Saturday, 29 September 2012

Amounts transferred by assessee to Mandi Parishad would constitute application of income for charitable purposes within meaning of Sec 11(1)(a) of Income Tax Act, 1961 - SC

THE question, for determination in this batch of civil appeals, is:
"Whether amounts transferred by the assessee to Mandi Parishad would constitute application of income for charitable purposes within the meaning of Section 11(1)(a) of the Income Tax Act, 1961?”
M/s. Krishi Utpadan Mandi Samiti , respondent-assessee is a Market Committee incorporated and registered under the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam , 1964. The assessee carries out its activities in accordance with Section 16 of 1964 Adhiniyam under which it is required to provide facilities for sale and purchase of specified agricultural produce

Service Tax - No Time Limit for taking CENVAT Credit: CESTAT

WHAT is the time limit for taking CENVAT Credit?
This was the issue before the CESTAT.
The appellants took CENVAT credit in the year 2009 for the period from October 2004 to March 2009. By a show cause notice, as the CENVAT credit has not been taken within a reasonable time period of one year, proposed to levy penalty and interest. Both the lower authorities confirmed the demand by denying the CENVAT Credit and imposed interest and penalty. Aggrieved by this order, the appellants filed appeal before CESTAT.
CESTAT observed that nowhere in the Central Excise Act as well as in the CENVAT Credit Rules prescribed any period in which credit has to be taken. Although it is mentioned in the CENVAT Credit Rules that assessee can take the credit immediately, but there is no prescribed time limit either in the CENVAT Credit Rules or in the Central Excise Act.
The observation made by both the lower authorities that credit is to be taken within a period of one year is totally incorrect and unacceptable. In view of this observation, impugned order is set aside and the appeal is allowed with consequential relief if any.


4 New Categories of payment been added to the existing list of 32 categories. Revised List is follows :-
193 – Interest on Securities
194 – Dividend
195 – Other sums payable to a non-resident
4BB – Winning from Horse race

Due date for Filing Form 23B Extended to 23.12.2012

General Circular No.31/2012
Dated: – 28th September, 2012
Sub: Filing of form 23B by statutory auditor for the accounting year 2012-13
The Ministry had issued circular No. 14 of 2012 whereby the fees was imposed on filing of 23B as per schedule X of the Act. To ensure smooth filing of the forms 23AC (Non-XBRL) and 23ACA (Non-XBRL) with the approval of the competent authority, the filing of e-form 23B is extended without any additional fees till 23/12/12 or due date of filing, whichever is later.
Yours Faithfully
Sanjay Kumar Gupta (Deputy Director)


General Circular No.30/2012, Dated: – 28th September, 2012
Sub: Filling of Balance Sheet and profit and loss Account by companies in Non-XBRL for the accounting year commencing on or after 01.04.2011.
The Ministry has issued general circulars No. 21/2012 dated 28/09/12 and No. 28/2012 dated 03/09/12 extending time for filing e-form 23AC (Non-XBRL) and 23ACA (Non-XBRL) up to 15/10/12 or within 30 days from the date of AGM whichever is later. The revise e-forms 23AC (Non-XBRL) and 23ACA (Non-XBRL) have now been notified vide notification dated 24/09/12 and shall come into effect from 30/09/12.
In order to ensure smooth filing and to avoid last minute rush, it is to inform you that with the approval of the competent authority, the due date of filing of e-forms 23AC (Non-XBRL) or 23ACA (Non-XBRL) as per new schedule VI is now further extended in following manner without any additional fees:-
(a)          Company holding AGM or whose due date for holding AGM is on or before 20/09/12, the time limit will be 03/11/12 or due date of filing, whichever is later.
(b)          Company holding AGM or whose due date for holding AGM is on or after 21/09 /12, the time limit will be 22/ 11/ 12 or due date of filing, whichever is later.
Yours faithfully
Sanjay Kumar Gupta
(Deputy Director)

