Thursday, 28 February 2013

MAJOR HIGHLIGHTS OF INDIA UNION BUDGET: 2013-14



The following are the major Highlights of the Union Budget 2013-14 presented by the Hon’ble Finance Minister Mr. P. Chidmabaram in the Parliament on Thursday (i.e. February 28, 2013)

The proposals made in the Finance Bill 2013 (Bill) are as follows.

A.   Corporate Direct TAX:

 

·      No change in the Corporate Income tax rate of 30%.

 

·      No change in the rate of Minimum Alternative Tax (MAT) on Book profit of 18.50 percent.

 

·      No change in the rate of Surcharge of 5.00% (for income exceeding Rs.1 Cr), but Surcharge will be 10% in case income exceeds Rs. 10 Crores.

 

·      No change in the rate of Secondary and Higher Education cess of 3%.

 

·      The effective Corporate Tax rate of 32.445% and MAT on Book Profit of 20.01 percent remain in case income below Rs. 10 Crores otherwise 33.99% and MAT @ 20.9605%.

 

·      No change in the rate of tax on Short term capital gains on listed securities subject to Securities Transaction Tax of 15%.

 

·      No change in the rate of Dividend Distribution Tax (DDT) however, surcharge increased to 10% . Effective rate of DDT is now  16.995%

 

·      Withholding tax on Royalty payments to non –residents increased to 25%.

 

·      Additional investment allowance @ 15% for acquisition of new plant & Machinery purchased of Rs. 100 Cr. or more after 1.4.2013 and before 31.3.2015.

 

LIVE BUDGET COVERAGE


INDIA BUDGET 2013 HIGHLIGHTS.

·         FY 2013 budget is to create opportunities

·         Rs. 41K Cr allocated to SC/ST

·         Number of grant to promote education

·         Allocated Rs. 13K Cr for Midday meal Scheme

·         Allocated Rs. 17K Cr for Healh

·         Allocated Rs. 1400 Cr for water purification.

·         Alocated Rs. 80K Cr for Rural development

·         JUNRM Continues allocated Rs. 15K  Cr.

·         Allocated 27K Cr to Agri Ministry.

·         Allocated Rs 1000K for East india states.

·         Promote Crop rotation allocated Rs. 500 Cr.

·         Short term loan for farmer continues.

·         Allocated Rs. 5K Cr for Water reservation

·         Food Security Bill – under process – set Rs. 10K Cr .

·         Introduce Infrastructure Debt  Fund

·         Allow tax free bonds

·         Infra Development target of $ 1 Trn.

·         Investment in 100 Cr in P&M from April 2013 to 2015 -  addl investment allowance of 15%.

·         Rajiv Gandhi Equity Scheme – Limit upto Rs. 12 Lakhs from 10 lakhs and added Mutual Fund

·         Home Loan taken from FY 2013-14 will get addl. Home loan deduction of Rs. 1 Lakh. Limit of Loan  Rs. 25 Lakhs.

·         RBI will introduce inflation free bonds.

·         MSE will continue get the benefit for next 3 years in case they made growth.

·         PPP model for Coal growth

·         Bangalore – Mumbai Industrial co-ordiar preparatory work started.

·         India First Women Public Sector Bank – Rs. 1K Cr Initial Capital.

·         All PSU bank have ATM  by 2014.

·         Banks allow to sell micro insurance products.

·         Low interest rate for renewable energy projects.

·         Pension fund to allow invest in ETF


·         Stock exchange introduce dedicated debt segment

·         Sebi will simply the process of investment by FIIS.

·         Zero Custom on semi-conductor industry.

·         Generation based incentives for Wind Power.

·         Ministry of Women will get Rs. 1K Cr for Women Safety called Nirbhaya Fund.

·         Auction 839 FM Lincences across India.

·         No Change in Tax slab

·         Rs. 2000 tax credit for income more than Rs. 5 Lakhs.

·         Tax Surcharge increased to 10% from 5% . Company >10 Cr and Others >1 Cr.

·         Edu cess cont.. at 3%.

·         No change in home loan interest of Rs. 1.5 Lakhs on existing loan.

·         Extended 80G benefits.

·         80-IA benefit extendted to power sector till 2014.

·         No DDT on international dividend received tax @ 15%.

·         TDS on immovable property @ 1% on > 50 L . except agri land.

·         TDS on buyback shares @ 20%

·         Foreign Royalty payment – TDS – 25%. (subject to DTAA)

·         Changes in STT

·         Introduced CTT for commodity market

·         Modified GAAR introduced  - as 1.4. 2016.

·         Rules of Safe harbour introduced.

·         E Filing mandatory for more category.

·         No change in Excise & Custom rates except few items.

