TAX & LAW ™

Rs 1,000 denomination banknotes to be issued non-sequentially: RBI

2012-02-02T15:21:00.002+05:30

The Reserve Bank today said it will soon start issuing banknotes of Rs 1,000 denomination in non-sequential numbering.

The packets of banknotes in non-sequential number will have hundred notes, the apex bank said in a statement.

In June last year, RBI had started issuing Rs 500 denomination notes in non-sequential numbering.

"It has now been decided to issue banknotes of Rs 1000 denomination also on similar lines," the statement said.

The bands of the packets containing the banknotes in non-sequential number will be superscribed with the words 'the packet contains 100 notes not numbered sequentially'.

Refund of Statutory Fees Paid for Certain Services

2012-01-31T11:28:00.002+05:30

The Ministry of Corporate Affairs has decided to refund the statutory fees paid for certain services. Earlier there was no process in MCA21 for refund of fees wrongly paid by the stakeholder while availing various services at MCA 21. New refund e-Form needs to be filed by the stakeholder applying for refund and upon processing of the same the refund request shall be approved or rejected.

The refund of MCA21 fees is available in the following cases: a) Multiple Payments of Form 1, Form 5; b) Incorrect Payments and c) Excess Payment

Refund process is not applicable for certain services/ e-Forms like Public Inspection of documents, Request for Certified Copies, Payment for transfer deeds, Stamp duty fee (D series SRN), IEPF Payment, STP Forms, DIN e-Form, etc.

Apply for PAN card through TAXnLAW and pay fee once you get the Card

2012-01-22T13:19:00.001+05:30

Dear Member,

Apply PAN card through TAXnLAW. Details given below.

About PAN

Permanent Account Number (PAN) Card is a photo Identity Card that carries 10 digits alphanumeric Unique Number for every card holder. It is issued by Ministry of Finance (Government of India) and it can be used as Photo Identity to opening Bank Account, to get Passport, travel in train with e-ticket etc.

Eligibility

Any individual, firm, joint venture can apply for PAN Card. For this, there is no any minimum and maximum age limit.

Required documents to applying for PAN

Good quality passport size color photo

Xerox copy of proof of identity

Xerox copy of proof of address

Attach any one document from the both list:

For Proof of identity

School leaving certificate

Matriculation certificate

Degree of a recognized educational institution

Depository account statement

Credit card statement

Bank account statement/ bank pass book

Water bill

Ration card

Property tax assessment order

Passport

Voters Identity Card

Driving License

Certificate of identity signed by Member of Parliament or Member of Legislative Assembly or Municipal Councilor or Gazetted Officer.

For Proof of Address

Electricity bill

Telephone bill

Depository account statement

Credit card statement

Bank account statement/bank pass book

Rent receipt

Employer certificate

Passport

Voters Identity card

Property tax assessment order

Driving License

Ration card

Certificate of address signed by Member of Parliament or Member of Legislative Assembly or Municipal Councilor or Gazetted Officer.

Note: Documents submitted as proof of address for serial numbers 1 to 7 should not be more than six months old from the date of application.

Please send above documents to our address given below and we will process your application and we will give the acknowledgment number immediately. After on eweek or ten days you will get the pan card. Once you get the pan card pay the fee to us through cash deposit, transfer or cheque.

Our address:

PURNA CHANDRA RAO

5^th Floor, Golden Edifice,

Khairathabad Circle,

Hyderabad – 500 004

Fee: Rs. 150/- only

Effective use of credit cards – cash back offers

2012-01-12T10:46:00.003+05:30

In these inflationary times, small discounts on bills matter a lot. Bankers realise this and take the opportunity to push a credit card in your hands - a credit card that gives you cash back. The proposition is very simple, every time you pay a bill, say your electricity bill using the cash back credit card, you are eligible for a cash back.

Assume you have paid Rs 2,000 towards electricity bill and the bank offers you a 5% cash back. In that case, your monthly credit card statement will ask you to pay Rs 1,900 only. Though the opportunity to save on your bills using a credit card is rather attractive, it's better to know the details.

Cash Back Item List

Some banks offer cash back on utility bills whereas some offer cash back only on discretionary spends such as - three-star rated and above restaurant bills. Always check if the service provider is empanelled with the bank for the cash back credit card programme. Even under utility bills, check if the banks have empanelled the utility service providers you are paying too. For example, your internet service provider or DTH service provider need not necessarily be a 'utility service provider' for your bank as far as the cash back credit card is concerned.

Limits & Sub Limits

Many banks introduce a limit in rupee terms, say Rs 2,500, as to how much cash back one can get in a month. Then there are sub limits like no single transaction can get cash back of more than a particular amount, say Rs 500.

Eligibility Of Transactions

Banks can also prescribe a minimum transaction value, say Rs 500, to get cash back. If you pay a bill of Rs 350, you won't be eligible for cash back on that transaction. Some banks can introduce varying minimum transaction value for different categories, such as utility bills and bills at retail outlets.

Charges

Cash back credit cards may have a joining fee and an annual fee. Some banks waive such fees, subject to conditions such as using the card at regular intervals or spending a minimum amount in a year, say Rs 25,000. Also check the interest rate at which the banks are offering you credit, if in case you cannot pay on due date, that should not be a burden. Though the idea of saving on your bills is good, never over spend to ensure that you maintain a good financial health.

Source: Net

Deduction u/s. 80C - overview

2012-01-10T22:44:00.001+05:30

1) Deduction for tuition fees u/s. 80c of the Income Tax Act 1961 is available to Individual Assessee and is not available to HUF.

2) Deduction under this section is available for tuition fees paid on two children’s education. If Assessee has more than two children then he can claim tuition fees paid of only two children’s. The Deduction is available for any two children.

3) Husband and wife both have a separate limit of two children each, so they can claim deduction for 2 children each.

4) This is the only clause u/s 80 C where assessee cannot claim tax benefit for expenditure incurred for self. In other words if assessee has paid tuition fees for his own studies, he will not be eligible for deduction.

5) Deduction is not available for tuition fees paid for studies of spouse.

6) Deduction for tuition Fees is available up to Rs.1,00,000/- Please Note that aggregate amount of deduction under section 80C , 80CCC and 80CCD shall not exceed Rs. 1,00,000/-

7) The deduction is available for Full Time courses only. In our opinion no deduction is available for part time or distance learning courses. The fees should be paid to university, college, school or other educational institution. No deduction available for fees paid for private tuition’s, coaching courses for admission in professional courses or any other type of courses are not covered as that fee is not paid for FULL time education.

