CA Online

  The budget has proposed a major reset in the taxation of share buybacks, shifting them from being treated as ‘deemed dividends’ back to capital gains. Under the proposal, buyback proceeds for individual shareholders will be taxed at 12.5%, significantly lower than the current slab-based rate of up to 30%. Tax treatment for promoters has also been rationalised: foreign promoters will face a 30% levy, while Indian promoters will continue to be taxed at 22%. Tax experts said the change corrects a distortion in equity taxation and restores buybacks as a more efficient capital-return mechanism. “With effect from October 2024, buyback proceeds were treated as dividends, taxed at regular rates, while the cost of acquisition was recognised separately as a capital loss. Less than 18 months later, the old system has been restored, but with added complexity—distinguishing between promoters, who do not get concessional rates, and non-promoter shareholders, who benefit from the lower capital ...

  Individuals who missed reporting small funds in foreign bank accounts, and other overseas assets like stock options or an apartment in their tax returns can now breathe easy. Under a one-time, six-month mini amnesty window announced in the budget, they can get the taxman off their backs for a fee of `1 lakh for assets up to `5 crore, as long as these were acquired with disclosed earnings. And where the source of funds is not revealed, a person can come clean by forking out 60% of the value of assets up to `1 crore. Over the years, tax officials have knocked on the doors of hundreds of residentswho remitted tax-paid moneythrough banking channels underthe Reserve Bank’s liberalised remittance scheme for failing to report overseas assets. Some werepulled up for offshore securitiesand properties bought when theywere working abroad as NRIs. Besides a hefty fine of `10 lakh,the black money law allows the income tax department to initiate prosecution gainst errant NRIs. While the big fi...

  Buying property from an NRI? Worried about obtaining TAN? Not anymore.To relax the compliance burden, the Budget has proposed that resident individuals and HUFs need not have a Tax Deduction and Collection Account Number (TAN) if they are purchasing a property from a non-resident Indian (NRI). The amendment will take effect from Oct 1, 2026. Under the proposed framework, resident individuals or HUFs can report the tax deducted at source (TDS) by quoting PAN, as is done when the transactions are between two residents. Presently, if a person buys an immovable property from a resident seller, the person is not required to obtain TAN to deduct tax at source. However, where the seller of the immovable property is a non-resident, the buyer is required to obtain TAN to deduct tax at source. Ameet Patel, partner at Manohar Chowdhry & Associates, said this used to be a detailed process. “At present, if a resident were to purchase an immovable property from an NRI, there is no separate...

  FOR TAXPAYERS FOR TAXPAYERS GAINS | Time limit to revise I-T returns can be extended by3 months to March 31 with a small fee TCS on overseas package tours, foreign education and medical treatment cut to 2% 6 ‑ month window to reveal undisclosed foreign assets/income subject to limits and additional tax payment Minimum alternate tax snipped to 14% Decriminalisation, rationalisation of penalty framework under I-T Act Some small taxpayers can apply for online issuance of lower/nil taxdeduction certificate on their income PAINS | No accumulation of MAT credit from April 1. Accumulated credit to be set off only under new tax regime Tax exemption for disability pension only to those services retirees who had to prematurely quit due to the disability FOR INVESTORS GAINS | Persons resident outside India can invest in listed Indian equity through portfolio investment scheme, individual limitraised from 5% to 10%, overall cap from 10% to 24% No need to obtain TAN for TDS if buyingproperty ...

  Governor Sanjay Malhotra on Wednesday asked the Reserve Bank staff to persist with regulatory calibrations and sharpen supervision in the new year.In his annual message to staffers, Malhotra said customer centricity and financial inclusion "must remain at the heart” of the central bank's work. “We must persist with strengthening the monetary policy framework, sharpening supervision, calibrating regulation, deepening financial markets, and improving payments and currency management,” Malhotra said in the message.The RBI staff must sharpen their knowledge, enhance their analytical capabilities, embrace technology, and continuously make improvements in processes, he added.Malhotra, a career bureaucrat who recently completed a year at the helm of the RBI, told the staff that their responsibilities will continue to expand in the new year, which will be marked by a rapidly evolving economic and financial landscape shaped by technological change, geoeconomic shifts, and rising publ...

  India's robust growth numbers for the September quarter are raising questions about the need for lower rates even as record-low inflation gives the central bank ample room to resume reductions later this week, analysts said.India's economy expanded at a sharper-than-expected clip of 8.2 per cent in the July-September quarter, prompting analysts to raise their full-year growth estimates to above 7 per cent.That means the world's fifth-largest economy is expanding at a pace close to its estimated potential growth of 6.5 per cent-7 per cent. Potential growth is the rate an economy can expand without sparking inflation.India's retail inflation, however, which slowed to a record-low 0.25 per cent in October, is expected to remain benign for months."The December RBI policy will be set against a backdrop of resilient growth and ultra-low inflation. The stellar growth numbers reaffirm our view of a pause," said Gaura Sen Gupta, chief economist at IDFC First Bank....

  The Reserve Bank of India (RBI) expects microfinance lenders ’ boards to review their spreads against the cost of funds and operating efficiency, said Swaminathan J , Deputy Governor, RBI. He also urged them to question outliers to ensure pricing remains reasonable and reflects actual costs, risk, and efficiency improvements so that no lender takes undue advantage of a borrower’s circumstances.Speaking at a MFIN event in Mumbai on November 14, Swaminathan said, “The Reserve Bank expects lenders to use the room provided by the 2022 framework in a way that strengthens borrower welfare and long-term portfolio quality.”The 2022 reset of the microfinance framework removed pricing caps and aligned rules across all regulated lenders. Swaminathan noted that lighter regulation is possible only if industry standards remain high. “Flexibility and accountability travel together,” he said.  He stressed that lenders must properly assess borrowers’ incomes, seasonal variations, and exist...