CA Online

The government has done away with the 1 per cent tax on cash payments of over Rs 2 lakh for purchase of any goods or service after it banned cash dealings above that limit from April 1. Finance Minister Arun Jaitley, in his Budget for 2016-17, had provided for the seller to collect tax at the rate of 1 per cent from the purchaser on sale in cash of any goods or offering any services exceeding Rs 2 lakh. Tax collection at source (TCS) limit for cash purchase of bullion was kept at Rs 2 lakh, but for jewellery, it was fixed at Rs 5 lakh.However, in the Budget 2017-18, presented last month, he brought in a new provision banning cash transaction above Rs 3 lakh. This cap was lowered to Rs 2 lakh through an amendment. To reconcile the two provisions, the tax at source on goods and services, including jewellery, has now been removed through an amendment to the Finance Bill, 2017. The amendment, along with other changes, were approved by the Lok Sabha Wednesday. The amendment scrapped sub-se

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 short-t

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