If you failed to get your accounts audited or furnish audit report before prescribed time limit - to avoid penalty - apply for extension the time to ...
INDIA’S GOODS AND SERVICES EXPORTS TO DOUBLE BY 2014: ANAND SHARMA INDUSTRIAL OUTPUT EXPANDS BY 10.4% IN AUGUST 2009 CONSULTATIVE COMMITTEE OF COMME...
Whether Foreign Tour Expenses of Wife of Director or Managing Director are allowed as deduction? Whether the expenditure incurred by the company on fo...
Advance tax collection by top companies increases in the quarter, raising government advance-tax receipts and signalling stronger tax compliance. Increase in advance tax collections from the top 90 corporate advance-taxpayers was recorded in Q3, with aggregate Q3 payments rising to Rs 12,881 crore from Rs 10,404 crore year on year and an incremental Rs 2,477 crore collected. Sixty-one companies paid more in Q3; 34 paid 100% or more of assessed advance tax. For the first three quarters the group's cumulative advance-tax payments rose to Rs 33,358 crore from Rs 27,197 crore, with 68 companies paying more year to date and 22 paying less.
Trade defence measures protect domestic industry via anti-dumping and safeguard duties against injurious imports. Where imports are priced below normal value and cause injury, domestic industry may seek imposition of anti-dumping duties; where increased imports cause serious injury or threaten market disruption, domestic industry may seek imposition of safeguard duties. The Customs Tariff Act provides relief consistent with international agreements on dumping, subsidies and safeguards, and the Central Government has power under the foreign trade statute to restrict imports.
Direct tax collections rose modestly overall, with personal income tax up but corporate tax falling in November. Net direct tax receipts for the first eight months rose by 3.71 percent year on year, with corporate tax up modestly and personal income tax (including related levies) up 4.53 percent. November aggregate collections were broadly stable year on year, reflecting a substantial month on month increase in personal income tax contrasted with a pronounced decline in corporate tax. Securities Transaction Tax collections for April-November increased modestly over the prior year.
Diplomatic missions: self certified Form 15CA suffices for consular remittances; Form 15CB not required under exemption. Diplomatic missions remitting consular receipts abroad must submit a self certified Form 15CA to the remitting bank and are not required to obtain Form 15CB; this rests on the exemption for mission fees and charges under Article 28 of the schedule to section 2 of the Diplomatic Relations (Vienna Convention) Act. Missions must upload remittance details electronically in Form 15CA, print and sign the acknowledged form, submit it in duplicate to the Reserve Bank of India or an authorized dealer, which will forward a copy to the Assessing Officer.
EET taxation of savings: proposal shifts tax to withdrawal, delaying DTC Bill until Budget Session. The Direct Tax Code proposes replacing the Income Tax Act by shifting many savings schemes from the current EEE treatment to an EET taxation framework taxing withdrawals; stakeholder resistance and unresolved issues including MAT have delayed introduction, and the bill will be tabled in the Budget Session after further consultations and review by the law ministry.
Automation of indirect tax administration enables centralized e-registration, e-filing, and electronic processing of refunds and disputes. Automation of Central Excise and Service Tax establishes a centralized web-based system that enables electronic registration, filing and scrutiny of returns, electronic processing of refund claims and permissions, maintenance of assessee running accounts, automated reporting, risk-based audit selection, export processing, and dispute-resolution workflows. The registration regime distinguishes new, existing, non-assessee and LTU clients with email-based TPIN/password procedures and mandatory PAN for certain refunds. Operational controls require permanent usernames, periodic password changes and validated email records; the system provides offline utilities, helpdesk support and specified technical requirements for access.
Dispute Resolution Panel mechanism enables taxpayers to seek binding directions on draft assessments before appeal rights to the tribunal. Notification establishes the Dispute Resolution Panel (DRP) under section 144C to review proposed variations in returned income; eligible taxpayers (notably foreign companies and domestic companies with transfer pricing issues) may apply to the three-member DRP collegium within one month of receiving a draft assessment order for directions to the assessing officer, and the DRP's directions are binding on the assessing officer though the taxpayer may still appeal the assessment order to the Income Tax Appellate Tribunal.