Service Tax Returns - Date Extended again - to 20.01.2012

2012-01-10T18:33:00.002+05:30

SECTION 70 OF THE FINANCE ACT, 1994 READ WITH RULE 7(4) OF THE SERVICE TAX RULES, 1994 - RETURN OF SERVICE TAX - DATE OF SUBMISSION OF HALF-YEARLY RETURN FOR THE PERIOD APRIL, 2011 TO SEPTEMBER 2011 EXTENDED FROM 6-1-2012 TO 20-1-2012

ORDER NO. 1/2012 - SERVICE TAX, DATED 9-1-2012

In exercise of the powers conferred by Rule 7(4) of the Service Tax Rules, 1994 read with notification No. 48/2011-Service Tax dated 19th October 2011, Central Board of Excise and Customs hereby extends the date of submission of half yearly return for the period April 2011 to September 2011, from 6th January, 2012 to 20th January, 2012.

This is being done in view of the fact that assessees are facing problems in electronic filing of returns due to various reasons.

No need to respond to tax notices for below Rs 100

2012-01-07T11:28:00.001+05:30

The Income Tax Department has asked assessees not to respond to notices of arrears of paltry amounts like Re 1, Rs 4 and Rs 6 as demands of less than Rs 100 would be adjusted against future refunds.

The Department has issued the clarification in response to reports that the Central Processing Centre (CPC), Bangalore, is sending notices for payment of tax arrears as small as Re 1, Rs 4 and Rs 6 and thus causing hardship to assessees.

As per extant procedure, demand of less than Rs 100 is not enforced but is liable for adjustment against future refunds.

UIADI launched mini ATM with AADHAR support

2012-01-07T11:20:00.000+05:30

The Unique Identification Authority of India (UIADI) has launched a micro ATM device that would enable beneficiaries like MG-NREGA workers with Aadhaar to withdraw money near their doors through core banking system.

The beneficiary has to put his finger and Aadhaar number in to the micro ATM wireless device and get the money within 8 to 9 seconds from a business correspondent after verification about the beneficiary having that much amount deposited in the bank account shown through a receipt by the device.

With the device not carrying any money unlike the regular bank ATMs, the beneficiary would get the withdrawn amount from the business correspondent on the spot.

The (about a foot-long) device functions through any SIM and wherever there is a mobile tower. The device will be with a bank-appointed business correspondent.

Once it is proved to be perfect, it would be introduced in other states.

Using the device to withdraw money by beneficiaries will save travel-related difficulties, money and they can also have some savings in their accounts as one knows that one can withdraw any time as business correspondents are available at their villages.

The UIADI, is also working to introduce the system in areas like telecom, public distribution system, LPG cylinder and fertiliser/kerosene.

Claiming Leave Travel Allowance – important to know

2012-01-05T11:36:00.001+05:30

Come January, it is time to claim your annual reimbursements such as medical and leave travel allowance (LTA). These reimbursements are as good as tax savings. The difference being that you submit the required bills and treat them as tax-free income. Under Section 10 (5) of the Income-Tax Act, an employee can undertake a trip within the country by claiming earned leave. The employee can then claim an exemption for the amount spent on travel.

The underlying assumption here is that the employee's salary has the LTA component as a part of his/her salary package. This monetary component covers the travel related expenses such as air/train/bus tickets or a rented vehicle. However, you cannot claim expenses incurred on lodging and other allied expenses under LTA. Apart from the employee, LTA covers such expenses of the spouse, children as well as dependent parents and siblings. However, this exemption is limited to two children born on or after October 1, 1998.

The restriction is not applicable to children born before this date. An employee cannot claim this tax benefit every year. It can be claimed only twice in a pre-defined block of four calendar years. The claim can be in alternate years or even consecutive years. The present block started from January 1, 2010 and will last until December 31, 2013. You can carry forward one journey to the next block. However, this has to be utilised in the first year of the new block. The claim amount is either the bill amount or the amount set by your employer, whichever is lower.

If the amount of bills claimed is lower than the LTA component in your salary structure, the balance will be taxed as per your income tax bracket. In addition, there are a host of other nitty-gritty that need to be taken into account. For example, if you have opted to fly, only the amount equal to the economy class airfare of the national carrier by the shortest route would be allowed as deduction. This apart, if you are travelling by road or rail, the cost of firstclass air-conditioned ticket by the shortest route would be considered for exemption.

In case you are travelling to several places, the destination farthest from your residence will be taken into account for calculating the exemption amount. You have to submit the LTA form along with the copies of original tickets and travel bills to the company to file a claim. If you miss out on filing a claim at your company, you can claim for this exemption at the time of filing your income-tax returns and avail of a tax refund later. But that would make it a cumbersome and longdrawn procedure. However, the new Direct Tax Code (DTC), if implemented, will take away all deductions like HRA, LTA and medical allowance, currently allowed under Section 10 of the I-T Act.

Source: Net

Book train tickets through mobile & travel without printout

2012-01-04T22:16:00.000+05:30

Booking train ticket was never so easy as you can now get it done through your cell phone.

After initial registration and downloading of suitable software on the mobile handset with Internet facility, it will be possible for the mobile users to book a ticket through their own mobile phone.

Launched by Indian Railway Catering and Tourism Corporation (IRCTC), a PSU under Railway Ministry, has been offering the service of booking e-ticket over the mobile phone, said a senior Railway Ministry official.

After booking, the passenger will receive a reservation message with full details of the ticket including PNR, train no, date of journey and class.

"This virtual message would be treated at par with the print-out of the e-ticket which at present is taken out by the passengers and is known as Electronic Reservation Slip (ERS)," he said.

Hence, with the virtual message, passengers would not be required to take a print-out of e-ticket to be carried with them. Showing the reservation message of the confirmed ticket on their mobile during travel will be sufficient. Internet is required on mobile phones to book tickets through mobile.

The passenger has to register at the time of first transaction and thereafter book the ticket using his ID and password.

The service was introduced on a pilot basis for a few and now the more than a thousand users are availing this facility everyday, he said.

The service charge is similar to e-tickets-- Rs 10 for Sleeper class and Rs 20 for other higher class

Savings bank number portability soon ….

2012-01-04T22:10:00.000+05:30

The Finance Ministry is working on savings banks account number portability, which will allow a customer to retain his account number while changing his bank.
Banks would have to work on identification code, know your customers (KYC) norms and core banking solution (CBS) for implementing the savings bank account number portability.

The move would help customers change banks, without the need of going through the KYC norms again.

Last year, the government had allowed portability of mobile numbers and health insurance policies.

State Bank of India, Bank of Baroda, Union Bank of India, IDBI Bank and Syndicate Bank are some of the lenders which will be benefited by the capital infusion initiative of the government.

ICICI Bank launches new platinum card: Rubyx

2011-12-31T19:36:00.000+05:30

ICICI Bank has recently announced the launch of its new platinum credit card targeted at affluent customers. ICICI Bank - Rubyx, the card entitles cardholders to two cards - one serviced by American Express and the other by MasterCard, which is achip card. However, both the cards are linked to a single card account and the card spends are chronicled in the same statement. Also, they will not attract separate fees.

