Understand Deep Discount Bond.

Deep discount bonds, as the name suggests, are bonds that are sold at a significant discount to their face value. However, they also offer lower interest rates compared to other types of bonds. In this article, we will explain the concept of deep discount bonds, provide examples, and discuss their advantages and calculation methods.

𝐓𝐨𝐩 𝐬𝐢𝐠𝐧𝐬 𝐨𝐟 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐬𝐭𝐚𝐭𝐞𝐦𝐞𝐧𝐭 𝐦𝐚𝐧𝐢𝐩𝐮𝐥𝐚𝐭𝐢𝐨𝐧

Financial statements are reports that provide information about a company's financial performance and position. The three main financial statements are the balance sheet, income statement, and cash flow statement. The balance sheet shows a company's assets, liabilities, and equity at a specific point in time. The income statement shows a company's revenue, expenses, and profit over a specific period. The cash flow statement shows a company's cash inflows and outflows over a specific period. Together, these statements provide a comprehensive picture of a company's financial situation and can be used to analyze its performance and make informed decisions about investing in the company. It is not necessary to be a financial market analyst to identify signs of manipulation in companies' financial statements of companies.

Income Escaping Assessment – The Legal Analysis

 There are various reasons why litigation arises between the assessees and the income tax department including TDS, disallowance of certain expenditures, exemptions, and deductions, etc. One of the major reasons for litigations is when the department finds a certain income that has escaped assessment and therefore proceeds to tax the same. This is known as income escaping assessment or Reassessment under section 147 of the income tax act & Section 148. Here, we have covered everything regarding income escaping assessment, what is covered in this assessment and why it is a major contributor in litigations.

How To Incorporate A USA Company As A Founder In India?

Indian startups seem to prefer Delaware for their business. Not only does register your Delaware corporation from India gives access to venture capital firms and startup investors, but you will also get tax benefits. Delaware has no state sales tax, and the state’s franchise tax for small US businesses is also less. Additionally, the state also allows non-residents to pay no separate corporate income tax.

One has to follow six steps in order to have a USA Company Registration from India:

Choose the right entity type for your business. As Investors highly prefer C corporations, most Indian companies choose this type.

Decide the state in which you want to register your company. Delaware is the most preferred state and is the home to the majority of US tech companies. 70% of Fortune 1000 companies are registered in Delaware.

File to incorporate.

The next step is to get an employer identification number (EIN) from the Internal Revenue Service (IRS).

Registering with the Internal Revenue Service also sets your company to pay taxes. Also, you need an EIN to open a US bank account.

Once you have an EIN, open a US bank account, which is essential for doing business in the US.
In the state of Delaware, you are required to file annual reports every year. So, keep your company in a sound situation by filing reports.

CHAT GPT - how to save tax in India

 

1. Invest in tax-saving investments such as Public Provident Fund (PPF), National Savings Certificate (NSC), Equity-Linked Savings Scheme (ELSS), and Tax-Saving Fixed Deposits (FD).

2. Utilize deductions and exemptions available under Section 80C of the Income Tax Act, such as tuition fee for children, principal repayment of home loan, and contributions to pension plans.

3. Take advantage of deductions available under Section 80D for health insurance premiums, and Section 80E for interest paid on education loans.

4. Consider renting out a property and claim deductions for interest on a housing loan and repairs and maintenance expenses.

5. Use exemptions available for long-term capital gains on sale of property and equity shares.

6. Take advantage of tax benefits available for charitable donations under section 80G.

7. Keep records of all investments and expenses to claim deductions and exemptions at the time of filing taxes.

8. Consult with a tax professional or financial advisor for personalized advice on tax-saving strategies.

It's important to note that the tax laws and regulations in India are subject to change, and it's always a good idea to keep yourself updated with the latest tax laws and regulations

Social Stock Exchange

 

A Social Stock Exchange allows the listing of a Non-Profit Organization on stock exchanges that provide an alternative fund-raising structure.   As per the draft of the SEBI report, a Social Stock Exchange may be helpful in rebuilding the livelihoods of people who are affected during the COVID-19 pandemic. According to experts SSEs will aim at unlocking large pools of social capital and encourage a mixed financial structure so that conventional capital can partner with social capital to meet the serious challenges of COVID-19.

IFRS 2: SHARE-BASED PAYMENT TRANSACTIONS

Grant of shares or share options to employees and directors is a common feature with most companies. Besides, companies may sometimes issue share options to creditors as well. Transactions, where is granting of shares or share options, may generically be referred to as “share-based payment transactions”. These transactions mostly involve the company receiving employment services, directorial services, or other goods or services, and the company in turn settling the supply of goods or services in the form of shares or share warrants. The shares are mostly equities of the company (note that the meaning of “equity” under accounting standards is not the same as the legal meaning of equity).

Understand Section 338(h)(10) of the federal tax code.

 

In simple terms, a 338(h)(10) is a tax election for a qualified stock purchase (QSP), which recharacterizes a stock purchase as an asset purchase for federal tax purposes. It remains a stock purchase for all other legal purposes, such as contracts and licensing 

 

Key notes on Circular No. 183/15/2022-GST dated 27 December 2022 on GSTR-2A & GSTR-3B

 

The CBIC in the captioned circular  issued a clarification with respect to the following scenarios to deal with differences in Input Tax Credit (ITC) availed in FORM GSTR-3B vis-à-vis as per FORM GSTR-2A for FY 2017-18 and FY 2018-19.

Taxation of Online Gaming

Let us understand the online gaming ecosystem in India with reference to the applicability of the Indirect tax and direct tax provisions in India.

·         There are two types of gaming

Is Form 10F is mandatory?

