CA Online

Finance minister Arun Jaitley is likely to significantly increase public investment in infrastructure in his upcoming budget, offering fiscal stimulus to boost economic growth at a time when private investment shows no signs of a pick-up. There is near unanimity that the economy needs to be spurred through higher public investment, unlike last year when there was a significant divergence of opinion over the need for fiscal stimulus, said an official with knowledge of the thinking within the government. The official requested anonymity. Last year, chief economic adviser in the finance ministry Arvind Subramanian advocated a stimulus, but the minister decided to stick to the  fiscal deficit target of 3.5% of gross domestic product (GDP), fearing a backlash from investors and rating agencies. “Different schools of thought have argued either in favour of fisaverage cal consolidation and stability or for a less aggressive consolidation  and for boosting growth. I have weighed the policy op

Govt had to give an option to domestic black money holders to declare their unaccounted wealth. In a minor relaxation to IDS tax payment rules, the Income Tax Department has said disclosures under the scheme will be considered valid even if the tax amount has been realised by December 5. The first instalment of taxes was to be paid by November 30. The government had come out with a 4-month long Income Disclosure Scheme, which closed on September 30, 2016, to give an option to domestic black money holders to declare their unaccounted wealth and come clean by paying 45 per cent tax and penalty. In an instruction to principal commissioners, the income tax department has asked them to condone the delay in payment of first  instalment which has arisen due to "genuine technical difficulties". "CBDT hereby directs... To accept the request for condonation of delay in payment of tax payable under the scheme in cases where payment has been made through cheque, RTGS, electronic tr

CBDT circular had raised multiple taxation concerns Foreign portfolio investors (FPI) can now breathe easy with the Income Tax (I-T) Department on Tuesday putting in abeyance  its controversial circular on taxing India-dedicated funds. Experts said clarity was necessary on the issue at the earliest so that FPIs were certain. They expect the finance ministry  to amend the law in the Budget to put an end to the controversy. The circular, in the form of frequently asked questions (FAQs), had spooked the markets when it was issued last month.  It also gave rise to fears of retrospective taxation as the principal amendment to the Income Tax Act on indirect transfers was such in nature.  These provisions were first introduced in 2012, with retrospective effect, after the government failed in levying a tax on  the British telecom giant Vodafone Group Plc’s purchase of Hutchison Whampoa’s India telecommunications business. The Central Board of Direct Taxes (CBDT) and the capital markets divis

The Reserve Bank of India (RBI) on Monday relaxed the per day cash withdrawal limit from automated teller machines (ATM) to Rs 10,000 per card, from Rs 4,500 currently. The weekly limit, however, remains unchanged at Rs 24,000. Current account holders can now withdraw up to Rs 1 lakh per week. Earlier, they were allowed to withdraw only up to Rs 50,000. This facility has been extended to overdraft and cash credit accounts as well.  RBI had imposed these limits in November after the government banned Rs 500 and Rs 1,000 notes. The withdrawal limits are unlikely to be removed completely till RBI supplied the economy with sufficient amount of new notes, analysts said. The daily withdrawal limit has been changed a number of times earlier. On November 8 — the day Prime Minister Narendra Modi announced the note ban — the central bank restricted daily withdrawal to Rs 2,000. It was increased to Rs 4,500 a few days later. This was quickly rolled back to Rs 2,000; then increased to R

Commerce and Industry Minister Nirmala Sitharaman today indicated that start-ups may get additional tax benefits in the forthcoming budget, to be unveiled on February 1. The ministry has already suggested the finance ministry to consider raising tax holiday for start-ups to 7 years from the current 3 years to encourage budding entrepreneurs. Business Standard New Delhi,17th January 2017

Days after government ordered seeking PAN details of all account holders, banks have started asking their customers, including KYC-compliant ones, to update their PAN details by February 28. Business Standard New Delhi,17th January 2017

The Goods and Services Tax (GST) Council on Monday broke a deadlock over issues of administrative control over assessees and broadly agreed to roll out the GST from July 1, instead of the earlier deadline of April 1. Whether a state or the Centre will assess an entity would be decided by a computer programme. The Council also resolved a logjam over the right to tax economic activities within 12 nautical miles from India’s coasts. Against the earlier proposals of reserving administration of assessees up to Rs 1.5 crore in annual turnover for states, or of allowing both the Centre and states to jointly administer these, the Council decided to blend the two suggestions. The entire tax base would be shared between the Centre and states in a predetermined ratio, Union Finance Minister Arun Jaitley, the chairman of the Council, said at a press conference after the meeting. The Centre agreed the states would have the powers to administer 90 per cent of assessees with an annual turn