Reward points

The reward points programme is being projected as the scheme's unique selling point. The scheme offers you three such programmes to choose from - shopping, travel and essentials. The scheme promises reward points of up to 6 on every 100 spent. In the case of the American Express card, for spends in your chosen category, you will acquire 6 points; while for other purchases, it will be 3. This will be 4 and 2, respectively, in case of the MasterCard credit card.

Perhaps the most interesting part of this programme is that the reward points can be redeemed for cash (1 point is equivalent to 0.25), with the amount being credited to your account. In effect, your spends can also take care of a part of your repayment, even if the amount is small.

Fee structure

If you wish to avail of the credit card, you will have to shell out a joining fee of 5,000. Upon signing up for the card, you will be entitled to five free Jet Airways tickets to travel any place in India. Second year onwards, you will be charged 2,000 annually. However, this renewal fee is waived off if you happen to spend more than 2,50,000 using the cards in the previous year. This apart, like in case of other cards, the other charges include overdue interest, late payment fee, cash transaction fee and so on. The overdue interest amounts to 3.40% per month, which works out to 40.80% on an annual basis.

Upside

Apart from host of reward programmes, the option to redeem the points accumulated for cash is a key benefit, as not many card issuers extend this facility to their customers.

Downside

Go for it only if you are confident of actively monitoring the points accumulated and spending time analysing the best redemption options. Else, paying 5,000 as a one-time fee and 2,000 annually may not seem worthwhile. Besides, the Jet Airways tickets are free to the extent of base fare only and taxes, surcharges and other levies will have to be borne by the cardholders.

DATE OF FILING ST RETURN EXTENDED TILL 6-1-2012

2011-12-30T10:35:00.002+05:30

SECTION 70 OF THE FINANCE ACT, 1994 READ WITH RULE 7(4) OF THE SERVICE TAX RULES, 1994 - FURNISHING OF RETURNS - DATE OF FILING ST RETURN EXTENDED TILL 6-1-2012

ORDER NO. 3/2011 - SERVICE TAX [F. NO. 137/99/2011 - SERVICE TAX], DATED 29-12-2011

In exercise of the powers conferred by Rule 7(4) of the Service Tax Rules 1994 read with notification No. 48/2011-Service Tax dated 19th October 2011, Central Board of Excise and Customs hereby extends the date of submission of half yearly return forthe period April 2011 to September 2011, from 26th December 2011 to 6th January 2012.

This is being done in view of the fact that assessees are facing problems in electronic filing of returns due to various reasons.

Amendment to Schedule XIV to the Companies Act, 1956 – Changes in Depreciation Rate on Plant and Machinery

2011-12-22T14:17:00.002+05:30

Amendment to Schedule XIV to the Companies Act, 1956 – Changes in Depreciation Rate on Plant and Machinery

Section 641 of the Companies Act, 1956 – Schedules, forms and rules – Power to alter Schedules – Alterations in Schedule XIV

NOTIFICATION [F. NO. 2/6/2008-CL.V], DATED 14-12-2011

In exercise of the powers conferred by sub-section (1) of section 641 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following alterations in the Schedule XIV of the said Act namely :-

In Schedule XIV to the Companies Act, 1956, under the heading “II PLANT AND MACHINERY”, under item (ii) relating to special rates, in sub-item B.7, for the entries, the following entries shall respectively be substituted, namely :-

Schedule XIV

Rates of depreciation

Name of assets	Single Shift		Double Shift		Triple Shift
	W.D.V.	S.L.M.	W.D.V.	S.L.M.	W.D.V.	S.L.M.
1	2	3	4	5	6	7
“7. Mineral oil Concerns Field operations (above ground). Portable boilers, drilling tools, well-head tanks, etc. (NESD)	30 per cent	11.31 per cent	–	–	–	–
7A. Rigs (NESD)	10 per cent	3.34 per cent	–	–	–	– “

CBEC prescribes the documents to be submitted along with the application of service tax registration

2011-12-17T13:16:00.000+05:30

The following documents have been prescribed by the CBEC to be submitted along with

the application for registration under service tax:

1. Copy of Permanent Account Number (PAN)

2. Proof of Residence

3. Constitution of the Applicant

4. Power of Attorney in respect of authorized person (s).

The above documents must be submitted within a period of 15 days from the date of filing of the application, otherwise the application may be rejected. The time limit of seven days within which the registration is to be granted by the Superintendent of Central Excise/Service Tax would be reckoned from the date the application for registration is complete in all respects.

[Order no. 2/2011 - ST dated 13.12.2011 - F.No. 137/120/2011 - ST]

New Version PAN Application 1.0 form with auto fill facility

2011-12-16T12:56:00.000+05:30

Dear Members,
now New version of PAN Application 1.0 with auto fill facility is available in our site.

Features

1. No need to write with pen
2. fully automated fill
3. fill, print, sign and submit

please click below to download it.

click here to download

All Payments of Rs. 20000/- and above is mandatory as Account Payee crossing.

2011-12-16T11:36:00.000+05:30

Recently Reserve Bank of India has issued a notification vide RBI/2011-12/ 250, DBOD.BP.BC. No. 49 / 21.01.001/2011-12 November 4, 2011 regarding instruction to issue Account Payee Crossing Drafts of Payment of Rs. 20000/- and above to Scheduled Commercial Banks, it is mandatory.

Opinion regarding Notification:

The credit parties can't be convert in to Cash at Cash Counter due to Demand Draft Account payee Crossing. Else it is easy to get cash at Cash Counter of Bankif not Accounting payee Cross Draft. Some Credit parties are taking undue advantage of uncrossing Account payee Demand Draft and they cash at Cash counter at Bank.

Validity of cheques to be reduced to 3 months

2011-12-16T11:32:00.000+05:30

The Reserve Bank has decided to reduce the validity of cheques and bank drafts from the present six months to three months beginning next fiscal.

The Reserve Bank of India (RBI) has advised that with effect from April 1, 2012, banks should not make payments against cheques, drafts, pay orders or banker's cheques if they are presented after the period of three months from date of issue.

It was reported to Central Economic Intelligence Bureau (CEIB) that some persons are taking undue advantage of the practice of banks of making payment of cheques or draft presented within a period of six months from the date of the instrument as these instruments are being circulated in the market like cash for six months.

ONLINE TAX PAYMENT – OVER VIEW

2011-12-05T13:09:00.000+05:30

ON-LINE TAX PAYMENT – OVER VIEW

E-payment is a facility that can be used to pay income tax through the Internet via Net banking. The amount of tax gets debited from the bank account electronically. To be able to use this service, the taxpayer's bank should be one of those authorised to provide the facility and he should have registered for Net banking.

