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The income tax (I-T) department has issued a proposed set of rules for computation of the 'fair market value' of assets for taxing any indirect transfer of assets abroad, to avoid Vodafone-type tax disputes in the future. This comes almost a year after finance minister Arun Jaitley had clarified in the 2015-16 budget that indirect transfer abroad between two companies would draw tax if the value of Indian assets of the company concerned on the specified date exceeded Rs 10 crore and these represented at least 50 per cent of the value of all the assets owned by such a foreign company globally. The budget provision had improved on the arbitrariness in the much-contested retrospective amendment to the I-T Act. Which had said the indirect transfers abroad would be liable to tax in India if the transfer derived value "substantially" from assets located in the country. The rules put out for stakeholder consultation on Monday give out the method of valuation of shares ...

The Narendra Modi government has decided to revamp the way records of assets created under Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) are maintained so that any inspecting authority can audit them to check the credibility of the scheme. Work done under MGNREGA results in the creation of assets in villages like canals or ponds. With the Centre's focus on the same, all states have been asked to create revamped `fixed asset registers' by June 15 which will be kept at gram panchayats.There was a provision for maintaining an asset register under the original MGNREGA guidelines issued by the UPA government but the present government feels the existing registers are not well-organised.The Ministry of Rural Development has now been asked to give top priority to this matter. “ An up-to-date asset register would serve as audit evidence that any inspecting authority may require, to express their opinion on the credibility of any MGNREGA works,“ the ministry said i...

Indian companies that witness any indirect transfer of assets will now have to lay bare minute details of their holdings to Income Tax Department.The government has unveiled a new stringent reporting framework to plug the gap in the system, after tax authorities faced trouble in sourcing information in a number of high-profile tax cases, dealing with indirect transfers. The rules prescribe that information and documents are required to be maintained and furnished to the tax authorities by an Indian entity whose shares are indirectly transferred. Tax experts say companies will have to prepared for exhaustive disclosures. “This information is required to be kept for eight years,“ said Rajesh Gandhi, part ner at Tax, Deloitte Has kins & Sells LLP . “The ex tent of the information and documentation requ ired to be kept by the Indi an concern seems to be ve ry substantial conside ring that such informa tion would not be forthcoming quite easily . Interestingly, any gap in info...

The Reserve Bank India has decided to cap the customers' liability arising out of fraudulent electronic transactions, and has warned banks that they should plug the loophole leading to misselling of insurance products, failing which they would be penalised. “The RBI is examining whether to issue regulatory directions to reduce the liability of the customer on fraudulent transactions arising out of electronic banking transactions,“ said RBI deputy governor SS Mundra, speaking at an event organised by Banking Codes and Standard Board of India. “Between the two -the institution and the customer -the balance of po wer is skewed. The idea is that the liability for the customer should not go beyond a point,“ he said. At present, BCSBI --a quasi-re . 10,000 beyond which a customer is ` not liable for fraudulent ecommerce transactions, provided the customer has notified the bank about it. Stating that misselling has been rampant on insurance products, he said, “Often higher sales...

Reserve Bank of India Deputy Governor SS Mundra on Friday said banks should increase the provision coverage ratio ( PCR) and aim to raise it to 70 per cent, the amount lenders were mandated to maintain earlier. “We do not have a prescribed level. We would encourage that on their own, they should inch it up to the extent possible. I don’t have any percentage in mind. There is no prescription at this point of time but let’s say there was a benchmark earlier, it would be a good thing to at least aim for that benchmark,” said Mundra. Earlier, banks were required to mandatorily maintain a PCR of 70 per cent. But, the mandate was withdrawn in September 2011 after most banks had met the criterion. Now, with the rise in bad loan, banks are increasingly reducing the PCR to ensure that the profitability is not hit adversely. In fact, several public sector banks ( PSBs) have seen a reduction in their PCR, as non- performing assets ( NPAs) in balance sheets have increased. Several banks’ P...

The government is looking to expand the scope of the singlewindow clearance mechanism for importers launched on April 1, which could significantly cut the cost and time for importers and, in turn, help improve ease of doing business. To further simplify inbound shipments, the government is working towards allowing all physical import licences to be uploaded online with a digital signature. This will do away with the cumbersome compliance measures requiring importers to show physical copies of import licences or rules of origin certificates to the authorities each time. “The next step is to do away with the need to present physical copies of licences each time one imports. It will all be made online within the next two months,” said a government official. The import facilitation move is expected to benefit a large volume of imports and, in turn, the economic growth and manufacturing, which is largely import- dependent. Currently, a bill of entry requires an average of three do...

