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Concerned at the slow transmission of policy rate changes by banks, the Centre plans to replace interest subvention schemes with interest subsidies that do not interfere with lenders’ marginal lending rates. The government has also asked states to coordinate with one another in market borrowings so that there is no liquidity crunch. “We need to revisit our interest subventions schemes and replace them with back-ended interest subsidies that do not interfere with the marginal lending rates, and yet have the same effect on the loan repayments as the interest subventions have,” Finance Secretary Ratan Watal said at a meeting with state finance secretaries here on Monday. While the focus is on setting policy rates, equally important is the monetary policy transmission, said Watal. “This cannot be left entirely to the central bank. Our policy interventions can often interfere with the transmission of monetary policy actions.” Noting that banks have moved to a new system of marginal ...

The Income-Tax department has activated the Aadhaar and net banking-based e-filing verification system for taxpayers to file the first appeal before a tax officer, on similar lines of online ITR filing. To reduce the interface between taxman and the taxpayer, the department has recently operationalised the maiden facility on its official e-filing portal. “One EVC (Electronic Verification Code) can be used to validate one form of the assesse irrespective of the assessment year,“ a notification in this regard said. The Economic Time New Delhi, 12th April 2016

At a time when the government is bearing down upon banks to recover up to Rs. 7 lakh crore of outstanding loans from companies, it has admitted that a like amount of outstanding taxes may be irrecoverable. The tax department has indicated to the government auditor, Comptroller and Auditor General (CAG) that more than 96% of this uncollected demand is difficult to recover in the current financial year. Speaking on condition of anonymity, one tax department official said even later, much of the amount was likely to prove unrecoverable. According to a CAG audit, pending tax demands have more than doubled in five years, from Rs. 2.91 lakh crore in 2010-11 to Rs. 7 lakh crore in 2014-15. The tax department ascribed the ‘difficulty’ in recovery to “inadequate assets for recovery, cases under liquidation, assessees not traceable, demand stayed by various authorities etc.” The CAG had rapped the department for its deficient recovery mechanism, saying: “The uncollected demand is risin...

The revenue department has decided to move the Supreme Court for transfer of petitions filed in three High Courts, which had stayed levy of service tax on legal services provided by senior advocates. It has also decided to rope in Attorney General in the case and get the stay orders vacated. The High Courts of Delhi, Gujarat and Calcutta have stayed the levy of tax on legal services. “The Chairman CBEC has directed to engage the services of the Ld Attorney General to get the stays vacated by moving...SC and requesting for aggregating the petitions filed in various courts,“ said a CBEC communication. The Economic Times New Delhi, 12th April 2016

The Securities and Exchange Board of India (Sebi) is working on a plan to allow a single licence for equity and commodity brokers, a move that will help the broking community reduce costs. Though both security and commodity market intermediaries are now regulated by Sebi, following the absorption of Forward Markets Commission (FMC) into it, they still adhere to different guidelines and requirements. Sebi has initiated an exercise to have a common set of these. “Once the commodity market stabilises, we will allow each lot of brokers to operate in the other segment. It will be done in a gradual and phased manner, so the market isn’t disrupted in any way,” a senior Sebi official told this newspsper. The issue has been discussed in several meetings after the FMC merger in September. Experts say the move will bring down the cost of operations for brokers, under pressure due to shrinking margins. High costs and moderation in growth has led to nearly 3,000 shutting shop in the past ei...

The government is considering a proposal to make it mandatory for foreign players entering the food processing sector to invest part of their FDI in developing back-end agriculture infrastructure. Business Standard New Delhi, 12th April 2016

www.caonline.in News... 1.Catering charges should be included in Mandap keeper service. 2.Section 40A (3): No disallowance for genuine and bonafide cash transactions. 3.Section 80IB: Subsidies for reimbursement of production cost are business income. 4.Section 24(b):Co-owners with unspecified shares entitled to equal interest deduction. 5.ICSI allows 10 secretarial audits for F.Y. 2016-17 for practicing CS: Press release dated 09-04-2016. 6.Forms AOC-4, AOC-4 CFS, FC-2, MGT-14, INC-23, INC-12, INC-2, INC-7, INC-29, MGT-10, FTE, PAS-3 have been recently updated on MCA 21 portal. For more News Like us on https://www.facebook.com/caonlineofficial Or Subscribe on mail visit : www.caonline.in

Refusing to relent on excise duty levy on non-silver jewellery goods, Finance Minister Arun Jaitley on Sunday said a “luxury item” cannot remain out of tax ambit when taxes need to be paid on many essentials. A large section of jewellers and bullion traders have been on strike for over a month seeking withdrawal of one per cent excise duty on non-silver jewellery items. They are also opposing the  mandatory quoting of the personal account number by customers for transactions of Rs two lakh and above. "How can a luxury item remain out of tax when essential items like cement, cloth and many others have to pay manufacturing tax? If we do not bring the goods and services tax (GST) on gold, taxation on other items will have to be increased," Jaitley said at a media interaction at the Press Club here. He said there was no reason why luxury items should be exempted when the country was moving toward GST. Jaitley said the Centre has given a benefit that excise would be simi...

The 'Panama Papers' puts the spotlight on how companies should manage the legal and regulatory issues around their foreign money Companies often need to open foreign currency accounts with banks outside India to make remittances for the purpose of business operations; mergers & acquisitions; and buying / selling real estate and financial assets abroad, among others. According to the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015, companies can remit up to 25 per cent of their net worth to meet specified business expenses. Further, Indian companies are allowed to hold and maintain foreign currency accounts abroad to make direct investment into foreign a joint venture, or a wholly-owned subsidiary on the condition that the amount received by way of dividend or any other entitlement from the subsidiary is repatriated to India within 30 days from the date of credit. However, a company set up by an individual, under ...

Those with annual income of more than Rs 50 lakh will have to furnish a lot of additional details Filing income-tax returns is not a pleasant job for most, even for those who have no income to show other than salaries. And, the continuous changes in the income-tax returns form, often, makes the filing process more complicated. One has to be extremely careful about filling the various boxes in the Income Tax Return (ITR) form and ensure that it matches the details mentioned in the income certificates. And, with filing possible only online, there is no scope for any error, or else you can expect a notice from the income tax department. This year might be a challenge for those who earn more than Rs 50 lakh. In addition to details of salary and various exemptions, these individuals also have to disclose the value of the non-financial assets they own. This value has to be the cost or acquisition value. The disclosures include particulars of assets like land, buildings, cash in hand, j...

The capital markets regulator has rejected a mutual fund industry proposal to allow them to isolate risky assets from the rest of their holdings and cap redemption, saying that it will encourage fund managers to take unnecessary risks, three people directly familiar with the developments said. The Association of Mutual Funds of India (Amfi) in March approached the Securities and Exchange Board of India (Sebi) to set rules for the creation of a so-called side pocket when a specific investment faces a credit risk as a way to insulate the broader portfolio from redemption pressure. JP Morgan Asset Management (India) Pvt. Ltd pursued this approach last year even though there were no clear regulations in place. The asset manager restricted redemptions as investors demanded their money back after the net asset values of two of its schemes plunged following the downgrade of the credit rating of Amtek Auto Ltd’s bonds. JP Morgan had a Rs. 193 crore exposure to Amtek Auto. This prompt...