·         No Change in Dividend Distribution Tax

·         No Relief for  IT Industry

·         Imported Car, bikes and Indian  SUV get costlier.

·         Mobile above Rs. 2000/- get costlier.

·         MRP based assessment

·         Two more items added in negative list of service tax.

·         Abatement reduce to 70% from 75% in case flat size inc 2000 Sq Ft  or value > 1Cr.

·         Service tax defaulter – can file one time tax return – no interest & Penalty.

·         Propose GST

 

Detailed on way.

Wednesday, 27 February 2013

India Taxes- Due Date Alert for the month March 2013



No
Due Date
Related to
Compliance to be made
1
05.3.2013
 
Service Tax
Payment of Service Tax for the Month of February 2013
2
07.3.2013
 
TDS/TCS
(Income Tax)
·        Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of February 2013.
·        Deposit TDS from Salaries  deducted during the month of February 2013
•   Deposit TCS for collections made under section 206C including sale of scrap during the month of February 2013, if any
•    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of February 2013, if any
3
20.3.2013
 
VAT
Payment of VAT & filing of monthly return for the month of February 2013
4
20.3.2013
 
STPI
Filing of Softex Form for the month ended February 2013
5
31.3.2013
 
Service Tax
Payment of Service Tax for the Month of March 2013
6
15.03.2013
 
Income Tax
Payment of Last instalment of advance tax (100%) for corporate
7
25.03.2013
Service Tax
Filing of return for the period July to Sep 2012

Whether principle of consistency fails when certain benefits, not legally available to assessee, were allowed in the past - YES: ITAT

THE issues before the Bench are - Whether even if the investment in plant and machinery exceeds Rs one crore, the assessee can claim to be treated as SSI merely because it was treated so in the past; Whether merely because the assessee was erroneously allowed certain benefits in the past, such allowance vests any right in the assessee to claim the same in the next AY; Whether the principle of consistency fails when certain benefits, not legally available to the assessee, were allowed in the past and Whether the doctrine of res judicata is not applicable in the case of administration of tax laws. And the answers go against the assessee.
Facts of the case

The
assessee company, a small scale undertaking, had claimed deduction u/s 80IB. The assessment was completed u/s 143(3), allowing the deduction. Subsequently, the CIT observed

10 Important Tips to Save Income Tax.for Salaried Employee.

People tend to forget that good times don’t last forever. If you spend lavishly during good times and continue the trend without adapting to changes in circumstances, very soon you will land in financial trouble. Hence to ensure you lead a consistent lifestyle, always draw out a budget and ensure you stick to it religiously. E.g. if you have allocated Rs 500 per month towards your entertainment expenses, don’t spend a rupee more than Rs. 500. It will not only help you handle your finances better but will develop your willpower by delaying instant gratification.

Don’t rely on future income

Depending on future income in order to spend today, is one of the biggest mistakes we make. This has been evident during a job crisis, where youth racked up a huge credit card debt and took heavy loans. But when the salary cuts and job losses occurred, they were unable to pay off their debt. E.g. if your monthly income is Rs. 20,000 always ensure you spend well within Rs. 20,000 as pay cut or job

Reduction of Share Capital

A company limited by shares has to state the share capital in the capital clause of its Memorandum of Association. As a general rule a company cannot provide for reduction of its share capital because preservation and conservation of capital is one of the important objects of company law. One of the core principles of company law is that a company limited by shares must maintain its share capital for the protection of creditors. However under certain situations provided under the Companies Act reduction of share capital of company is very much possible. Sections 100 to 104 are the provisions governing reduction of share capital.
Procedure of reduction:
According to Section 100 a company may reduce its share capital by passing a special resolution in an extraordinary general meeting and by obtaining confirmation for the same from Company Law Tribunal.

Tuesday, 26 February 2013

INDIA RAILWAY BUDGET 2013 - HIGHLIGHTS

Fares and Freight
 No hike in passenger fares
 Proposal for setting up of Railway Tariff Regulatory Authority formulated and at inter-ministerial
consultation stage
 Fuel Adjustment Component (FAC) linked revision for freight tariff to be implemented from 1st April 2013
 Supplementary charges for super fast trains, reservation fee, clerkage charge, cancellation charge and tatkal
charge marginally increased
 Enhanced reservation fee abolished

Understanding Taxation of Trust – Part- II


 

 

We had earlier discuss in detail about the concepts of Taxation of Trust along with various case laws earlier in part –I. In case you want to refer, the part –I, please click on the link below:

 


 

Over a period of time, there are number of judgements comes from various levels of courts from different locations of India and hence it is very important to know the same for the

