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Tax cloud over IFSC dividend payout DDT waiver only on what is paid from current income, not accumulated profit; experts say Centre should clarify There is concern that a portion of the dividend to be declared by companies operating out of the International Financial Services Centre (IFSC) could come under the tax net. The central government had announced various tax sops for new businesses engaging in financial services at IFSC, set up at GIFT City in Gujarat. Among these, waiver of dividend distribution tax (DDT) on profits distributed by IFSC companies was considered a major relief, as it would help them to repatriate profits without additional cost to the business. However, the waiver has been provided for dividend distributions made by IFSC companies only from current income. The present company law provisions, which apply to companies set up at the IFSC, permit declaration of dividends out of accumulated profits. Given these, companies could potentially bifurcate the am

Digital transactions decline in February February saw total digital transactions worth Rs115.5 trillion, down 12.5% from Rs131.9 trillion in January, provisional data by the RBI showed Digital transactions in February fell from the previous month in terms of both value and volume, provisional data released on Tuesday by the Reserve Bank of India (RBI) showed. The month saw total digital transactions worth Rs115.5 trillion, down 12.5% from Rs131.9 trillion in January, according to the data. The number of digital transactions also declined marginally to 1.09 billion in February from 1.12 billion in January. The highest volume was recorded in January. Digital transactions include those conducted via credit and debit cards, unified payments interface (UPI), unstructured supplementary service data (USSD), prepaid payment instruments (PPIs) and internet banking. Transactions across UPI yet again reached a new peak in February. The transaction volume was 171.2 million, up 13% from 1

Government probing 53 cases of profiteering in GST regime MoS finance Shiv Pratap Shukla informed Rajya Sabha that out of 354 petitions received, a standing committee attached to NAA has forwarded 65 to the Directorate General of Safeguards for investigation The Directorate General of Safeguards, which probes complaints of profiteering by businesses under the goods and services tax (GST) regime, has initiated investigation in 53 cases, the finance ministry said on Tuesday. In a written reply, minister of state for finance Shiv Pratap Shukla informed Rajya Sabha that out of 354 petitions received, a standing committee attached to the National Anti-profiteering Authority (NAA) has forwarded 65 to the Directorate General of Safeguards for investigation. The NAA’s task is to ensure that businesses do not pocket the benefit of tax cuts meant for consumers. “Notices of initiation of investigation have been issued by the Directorate General of Safeguards in respect of 53 applications,

Corporate social responsibility spends of firms warrant audit, says P.P. Chaudhary MoS P.P. Chaudhary said the government was in the process of improving procedures relating to CSR spending outlined in the Companies Act of 2013 Corporate social responsibility (CSR) spending by businesses warrants auditing as their total spend of about Rs15,000 crore a year has the potential to transform the rural economy by complementing government efforts, said P.P. Chaudhary, minister of state for law and justice and corporate affairs Speaking at the India Sustainability Conclave organized by industry chamber Federation of Indian Chambers of Commerce and Industry (Ficci), Chaudhary said the government was in the process of improving procedures relating to CSR spending outlined in the Companies Act of 2013. The law mandates that firms with a net worth of at least Rs500 crore or revenue of Rs1,000 crore or net profit of Rs5 crore should spend at least 2% of net profit on CSR. It also mandates

I-T Dept probes Rs 10-bn tax refund fraud by govt and PSU employees I-T wing identifies over 18,000 revised returns, claiming false refunds in Mumbai, Bengaluru With less than a month left for revising income-tax (I-T) returns for 2016-17, the I-T department has unearthed a giant fraud in multiple cities, where government employees allegedly claimed huge tax refunds forging documents, inflating expenses and not revealing complete information In Mumbai alone, around 17,000 revised returns have been filed claiming refunds. Similarly, in Bengaluru, the I-T department has found over 1,000 returns filed with inflated claims on account of payments towards home loans. Since the I-T department is still investigating the matter, the loss to the department could not be ascertained, but it could go up to over Rs 10 billion, sources said. They added most of these refunds were being claimed by employees working for the government or in public sector undertakings (PSUs). “These assessees’

RBI to infuse Rs 1 trn into banking system via special auctions in March Higher tax outgo will fuel cash demand by banks, corporate sectors The Reserve Bank of India (RBI) will infuse up to Rs 1 trillion into the banking system through special auctions this month to manage additional demand for liquidity as activities of banks and corporate entities pick pace before the close of the financial year. The current financial year (2017-18) ends on March 31. Treasury executives said liquidity in the system has been under pressure, with supply falling short of demand on some days. The RBI has maintained its stance to keep liquidity close to neutral. The announcement to conduct special auctions to inject additional resources into the system to tackle the changing situation — high activity and outgo on account of tax payments — will give respite to the market, and prevent any sharp rise in short-term interest rates. Last month, the RBI had indicated that it was prepared to inject adeq

 RBI to inject Rs 1 lakh cr cash into banking system in March  The Reserve Bank of India will inject Rs 1 lakh crore short term money into the banking system ahead of the financial year-end that normally sees cash crunch.  The move is likely to keep short term rates under check benefiting borrowing companies.  “In order to address additional demand for liquidity and with a view to provide flexibility to the banking system in its liquidity management towards March-end, it is prepared to inject adequate additional liquidity….,” RBI said in a release.  The central bank will use a combination of appropriate instruments for such fund infusion, while continuing with its normal liquidity adjustment facility (LAF) operations.  Beginning Tuesday RBI will conduct four variable repo operations of Rs 25,000 crore each.  After reviewing the current and evolving liquidity conditions in the banking system it has been decided to conduct additional variable rate repo operations for longer tenor