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Clearing the Air Central Board of Direct Taxes' guidelines on whether an entity's place of effective management lies in India will affect foreign, domestic cos' overseas ops PLUGGING THAT LOOPHOLE Cos avoided paying tax in India by artificially escaping residential status outside India Foreign companies outsourcing high-end critical functions to India that contribute substantially to their global value or domestic companies setting up arms outside the country for raising funds or expanding business could now face a tighter scrutiny to see if they were being effectively managed from India. In what could have significant tax implications for such businesses, the Central Board of Direct Taxes has spelt out norms to determine if an entity's place of effective management lies in India. These guidelines follow a change in income tax in the budget, which provided that a company will be resident in India in any previous year if it is an Indian company or its place of effe

In a relief to those thinking of buying or selling properties in the capital, the Delhi High Court on Wednesday ruled that municipal corporation’s Registering Officer cannot refuse to register the sale or transfer deed, even if they are under-valued against the existing circle rates. A bench of Chief Justice G Rohini and Justice RS Endlaw said the registering authority will then have to give an opportunity to the parties to revise the valuation in “consonance with the circle rates”. However, in the event parties do not pay the deficient stamp duty or transfer duty in terms of the circle rates, the registering authority will forward the case to the Collector of Stamps for determination of the actual value. “…the stamp duty paid on a transfer document need not always be in accordance with the prescribed circle rates and that if the valuation and stamp duty is below the circle rates the registering authority has to first register the document and refer it to the Collector for dete

IT min seeks relief on cap gains invested in new ventures & those made on investments The ministry of communications and information technology has proposed tax exemptions on stock options given to employees by startups, on capital gains that are invested in new ventures and those made from investing in new firms. The moves could have a catalytic effect on such companies in the event the measures are adopted. The proposals have been sent to the finance ministry as part of suggestions for next year's Budget and are aimed at promoting the startup ecosystem, in line with the initiative that Prime tive that Prime Minister Narendra Modi announced in his Independence Day speech. Some “70-80% of startups in the country are tech-related and we need to find a way to encourage private capital and long-term investment in Indian tech startups“, said an official. The department of IT, which is part of the ministry, has also proposed that such exemptions on employee stock options (Es

Such firms to pay tax in India if decision- makers hold Multinational companies ( MNC) will be liable to pay tax in India if those who take key decisions conduct most of their meetings in India, even if the decisions are implemented in another tax jurisdiction, according to the draft guidelines of the finance ministry. The proposed rules might force MNCs to locate their regional controller offices outside India, say experts. With a view to tightening loopholes to deter tax evasion by multinational companies —Indian or foreign — the government on Wednesday released guidelines on place of effective management ( PoEM). The rules will affect Indian companies that take most decisions about their foreign subsidiaries from India and also foreign multinational companies with shell divisions. The rules will come into effect from 2016- 17 assessment year, which means this financial year. PoEM has been defined as “ a place where key management and commercial decisions that are necessa

Updates Of the Day 1.Online Applications are invited from CA firms / LLPs from 1st January 2016 to 15th February 2016 for empanelment for appointment as auditors of Govt Co.s / Corporations for the year 2016-17. www.saiindia.gov.in. 2.ICAI issued revised schedule of counting of votes for Northern Region o Postal Ballots –4th or 5th January, 2016 o Ballot Boxes – 5th or 6th January, 2016 3.Ghaziabad branch of CIRC OF ICAI is hosting National Convention of CA Students on 25th and 26th December 2015 at Hindi Bhawan, Lohia Nagar, Ghaziabad Fee : 400/- only. For registration call at 0120-4114478 / 2793802 4.Lok Sabha on Thursday passed the Arbitration and Conciliation (Amendment) Bill, 2015, aimed at making dispute resolution in the country quicker and easier. 5.Reserve Bank of India has created an email helpline to provide regulatory advice for start-ups. 6.MCA has notified the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015 which shall come into force o

Updates Of the Day 1.ICAI invites Quotations from CA / Firms of CAs for consultant for Ind AS as ICAI needs assistance from an experienced and competent consultant in preparation of financial statements for the year 2015-2016. 2.PF sms alert has started from today, to know your total PF balance, just give a missed call on 01122901406 from your registered mobile number and you will get SMS alert immediately. 3.CBEC direct its custom officers to follow instructions scrupulously given in Audit Manual 2015. Notifications F.No.307/32/2015-SO ( PAC-Cus.). 4.MCA has amended the Companies (Audit and Auditors) Rules, 2014 and notified the rules, it shall come into force on the date of their publication in the Official Gazette. 5.Transfer Pricing adjustment cannot be made in respect of transactions with unrelated third parties. [CIT vs M/s Thyssen Krupp Industries India Pvt. Ltd. (Bombay High Court)] 6.Trade Discount on sales after considering commercial expediency and accrual method of a

The objective of the bill is to make the arbitration process friendlier and cost effective for investors, ensuring speedy disposal of cases The Lok Sabha on Thursday passed the Arbitration and Conciliation (Amendment) Bill, 2015, aimed at making dispute resolution in the country quicker and easier. The objective of the bill is to make the arbitration process friendlier and cost effective for investors, ensuring speedy disposal of cases. This will make India a hub for international commercial arbitration, a government statement said. The cabinet had approved the amendment to the Arbitration and Conciliation Act, 1996, in August. The amendments, based on a Law Commission report, seek to impose a time limit of 12 months for arbitrators to decide on disputes. Parties can also choose to fast track their arbitration within 6 months. Courts will also be asked to decide disputed arbitral awards within a year. An ordinance introducing amendments to the 1996 Act was promulgated in