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CBDT has pulled up the Income Tax department for having an “unsatisfactory“ record of grievance redressal despite the subject being monitored by the government on a priority basis. Officials said Central Board of Direct Taxes (CBDT) Chairman Atulesh Jindal has written a terse letter to the supervising chiefs of the IT across the country asking them to immediately review taxpayer's complaint cases in their respective regions, ensure redressal and undertake “administrative action“ against erring officials in this regard. The Economic Times New Delhi, 23th March 2016

Tax tribunal gives reprieve to investors, says gains not bogus just because Sebi is probing irregularities in the segme nt Investors holding penny stocks have got a reprieve from the Income-Tax Tribunal. The body has ruled that gains from penny stocks cannot be termed as bogus just because the Securities and Exchange Board of India (Sebi) is probing into possible irregularities in these stocks. Recently, investors who have tried to claim the benefit of longterm capital gains from penny stocks, have come under the radar of tax officials. “If payment is by cheque and delivery of shares is taken, then long-term capital gains tax cannot be treated as bogus,“ the tribunal said. The tribunal's ruling was on a case where the assessee had shown sale proceeds of shares in the scrip Ramkrishna Fincap as a long-term capital gain and claimed exemption. Further, the assessee had claimed to have purchased this scrip at Rs. 3.12 per . 155.04 share in 2003 and sold it for ` per share in 20...

Buoyed by a steady growth in collections from tax deducted at source (TDS), the Income Tax department now plans to undertake multiple steps to "augment" revenue from this category and minimise tax avoidance. The department plans to undertake meetings with various stakeholders like company deductors and chartered accountants to ensure that due taxes under this category are deposited accurately and on time. Business Standard New Delhi, 23th June 2016

Before taking advantage of the facility, they should weigh the currency and tax implications The Pension Fund Regulatory and Development Authority (PFRDA), which regulates the National Pension System (NPS), has extended the eNPS facility to non- resident Indians ( NRIs). So far, NRIs could enrol for NPS by visiting abank branch, but now they can do so online from the country of their residence, provided they have an Aadhaar or PAN card. Before an NRI decides to invest in the scheme, she should weigh the pros and cons. One advantage is that NPS is a dedicated retirement product. “ The principal cant be accessed, so it does not get used for any other purpose and remains safe for your retirement,” says Vishal Dhawan, chief financial planner, Plan Ahead Wealth Advisors. Access to an Indian financial advisor is difficult for NRIs. The auto choice option, which automatically manages the asset allocation to equity and debt with change in age, is an efficient solution for them. The NPS...

To ease trading requirements in the currency derivatives segment, the Securities and Exchange Board of India (Sebi) on Wednesday said position limit linked to open interest will be applicable at the time of opening a position. Such positions will not be required to be unwound in the event of a drop of total open interest in a currency pair at the stock exchange, the Securities and Exchange Board of India ( Sebi) said in acircular. However, in such scenario, the eligible market participants will not be allowed to increase their existing positions or create new positions in the currency pair till they comply with the applicable position limits. In view of risk management or surveillance concerns with regard to such positions of the market participants, Sebi said stock exchanges may direct the market participants to bring down their positions to comply with the applicable position limits within the time period prescribed by the bourse. Currency derivatives are Future and Options c...

Opposes using RBI reserves to recapitalise banks Reserve Bank of India Governor Raghuram Rajan on Wednesday said bad debts, rather than high interest rates, impinged on public sector banks ( PSB)’ ability to lend and a regulator has no say on how a credit decision is taken but at best raise red flags and force balancing measures. “Bankers sometimes turn around and accuse regulators of creating the bad loan problem. The truth is bankers, promoters, and circumstances create the bad loan problem,” Rajan said at an interactive meeting with industry and trade in Bengaluru, organised by Assocham. “The regulator cannot substitute for the banker’s commercial decisions or micromanage them or even investigate them when they are being made. Instead, in most situations, the regulator can at best warn about poor lending practices when they are being undertaken, and demand banks hold adequate risk buffers,” said Rajan. Rajan has been criticised a number of times for not letting interest rat...

The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) have received approval from the Securities and Exchange Board of India (Sebi) to launch electronic book mechanism for issuance of debt securities on a private placement basis. The mechanism will increase efficiency, transparency of the price-discovery mechanism and improve liquidity in the secondary market. It will come into effect from July 1, 2016. Hindustan Times New Delhi, 22th July 2016

Firms like DLA Piper, Baker & McKenzie keen on mapping local corp legal professionals As the Indian executive debates and formulates laws to allow foreign lawyers to practice here, big foreign law firms are scoping the market for talent and acquisition targets. Global recruitment firms that have so far remained fringe players in the area are beefing up their legal practices as firms like DLA Piper, Baker & McKenzie, Allen & Overy, Linklaters, Jones Day and Gibson Dunn show interest in mapping Indian corporate legal professionals. Foreign law firms at the moment are keen on identifying talent in niche areas synergistic to their existing clients with Indian presence or little law firms with low cost structures and small presence in major cities, said recruitment experts contracted by foreign firms almost on a quarterly basis for updated reports on Indian lawyers. “Foreign law firms seem to be looking at lean operations and would not be looking to compete for domestic ...

Capital markets regulator Securities and Exchange Board of India ( Sebi) has issued a consultation paper proposing changes to regulations regarding portfolio managers to enable fund managers to handle foreign money from Indian shores. The amendments were approved by Sebi’s board at a meeting held on June 17. Within the consultation paper, Sebi has proposed to insert offshore fund managers (OFMs) or eligible fund managers ( EFMs) as a new chapter in the existing norms. The change may allow Sebi registered portfolio managers to act as offshore fund managers with prior intimation to Sebi. Eligible fund managers/ offshore fund manager acting on behalf of an eligible investment fund ( EIF) can register under the PMS regulation, subject to conditions. Sebi has said in the paper, issued on Tuesday, offshore fund manager will be required to have a minimum networth of Rs. 2 crore apart from appointment of a principal officer and a minimum of two employees with requisite qualificatio...

During the tax filing season, many of our investments in property or instruments get tax exemption, leading to considerable savings. In fact, many investors rush to make investments at the end of the financial year only to get these exemptions. However, simply buying a property or investing does not ensure exemption. Other guidelines need to be followed lest the Income Tax Department comes back with queries or even withdraws the exemptions. Here are a few examples that will help understand this: Property: If you purchase a property on a home loan, you can claim exemption on the principal up to Rs. 1.5 lakh and up to Rs. 2 lakh on the interest amount. However, if you sell the house within five years of buying, you will lose the exemption on the principal in the following year. There is no mechanism for tax authorities to know, as filing is self- declaration. But, since there is one per cent tax deduction at source for any transaction above Rs. 50 lakh, the information will go to t...

In stricter measures on tax defaulters, the department of revenue has decided to block their Permanent Account Number (PAN), cancel their cooking gas subsidy and ensure non- sanction of loans by banks, among others. The measures are contained in the income tax department’s Central Action Plan for 2016- 17, presented at the recent conference of tax officials. The department also aims at augmenting collection from tax deduction at source (TDS), by identifying focus areas such as large companies and the ecommerce segment. The department aims to collect Rs. 54,000 crore in taxes from arrears in 2016- 17. The paper also asked tax recovery officials to use the provisions of arrest and detention contained in the Income Tax Act against defaulters. However, the finance ministry on Tuesday issued a clarification that no such statement had been authorised by the I- T department. “ Though the provisions for arrest and detention in respect of defaulters are contained in the Act, these are u...