While there has been a recent buzz in the industry over the government's move of mandating the furnishing of Form 10F electronically, many people are unaware of the basic fact that the aforesaid form [as per section 90(5)] is only required to be furnished if the Tax Residency Certificate (TRC) furnished by the Non-Resident payee in accordance with section 90(4), does not contain certain information as prescribed in Rule 21AB(1). This is also stated in rule 21AB(2).

48th GST Council meeting

 Given below the update with respect to relevant announcements made post the 48th GST Council Meeting held on 17 December 2022:

 

History of Global Transfer Pricing

 
The First World War ended way back in 1918/19. It was the first time when the different nations in the world collaborated to form the “League of Nations” in order to maintain peace and security, and take decisions in the matter of International Affairs.

UAE adopts Transfer Pricing Regulations

 

A corporate tax regime without transfer pricing provisions would be spineless. Transfer pricing is detailed and mention in the Federal Decree released on 9 December 2022. While we are undertaking detailed research on transfer pricing law in the UAE, here is our first take on the transfer pricing law in the UAE.

Compute Customer Acquisition Cost (CAC) and Lifetime Value (LTV)

Calculating Customer Lifetime Value (LTV):

- Suppose a company’s ARR (Annual Recurring Revenue)= $500K
- Total number of customers= 2500
- Average Revenue Per Customer= $500K/ 2500= $200

Know about “Form ITR-A

 

1. ITR-A is a form provided to furnish a modified return by a successor company to a business reorganization for an assessment year.

2. Where businesses go through a reorganization the successor entity, is required to file modified returns for the period between the date of effectivity of the order and the date of issuance of the final order of the competent authority. Form ITR-A is the prescribed form by the Income Tax Department for filing such a return.

3. When two or more business goes under remodeling, reconstruction, amalgamation, or merger the resulting business or entity is known as the successor entity, and the businesses going under reorganization are known as the predecessor entity.

4. The prescribed form should be furnished within six months from the end of the month in which said order was issued.

5. The ITR-6 (applicable for companies) has been modified to include information contained in FORM ITR-A.

6. In Appendix II, in Form ITR-6- PART A-GEN, entries of the serial number (A19)(a)(i), have been substituted, for every assessment year commencing on April 01, 2022, or any, earlier assessment year.

(Rule 12AD of the Income Tax Rules)

Comparing Indian GST with European VAT

 

It has been more than 5 years since GST has been introduced in India and with the passage of time, the process of GST has stabilized in the country and the government feels proud of the success of GST implementation in the country.  Being tax head of an MNC, I am being exposed to the GST or VAT process of other countries, especially  European countries, and in this article tries to compare the indirect tax process of both countries from my own experience.

GST input credit on Motor vehicles.

ITC is blocked on motor vehicles having seating capacity ≤ 13 persons (including the driver) used for the transportation of persons. Further, ITC is also blocked on certain services relating to motor vehicles namely, insurance, servicing, and repair and maintenance.

What would be the treatment of 𝐭𝐚𝐱𝐞𝐬 𝐩𝐚𝐢𝐝 𝐢𝐧 𝐟𝐨𝐫𝐞𝐢𝐠𝐧 𝐜𝐨𝐮𝐧𝐭𝐫𝐢𝐞𝐬 𝐟𝐨𝐫 𝐰𝐡𝐢𝐜𝐡 𝐜𝐫𝐞𝐝𝐢𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐚𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞 𝐢𝐧 𝐈𝐧𝐝𝐢𝐚?

Indian Income Tax Act does not allow refund in such cases but based on various judgments 𝐭𝐡𝐞 𝐩𝐨𝐫𝐭𝐢𝐨𝐧 𝐨𝐟 𝐭𝐚𝐱 𝐟𝐨𝐫 𝐰𝐡𝐢𝐜𝐡 𝐜𝐫𝐞𝐝𝐢𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐚𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞 𝐜𝐚𝐧 𝐛𝐞 𝐜𝐥𝐚𝐢𝐦𝐞𝐝 𝐚𝐬 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐝𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧. For example, tax paid in say UK is Rs.1000/- whereas credit is only available for Rs.600/-, in this case Rs.400/- can be claimed as business deduction.
Various judgments in support of this view:
𝑉𝑖𝑟𝑚𝑎𝑡𝑖 𝑆𝑜𝑓𝑡𝑤𝑎𝑟𝑒 𝑎𝑛𝑑 𝑇𝑒𝑙𝑒𝑐𝑜𝑚𝑚𝑢𝑛𝑖𝑐𝑎𝑡𝑖𝑜𝑛 𝐿𝑡𝑑. 𝑣𝑠. 𝐷𝐶𝐼𝑇 [𝐼𝑇𝐴 𝑁𝑜.1826/𝐴𝐻𝐷/2019]
𝐵𝑎𝑛𝑘 𝑜𝑓 𝐼𝑛𝑑𝑖𝑎 𝑣𝑠 𝐴𝐶𝐼𝑇 [𝐼𝑇𝐴 𝑁𝑜.869/𝑀𝑢𝑚/2018]
𝑅𝑒𝑙𝑖𝑎𝑛𝑐𝑒 𝐼𝑛𝑓𝑟𝑎𝑠𝑡𝑟𝑢𝑐𝑡𝑢𝑟𝑒 𝐿𝑡𝑑. 𝑣𝑠. 𝐶𝐼𝑇 [𝐼𝑇𝑅 75 𝑜𝑓 1998, 𝐵𝑜𝑚𝑏𝑎𝑦 𝐻𝐶]

Understand foreign tax credit for USA ex-pats.

 

One of the most common problems US ex-pats face is double taxation—paying taxes twice on the same income. Fortunately, the IRS offers multiple tax credits and deductions to help expats avoid this costly burden. One example is the Foreign Tax Credit (Form 1116). Using this credit, many Americans living abroad are able to erase their US tax debt entirely.