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Aadhaar is on course to evolving into a comprehensive identification number for financial transactions, with the government deciding to introduce Aadhaar-enabled know-your customer regime across financial sector. The government is holding consultations with all regulators including the Reserve Bank of India in this regard, officials said on Thursday, a day after Aadhaar was made mandatory for filing income tax returns and applying for permanent account number or PAN. “Aadhaar e-KYC provides an instant, electronic and non-repudiable proof, besides updated contact details, which helps in further streamlining the process of service industry ,“ said a senior finance ministry official, who did not wish to be identified. The government has through an amendment in the Finance Bill made Aadhaar, the 12-digit number issued by the Unique Identification Authority of In dia, mandatory for filing income tax returns and applying for PAN. “Those individuals who already have Aadhaar, will need to pro...

The government on Thursday emphasised the urgency to pass the Goods and Services Tax (GST) laws during the current session of Parliament, saying the Centre and the states would otherwise lose their right to collect indirect taxes after September 15.Finance Minister Arun Jaitley said in the Rajya Sabha that the government is keen to roll out the GST on July 1 and other aspects like bringing petroleum and land under its ambit will be considered after the first year of implementation of the new system of indirect tax collection.Replying to a debate on the Bugdet which was approved by the House later, he said four bills supporting the Constitution amendment law on GST enacted last year will be introduced in the Lok Sabha shortly. 24TH MARCH,2017,BUSINESS STANDARD,NEW-DELHI

With the new tax treaty with Singapore and Mauritius coming into effect from April 1, inflows through participatory notes (Pnotes) could see a sharp drop. According to Securities and Exchange Board of India (Sebi) data, nearly 90 per cent of P-note investments are routed through Singapore and Mauritius, with which the Indian government has reworked tax arrangements. According to the changed double taxation anti avoidance agreements (DTAAs), all investments made from these jurisdictions would attract shortterm capital gains as  the exemptions would get removed. Mauritius and Singapore are favoured by entities issuing P-notes also called offshore derivative instruments (ODIs), thanks to tax-treaty benefits, particularly non-applicability of Indian laws. The new treaty says that capital gains that arise from shares purchased after April 1 by foreign investors based in these countries can be taxed in India.Accordingly, a capital gains tax of at least 7.5 per cent can be charged on sho...

The Securities and Exchange Board of India (Sebi) is looking at the concentration risk from bank exchange traded funds (ETFs) investing in stocks of the banking indices of the two major bourses. Of a total of 12 banking scrips in the National Stock Exchange´s Nifty Bank index, three-HDFC Bank, ICICI and Kotak Mahindra -contribute 45 per cent to the index weight.The bottom five contribute five per cent. Similarly, for the BSE exchange´s Bankex, the top five out of 10 stocks contribute four fifths to the weight. These indices are created on a free float method.Here, the price is multiplied by the number of shares readily available in the market and excludes lockedin shares held by promoters, government, etc. Under the diversification norms, mutual fund (MF) schemes cannot invest more than 10 percent in a single stock.However, this rule is not applicable to ETFs, as these mimic the weight of stocks that comprise the ETF basket.While openended sectoral funds can reset the weight ofapartic...

The tax department on Thursday said provisions of the Income Computation and Disclosure Standards (ICDS), the new accounting standards for computation of business income, will prevail over judicial precedents.The ICDS are applicable for computation of income chargeable under the head profits and gains of business or profession or income from other sources and not for the purpose of maintenance of books of accounts.The accounting standards came into effect from April 2016 (assessment year 201718). It aims to ensure consistency and help minimise taxrelated disputes.Seeking to instil confidence among stakeholders regarding applicability of ICDS, the Central Board of Direct Taxes came out withaset of 25 FAQs. 24TH MARCH,2017,BUSINESS STANDARD, NEW-DELHI

Union Finance Minister Arun Jaitley on Wednesday tried to calm fears over an amendment to the Finance Bill giving more powers to income tax (IT) officials. He played down charges that this was an “undeclared Emergency”. The FM said the amendment related only to disclosure of the source of information regarding alleged tax evaders. Jaitley, in his reply to the debate on the Finance Bill, 2017, in to make Aadhaar cards mandatory for filing ITreturns and applying forapermanent account number (PAN), claiming it might become the only identity card in the future. He also assured of action against 929,000 entities which had not responded to the ITdepartment´s queries over amounts that did not match income profile deposited in their accounts between November 8 and December 31. Prime Minister Narendra Modi had announced the demonetisation of old series Rs.500 and Rs.1,000 notes on November 8. Those who had money in these denominations were allowed to deposit it in their accounts til...

