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Finance Minister Arun Jaitley today said a lower level of taxation that is globally compatible is necessary if the country has to have a broader base of economy. He said gone are the days of the philosophy that high taxation will bring greater revenues and that since 1991 the course of economy has altered itself. "... What you need is a broader base of economy for which you need a lower level of taxation. You need to manufacture products and provide services which are more competitive in character and therefore your taxes have to be globally compatible," Jaitley said while inaugurating the professional training of IRS officers. He said competition is not merely domestic but global and therefore in the last two-and-a-half decades, governments have been guided by these principles. Tracing the behaviour of people in the last 70 years, the Finance Minister said there has been an impression if avoidance could be done of government revenue, there is nothing "improper...

Higher levy on dividend searned by individualsal so on govt’sradar The government is mulling a hike in the short-term capital gains (STCG)tax rate,and also a higher levy on dividends earned by individuals. At present,the STCG (profits on sale of shares held for less than 12 months)tax rateis15 percent;the government is planning to increase it to 20 percent, according to sources in the know.The Centre has already started gathering feedback from key market participants. Also, although the Finance Minister Arun Jaitley ruled out changes to the long-term capital gains(LTCG)—currently tax free—the government is toying with the idea of increasing the time frame for availing such benefits from 12 to 36 months. The government is taking securities market regulator Securities and ExchangeBoardof India’s(Sebi’s)and stock exchanges’ views on the proposals to change the tax structure in the capital markets.Announcement regarding this could be a part of the Union Budget on February1, 2017....

Extensively using carve-outs, which is creating subsidiaries and then going in for IPOs, and exemptions have been hobbling the IFRS-compliant new Indian Accounting Standards (Ind-AS), which kicked in from April 1, 2016. It helped that Sebi, the stock market regulator, allowed reporting standalone financial results instead of consolidated results. Around 1,000-odd companies with net worth of Rs 500 crore or above were covered in the first phase of Ind-AS implementation. Comprising 40 accounting standards, this entailed changes in the financial reporting framework. Revenue recognition, taxes and financial instruments were seen as the key impact areas to watch out for. “The full impact of Ind-AS on financial performance, as well as on the financial position of corporate India, will be visible only when one gets the consolidated accounts for the full year with all the relevant disclosures,” said Sai Venkateshwaran, partner and head, accounting advisory services, KPMG. Tax experts p...

The next step in the war against corruption would be a crackdown on benami property, Prime Minister Narendra Modi said Sunday, as he again thanked people for enduring the “pain” caused by the scrapping of high-value currency. Modi, who has come in for criticism for scrapping Rs.500 and Rs.1,000 notes that triggered a cash crunch, said if curbing corruption required “even tougher steps, those would be taken”. “You are possibly aware of a law about benami property in our country which came into being in 1988, but neither were its rules ever framed, nor was it notified. It just lay dormant,” Modi said during the year’s last edition of Mann ki Baat, his monthly radio programme. “We have retrieved it and turned it into an incisive law against benami property. In the coming days, this law will also become operational,” he said. One of the biggest criticisms of demonetisation is that cash accounts for only 6% of the black money, the bulk of which is parked in real estate, bullion or is st...

The proposed changes could do away with the long-drawn process of settling disputes, even after years of litigation. Among the suggestions being considered is to give a window — possibly 30 days — for settling disputes between complainants and people whose cheques bounced. If the two parties fail to come to an understanding within that time, the defaulter could be put in jail without bail at the court’s discretion. “These are among several options on the table. We will finalise the specifics shortly. To promote cashless transactions, we will not shy away from incorporating stringent provisions,” said a source involved in deliberations over amendments to the negotiable instruments act, which governs cases relating to bounced cheques. Cheque bounce is a bailable offence under the current law, which enables defaulters to stay away from jail as long as the trial is on. The law stipulates imprisonment up to two years or fine that may extend up to double the dishonoured amount, or ...

Restrictions on withdrawal of cash from banks and ATMs are likely to continue beyond December 30 as currency printing presses and Reserve Bank of India (RBI) have not been able to keep pace with the demand for new currency notes. As the 50-day deadline for the completion of demonetisation process draws near, there is a growing consensus among bankers that the restrictions on withdrawal would have to continue even in the New Year so as to maintain orderly working at the banks. Banks at many places are not in a position to disburse even the current limit of Rs 24,000 per week due to the cash crunch and are rationing the valid currency depending on cash availability. If this limit is withdrawn for individual and businesses from January 2, it is unlikely that banks would be able to disburse the higher demand for valid currencies given the current cash position. "Most of us think that the withdrawal limit would not be completely withdrawn. It is a possibility that it could be relaxed...

