CA Online

If you have made large cash deposits in the aftermath of demonetisation, you should brace for tougher scrutiny from the income tax department and keep documents like bank statements, passbooks, land records and sales records handy. The income tax department will soon ask you to furnish these documents to support your claims of these large cash deposits being made either from income exempt from tax like agricultural income or cash received from unidentifiable persons in the case of businesses or cash withdrawn from own bank accounts. Following the large cash deposits in bank accounts, the tax department started Operation Clean Money to scrutinize the source of all cash deposits to check if they were from legally declared income. The income tax department has data on 10.9 million accounts where deposits ranging from Rs2 lakh to Rs80 lakh were made in the period between 10 November and 30 December. Around 148,00 accounts were also identified wherein deposits of more than Rs80 lakh wer

On states' insistence, those transporting goods within or outside states will have to queue up at border for checking of e-permits The revolution the proposed goods and services tax (GST) promised might not be all that rosy because it would be hobbled by the need for an e-permit to be flashed at inter-state borders as the states insisted the old analogue practises continue. The states seem to have gotten their way and will continue with the old `permit raj' system, undermining one the biggest gains of GST. Though the paper permit may become an e-permit, those transporting goods within or outside states will still have to queue up at border checkposts where their e-permits will be checked. The centre resisted the move as its indirect tax administration moved away from the inspector raj era, but yielded to states' insistence on inclusion of this clause in the final GST law in order to build consensus and get the reform bill rolling. State tax authorities wanted this pro

The war on black money that has been raging since November, pitting income tax officials against tax offenders, is far from reachingadecisive turn. The latest battle in this war is being fought through two schemes: the Pradhan Mantri Garib Kalyan Yojana and Swachh Dhan Abhiyan. In addition,agrace period has been offered for nonresident Indians and those who were abroad from November 9 to December 30: they have time till March 31 to deposit their old currency notes with the Reserve Bank of India. According to provisional estimates, 94 per cent of the demonetised Rs.500 and Rs.1,000 notes, collectively worth Rs.15.44 lakh crore, have been deposited with the banks. If these figures are indeed the final numbers, it would mean the black money drive hasn´t achieved what the government had hoped for. Hence, income disclosure schemes have followed. While people are being encouraged to voluntarily disclose their wealth, advance analytics is also being used to catch the offenders. The first

The Securities and Exchange Board of India (Sebi) on Wednesday increased the investment ceiling of debt mutual funds in housing finance companies (HFCs). "In light of the role of HFCs, especially in affordable housing, and to further the government´s goal under Pradhan Mantri Aawas Yojana (PMAY), it has now been decided to increase additional exposure limits provided for HFCs in the financial services sector from 10 per cent to 15 per cent," said the regulator inacircular. Under the current guidelines, the sectoral exposure for debt mutual fund schemes is 25 per cent. However, for the financial sector, an additional exposure of up to 10 per cent was allowed only to HFCs. This additional exposure has been increased by five percentage points. Business Standard New Delhi,23rfd February 2017

The incometax department will not carry out any further verification for cash deposits up to Rs.5 lakh made by people above 70 years of age after note ban, but the limit has been fixed at Rs.2.5 lakh for other individuals. Business Standard New Delhi,23rd February 2017

Acharya proposes 2 AMCs and 2 rating agencies for valuation of stressed assets The Reserve Bank of India is proposing its toughest measures yet to recover loans from defaulters by prescribing December deadline for the loan restructuring of top 50 defaulters in a way that the assets turn viable and also in an environment where vigilance departments do not stifle the right economic outcome. Picking up from where former governor Raghuram Rajan left, deputy governor Viral Acharya proposed setting up two asset management companies, one private and the other quasi with government stakeholding, and two rating agencies backing for valuation of stressed assets. The rate of bad loans has come to such an alarming level that banks should be shown some `tough love' by barring those non-performers from taking deposits and lending.In some cases, merger of banks should also be considered to reduce dependence on government capital. “This situation should be a cause for concern to all of us,

Sachin Dave & Reena Zachariah Govt proposed in budget that anyone who bought shares in unlisted cos before Oct 1, 2004, and not paid STT will have to pay LTCG tax The government may be looking to roll back or tweak a budget announcement, imposing long-term capital gains (LTCG) tax on holders of ESOPs and private equity investors, people close to the development said. In the budget, the government had introduced a provision whereby anyone who acquired shares in unlisted companies before October 1, 2004, and had not paid securities transaction tax (STT) will be liable to pay 10% LTCG tax. “Several representations were made by stake holders, and the government may look into this.While the demand is for a complete rollback, the government may come out with a clarification so that genuine investors are exempted,“ a person close to the development said. The government had brought the provision to plug a loophole being used to evade taxes. “Several representations were made by the