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Showing posts from June, 2014

The Recent Clarifications issued by MCA on 25th June 2014

The Recent Clarifications issued by MCA on 25th June 2014 and Notification is reproduced below for your ready reference:

1. General Circular no. 24/2014 : In continuation of the General circular No. 20/2013 dated 2711212073, it is clarified that the shares held by a company in another company in a 'fiduciary capacity' shall not be counted for the purpose of determining the relationship of 'associate company' under section 2(6) of the Companies Act, 2013.
2. General Circular no. 23/2014 : it is clarified that there is no bar in the new Act for a company incorporated outside India to incorporate a subsidiary either as a public company or a private company. An existing company, being a subsidiary of a company incorporated outside India, registered under the Companies Act, 1956, either as private company or a public company by virtue of section 4(7) of that Act, will continue as a private company or public company as the case may be, without any change in the incorporation…

Govt extends excise duty sops for capital goods & auto sector for six more months

Govt extends excise duty sops for capital goods & auto sector for six more months[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]GOVERNMENT OF INDIAMINISTRY OF FINANCE(DEPARTMENT OF REVENUE)Notification No. 06/2014-Central ExciseNew Delhi, the 25th June, 2014            G.S.R.     (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2012-Central Excise, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 163(E), dated the 17th March, 2012, namely:-            In the said notification, in the opening paragraph, in the second proviso, for the f…

e Wealth Tax Return Mandatory

WEALTH-TAX (FIRST AMENDMENT) RULES, 2014 - SUBSTITUTION OF RULE 3 AND INSERTION OF FORM BBNOTIFICATION NO.32/2014 [F.NO.143/1/2014-TPL]/SO 1576(E), DATED 23-6-2014 In exercise of the powers conferred by clause (ba) and clause (bb) of sub-section (2) of section 46 read with section 14A and section 14B of the Wealth-tax Act, 1957 (27 of 1957), the Central Board of Direct Taxes hereby makes the following rules further to amend the Wealth-tax Rules, 1957, namely:— 1. (1) These rules may be called the Wealth-tax (First Amendment) Rules, 2014. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Wealth-tax Rules, 1957 (hereinafter referred to as the "said rules"),— (i) for rule 3, the following rule shall be substituted, namely:— "3. FORM OF RETURN OF NET WEALTH.—(1) The return of net wealth referred to in section 14 shall— (a)in respect of assessment year 2013-14 and earlier assessment years in the case of individu…

Chapter XII, section 185 Shall not apply to Private companies

Proposed notification includes: Relaxation given for deposits from shareholders. Provisions Shall not apply to private companies having 50 or less number of members if they accept monies from their members not exceeding twenty five per cent of aggregate of the paid up capital and free reserves or one hundred per cent of the paid up capital whichever is lower.Private limited companies limit of 20 audits not 2 apply
Chapter XII, section 185 Shall not apply to Private companies - (a) which have borrowings from banks or financial institutions or any bodies corporate not more than twice of their paid up share capital or Rs. 50 crore, whichever is lower;  and   (b) in whose share capital no other body corporate has invested any money”.


20-06-2014Section 143(3)(i) of the Companies Act 2013 requires the auditors of the companies to report as whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
The Council of the Institute of Chartered Accountants of India, at its adjourned 333rd meeting held on 18th June 2014, considered the issue of applicability of the provisions of sections 143(3)(i) of the Companies Act 2013 and the related Rules to the audits of the periods beginning on or before 31st March 2014.
The Council noted that the sections 143(3)(i) had come into force in respect of financial years beginning on or after 1st April 2014.  The Council was of the view that the provisions of sections 143(3)(i) of the Companies Act 2013 applied to the auditors appointed under the Companies Act 2013 to audit the financial statements for the year beginning …

Mobile mandatory by ITD

From today ITD made mandatory updation of mobile no and email id of all assessees to make website more secure. All assessees to update their credentials this will be used for recreation of passwords in case it is misplaced or forgotten. Information from CPC call centre password regeneration request will be sent on registered new email id

Annual Return-FLA

Date: Jun 18, 2014 Annual Return on Foreign Liabilities and Assets Reporting by Indian Companies – Revised format RBI/2013-14/646
A .P.(DIR Series) Circular No. 145June 18, 2014 To
All Category - I Authorised Dealer BanksMadam / Sir,Annual Return on Foreign Liabilities and Assets
Reporting by Indian Companies – Revised formatAttention of the Authorised Dealer Category – I banks is invited to A.P. (DIR Series) Circular No.133 dated June 20, 2012 which stipulated that all Indian companies which have received FDI and/or made FDI abroad in the previous year(s) including the current year, should file the annual return on Foreign Liabilities and Assets (FLA) in the soft form to the Reserve Bank by July 15 every year.2. In order to collect information on Indian companies' Outward Foreign Affiliated Trade Statistics (FATS) as per the multi-agency global 'Manual on Statistics of International Trade in Services', the FLA return has …