No Service tax on Railway tickets issued prior to 30-9-2012

Levy of Service Tax on Railway Passengers Travelling in AC Classes/First Class from 1-10-2012 – No Service Tax to be Levied on Tickets Issued Prior to 1-10-2012 – In Case of Cancellation of Tickets Issued on or after 1st October 2012, the Applicable Amount Including Service Tax to be Refunded by Railways
Press Release, dated 28-9-2012
The Ministry of Railways has made partial modification in levy of Service Tax on the fare of passengers travelling in AC Classes/First Class from 1st October, 2012. As per the corrigendum issued by Ministry of Railways today i.e. 28-9-2012, there are following changes:
(iService Tax amounting to 3.708% on the total fare of passenger services in (a) AC First Class, (b) Executive Class, (c) AC-2 tier Class, (d) AC-3 tier class, (e) AC Chair Car class, (f) AC Economy class and (g) First Class is leviable from the 1st day of October, 2012. It has been clarified that the Service Tax would be collected on the tickets issued/bookings made on or after 1-10-2012. Service Tax is not leviable on tickets issued prior to 1-10-2012 and hence will not be collected on board the trains.
(ii) In case of cancellation of tickets booked by the passengers on or after 1-10-2012, the applicable amount including refundable Service Tax amount will be refunded by Railways as per Railway refund rules and Finance Ministry guidelines.

Form „ST-3‟ required to be submitted by the 25th day of October, 2012 shall cover the period between 1st April to 30th June, 2012 only

No ST-3 filing Now as you have to wait for new Service Tax return Form

All Service Tax assessees are hereby informed that they will not be able to file ST 3 returns in ACES now and have to wait until the modified version of ST 3 Form is made available in a few weeks. Please revisit ACES website for further information. For details please see What's New Section above. Inconvenience caused is regretted.                   CBEC implements Negative list of

Friday, 28 September 2012

Income Tax Office to remain open all over India on 29th & 30th September, 2012

To Read the  notification - Click here

Circular No 07/2012 – CBDT allows general permission for the reduced tax withholding on interest in relation to foreign currency borrowings under section 194LC of the Income-tax Act, 1961 (“Act”)


Provision for (concessional) tax withholding in relation to foreign currency borrowings was introduced in the Finance Act, 2012 by way of inserting section 194LC in the Act, wef July 1, 2012.  The amendment was introduced with the

Tax Due Date Reminder for October 2012

India Taxes – Due Date Alert for the month October  2012
Sl No
Due Date
Related to
Compliance to be made

Service Tax
(Payments through Bank)

Payment of Service Tax for the Month of September 2012

Service Tax (E-payment of taxes through internet)

Payment of Service Tax for the Month of September 2012

[E-payment is mandatory for assesses who have paid service tax of Rs.10 lakhs or more including the amount paid by utilization of CENVAT credit, in the preceding financial year]
(Income Tax)
·                      Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of September 2012.

·                      Deposit TDS from Salaries  deducted during the month of September 2012

·                      Deposit TCS for collections made under section 206C including sale of scrap during the month of September 2012, if any

·                      Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of September 2012, if any

(Income Tax)
Furnish quarterly statement of tax deducted at source and tax collected at source for the quarter ended September 2012 in Form 24Q / 26Q / 27Q / 27EQ.

Payment of VAT & filing of monthly return for the month of September 2012

Service Tax
Filing of Service Tax return for the First half year ended  in Form ST-3
(Income Tax)
Issue of TDS Certificate - Non Salary for Q2 FY 2012-13

Identifying Problems in a Financial Statements and How To Minimize it?