Foreign portfolio investors and Singapore govt want some leeway in new tax treaty India, which is currently looking to renegotiate its tax treaty with Singapore, has got feelers from foreign portfolio investors (FPIs) and the Singapore government to include some concessions in the agreement. Concerned that investing in Indian equities through Singapore may become tougher if India offers the city state a tax treaty similar to the new agreement with Mauritius, the FPIs are demanding some leeway . Their main point is that unlike Mauritius, Singapore has lot of checks and balances in place and so the scope for irregularities is less when an investment is routed through the Southeast Asian country . In an interaction with FPIs on Friday, Minister of State for Finance Jayant Sinha said in all probability, the current India-Singapore tax treaty would be renegotiated before the end of March next year. “If the tax treaty is not renegotiated, India will assume right to tax capital gains. T...

DIPP collating the progress made and will share its report with Niti Aayog, two meetings already held by DIPP officials in this regard The government is reviewing the Startup Action Plan launched in January by Prime Minister Narendra Modi to assess if it is moving in the right direction. The department of industrial policy and promotion (DIPP) is collating the progress made on the plan and will share its report with the NITI Aayog. Two meeting have already been held by DIPP officials to take stock of the steps undertaken so far. Having recently revised the patent rules to create a conducive envi ronment for startups, the DIPP has also put together a group of 280 experts, including lawyers and consultants, to assist startups in filing their patent applications. The amended rules provide for expedited services for patent registration and also include the definition of `startup' for passing on the special benefits. Besides, the government is also conducting an exercise to ...

Move to make available over Rs. 6,000 crore to states a year for improving forest cover The government will push for the passage of the Compensatory Afforestation Fund Bill in the Rajya Sabha in the upcoming monsoon session, which will make available more than Rs. 6,000 crore to states every year for improving the forest cover. The proposed law is expected to create over 15 crore man-days of direct employment, most of it in the tribal and backward areas of the country. The Lok Sabha has already passed the Bill, incorporating 20 of the 26 proposals of a standing committee that vetted it. Rs. 40,000 crore lying in There is ` the fund, excluding interest accrued on amounts invested in fixed deposits, indicating the huge financial resources at the disposal for afforestation. Any delay in passing the Bill will not only affect the afforestation drive, but also deprive tribal people and other backward communities huge employment opportunity, a senior government official said. FUND...

www.caonline.in News... 1.Additional Depreciation u/s 32(1) (iia) on printing and publishing :Circular No. 15/2016. 2.S. 274 notice must specify if it’s for concealment or for incorrect particulars. [Sanghavi Savla Commodity Brokers Pvt. Ltd. vs. ACIT (ITAT Mumbai)]. 3.No disallowance u/s. 14A on shares held as stock-in-trade. [Shri Paresh Pritamlal Mehta vs. Income Tax Officer, (ITAT, Pune)]. 4.No Addition u/s 68 if identity, creditworthiness and genuineness established. [DCIT vs. Overseas Infrastructure Alliance (I) Pvt. Ltd. (ITAT MUMBAI)]. 5.S. 263 not justified due to multiple view on applicability of TDS. [Neo Sports Broadcast Pvt.Ltd. vs. CIT (TDS) (ITAT Mumbai)]. For more News Like us on https://www.facebook.com/caonlineofficial Or Subscribe on mail visit : www.caonline.in

www.caonline.in News... 1.Tax on services rendered abroad by foreign firms to Indian CA firms. [ACIT vs.BSR & Co. (ITAT Mumbai)]. 2.Central Government notifies special courts u/s 435 for trial of offences punishable with imprisonment of 2 years or more under the Companies Act, 2013. MCA notification dated 18.5.2016. 3.Section 2(29)(iv) & Sections 435, 436, 437, 438, 440 of Companies Act, 2013 notified by MCA w.e.f. 18.05.2016. 4.All register dealer under DVAT has to file online DS-1 for all transactions of central sales before actual delivery of the goods with correct codification and complete details of transporter w.e.f. 01/06/2016. 5.Today (21.05.16) is the last date for e-payment of DVAT & CST for the month of April, 2016. For more News Like us on https://www.facebook.com/caonlineofficial Or Subscribe on mail visit : www.caonline.in