TARC Report

First Report Of The Tax Administration Reform CommissionIt may be recalled that the Tax Administration Reform Commission, headed by Dr. Parthasarathi Shome, was set up in August 2013 to suggest core reforms to the tax administration set-up in the Country. The TARC has now issued a report dated 30.05.2014 called the "First Report of the Tax Administration Reform Commission (TARC)". The said report makes several critical and far-reaching suggestions which are intended to radically change the working of the Income-tax and other Revenue departments.One of the important recommendations is that the department should treat the taxpayer as a "customer" and have "customer focus" in its attitude, which is totally lacking at present. One of the important "fault lines" identified by the TARC is that there is extreme "risk aversion" amongst the officials with the result that it leads to infructuous tax demands and the filing of frivolou…

Applicability of PAN Requirement for Foreign National

Applicability of PAN Requirement for Foreign National Ministry has issued a circular dated 10th June, 2014 clarifying that foreign nationals, who are subscribers/promoters of a company are not required to furnish their PAN details, in case they are not allotted a PAN. They may provide a declaration instead in the prescribed proforma. The corresponding notifications and circulars are available on the Ministry’s website at Ministry of Corporate Affairs
13-June-2014 13:00 IST

Sale of Malba (Scrap) on demolition of structure thereon is a Capital Gain

Sale of Malba (Scrap) on demolition of structure thereon is a Capital Gain and not income from other sources, held by High court of P. & H. in the case of CIT, Jalandhar V. Ribu Saggi. The 'a' sold land and malba after demolition of structure. AO treated sale of malba as income from other sources. It was held by HC that there was extinguishment of right of the assessee, in superstructure leading to transfer of the super structure, within the meaning of Sec. 2(47). Capital gain was to be computed by deducting indexed cost of structure from sale value of malba. In the same case capital gain on sale of land was computed by under estimating Fair market value of land as on 1.4.1981 at Rs. 21000/- per Marla only, by AO, Tribunal directed to take FMV at Rs. 125000/- per Marla, after considering valuation by DVO and valuation got done by 'a'. HC held that valuation of land is question of fact based on material on record and there arise no question of law. Hence upheld the …

Sec 7 clarification about foreign national

GENERAL CIRCULAR NO.16/2014[F.NO.01/12/2013 CL-V], 2014- 06 -10
In continuation of the General Circular No. 12/2014 dated 22.05.2014 regarding the above subject, it is clarified that the provisions of the said Circular are applicable to a Foreign National who is a subscriber/promoter at the time of incorporation of the Company.
2. In case the said subscriber/promoter, does not possess Permanent Account Number (PAN), he/she shall furnish a declaration in the prescribed proforma, as an attachment to the Incorporation Form (INC-7).
3. Further, it is clarified that, in case of a Resident Director of the proposed company he/she shall be required to submit PAN details at the time of incorporation.
4. This issue with the approval of the Competent Authority.
I. . . . . . . . . . . . . (name) . . . . . . . . . . . . ., son of . . . . . . . . . . . . . (father'…

Update in ITR form

FYI - Please find updates in the ITR form of Financial year 2013-14 (AY 14-15) as under: 1. There are no refund by Cheque and only e-refund will be allowed2. Claim of TDS/TCS credit of earlier years - Hence if we don't have sufficient income we can carry forward the credit benefit.
3. CIN/LLPIN in ITR has to be filled by Company/LLP4. Buy back of shares must be reported in the ITR by CHC5. PAN of Debtors has to be provided if the assessee is claimed Bad debts6. In Capital gain Computation - Details U/s. 50 C is required to be reported
- Sale of securities by FII's7. Gains U/s. 43CA under PGBP8. Special income tax Return has to be shown separately9. Payment details to Non-residents required to be reported in ITR10. Changes in ITR5/7- ITR 5 includes Private discretionary trust
- In ITR 7 following details has to be reported:a. Registration No. & Registration Authority
b. Accumulation of Income details
c. Voluntary contribution like whether from foreign or anonymous 11. Additi…