Rail Budget New Trains 2013


 Express trains
1. Ahmedabad – Jodhpur Express (Weekly) Via Samdari, Bhildi
2. Ajni (Nagpur) – Lokmanya Tilak (T) Express (Weekly) Via Hingoli
3. Amritsar – Lalkuan Express (Weekly) Via Chandigarh
4. Bandra Terminus – Ramnagar Express (Weekly) Via Nagda, Mathura, Kanpur, Lucknow, Rampur

Whether when very foundation of reopening is knocked out, any further proceeding in respect to such assessment can still survive - NO: HC

THE issues before the Bench are - Whether if the reason for which the assessment is reopened u/s 147 fails, the AO can still proceed to assess other income, which had escaped assessment; Whether when the very foundation of the reopening is knocked out, any further proceeding in respect to such assessment can still survive and Whether where notice for reopening has been issued beyond a period of four years, the assessment would continue, even though on all the grounds on which the additions are being made, there was no failure on part of the assessee to disclose true and full material facts. And the verdict goes against the Revenue.
Facts of the case
The assessee had filed return of income and assessment was framed originally after scrutiny. Thereafter, the AO issued a notice u/s 148 for reopening such assessment. The AO had recorded reasons that the return was filed after claiming the deduction of Rs. 1,82,746 u/s. 80HHC, but on verification it was found that the assessee had considered DEPB License income and excise

Whether when Medical Council's amended regulations prohibit freebies gifted to practitioners by pharma companies, any fault can be found with CBDT Circular disallowing expenditure incurred on such freebies - NO, validity of Circular upheld: HC

THE issue before the Bench is - Whether when the Medical Council's amended regulations prohibit freebies gifted to practitioners by pharma companies, any fault can be found with CBDT Circular disallowing the expenditure incurred on such freebies in violation of MCI's rules. And the verdict goes against the assessee.
Facts of the case
Assessee is a confederation of pharma SSIs. It filed a writ against the CBDT Circular No. 5/2012 dated 1.8.2012 and prayed for its quashing. As per the Circular, the Medical Council of India in exercise of the powers vested in it under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 imposed prohibition on any medical practitioner or their professional associates from accepting any gift, travel facility, hospitality, cash or monetary grant from any pharmaceutical and allied health sector Industries. So, the Circular disallows all such expenses, which are incurred on providing freebies to medical practitioners in violation of the MCI's regulations.
While arguing before the High Court, the counsel for the assessee contended that the Circular

Exchange Rate effective from 22/02/2013

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, PART-II, SECTION 3, SUB-SECTION (ii), EXTRAORDINARY]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS
Notification No.23/2013 - Customs (N.T.)
Dated the 21st February, 2013
2 Phalguna, 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.20/2013-CUSTOMS (N.T.), dated the 7th February, 2013 vide number S.O.331(E), dated the 7th February, 2013, except as respects things done or omitted to be done before such super session, the Central Board of Excise and Customs hereby determines that the rate of exchange of conversion of each of the foreign currency specified in column (2) of each of Schedule I and Schedule II annexed hereto into Indian currency or vice versa shall, with effect from 22nd February, 2013 be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.
SCHEDULE-I
S.No.
Foreign Currency
Rate of exchange of one unit of foreign currency equivalent to Indian rupees
(1)
(2)
(3)
(a)
(b)
(For Imported Goods)
(For Export Goods)
1.
Australian Dollar
56.65
55.25
2.
Bahrain Dinar
148.55
140.20
3.
Canadian Dollar
54.75
53.25
4.
Danish Kroner
9.90
9.55
5.
EURO
73.40
71.60
6.
Hong Kong Dollar
7.10
6.95
7.
Kenya Shilling
64.15
60.20
8.
Kuwait Dinar
198.40
186.85
9.
New Zealand Dollar
46.50
45.30
10.
Norwegian Kroner
9.95
9.65
11.
Pound Sterling
85.20
83.15
12.
Singapore Dollar
44.45
43.30
13.
South African Rand
6.30
5.95
14.
Saudi Arabian Riyal
14.95
14.10
15.
Swedish Kroner
8.70
8.45
16.
Swiss Franc
59.50
58.00
17.
UAE Dirham
15.25
14.40
18.
US Dollar
54.90
53.90
SCHEDULE-II
S.No.
Foreign Currency
Rate of exchange of 100 units of foreign currency equivalent to Indian rupees
(1)
(2)
(3)
(a)
(b)
(For Imported Goods)
(For Export Goods)
1.
Japanese Yen
58.55
57.05
[F.No.468/03/2013-Cus.V]
(ABHINAV GUPTA)
UNDER SECRETARY TO THE GOVT. OF INDIA
TELE: 2309 4610