In case a bank does not have an online payment facility or is not an authorised bank, electronic payment of tax can be made from the account of any other person who has an account with the authorised bank having online facility. However, the taxpayer must quote his PAN in the challan. For list of banks providing this facility is available click here.

NSDL TIN site

The NSDL Tax Information Network (TIN) Website can be accessed at 'tinyurl.com/33nrceb' and 'tinyurl.com/cbm6fzs' for service tax, or by logging on to the Net banking facility of the bank to make online tax payment. Select the relevant challan for tax payment or enter the assessee code as applicable.

Personal details

In the challan, select the data pertaining to the taxpayer, tax head, assessment year, type of payment and the bank name from the dropdown provided. In case of service tax payment, accounting codes have to be selected for the payment.

Payment of taxes

The TIN system will direct the taxpayer to Net banking facility of the bank. The tax payable and the bank account number need to be entered and confirmed to proceed with the payment.

Challan number

Taxpayers receive an immediate, confirmed receipt in the form of an electronic challan counterfoil having a Challan Identification Number (CIN). This form can be printed or saved.

Points to note

The Challan Identification Number or CIN should be quoted in the income tax return as proof of having paid the tax.

The online bank statement can be checked to verify the tax payment.

By using the e-payment facility, taxpayers can get an extended deadline for payments. These will differ from bank to bank.

Source: internet

Compiled by

PURNA CHANDRA RAO

Small Write-ups on Taxation by P.S. Chiranjeevi for the month of Sep, 2011

2011-09-30T11:50:00.001+05:30

Small Write-ups on Taxation by P.S. Chiranjeevi for the month of Sep, 2011

1. Income from House Property (4) [New]

2. Income from House Property (3)

3. Income from House Property (2)

4. Income from House Property (1)

Now we can check our EPF Balance online

2011-09-13T16:06:00.001+05:30

Know Your EPF Balance

(Service launched on 01/07/2011)

Please click on the following link to know the balance in your EPF Account upto the date, the accounts are updated, which also includes the latest approved transactions of settlement/advances/transfer-in/transfer-out, if any.

Select the EPFO office where your account is maintained and furnish your PF Account number.

Leave the extension field blank, in case your account does not have one.

You will be asked to enter your name and mobile number. The given mobile number will be recorded along with the PF Account Number.

On successful submission of above information, the details will be sent through SMS to the given mobile number.

click here

CBEC proposed to introduce TDS concept in collecting service tax

2011-08-19T11:55:00.002+05:30

The Central Board of Excise and Customs (CBEC) has proposed to introduce a Tax Deducted at Source (TDS) mechanism in collecting service tax. TDS has been successfully used for direct taxes like the income tax. Although the proposal is at initial stage, the board has set up a study group to examine its feasibility and how to implement it. It is learnt this may be introduced in a phased manner in the current year itself. A TDS on service tax would substantially help. The opinion of industry organizations has been sought.

Now all Students can view their Answer Sheet including professionals: Supreme Court

2011-08-11T09:58:00.002+05:30

In a landmark judgement which would be thanked by the Student Fraternity across India, Supreme Court on 9 th August 2011 has announced that any Student aggrieved by the marks awarded to him/her in the Exams can now make an application and have a look at how the marks have been awarded. All Students irrespective of whether in School, College or pursuing Professional Qualification like CA/IAS/MBA can now file an application under RTI and the Institute conducting the Exams would be under an obligation to reveal to the Student his answer sheet and the manner in which he has been awarded marks.

Even Students appearing for Class X and Class XII Boards would now be able to view their answer sheets as Supreme Court has now ordered for disclosure of Answer Sheets for those students making an application under the RTI Act.

Passing the path-breaking order that will be lapped up by students, but may cause consternation among the teaching fraternity, a bench of Justices R V Raveendran and A K Patnaik dismissed a bunch of appeals filed by the Central Board of Secondary Education, West Bengal Board of Secondary Education, Institute of Chartered Accountants of India (ICAI), University of Calcutta, West Bengal Central School Services Commission and Assam Public Services Commission who had challenged the Judgement of the High Court. The petitioners had challenged rulings by different information commissioners under the RTI Act directing them to show the answer-sheets to the students.

The basic contention of all these education boards, Calcutta University and ICAI was that there was a fiduciary relationship between the examiner and the board, and hence it was not proper to show the answer-sheet to the student. CBSE had claimed exemption from the ambit of RTI Act. The Supreme Court held that evaluated answer-sheets were covered under the definition of information under the RTI Act, 2005 and reiterated the duty of the public authority to allow maximum disclosure as envisaged by the RTI.

Explaining the scope of the fiduciary relationship of the agency holding the examination, the Bench held that bodies conducting examinations could not retain evaluated answer sheets in any fiduciary capacity and contend that they would not disclose the same. Welcoming the judgment, the National Campaign for Peoples Right to Information, said: The NCPRI believes this ruling would positively affect the transparency rights of lakhs of students of all kinds across the country including examinations conducted by school boards, universities and public service commissions CAT 2011 New Format iCATs replicate 2 70 min sections. Experience the most realistic mocks www.TestFunda.comThe move will help make the education system more transparent and administrators more accountable, said Sobha Mishra, head of education at industry lobby Ficci. If someone sat for an exam, he should not be denied the right to see his answer paper once the result is out.

No institute or exam-conducting body should ever resist such disclosure, she said. The verdict will benefit lakhs of students appearing for various examinations, including CA Exams conducted by the ICAI, as it gives a student the right to inspect answer-sheets by just applying to the relevant university, council, board or commission.

Background of the Case This case had reached the Supreme Court from high court which in its earlier judgment had permitted a student, Pritam Rooj, to inspect his answer sheets. Rooj was a student of mathematics in the Presidency College.

In 2006, when he sat for the first part of degree examination he secured 52 percent marks. In the second year he got 208 out of 400 marks and got just

28 marks out of 100 in the fifth paper. Upon seeking re-evaluation, his marks increased by four in the fifth paper. He contended that his poor marks stood in the way of his getting admission in post-graduation course and applied to inspect his mark sheet under the RTI law which was rejected.

The university said that the answer sheets of an examinees cannot be shared. He then approached the High Court and the High Court announced in the favour the Student. Calcutta University challenged the order of the High Court and approached the Supreme Court and the Supreme Court on 9 th August 2011 upheld the judgement of the high court and ordered Answer sheets to be disclosed under RTI

Have you filed your e-return or not? Of course check below points.

2011-07-14T15:34:00.002+05:30

Filing errors

Taxpayers often make mistakes that lead to deduction or incorrect calculation of taxes. One of these is not declaring the correct break-up of deductions under Section VIA, which includes tax-saving investments in life and health insurance policies, mutual funds, bank fixed deposits, etc. Iyer points out, "It is essential to have the tax filing details like deductee's PAN details, PAN & TAN of the deductor, total amount paid, total taxes deducted and deposited in Form 16/ Form 26AS."