The Securities and Exchange Board of India (Sebi) will go through a third-party assessment of its regulatory framework by the World Bank and the IMF this year, an exercise which will help the former align itself closer to global regulatory standards and get feedback on its current functioning. The assessment will be conducted as part of the Financial Sector Assessment Program (FSAP), a joint programme of the IMF and World Bank established in 1999. The programme analyses the resilience of a country's financial sector, the quality of its regulatory and supervisory framework, and the capacity to manage and resolve financial crises. This is the third time Sebi is going through this programme, with previous supervisions in 2012 and 2001, which was a pilot assessment. In September 2010, IMF had made it mandatory for 25 jurisdictions (including India), with systemically important financial sectors to undergo financial stability assessments under the FSAP every five years. Among ot...

The Employees´ Provident Fund Organisation (EPFO) has decided to reduce administrative charges to 0.65 per cent of total wages of an employee from April 1,amove that will result in savings of Rs.1,000 crore annually for 600,000 employers. The EPFO´s decisionmaking body, the Central Board of Trustees, had approved the proposal to reduce the administrative charges to 0.65 per cent from the existing 0.85 per cent of total wages. Business Standard New Delhi,23rd March 2017

TAKING A CALL Move to benefit those looking at succession planning; the finance bill proposes to make Aadhaar a must for getting PAN card & filing income tax returns Gifts to trusts in the form of money or property for the benefit of relatives will not be taxed. The finance bill, approved by the Lok Sabha on Wednesday, has amended the original proposal that had expanded the scope of gifts to include money or property received for no consideration by trusts. Gifts received from trusts registered under section 12A of the Income Tax Act will also be excluded. Besides, trusts receiving dividend income will be exempt from the additional 10% tax on dividend income exceeding `10 lakh. The move benefits those looking at succession planning. The provision had been introduced in the finance bill to prevent abuse and the exclusion was made to avoid hardship in genuine cases, a government official said. “This is a welcome amendment and would not impact succession planning through trust...

The Securities and Exchange Board of India (Sebi) on Wednesday said municipalities planning to issue bonds on private placement basis next financial year will have to submit audited accounts for past three financial years starting 201314 to bourses. The decision has been taken after receiving feedback from municipal corporations. In view of the operational procedures followed by them, it would be difficult for them to submit the audited accounts for the immediately preceding financial year, it said. Shankara Building IPO subscribed 51% on Day 1 The initial public offering(IPO) of Shankara Building Products was subscribed 51percent on the first day of the issue on Wednesday. The IPO received bid sfor 2,700,704 shares against the total issue siz eof  5,2,94,67 shares, data available with the NSE till1830 hoursshowed.   The non institutional investors category  was subscribed 10percent, while retail investorsportion 98 percent. The Bengaluru based retailer Shankara...

Harmonising efforts to curb flow of cash and unaccounted money into the political system, the Lok Sabha on Wednesday approved the government´s proposal to relax conditions for contributions made by corporate entities. This will also facilitate the broadening of political funding channels. Besides removing the cap for contributions, companies will also be allowed to keep the names of political parties confidential in their accounts. The move was proposed as part of the amendments to the Finance Bill, 2017, by the government. This effectively means that Parliament has passed it. The Rajya Sabha does not have any power to rejectamoney Bill. Till now, corporate entities could contribute only 7.5 per cent of average net profit in the past three financial years. This cap has been removed, allowing free flow of funds to political parties. For this, provisions of the Companies Act will be amended as part of the Finance Bill. Besides, another provision in the Companies Act w...