In a bid to calm frayed nerves of stock market players, Finance Minister Arun Jaitley on Sunday clarified the government has no intention to impose a tax on long-term capital gains from trading in shares. He went on to blame “some sections” of the media for “misinterpreting” Prime Minister Narendra Modi’s speech in Mumbai on Saturday. Jaitley said: “The Prime Minister’s speech in Mumbai on Saturday has been misinterpreted in some sections of the media, which have started speculating this is an indirect reference to the fact that there could be long-term capital gains (tax) on securities transactions.” He said such an interpretation was “absolutely erroneous,”, adding the “Prime Minister had made no such statement directly or indirectly... and therefore, I wish to absolutely clarify there is no occasion or opportunity for anybody to reach such a conclusion because this is not what the Prime Minister said, nor is the intention of the government as has been reported.” Read our ful...

Reserve Bank of India. In response to a RTI query by HT, the central bank said the central board of directors recommended ban on rs 1000 and 500 notes at its meeting in New Delhi on November 8, hours before PM Modi announced the step on TV. (AFP File Photo ) The government and the RBI have kept the consultation process that led to the decision to demonetise 86% of India’s cash in circulation a closely-guarded secret. Both, however, have insisted that the demonetisation plan had been under discussion for long and consultations were being held. Economic affairs secretary Shaktikanta Das told reporters on November 8 that there was “no need to go into the process which led to this decision. I think what we should be focusing on is the outcome and the decision itself”. The government’s shock move has led to a severe cash crunch, forcing millions of people to line up at banks and ATM kiosks for more than a month. Cash withdrawals have been restricted, but most banks are unable to provide ev...

NEW DELHI: The Income Tax department today clarified that businesses and traders receiving cash exceeding Rs 2 lakh in any single transaction for sale of goods and services are required to report it to the authorities. The clarification on the reporting guidelines under Rule 114E of Income Tax Rules, 1962, which came into force from April this year, has come amid doubts being expressed in certain quarters about reporting of cash transactions that aggregate to Rs 2 lakh. "The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT notification dated October 6, 2016, clearly indicating that the said transactions did not require aggregation and the reporting requirement under SFT for this purpose is on receipt of cash payment exceeding rupees two lakh for sale of goods or services per transaction," the CBDT said in a statement. Rule 114E of Income-Tax Rules, 1962, for furnishing Statement of Financial Transactions (SFT) came into force with effect ...

The government on Friday announced that Aadhaar and e-Aadhaar card could be used as proof of date of birth (DOB) while applying for passports.   In order to streamline, liberalise and ease the process of issue of passport, the ministry has taken a number of steps in the realm of passport policy, expected to benefit the citizens of India applying for a passport, said Minister of State for External Affairs V K Singh.   In case of proof of DOB, while filing the application, it has now been decided that all applicants of passports can submit any one of the documents transfer/school leaving/matriculation certificate, PAN card, Aadhaar card/e-Aadhaar having the DOB of applicant, copy of the extract of the service record of the applicant, driving licence, Election Photo Identity Card (EPIC) or LIC policy bond.   Birth Certificate issued by the Registrar of Births & Deaths or the Municipal Corporation or any other prescribed authority whosoever has been empowered under the R...

The tricky issues of division of administrative turf over assessees between the Centre and states — which can make or break the roll-out of the goods and services tax (GST) on April 1 — was not taken up by the GST Council during its two-day meeting that ended Friday. All other provisions of the draft model GST Bill and compensation Bill were cleared. The next meeting of the Council, on January 3 and 4, will try to resolve the issue of dividing the administrative powers between the Centre and states, but signals given by state governments on Friday suggest that it would be a difficult task.  The meeting will also take up the Integrated GST (IGST) Bill. GST “That leaves us with the very important work of IGST law and cross-empowerment,” Union Finance Minister Arun Jaitley told reporters after the meeting on Friday. A state finance minister said states were clear there should be no dual control over assessees with up to Rs 1.5 crore annual turnover. This means that states want sole c...