Identifying problems in a financial statements and figuring out how to minimize it in the first place, is a vital role the accounting people should strive in. Occurrence of problems are inevitable although, by virtue, it is presumably that financial reporting process always works the way it should and that the resulting financial statements are accurate.
Not only small medium businesses, the same issues also happened in giant-fortune 100 companies, otherwise big scandal such as Enron, WorldCom, Xerox, Quest, Tyco, and many more, never existed.
Possible reason for those problems could endless—ranging from unintentional errors to intentional deception

Financial Restructuring of UCBs

To read the RBI Notification, click here

Maldives Tax

Maldives personal Income Tax
There is no income tax in the Maldives, but the growing GDP and overall life level makes Maldivian government discuss a probable income tax introduction in the future.


Thursday, 27 September 2012


1.                   Expenses Covered. 
(a)    Entertainment Benefits including meal (Food & Drink) but not include entertainment to client , Tea Coffe & Light snacks) and include re-creational activities
(b)    Car benefits in KM and car parking but not include Pool Car, Utility Van
(c)    Expenses Payments eg, Health Insurance, professional membership, personal credit card
(d)    Home Telephone & Internet
(e)    Mobile Phone for personal use
(f)      Laptop & Computer , only one exempt.

S. 40A(9) applies to a "contribution" but not to "reimbursement"

Sandur Manganese and Iron Ores Ltd vs. CIT (Supreme Court)
The interpretation of Section 40A(9) of the Act clearly brings out a dichotomy between `contribution’ and `reimbursement’. Section 40A(9) of the Act was inserted by Finance Act No.2 of 1984. The Explanatory Memo to the Finance Bill, 1984 indicates the reasons why the word `contribution’ finds place in Section 40A of the Act. It appears that Section 40A(9) of the Act was inserted as a measure for combating tax avoidance.

To implement the incentive scheme, sugar was rightly valued at levy price

CIT vs. Bannari Amman Sugars Ltd (Supreme Court)
Valuation of opening and closing stock is a very important aspect of ascertainment of true profits. An improper valuation could result in rejection of books of account though all that is needed for rectifying it, is to make an addition or necessary adjustment based on proper valuation. Valuation of stock, whatever be the method, should be consistently followed. Method of valuation is generally at cost or the market value whichever of the two, is lower. As the incentive scheme was held to be a capital receipt in Ponni Sugars 306 ITR 392 (SC), the assessee is right in valuing the closing stock of incentive sugar at levy price which was less than the cost of manufacture of sugar (cost price).

To decide what is "manufacture" Dept should have a panel of experts

Morinda Cooperative Sugar Mills Ltd vs. CIT (Supreme Court)
The terms `manufacture’ implies a change, but every change is not a manufacture, despite the fact that every change in an article is the result of a treatment of labour and manipulation. However, this test of manufacture needs to be seen in the context of the above process. If an operation/process renders a commodity or article fit for use for which it is otherwise not fit, the operation/process falls within the meaning of the word `manufacture. Q whether conversion of sugar into sucrose is “manufacture” should be decided by experts.

Summary of Recent Direct & Indirect Tax case Laws

Direct Tax

High Court decisions

High Court upholds genuineness of gift of shares

The taxpayer, a company incorporated in India was held by three shareholders. 
Two of the shareholders gifted 25,000 shares of Infosys Technologies Limited to the taxpayer vide a gift deed dated February 23, 2000, out of which 5000 shares were sold by the company on March 7, 2000, realizing a sum of INR 64,179,500. 

The taxpayer paid tax on proceeds received on sale of the 5,000 shares as capital gain adopting the cost basis as

Whether surrender of tenancy rights can be taxed as CG - Whether as per Sec 55(2) COA of tenancy rights has to be taken as NIL

THE issues before the Bench are - Whether the surrender of tenancy rights can be taxed as capital gains; Whether as per Section 55(2) of the Income Tax Act, the cost of acquisition of tenancy rights has to be taken as nil; Whether the compensation on surrender of tenancy rights prior to 01-04-1995, no capital gains tax is leviable and Whether the Tribunal cannot justify an order passed u/s 263 on grounds other than those mentioned by the Commissioner in the revised order itself. And the verdict goes in favour of the assessee.
Facts of the case
For AY 1994-95, the assessee was the lessee of the premises known as Dinrose Estate since 1950 on a monthly lease rent