In case of a change in the residential address, make the necessary alterations in the PAN database since the IT Department refers to it for correspondence. Do not mention bank accounts that are closed or even dormant because refunds are unlikely to reach you in such a case.

Printing ITR V

Printing the ITR V [acknowledgment] form correctly is critical. Avoid using the dot matrix printer because the bar code on the ITR V should be clearly visible for quicker processing, and this can be done only by using the ink jet or laser printers. Take the printout in black ink only. If you are sending two returns, don't print them back to back. Use a fresh A4 size sheet to print each time. Perforated paper or of any other size is not acceptable.

Signing

The signature on the form must be clear and legible. For this, use a ball-point pen in blue ink only. Also, if you are taking photocopies, make sure you send out the original one signed in blue ink. A photocopy of the signature is not accepted.

Sending

The filing of non-digitally signed returns is completed only when the ITR V reaches the CPC in Bangalore. So, make sure that your ITR V reaches the destination within 120 days of e-filing. In case it does not reach CPC Bangalore within the stipulated period, you will have to go through the agony of filing your tax return again. Earlier, you could not send more than one ITR V per envelope, but now, you can include more than one such form. Do not attach other documents, such as photocopies of Form 16 or TDS certificates along with the ITR V. Even annexure documents don't need to be attached. Dispatch it in an envelope that can hold an A4 size paper without folding it.

No response from CPC

The CPC dispatches an acknowledgement on receiving the ITR V. Ideally, it should reach you within three days. If you don't receive it, consider sending it again. You can send it through regular postal service or speed post. Do not use the courier or deliver it personally. You can call 1800-425-2229 and 080-22546500 from 9 am to 8 pm on working days to check its status. It can also be done online at www.incometaxindiaefiling.gov.in.

Inviting instructor for CA students through TAXnLAW

2011-07-05T20:14:00.004+05:30

Details below

1) Instructor needs to send at least two sms on useful matters for CA Students. It may be on

a. Syllabus [subject wise],

b. Exam tips,

c. Last minute preparation & time table,

d. Important questions,

e. Registrations etc.

2) The same will be updated in our website also with his profile.

3) Instructor must be in the same field [CA]

4) This is absolutely free service.

5) Interested members please send your details to purna@taxnlaw.info or 99 66 00 89 00

Banks will compensate for non solving ATM transaction and re-credit the account within 7 days

2011-06-30T19:03:00.000+05:30

Banks will compensate for non solving ATM transaction and re-credit the account within 7 days. The compensate will be Rs. 100 per day from the 7th day of receipting the complaint. RBI issued a circular about failure of ATM transactions and reduce the timings of solving the ATM transaction failure. The main points of this circular are as under.

Solving the ATM transactions failure is reduced to 7 days from 12 days earlier.
If bank doesn't re-credit account within 7 days from the day of receipt of complaint, bank need to compensate Rs. 100 per day after the 7th days.
The customer needs to lodge a complaint within 30 days from the transaction failure day to get compensation.
Number of free transactions per month from the other ATM are inclusive of both financial and non financial transaction.
This rule will effect from 1 July 2011.

Medical check-ups to be exempt from I-T

2011-06-20T17:14:00.002+05:30

In a major relief to employees, the government said they would no longer have to pay income tax on money drawn from welfare funds for annual medical check-ups.

The Central Board of Direct Taxes has issued a notification in this regard. Exemption from taxation is granted under section 10 of the Income Tax Act.

MCA Finds 12 Cases of Wrong e-filing

2011-06-11T13:06:00.000+05:30

The government on Friday said it has initiated action against practicing professionals who had certified the incorrect particulars submitted by 12 listed companies. “The Ministry of Corporate Affairs has directed its regional directors to initiate inquiry against those practicing professionals who had certified 12 cases of wrong e-filing by certain listed companies in their e-forms,” an official statement said.

The MCA during examination has found 12 cases of wrong E-filing, wherein the data furnished in the e-forms were totally different as compared to the records of the company. It said if found guilty in preliminary enquiry by the regional director, the concerned professional institute would be told to initiate an enquiry under their regulations

Companies Can Register In 24 Hrs

2011-06-06T17:00:00.000+05:30

Come July, you can register a company in India in 24 hours! The Union ministry of corporate affairs has set the first week of July as the target date for launching a completely digitized service that will allow anyone with all relevant documents and approvals to complete the process of registering a company in one day.

All the offices of the Registrar of Companies (ROC) were busy putting in place the new system and an announcement of the launch of the new service was likely by the end of June. The offices of ROC, appointed under Section 609 of the Companies Act, have the primary responsibility of registering companies floated in different states and Union territories and ensuring that they comply with statutory requirement under the Act.

Relief to salaried tax payers below 5 lakh – “Classes of persons”

2011-06-01T12:52:00.002+05:30

As many as 85 lakh salaried tax payers with an annual income of up to Rs 5 lakh will not have to file income-tax returns from now. No income-tax returns would be required for salaried persons earning up to Rs 5 lakh per annum. Govt. would notify this in first week of June. The scheme would be applicable from assessment year 2011-12 onwards. This means that the salaried persons eligible under the scheme would not have to file returns for the financial year 2010-11 in 2011-12 (assessment year).

However, such tax payers would have to file returns if they want to claim refunds. As per the Memorandum to the Finance Bill 2011, the government will be issuing a notification exempting 'classes of persons' from the requirement of furnishing income tax returns. In case such a salary earner has income from other sources like dividend, interest etc and does not want to file returns, he would have to disclose such income to his employer for tax deduction. In the scenario, the Form 16 issued to salaried employees will be treated as Income Tax Return. The idea behind the move is that in cases where there are no other sources of income, filing of a return is a duplication of existing information.

I-T department plans to accept refund applications at ATMs

2011-05-31T14:12:00.002+05:30

AFTER tying up with banks for providing tax deducted at source (TDS) details through internet banking and payment of tax at ATMs (automated teller machines), the income tax department is planning to take the convergence of banking and tax services to the next level.

The department plans to give taxpayers the facility of applying for tax refunds and tax credits through ATMs. Taxpayers will also be able to check the status of their refund applications at ATMs. They will also be able to spot mistakes they may have made while filing for refunds/credits. In future, taxpayers may also be allowed to file returns through the banking channel. “The revenue department plans to expand collaboration with banks.

CBDT Plans To Use Third Parties To Recover Tax Dues

2011-05-25T14:06:00.002+05:30

The Central Board of Direct Taxes (CBDT) is considering use of third parties to recover tax dues. This is part of a plan to control mounting tax arrears. The plan has been envisaged because insufficient information on assets of taxpayers is hampering CBDT’s recovery efforts.