Income tax search and seizure: evidence from operations informs assessment and appeals and shapes final legal consequences. Searches and seizures under the Income Tax Act, assisted by another enforcement agency, targeted lockers, bank accounts and premises under proprietary orders; seized materials are under investigation, with some prima facie indications of hawala transactions and properties exceeding declared income. Evidence from these operations is used in assessment and reassessment proceedings and attains finality only after completion of assessments and appeals, after which appropriate legal action may follow against those found culpable.
Audit report compliance under section 44AB upheld where report obtained within extended time; penalty under section 271B not imposed The CBDT circular dated June 19, 1985, binding under section 119, provided that obtaining the audit report within the period recognized by the circular constitutes compliance with the tax audit requirement; where an assessee obtained the audit report in late September after seeking extensions, deposited tax before filing and filed the return within the extended period, that sequence sufficed for compliance and the penalty for failure to get accounts audited was not imposable.
Taxability of non-residents: withdrawal of CBDT circulars removes direct reliance, requiring assessment under law and treaties. Withdrawal of CBDT circulars rescinds administrative guidance on the taxability of non-residents-guidance that had limited taxable income to profits attributable to Indian operations, excluded certain principal-to-principal sales and export commissions, and exempted procurement offices buying in India solely for export. The withdrawal prevents direct reliance on those circulars and strengthens revenue arguments in pending disputes, requiring taxpayers to determine taxability by reference to the Income Tax Act, applicable tax treaties and judicial precedents rather than withdrawn administrative instructions.
Foreign Trade Policy focused on export growth through incentives, market access and trade facilitation to revive industry. The New Foreign Trade Policy, 2009-14, prioritises export revival through fiscal incentives, institutional reforms, procedural rationalisation and sustained export promotion schemes focused on employment intensive sectors. Policy measures aim to diversify markets, enhance market access including via ASEAN, consider restoration of income tax benefits for exports, and link incentives to job protection. Trade facilitation is being advanced by a committee to reduce transaction costs and port delays, alongside emphasis on a rule based global trade regime and completion of WTO negotiations.
Direct tax collection growth slowed due to higher tax refunds, while corporate and personal tax trends diverged. Net direct tax collections for the first seven months showed modest growth with corporate receipts outpacing personal income tax, but substantially higher tax refunds materially constrained net collection growth; October collections remained positive with stronger personal tax monthly growth, weaker corporate monthly receipts, and marginal rise in Securities Transaction Tax over the April-October period.
Direct Tax Code reform: stakeholder-led revisions to MAT, GAAR, APAs and tax base rationalisation to simplify and stabilise taxation. The Government will comprehensively review and modify the draft Direct Tax Code after stakeholder consultations, focusing detailed examination on nine critical areas including Minimum Alternative Tax based on gross assets, Capital Gains Taxation for non-residents, Income Tax interaction with Double Taxation Avoidance Agreements, the proposed General Anti-Avoidance Rule, taxation of foreign companies via effective management control, taxation of charitable organisations, shift from EEE to EET, treatment of self-occupied property, and taxation of salaried employees; proposed reforms include tiered personal tax slabs, a 25% corporate rate, Advance Pricing Agreements, and rationalisation of deductions and exemptions.
Withholding tax liability asserted under section 201 for failure to deduct tax on cross-border share transfer; show-cause required. A statutory show-cause notice was issued to Vodafone International Holdings BV under section 201(1) and section 201(1A) alleging failure to deduct tax at source on a cross-border payment for transfer of interests in an Indian company, asserting the Department's jurisdiction to proceed against the foreign payee and requiring a response by the specified compliance date.
Section 9 tax exposure: withdrawal of circular removes arms length safe harbour, widening tax reach over foreign BPO parent income. Withdrawal of cited circulars eliminates an administrative safe harbour and permits broader attribution of income to foreign parents under Section 9-style income sourcing rules by treating BPOs as a business connection. Arms length payments will no longer automatically prevent assessments of income deemed to arise from Indian activities. The step also removes related protections for export commission and agency remuneration, enhancing the tax authority's ability to claim profits attributable to on shore service operations and increasing transfer pricing and permanent establishment exposure for foreign companies.