Changes in tax returns

Now in the Income tax return form it will be necessary to show Property's guideline value and transaction value separately U/s 50CNow builders and colonizers will also have to show amount of difference in
property sold by them at less than guideline value U/s 43CAEarlier State Govt. Undertakings used to save tax by making payment of
royalty, fees, charges, licence fee to its own State Government, now U/s
40(a) (iib) they are not allowed any deduction of such expenses, thereofre in the ITR FORMS such payments will have to be sepaprately shown for
Now credit of unused TDS can be carried forward and brought forward if
the corresponding income is not taxable in the current year.Now charitable and religious trust will have to give break up of corpus and
non corpus donation from local and foreign nations.
In case of bad debts exceeding 1 Lakh PAN No. will have to be given.Payments to Non Residents will have to be shown separately by way of Royalty, Commission, Intere…

Maharashtra BUDGET

The Maharashtra BUDGET for 2014-2015 is announced today 5th June, 2014 and the main tax proposals in respect of Maharashtra VAT and Profession Tax are -
Registration limit increased to 10 lakhs
VAT Audit limit raised to 1 crore from FY 2013-2014
Late Fee reduced to Rs.2,000/- for late upto 1 month in filing Return
Pending Returns can be filed with Tax, interest and Late Fee of Rs.1,000/-.
Retailer composition @1% of total turnover or @1.5% of taxable turnover
No 30(4) penal interest if additional demand as audit or investigation is less than 10% of tax paid with returns.
Rate of Tax on Cotton reduced to 2%
Profession Tax limit for salaried persons increased to Rs.7,500/-

Representation on Companies Act,2013

Companies Act Needs Comprehensive Review: CII President Jun 04, 2014
CII has called for a comprehensive review of the Companies Act 2013 and Companies Rules, 2014 issued thereunder. "Due to the hurried pace in which the Companies Act, 2013 and the Companies Rules, 2014 were implemented, the industry barely got an opportunity to absorb and understand the provisions or their impact in their entirety.Many new concepts are being introduced in the legislation for the first time, and practices with respect to these need to be allowed to evolve over time. However, the rush to notify the Act has introduced disruptive features making it harder for corporates to ensure compliance", said Mr Ajay Shriram, President, CII, referring to the fact that the final set of Rules were released in the last week of March 2014 to be implemented from April 1, 2014.Mr Shriram further added that "the Government needs to trust Industry. One or two incidence of corporate ma…

PF Contribution capped at Rs.6,500

TheProvidentFund Office has allowed companies to cap their monthlyProvident Fund contributionto employees at Rs. 6,500. At present, companies contribute an amount equal to at least 12 per cent of an employee's basic salary towardshis/her PF. 
Now,when an employer deducts and deposits Employees' PF contributions upon more than the prescribed salary, it can be reduced to Rs. 6,500 per month and in that event, section 12 of the Employees' Provident Funds & Mis­cellaneous Provisions Act providing bar for not reducing wages will not be attracted unless the terms of the employment specifically provide so. The full text of the circular is enclosed. Hope you find the update useful. Note: The above update is just for reference.  User discretion and professional assistance is highly recommended before acting on the above.

LRS Limit Increased to USD 125,000

Date: Jun 03, 2014 Liberalised Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000 RBI/2013-14/624
A.P. (DIR Series) Circular No.138
June 3, 2014 To
All Category – I Authorised Dealer Banks
Liberalised Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the A.P.(DIR Series) Circular No 24 dated August 14, 2013 and the subsequent clarifications issued vide A.P. (DIR Series) Circular No 32 dated September 04, 2013 regarding the Liberalised Remittance Scheme (LRS) for Resident Individuals (the Scheme).
2. As indicated in paragraph 13 of the Second Bi-Monthly Monetary Statement, 2014-15, it has now been decided to enhance the existing limit of USD 75,000 per financial year (April-March) to USD 125,000 with immediate effect. Accordingly, AD Category –I banks may now allow rem…

TDS Credit-Interest and Cost Payable

Assessee cannot be denied credit for TDS on the ground of Form 26AS mismatch because he is not at fault. Non-grant of TDS credit causes harassment, inconvenience & makes the assessee feel cheated. Dept to pay interest + costs of Rs. 25,000The assessee filed a return in which he claimed a refund of Rs. 2.32 lakhs on account of excess TDS by the Government department. The return was processed by the Central Processing Centre (CPC) of the Income-tax Department at Bangalore and a refund of only Rs.43,740 was issued. No intimation was given to the assessee as to why the balance amount of Rs.1.88,630 was not refundable. The assessee filed an application u/s 154 for rectification of the mistake and asked for refund of the balance amount. As there was no response from the department despite several reminders, the assessee filed a writ petition in the High Court. HELD by the High Court allowing the Petition:(i) The difficulty faced by the tax payers relating to credit of TDS w…