25 October 2005

IT DEPARTMENT TO ACCEPT IT RETURNS ON 29TH AND 30TH OCTOBER ALSO

The Income tax authorities have been directed to make arrangements for accepting the returns of income on 29th and 30th October, 2005 (being Saturday & Sunday). The Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income Tax Act, has issued this direction for administrative convenience. The due date for filing of return of income within the meaning of Explanation 2(a) and (b) to Section 139(1) of the Income Tax Act, 1961 is 31st October, 2005.


Ashwin Nagar

in Ahmedabad (+91) 09825781065

In Mumbai (+91) 09833015352

Success is not permanent and failure is not final

 

16 October 2005

Note on SAP

 

Dear friends,

 

As promised by me, I am writing this Note on SAP for the benefit of all the members.

 

  1. What is SAP:

It is an ERP software. Very wide and very big. There are so many other software available such as Oracle, BAAN, Peoplesoft etc.

 

  1. What CAs role in SAP:

SAP has so many different modules. It is integrated software. SO CAs with good domain knowledge can take course in SAP FICO module that is Financial and Controlling. As a functional consultant, FICO consultant has role in implementation of the software in organisations opting for SAP. This is a very vast module wherein all possible business processes are covered. The CAs with SAP knowledge can better configure and implement this module.

 

  1. SAP FICO for a CA who is practicing:

I think this is not for practicing CAs who are in practice for a long period of time. The practicing CAs can take up this course for the better understanding of the software where by better conduct of the audit in the organisations which are running on SAP. But you know who is auditing the concerns that run SAP? Big firms only. So for CAs associated with small or medium size firms, I don’t think this is of more use or the learning of the SAP could be a value for money.

 

  1. What if practicing CAs take up a job?

It is very difficult for a practicing CA to get a job. A CA with 10 years of experience will not EVEN be called for interview for even a post of Assistant manager Finance. In service industry, the practice experience never counts, except in very few companies and for very few positions. All gate closed for these CAs, they have to do practice only.

 

About SAP job, the practicing experience in my opinion is very useful, but the employers never recognise it, and the CAs from industry will get an edge. So to get a job as a SAP fresher is equally tough.

 

  1. Fresher and young CAs:

Yes, the fresher and young CAs can take up this. Even CAs with some years of industry experience can opt for SAP carrier. SAP certified CAs can opt for either a regular carrier in Industry, there they will have an edge due to their SAP certification, as the companies working on SAP will always prefer a CA who understands how the SAP works.

 

Alternatively, a career could be made as functional consultant in implementing organisations. Here again, CAs can get a good job and good opportunity. But it involves lots of travelling; if the person is in implementation side and not in support side, as majority of work are executed onsite.

 

  1. Job Opportunity:

This is very peculiar and vicious circle about job. For a SAP consultant with more than one year experience, there are lots of opportunities and openings available through out the world. But ironically for fresher, No opportunity. To get first job is the great struggle. It may take months or years. The salary will be very low initially. But once you get through the initial phase and have added on experience, there is a very great and very rapid hike in your pay, you will never imagine. SAP professionals are the highest paid community in the world. But No first job, then no experience and No experience then no first job, this circle is a struggle circle and once has to get out of it and this is very challenging phase.

 

  1. Future Prospects:

As SAP has introduced packages of even SMEs. One can work as Independent consultant too after acquiring a good experience. The implementation and thereafter support work would there. But there are lots of International and national players, who are in this consultancy. The employees once keep are very highly paid, so looking at all these aspects one can develop business of practice in consultancy and support too. But very challenging this opportunity is.

 

  1. The Certification:

The certification does have value, but the experience has more values. I have seen B.Com. Non SAP certified with good experience drawing 80K salary per month. For certification two ways. One, if you have more than one year functional or user experience of SAP, you can directly sit for the exam, the exam fee is 25000 plus Service tax. If you don’t have such experience then, go to any authorised Educational Partner of SAP, Siemens or Genovate and do a 5 weeks course costing 2.25 lacs plus Service tax and then sit for exams. The qualifying marks for exam are 70%. If fail, pay another fee of 25000 plus Service tax and reappear. Costly, yes, very costly affairs.