Taxation of retirement benefits under the draft Direct Taxes Code remains under review; proposals are illustrative and consultative. Draft Direct Taxes Code proposals are illustrative and open to consultation; seven critical areas-including taxation of retirement benefits-have been identified for resolution. Controversial elements such as taxation of retirement savings, removal of housing loan incentives, and changes to the Minimum Alternate Tax will be addressed before the Code is finalised and implemented through the appropriate future finance legislation.
Tax treatment of foreign tour expenses: business nexus versus personal benefit determines deductibility and assessability of spouse travel. Whether foreign travel expenses borne by a company for a director's wife are deductible or taxable turns on a factual twofold test: existence of a demonstrable business nexus and whether the expenditure confers a gratuitous personal benefit. If a direct business purpose is shown, the expense may be treated as business expenditure; if gratuitous and without obligation, the value is treated as a perquisite assessable in the hands of the spouse.
General Anti-Avoidance Rule under review alongside other Direct Taxes Code reforms to refine tax base and compliance. Direct Taxes Code reform now targets seven critical areas for detailed examination: Minimum Alternative Tax based on gross assets; Capital Gains taxation for non-residents; the Income Tax Act's interaction with Double Taxation Avoidance Agreements; the General Anti-Avoidance Rule; effective management control and taxation of foreign companies; taxation of charitable organisations; and the shift from an EEE to an EET taxation system, with further steps contingent on a comprehensive review of the draft Code and stakeholder inputs.
Phishing alert: fraudulent refund emails request credit card details; do not respond to such communications. Phishing emails impersonating the Income Tax Department inform recipients of tax refunds and solicit credit card details; the Income Tax Department does not send refund-related emails or request credit card information. Taxpayers are warned not to respond to such messages and are put on notice that providing information in reply is at their own risk, as these communications are fraudulent impersonations using deceptive sender addresses.
Direct tax collections rise as corporate receipts and advance tax improve despite higher tax refunds constraining net growth. Net direct tax collections in the first half showed a modest increase driven by stronger corporate tax receipts and improved advance tax, while higher tax refund outgo substantially reduced net growth. Securities transaction tax recorded marginal positive growth for the April-September period. Advance tax moved from negative growth in the first quarter to positive net growth after second-quarter instalments, with corporate advance tax reversing earlier weakness and improving notably in the second quarter.
Net direct tax collections during first six months of the present fiscal (up to September 2009) stood at Rs.1,52,625 crore, up from Rs.1,47,197 crore in the same period last fiscal, registering a growth of 3.69 percent. Growth in Corporate Taxes was 5.55 percent (Rs.1,00,572 crore as against Rs.95,283 crore), while Personal Income Tax (including STT, and residual FBT and BCTT) grew at 0.38 percent (Rs.51,897 crore as against Rs.51,700 crore). Lower growth in net collection was mainly on account of higher tax refund outgo of 51.1 percent at Rs.28,281 crore as against Rs.18,717 crore last fiscal.
Net collections during the month of September 2009 continued to be positive at Rs.64,737 crore compared to Rs.62,788 crore during September 2008; while growth in Securities Transaction Tax (STT) also remained positive at 0.79 percent during April-September 2009 (Rs.3,207 crore as against Rs.3,182 crore) compared to the corresponding period last fiscal.
After receipt of the instalments up to the second quarter (September), advance tax collections stand at a net growth of 2.15 percent up from a negative growth of 6.17 percent in the first quarter (June) in the present fiscal compared to last year. During the second quarter, the net growth in advance tax was 6.21 percent. Particularly, corporate advance tax registered a growth of 12.24 percent during the second quarter, up from a negative growth of 3.44 percent in the first quarter.
Direct tax collections rise as corporate receipts and advance tax improve despite higher tax refunds constraining net growth.
Net direct tax collections in the first half showed a modest increase driven by stronger corporate tax receipts and improved advance tax, while higher tax refund outgo substantially reduced net growth. Securities transaction tax recorded marginal positive growth for the April-September period. Advance tax moved from negative growth in the first quarter to positive net growth after second-quarter instalments, with corporate advance tax reversing earlier weakness and improving notably in the second quarter.
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