CBDT Circular : No. 639, dated 13-11-1992. Date: 13-11-1992

1. Representations have been received by the Board seeking clarifications as to whether, the
assessee could file a return of income/loss under the Income-tax Act, 1961 on the next
working day following a holiday and claim it 

Considering Whether Using Perpetual or Periodic Inventory System

Considering whether using perpetual or periodic inventory systems, is a first yet fundamental to take by a company before attempting to set up its inventory accounting. And this is also the case of accounting people when attempting to learn about journal entry for any transaction related to inventory, in the company.
Every business has products or services that it sells. Particularly companies that sell product (either a

Specific Issues in Revised Schedule VI

Financial year 2011-12 has elapsed and nearly all companies have prepared there financial statements in accordance with revised Schedule VI. With every change, lots of clarifications and guidance material is made available to stakeholders, however, with due regard to infinite nature of accounting transactions and events, all such aspects cannot be dealt with at inception.

General Instructions to revised schedule VI provides flexibility to add, delete, amend or substitute any head/sub-head in order to comply with the requirements of the Companies Act, 1956 or accounting standards notified for companies. It is advisable, however, to incorporate any change in notes to accounts rather than on face of balance sheet or statement of profit or loss. This should be done in order to achieve


China Income Tax
China income tax rates are progressively between 5% - 45%, shared out on 9 brackets:

Taxable Income     /     Tax Rate %

CNY 0-500                         5%
CNY 501-2,000                 10%
CNY 2,001-5,000              15%
CNY 5,001-20,000            20%
CNY 20,001-40,000          25%
CNY 40,001-60,000          30%
CNY 60,001-80,000          35%
CNY 80,001-100,000         40%
Above CNY 100,000          45%

Wednesday, 26 September 2012

Guide to fringe benefits tax (FBT) and cars in Australia

A car fringe benefit could be levied on a vehicle owned or leased by an employer that is used privately by an employee.
For Fringe Benefit Tax reasons, a car is:
  • a station wagon, sedan, panel van or ute (including four-wheel drive utes);
  • any other goods-carrying vehicle that has a capacity to carry 1 tonne or less; or
  • any other vehicle which is designed to carry less then nine passengers.


Price Waterhouse Coopers Pvt. Ltd vs. CIT (Supreme Court)

No s. 271(1)(c) penalty for a “bona fide/ inadvertent/ human error”

The assessee filed a ROI together with the Tax Audit Report. In the Tax Audit Report, it was disclosed that an amount of Rs. 23 lakhs towards provision for gratuity was not allowable u/s 40A(7). However, in the computation of income, the said amount was not disallowed. The AO also overlooked the item and omitted to make a disallowance. Subsequently, he reopened the assessment u/s 147, disallowed the expenditure and levied penalty u/s 271(1)(c). The assessee explained that the omission to make a disallowance had occurred because it had a separate accounts department and there was “some confusion” and that the return was prepared by a non-CA and was signed a director who proceeded on the basis that the return was correctly drawn up. The CIT (A), Tribunal and High Court affirmed the levy of penalty on the ground that since the assessee was a well known and reputed Chartered Accountant firm and a tax consultant, it was not expected to make such a mistake and that there had been a failure to discharge the strict liability to furnish true and correct particulars of income. On appeal by the assessee to the Supreme Court, HELD reversing all the lower authorities:

Key features of NSDL Return Preparation Utility (RPU) version 3.1

·         Incorporation of File Validation Utility (FVU) as below:

FVU version
Applicable from FY 2010-11 onwards.
Applicable upto FY 2009-10.

·         Aforementioned FVU version will be mandatory w.e.f October 16, 2012.
·         Import of challan file (.csi file): Import of challan file downloaded from the TIN website (Challan Status Inquiry) has been made mandatory at the time of validating

Forms or modes of investment or deposits by a charitable or religious trust or institution.