The income tax arrear demand made by CBDT stood at Rs. 2,29,032 crore on March 31, 2010. Out of this, Rs. 9,476 crore is difficult to recover because the assessees are not traceable. Cases where the board has found no or insufficient assets for recovery — called ‘no-asset cases’ — account for Rs. 92,360 crore. A worried CBDT has felt the need to take outside help to find these assets. CBDT is also planning to reward those who give information on assets of defaulters. The names of defaulters who are not traceable or whose assets are not identifiable may be given in newspapers. Anyone giving information in response will be rewarded. At present, those who give tip-offs at the time of investigation, that is, before the tax demand is raised, are rewarded. The board is also increasing the limits for taking irrecoverable demands off its books by four-five times.

Service tax relief for food served in hotel rooms

2011-05-11T11:34:00.002+05:30

The Finance Ministry has said that food served in hotel rooms from air-conditioned restaurants holding liquor licenses and housed within the hotel premises will not attract service tax.

"When the food is served in the room, service tax cannot be charged under the restaurant service as the service is not provided in the premises of the air-conditioned restaurant with a license to serve liquor," a circular issued by the Central Board of Excise and Customs (CBEC), the apex indirect taxes body under the Finance Ministry, said on Tuesday.

The CBEC said the value added tax (VA) is excluded from the total taxable value. Similarly, the luxury tax would be excluded in case of short-term accommodation service.

Finance Minister Pranab Mukherjee had, in the 2010-11 budget, announced a 10% tax on services provided by air-conditioned restaurants with a license to serve liquor. To lessen the burden of the tax, the government provided an abatement of 70%, implying that tax would be applicable only on 30% of the total value of the bill.

Also, tax cannot be charged under the provision of short-term accommodation if the bill for the food is raised separately and does not form part of the declared tariff.

I-T Returns Filing Waiver to Benefit 85 Lakh

2011-05-09T12:44:00.000+05:30

As many as Rs.85 lakh tax payers will benefit from the government's decision to exempt persons earning less than. Rs.5 lakh a year from filing I-T returns.

The decision, which will come into effect from June 1, 2011, will reduce the compliance burden about 85 lakh small taxpayers. As per the Memorandum to the Finance Bill 2011, the government will be issuing a notification exempting 'classes of persons' from the requirement of furnishing income tax returns. Tax payers with income of less than Rs.5 lakh will not have to file tax returns for the assessment year 2011-12 and a notification in this regard is likely next month.

Income Tax returns – filing procedure – some instructions

2011-05-05T21:46:00.000+05:30

Income tax department enabled filing our returns for ITR-1 [SAHAJ] and ITR-2. To escape from last min hassle, we should file our return at this time. Please follow the following instructions.

1) Keep your PAN card copy ready to enter your PAN number in the return and to access income tax website[if you are filing online]

2) Keep your form-16 or 16a ready to enter TDS deductions. If you have not received form 16 or 16A get the details from Form 26AS from online. There are two ways to get the details

a. If you already register in TIN-NSDL site to access Form 26 AS, use your log-in details and copy the details and take a print out. There is an option to download your form 26 AS in text format, but there is no use with the download.

b. If you have not registered with TIN-NSDL, access income tax department website with your PAN details. Go to ‘Services; options and click ‘View Form 26AS’ option. By giving your date of birth you can access form 26 AS and copy the details.

3) Keep ready your savings, investments details like LIC, Loans, Mutual funds, donations etc which will come under Chapter-VI

4) From the income tax website, download ITR form in excel format which is applicable to you.

5) Fill the form with all the details available. Check the form twice or thrice and generate XML format.

6) Go to income tax website and upload the form with or without digital signature.

7) Once submitted take a print out of ITR-V and sign it. Signed acknowledgement need to send CPC-Bangalore through ORDINARY POST only.

8) All this above procedure will take nearly 1-2 hours depending upon the technical knowledge. If you don’t have time to concentrate please file your returns through our TAXnLAW. Just send your PAN scan copy, TDS details, savings details and others [if any]. We will file your returns and send the acknowledgment copy to your mail id and we will assure our support if needed at any time. For more details contact through PURNA@TAXNLAW.INFO or 0 99 66 00 89 00

Provision of 15-minutes reading time to the candidates of Chartered Accountants Examinations

2011-04-27T13:08:00.002+05:30

Provision of 15-minutes reading time to the candidates of Chartered Accountants Examinations

(Effective from May-2011 CA Examinations)

The Council of the Institute, based on the recommendation of the Examination Committee has decided to allow 15-minute reading time to the candidates in the Chartered Accountants Examinations before the scheduled commencement of the examinations i.e, if the examination commences from 2.00 PM, then the candidates will be given Question Papers at 1.45 PM. This reading time will not be available for CPT and all post qualification Courses Examinations.

The objective of providing question paper 15 minutes before the scheduled time is to:

(i) Enable the candidates to read the question paper thoroughly (without encroaching on the examination duration) and

(ii) Chalk out the strategy to answer the questions.

Candidates are required to note the following in this regard:

(1) The candidates will not be allowed to leave the Examination Hall under any circumstances from 1.45 PM to 3.00 PM.

(2) The candidates shall be allowed to enter the hall from 1.30 PM upto 2.30 PM only.

Any breach of the above requirements would be treated as adopting Unfair Means by the students concerned and applicable disciplinary action would be taken on such erring students.

Filing Income Tax Returns – a quick review

2011-04-26T22:44:00.001+05:30

1) Every individual, whose total income exceeds the prescribed exemption limit i.e. is Rs. 160,000 for male assesses, Rs. 190,000 for female assesses and Rs. 240,000 for those above 65 years of age [senior citizens], is required to file an ITR on or before the prescribed due date.

2) If you have agriculture income as well as non-agriculture income and your non-agriculture income is less than the minimum threshold limit, you will not be obliged to file an ITR.

3) The prescribed due date is September 30, 2011 for FY11, if the individual being a sole proprietor, has his accounts subjected to tax audit or is a partner of a partnership firm whose accounts are subject to tax audit. In all other cases, the due date is July 31, 2011.

4) The ITR form for FY11 is yet to be prescribed. So, the filing would have to wait till it is prescribed.

5) The ITR is required to be signed by the individual himself or herself. However, in case the individual is not physically present in India to sign the ITR or in case of a non resident, a power of attorney holder could sign the ITR. In case of deceased assesses, the executor, administrator or other legal representative would be required to sign the ITR. An unsigned return is not a valid return.

6) An ITR can be filed electronically with the income-tax department website (incometaxindiaefiling.gov.) with or without a digital signature. In case an ITR is filed online without the digital signature, the acknowledgement generated is required to be signed and sent to the Central Processing Centre at Bengaluru.

7) No documents can be submitted along with the ITR. However, the tax authorities sometimes ask for a copy of the PAN card or acknowledgement of previous ITR filed, to verify the tax jurisdiction. In case the ITR is signed by a legal representative, copy of the power of attorney is required to be filed.