 

Hope I have answered all the queries members had asked me at different point of time with regard to SAP.

 

Thanks and regards,



Ashwin Nagar

in Ahmedabad (+91) 09825781065

In Mumbai (+91) 09833015352

Success is not permanent and failure is not final

 

11 October 2005

New Guidance Note on Tax Audit. Sec. 40 A

TRUE EXTRACT ON IMPORTANT SECTIONS 40A OF Guidance Note on Tax Audit under Section 44AB of the Income – tax Act, 1961. (Revised 2005 Edition)     By

Fiscal Laws committee.

                 

33.clause 17 (f)-amounts inadmissible under section 40 (a)

33.1     Section 40 (a) specifies certain amounts, which shall not be deducted in computing the income chargeable under the head “ profits and gains of business or profession”. They are as follows :

(i)                Any interest, royalty, fees for technical services or other sum chargeable under the income tax act which is payable outside India or inside India to a non-resident or foreign company on which tax has been deductible at source under chapter XVII-B and such tax has not been deducted or after deduction has not been paid during previous year or in subsequent year before the expiry of the time prescribed under the sub section (1) of section 200.

(ii)             Any interest, commission or brokerage, fees for professional services or fees for technical services payable to a resident or amount payable to a contractor or sub-contractor, being resident, for caring out any work  (including supply or labor for carrying out any work) on which tax is deductible under chapter XVII-B and such tax has not been deducted or after deduction has not been paid during the previous year or in the subsequent year before the expiry of the time prescribed under the sub-section (1) of section 200.

(iii)            Any sum paid on the account of securities transaction tax.

(iv)          Any sum paid on the account of fringe benefit tax.

(v)            Any sum paid on account of any rate of tax levied on the profits or gains of any business or profession or assessed of or otherwise on the basis of, any such profits or gains.

(vi)          Any sum paid on account of wealth tax.

(vii)        Any payment which is chargeable under the head “salaries”, if it is payable outside India or to a non-resident and if the tax has not been paid thereon nor deducted there from under chapter XVII-B.

(viii)       Any payment to provident or other fund established for the benefit of employees of the assessed, unless the assessed has made effective arrangement to secure that the tax shall be deducted at source from any payment made from the fund which are chargeable to tax under the had “salaries”.

(ix)          Any tax actually paid by an employer referred to in clause (10CC) of section 10.

33.2        In respect of items (I), (ii) and (vii) the tax auditor should obtain in writing from the assessed the details of all payments of the nature referred to in paragraph 33.1 and debited to the profit and loss account. Where an actual remittance overseas has been made by the assessed during the relevant previous year without deducting any tax at source, the tax auditor may rely upon the legal opinion and/or certificates from chartered accountant based upon which remittance have been made without deduction of tax at source.

The tax auditor need to report under this clause only if he has a different opinion on the issue. In this connection the tax auditor is advised to refer the application Double Taxation Avoidance Agreement (DTAA). Where no remittances have been made during the relevant year, the tax auditor may examine the relevant provisions vis-vis the agreement or correspondence in pursuant to which the liability is provided by the assessed in his books of accounts in order to determine whether any amount so provided is at all chargeable to tax under the Act. The tax auditor may use his professional judgment in these matter based upon decides cases and and he may rely upon a legal opinion obtain by the assessed where no tax is required to be deducted in respect of the amount so provided. In case he discharge with the stand taken by the assessed, he should give both the view in his report.