Following  additions  were made in Rule 17C.

New Delhi, the 20
th September, 2012

Tax Residency Format prescribed

India Goverment has amended section 90 & Section 90A of the Income tax Act vide finance Bill 2012 to  provide that submission of Tax Residency Certificate containing prescribed particulars, as a necessary but not sufficient condition for availing benefits of the agreements referred to in these Sections. The amendment will come into effect from from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-14 and subsequent years.
Government has now vide notification No. NOTIFICATION NO. 39/2012 [, DATED 17-9-2012 released the following forms which are applicable from  1st day of April, 2013 :-
FORM No. 10FA - Application for Certificate of residence for the purposes of an agreement under section 90 and 90A of the Income Tax Act, 1961
FORM No. 10FB -  Certificate of residence for the purposes of section 90 and 90A

To read the complete notification - Click here - - Direct Tax Laws

Whether when an allowance claimed by assessee involves a question of law, same cannot be disallowed by treating it as a mistake u/s 154 - YES: Supreme Court

THE issues before the Apex Court are - Whether when an allowance claimed by the assessee involves a question of law, the same cannot be disallowed by treating it as a mistake u/s 154 and Whether when the assessee claims Sec 80IA benefits before adjusting carry-forward losses based on a HC decision, although the issue was later settled against the assessee, it can be said that allowing the assessee's claim was a mistake and the same can be corrected u/s 154. And the verdict goes in favour of the assessee.
Facts of the case
Assessee is an industrial undertaking. It is engaged in the manufacture of steel products. It commenced business during a

The role of Company Law Board - Indian Company Law

As we all aware, section 397/398 of the Companies Act, 1956 deals with oppression and mismanagement and the protection to the minority against the majority. The law makers could not have expected that a situation will come where a majority are harassed or oppressed by the minority. Sections 397/398 and other connected provisions of companies act, 1956 meant to provide relief to the minority shareholders against the majority when minority are oppressed or the property of the company is mismanaged. Sections 397/398 of the Companies Act, 1956 deals with very important issue touching

Government approves Foreign Direct Investment in multi-brand retail and power exchange; liberalizes single-brand retail, aviation and broadcasting sector

The Government of India has recently issued notifications allowing 51 percent Foreign Direct Investment (“FDI”) in multi-brand retail trading (“MBRT”), besides reforming FDI norms in other vital sectors.  In this alert, we have briefly summarized the recent FDI changes notified by the Government. 

   i.     FDI allowed in MBRT

The present policy prohibits FDI in retail trading except in single-brand retail trading (“SBRT”).  The Cabinet in its meeting on November 24, 2011 while allowing 100 percent FDI in SBRT also approved 51 percent FDI in

Tuesday, 25 September 2012

Tax Saving by International Holding

The overall effective tax rate of a U.S. multinational corporation may have significant impact on the value of
its stock. Therefore, it is very important for U.S. multinationals to explore and implement tax planning
strategies to reduce their global tax rate. A key objective of global tax minimization planning is to allow a
multinational to defer U.S. tax on its foreign profits and eventually repatriate such profits in a tax‐efficient

Basic Offshore Holding Company Structure
Traditional Corporate Structure

S. 147: There is no “change of opinion” if AO does not specifically apply his mind

CIT vs. Usha International Ltd (Delhi High Court – Full Bench)

The Full Bench was constituted to consider the meaning of the expression “change of opinion” for purposes of s. 147 and whether, in the light of Kelvinator 256 ITR 1 (Del FB), as
approved in 320 ITR 521 (SC), in a case where the assessee has furnished full and true particulars at the time of original assessment with reference to the income alleged to have escaped assessment, the AO, even within 4 years from the end of the AY, could be said to have formed an opinion and to have no jurisdiction to reopen the assessment even though he had not raised any query with respect to the issue. HELD by the Full Bench:

S. 14A & Rule 8D(2)(ii): Interest incurred on taxable income has also to be excluded to avoid incongruity & in view of Department’s stand before High Court

ACIT vs. Champion Commercial Co Ltd (ITAT Kolkata)

The Tribunal had to consider two issues on s. 14A & Rule 8D: (i) whether the AO has to record a specific satisfaction that the claim of the assessee that it has not incurred any expenditure on earning tax exempt dividend is incorrect & (ii) whether in view of the definition of variable ‘A’ embedded in the formula under Rule 8D(2)(ii), interest expenditure directly related to taxable income has also to be excluded even though it is not specifically referred to. HELD by the Tribunal:

Whether gift of IMD certificates can be equated with gift of money, even when former is not freely exchangeable and transferable like money - NO: ITAT

THE issues before the Bench are - Whether the gift of IMD certificates can be equated with gift of money, even when the former is not freely exchangeable and transferable like money; Whether in view of this, section 56(2)(V) & (Vi) can be applied to such gift of IMD certificates and Whether provisions of section 56(2)(V) can be applied to a situation where the IMD certificates have been gifted before September 1, 2004, but proceeds are matured thereafter. And the verdict goes against the Revenue.
Facts of the case
Assessee received gift in the form of IMD of face value of USD 1,50,000 from Mrs Hansa Agarwal, NRI, residing at Sharjah

•Foreign investment in Single–Brand Product Retail Trading/ Multi-Brand Retail Trading / Civil Aviation Sector / Broadcasting Sector / Power Exchanges - Amendment to the Foreign Direct Investment Scheme [Circular No.32]

To Read the notification, click the link below.

Future Value of Inventory is in Doubt, What Should I Do?

Future Value of Inventory is in Doubt - What Should I DoOne among other accounting issues, which is inevitable, in the inventory area is having future value of inventory that is in doubt (e.g. inventory items that are used, out-dated models, damage or any other obsolete conditions.) A similar situation also arise in the case that we find inventory items have been over charged.
Letting such inventory accounted at its original cost is definitely not acceptable. Doing so, may result in

Monday, 24 September 2012

Section 80IB deduction available where the construction is completed, though the certificate of completion from the local authority is not granted within the prescribed time limit

The Gujarat High Court (“HC”) in a recent decision has held that if the construction of a housing project is completed within the prescribed time, and there has been a delay in obtaining a construction certificate, it should not impact the eligibility to claim deduction under section  80IB(10) of the Income-tax Act, 1961 (“Act”).  A summary of the case is provided below:

The Facts

·        The taxpayer, Tarnetar Corporation (“the Taxpayer”) claimed deduction under section 80IB(10) of the Act for the development and building of a housing project.

Properties not in Company’s name – litigation?

While some closely held Private Limited Companies do strictly adhere to the provisions of the Companies Act, 1956, many closely held Private Companies completely ignore the provisions of the Companies Act and these companies are often run as if those are proprietorship concerns. There are closely held Private Limited Companies which simply follow the advice given by the Company Secretaries and Chartered Accountants. The promoters and the management of these companies which depend upon the advice of the

Tax Accounting for Constructions Contracts

Many Construction Contractors are Always Found in Confusion to Which System is to be Followed for Accounting as Far as Income Tax Act is Concerned.

Here is Detail Discussion on Tax Accounting of Construction Contract.

After reading given write up you can find the answers of following questions:

a. How to Do Accounting of Construction Contracts.


What is Accumulated Other Comprehensive Income, Why Does it Exists?


Example of Accumulated Other Comprehensive Income Since couple of decades ago, balance sheet started to showing a strange snippet on its Equity section called Accumulated Other

Saturday, 22 September 2012

Rate of Exchange effect from 21st September, 2012



Notification No. 84/2012-Customs (N.T.)