8) No need to wait for TDS certificate from your employer or others. Just access your Form 26AS and check your TDS deductions and payments. From the details available in Form 26AS you can fill your ITR.

9) If the ITR is not filed before the prescribed due date and also if the taxes due are not deposited before the said date, the individual would be subject to penal interest at the rate of 1% per month of such taxes due, for the duration of the non-compliance . In addition, a penalty of Rs 5,000 could be levied by the authorities if the ITR is not filed before the end of the assessment year (i.e. March 31 following the year for which the tax return pertains).

10) An ITR can be filed after the prescribed due date but before the end of one year from the end of assessment year. So for FY11, ITR can be filed by March 31, 2013. But you should be aware of the fact that the belated return so filed cannot be revised under any circumstances. Also, if you have business loss and capital loss during the financial year, it cannot be carried forward to subsequent financial year, impacting your next year's planning.

Now, quote PAN to buy gold in cash

2011-04-25T11:45:00.002+05:30

UNDER attack for not being able to curb black money transactions, the finance ministry is planning to make quoting of the permanent account number (PAN) mandatory for more transactions. The income tax (I-T) department may make quoting of PAN in documents for sale and purchase of bullion or jewellery involving cash transfer of Rs.5 lakh or more mandatory.

PAN may also be required for cash payment of `1lakh or more as life insurance premium, amid concerns that insurgents may be parking funds in high-value insurance policies. The department is also considering changes in the limits for cash payment for foreign travel. At present, the cap is Rs.25,000, including fare, the fee of a travel agent/tour operator and purchase of foreign currency.

Companies need not Pay Stamp Duty on Increased Capital: HC

2011-04-25T11:43:00.002+05:30

The Delhi High Court has held that a company is not required to pay the stamp duty on the increased amount of its authorised share capital. A bench headed by justice S Muralidhar said this while allowing the plea of S E Investments, which challenged the direction of the Registrar of Companies (ROC) seeking stamp duty on increased amount in authorised share capital.

In the absence of a specific provision that permits the levy of stamp duty on the increase in authorised share capital, it would not be open to the Respondents (ROC) to insist upon S E Investments having to pay stamp duty for the increased authorised share capital, the court said. The court, however, made it clear that the company would not be entitled to refund of the amount which it had already paid as stamp duty. This will however not enable the petitioner to claim refund of any stamp duty paid earlier by it for increase in authorised share capital, the court added. S E Investments, a public limited company, was incorporated on March 5, 1992 with an authorised share capital of.Rs.3. 5 crore. In 2010, it increased its capital to.Rs.125 crore. The company sought the opinion of ROC and contended that there is no provision in the Delhi Stamp Act to pay the duty on increase in the authorised share capital. However, the ROC directed the company to pay.Rs.25 lakh as stamp duty, prompting S E Investments to move the court. It is directed that the ROC will now proceed to accept the petitioner's Form 5 and record the increased authorised share capital without insisting on the petitioner paying stamp duty thereon, the court added

'No Return' scheme for salaried class income below 5 Lakh to be notified by June

2011-04-24T22:19:00.000+05:30

The Chairman of Central Board of Direct Taxes ( CBDT ), Sudhir Chandra , today said the scheme to exempt salaried people earning up to Rs 5 lakh annually from filing income tax returns will be notified in the first week of June.

The scheme was announced in the Union Budget 2011-12 by Finance Minister Pranab Mukherjee.

"A category of small-salaried tax payers whose net salaried income is not above Rs 5 lakh and whose tax is deducted at source by the employer who files return, will be exempted from filing returns," Chandra told.

"The scheme for this category will be notified in the first week of June," he said. "But if the taxpayer is claiming a refund from the I-T department, then he will have to file the return."

The scheme will provide relief to about 70 to 80 lakh people from filing I-T returns.

"We are also trying to exempt small bank-interest income, the tax on which has been deducted at source, under this scheme," he said.

"A new facility has been introduced on filing of electronic returns. At the click of the mouse, a portal will open...on which you can view every month how much money your employer has deducted, and whether it has been deposited in the government kitty," Chandra said.

Discontinuation of 'certificate of posting' and notices sending through e-mails

2011-04-24T11:55:00.001+05:30

Recently, the Postal Department has discontinued the UPC service namely the facility of Certificate of Posting.

Therefore, now the Ministry of Corporate Affairs has permitted the service of documents upon the Shareholders through e-mail instead of physical mode, the method presently applicable. To this effect, now the MCA has come out with a Circular No.17/2011 dated 21.04.2011.

This circular really brings a great relief to all stake holders in particular to the Listed Public Companies as it provides that the documents which are required to be served to members can be done by way of email (u/s 53 of the Companies Act 1956).

A copy of the relevant circulars are appended herewith for reference.

DISCONTINUATION OF 'CERTIFICATE OF POSTING'

Sub: Discontinuation of 'Certificate of Posting'

D.G. Posts No.2-4/2008-PO dated 23.02.2011.

Under the provisions of Rule 195 of the Indian Post Office Rules , 1933 'Certificate of Posting' is granted to the public to afford an assurance that letters and other articles for which no receipts are granted by the Post Office and entrusted to servants or messengers for posting have actually been posted.

It has since been decided that' Certificate of Posting' may be discontinued immediately.

A copy of Gazette Notification No. 58(E) dated 31.1.2011 deleting rule 195 of the Indian Post Office Rules, 1933 regarding 'Certificate of Posting' is enclosed for information and necessary action.

This may kindly be brought to the notice of all concerned for strict compliance.

The receipt of this communication may also be acknowledged.

click here for circular

Income Tax returns 2011 - Only Color Forms; No Black and White - some instructions

2011-04-23T11:08:00.000+05:30

FOR the new Income Tax returns, No Black and White forms will be accepted and only standard forms with appropriate colors prescribed, fonts used, paper size, paper quality, Bar Code Values will be accepted by the department.

The specifications are:

1. Size of the paper should be A4 Sheet- (8.268 inches by 11.693 inches / 210mm by 297 mm )

2. Quality of the paper should be White Paper and above 70GSM. The Paper thickness should be of Executive Bond quality with a minimum of 70 GSM and above

3. Registration Marks should be present at every page and the coordinates of the same are indicated in the Sample Form given in Annexure A. It should be 0.25” from the top edge and the left corner edge.