33.3     With the introduction of clause (ia), in the section 40 (a), the scope of disallowance of the expenditure has been widened to include interest, commission, brokerage, fees for professional services or fees for technical services payable to a resident or amounts payable to a contractor or sub-contractor, being resident for carrying out any work including supply of labor for carrying out any work. Under this sub-clause any payment of expenses, specified therein on which tax is deductible under chapter XVII-B

and such tax has not been deducted or after deduction has not been paid during the previous year or in the subsequent year before the expiry of the time prescribed under the sub-section (1) of section 200, is not eligible for the deduction while computing income chargeable under the head “profits and gains of business or profession”. Accordingly, such amount will be inadmissible and will be required to disclose under this clause. For this purpose the tax auditor will be required to examine whether the provisions relating to tax deduction  at a source have been complied with in respect of the payments specified under the clause. For this purpose the tax auditor may examine the accounts and tax deduction returns pertaining to these payments.

33.4    In case where the  assessed submits that the tax is not required to be

deducted on any payment covered under clause (ia) , the tax auditor may

exercise his judgment  in the light of the applicable laws and repot

accordingly about the compliance of this provision. The tax  auditor may rely

upon the judicial pronouncements while taking any particular view. In case of difference of opinion between the tax auditor and the assessed, the tax auditor should state both the view points.

33.5             As suggested under clause 16(b), here also, in  view of the voluminous  nature of the information, the tax auditor can apply tests checks and compliance test for verifying the information required to be provided under this clause.

33.6             The securities transaction tax (STT) has been levied by Finance (No.2) Act,2004 on transaction of sale / purchase of securities through stock exchange. Sub-clause (ib) of section 40 (a) provides that any amount paid as STT shall not be allowed as deduction. There is possibility that STT paid on purchase or sale is either included in the cost of purchases or reduced from the amount of sale. In both the situations it will have effect on the profit and loss account. The tax auditor should verify this aspect as well and report such amount and the amount of STT debited in the profit and loss account under this clause.

33.7             The finance act,2005 has introduced  a new tax known as Fringe Benefits Tax (FBT) which is levied on an employer at prescribed rate on the amount of fringe benefits or deemed fringe provided to its employees. The Finance Act has also introduced  sub clause (ic) in section 40 (a), which provides that FBT shall not be deductible in computing profits and gains from business and profession. The tax auditor is required to report the amount of fringe benefit tax paid by the employer during the year ended this clause, if the same has been debited to the profit and loss account. The tax auditor should also verify the FBT has not been included under any other head of expenditure.

33.8             The Finance Act, 2002 had increased a clause (10CC) in section 10 to provide that any tax had paid by an employer on non-monetary perquisites is exempt in the hands of employees. Consequently, a new sub-clause (v) was inserted in section 40 (a) to provide that any tax referred in section 10(10CC) paid by the employer on non-monetary perquisites provided to employees shall not be deductible in computing profits and gains from business or profession. The tax auditor is required to report the amount of such tax paid by the employer, in case it is debited to the profits and loss account.




Ashwin Nagar

in Ahmedabad (+91) 09825781065

In Mumbai (+91) 09833015352

Success is not permanent and failure is not final

 

08 October 2005

re:- change of mail profile

Dear All,

wouod request you to send all mails hitherto marked to me in my previous
mail profile "tapajyoti.sarkar@boci.co.in" to the undermentioned mail
address of mine w e f 15.10.05.

sarkart@rediffmail.com

This is because the undersigned is in the midst of the job change and the
existing mail profile will be closed w e f 15.10.05

Please confirm.

Thanx and regards

tapajyoti sarkar
ACA, 058484

> -----Original Message-----
> From: Ashwin Nagar [SMTP:ashwinnagar@yahoo.com]
> Sent: Sunday, September 25, 2005 11:28 AM
> To: BlogIndianCAs
> Cc: indiancas@yahoogroups.com
> Subject: IndianCAs: DUE DATE FOR 26QA EXTENDED UPTO 31.12.2005
>
> The due date extended. Find the attachement
>
> Write commenst on:
>
> www.IndianCAs.blogspot.com <http://www.IndianCAs.blogspot.com>
>
> With Regards,
>
> Ashwin Nagar
> 9825781065
>
>
> ********************************************************************
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