Dated the 20th September, 2012
29 Bhadrapada, 1934(SAKA)

S.O.       (E). – In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.80/2012-CUSTOMS (N.T.), dated the 6th September, 2012 vide number S.O. 2040 (E), dated the 6th September, 2012, except as

Approval of loan agreements/ long term infrastructure bonds and rate of interest for the purpose of Section 194LC of the Income-tax Act, 1961- regarding.

Page 1 of 3
CIRCULAR NO. 07/2012
F.No. 142/17/2012-SO(TPL)
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)
Dated: September 21, 2012 Subject: Approval of loan agreements/ long term infrastructure bonds and rate of interest for the purpose of Section 194LC of the Income-tax Act, 1961- regarding. The Finance Act, 2012 has introduced section 194LC in the Income Tax Act. This section provides for lower withholding tax at the rate of 5% on interest payments

Singapore Tax

Singapore personal Income Tax
Resident individuals deriving employment income and rental income is subject to
Singapore personal income tax at progressive rates up to 20%, based on the following progressive rates.

Singapore Personal Income Tax Rates for resident individuals:

Chargeable Income          Tax Rate         Gross Tax Payable ($)
First $20,000                       0%                     0
Next $10,000                     3.50%                  350
First $30,000                       -                        350

Details of Rajiv Gandhi Equity Scheme

The governemnt has release press release about the new Rajive Gandhi Equity Svanings scheme  which is approved by the Union Finance Minister Shri P. Chidambaram . The scheme is exclusively for the first time retail investors in Securities Market. This Scheme would give tax benefits to new investors who invest up to Rs. 50,000 and whose annual income is below Rs. 10 lakh.
The Union Finance Minister Shri P. Chidambaram approved a new tax saving scheme called “Rajiv Gandhi Equity Saving Scheme” (RGESS),exclusively for the first time retail investors in Securities Market. This Scheme would give tax benefits to new investors who invest up to Rs. 50,000 and whose annual income is below Rs. 10 lakh.

Friday, 21 September 2012

Reforms continue: Tax on overseas borrowings slashed, Rajiv Gandhi Equity Savings Scheme approved

Moving ahead with steps to revive investor sentiment and curb demand for gold, Finance Minister P Chidambaram today cut withholding tax on overseas borrowings to 5 per cent from 20 per cent and approved the Rajiv Gandhi Equity Savings Scheme (RGESS).

While the RGESS is aimed at encouraging first time retail investors to invest in stock markets through tax concessions, the cut in withholding tax to 5 per cent seeks to lower the cost of foreign borrowings by the Indian companies.

How to resolve Inconsistencies in TDS/TCS Statements through Correction Statements

Get Tax Benefit on jointly purchase property.

Is it necessary to purchase the property jointly.

Exemption is admissible even if the property is purchased individually:
It is not at all necessary to purchase a joint property to claim an exemption from LTCG. By purchasing two separate property individually also, one can have an exemption from LTCG.

Time Limit to purchase the Property:
Exemption u/s 54 (or u/s 54F,if the asset sold is not a residential house property) is available if the Assessee invests amount of LTCG for purchase of another residental house property.
  • within one year before or two years after the date of transfer, or
  • constructs a residential house within a period of three years from the date of the transfer of the original house.

Whether when assessee incurs certain expenditure on an aborted business, to claim it as part of existing business, assessee is necessarily required to satisfy that new business had common elements like unified administration, resource sharing and common funding

THE issues before the HC are - Whether when the assessee incurs certain expenditure on an aborted business venture, to claim it as part of the existing business, the assessee is necessarily required to satisfy that the new business had common elements like unified administration, resource sharing and common funding - Whether when the new business was not even permitted and the JV partner is unknown, even then expenditure incurred in this connection can be claimed as expenditure of the existing business - Whether the liability arising out of the Provident Fund, ESI arrears etc can be allowed as deduction u/s 43B if the liability accrued in the AY though the mode and manner of payment was deferred. And the verdict partly goes in favour of the Revenue.
Facts of the case

assessee is engaged in the business of printing and publishing of newspapers, periodicals and also production of