither collect GST from his customers nor claim any input tax credit of GST paid by him. There will be athreshold of gross annual turnover, including exports and exempted supplies ( to be calculated on all- India basis), below which any person engaged in supply of goods or services or both ...