4. There should be a series of square dots which should be placed on the both sides of the pages on every page. The distance of the same should be 0.32” from the left edge. The square dots are uniformly spaced at 3mm distance from each other

5. Bar Code Specifications should be in Code 39 Format. The Position and Size of the Bar Code should be as Per Annexure A

vi. The Values of the Barcode

• SAHAJ

• 1201111A1C150000– Page 1

• 1201121D1T040000-Page 2

• Schedule TDS1

• S201112S4S300000

• Schedule TDS2

• S201113T5T310000

• Schedule IT

• S201114R6R320000

• Schedule TCS

• S201115U4U300000

• SUGAM

• 4201111A1C130000-Page 1

• 4201121C14E60000-Page 2

• 4201131E7T040000 – Page 3

• ITR-V Acknowledgement

• ACKNOWLEDGE

vii. Color : RED -CMYK ( 0,100,100,0 ), BLACK CMYK ( 0,0,0,100). The Color specification should be as per color specifications given in the PDF File. The Ink used is the Dropout Ink which can be dropped out by a standard scanner.

viii. Fonts Used are as follows

• Helvetica

ix. The relative position of all elements is fixed and the position of any elements cannot be altered

a. Order of TDS schedules, TCS Schedules cannot be altered

b. The number of entries in each schedule, the column elements cannot be altered. This is done to ensure direct mapping of Form 26 AS report with the form

c. For any extra entries in Schedule TDS1, TDS2, IT and TCS, taxpayer should use supplementary schedules given in each form. Additional entries in this schedules would be accepted only in this supplementary schedules

d. ITR-V Acknowledgement should be entered and signature taken from the concerned officer in charge

sample given below

150 Rupee Coin Launched By Reserve Bank Of India

2011-04-22T17:10:00.002+05:30

India celebrating the Rabindranath Tagore's 150th birth anniversary. On this celebration Reserve Bank of India launched the 150 Rupee coin in the memory of Nobel Winner Sir Rabindranath Tagore. Newly launched 150 Rupee coin is about 40 mm in diameter and It's weighs is about 35 grams. The coin of 150 Rupee contain Rabindranath Tagore image on one side and on another side it will contain the image of Ashok Stambha.

Both Side of Indian 150 Rupee Coin

Soon, bank accounts for primary students

2011-04-21T11:56:00.002+05:30

A Month down the line, students of municipal corporation-run primary schools will boast of their own savings account with a nationalised bank. Schools are busy completing formalities at a break-neck speed to meet the deadline and teachers say that almost 90 per cent of the work is complete.

L D Desai, Administrative Officer, Municipal School Board, said officials from Bank of India have said that at least 30 computers and as many employees have been spared for completing the data feeding work before the accounts are formally opened. The accounts will plug any irregularity in payments being made to the students from the government’s side under the different welfare schemes. This will also serve as a check on the dropout rate among students as they will regularly be keeping track of the accounts. Desai said the school board distributed around Rs 4 crore among civic school students every year by way of scholarship money.

“The importance of having a bank account will be further increased in times to come as the government has decided to double the scholarship money to Rs 8 crore,” he said. A principal of a civic school said the move will spare school staff of keeping records of financial transactions. “We will be able to spend more time on regulating educational activities in schools,” he said. He added that following awareness among parents, the response to the scheme has become much better.

File e-returns; get income-tax refunds in a month

2011-04-19T16:55:00.003+05:30

There is an incentive for taxpayers who file their income-tax returns electronically - they will get their refunds within a month.

To speed up refunds and encourage electronic filing of tax returns, the Central Board of Direct Taxes has promised expeditious refunds.

The verification of the paper tax returns filed is a tedious process that also delays tax refunds. This has become a bigger issue with the rising refunds. In 2010-11, the government had refund extra tax of Rs 78,000 crore.

E-filing ensures that tax payers' information on income, taxes and refunds are uploaded in the tax system instantly and tax computations are processed on a real-time basis.

The income-tax department has been trying to make refund process faster and efficient through the use of technology interface.

A refund banker scheme is already in place in the whole of country to ensure that taxpayers get refunds well in time.

Income-tax authorities send data to State Bank of India which in turn issues refund it directly to tax-payers under the refund banker scheme.

CBDT will, by June, notify guidelines for small salaried tax-payers having annual income of Rs 5 lakh who will not be required to file tax returns if they do not have refund claims. Such tax-payers will not be required to file return even if they have small interest income.

E-filing, which was formally launched on October 13, 2006, is mandatory for companies but remains optional for individuals.

Mandatory DIN-4 for PAN Updation before 31-May-2011

2011-04-15T14:34:00.001+05:30

First…

At present, the PAN of the applicant is not mandatory in field in DIN e-form 1. In order to examine DIN-4 e-form through the system and to avoid duplicate DIN, it has been decided that all existing DIN holders who have not furnished their PAN earlier at the time of obtaining DIN, are required to furnish their PAN by filing DIN-4 e-form by 31-May-2011

Mandatory fields

1) Name of the applicant

2) Father’s Name of Applicant

3) Date of Birth

4) PAN # for all Nationals

5) Passport in case of all foreign nationals

How to check whether PAN is updated or not?

There are two ways

1) Prefill DIN in Form 1A if PAN column has prefilled means it has got updated.

2) Use option Get DIN Application where the DIN applications reveals whether the Director has given PAN while applying DIN.

Govt. to soon notify 'Sugam' IT form for small taxpayers

2011-04-13T12:19:00.001+05:30

The Finance Ministry will soon unveil the simpler income tax return form 'Sugam', which is aimed at reducing compliance burden on small businessmen and professionals. Sugam is currently being examined by the Law Ministry and will be notified soon. The new form is in line with the government's effort to make filing of returns simpler and user friendly.

The filing of return for individual salaried people has already been simplified significantly with introduction of SARAL-II form. This has enabled individuals to enter relevant details in a simple format in only two pages. Presumptive taxation involves the use of indirect means to ascertain tax liability, which differ from the usual rules based on the taxpayer's accounts. Under India's presumptive taxation, person carrying on business will not be required to get his accounts audited if the annual total sales, turnover or gross receipts is less than Rs 60 lakh. The limit was increased by Mukherjee in 2010-11 budget from Rs 40 lakh. The presumptive tax limit in case of professionals was increased to Rs 15 lakh from Rs 10 lakh.

Government to issue biometric PAN cards

2011-04-13T12:18:00.000+05:30

The government has decided to issue biometric PAN cards to taxpayers across the country to weed out the duplicate and fake ones.

The decision was recently taken by the finance ministry and it comes in the wake of a Comptroller and Auditor General Report that asked the Income Tax department to ensure a single tax payer was not issued multiple cards. The proposed new biometric Permanent Account Number (PAN) cards would bear the I-T assessee’ fingerprints (two from each hand) and the face. There could be an option to existing PAN card holders to opt for the biometric cards, but it may not be mandatory.

Now you can claim income-tax deductions for fines paid to RTO

2011-04-11T11:35:00.000+05:30

Now you can claim income-tax deduction for fines paid to the RTO that are compensatory in nature. In a recent order, Income-tax Appellate Tribunal, (ITAT) has held that fines paid to RTO are an allowable expenditure under the Income-tax Act.

According to the provisions of the Income-tax Act, if a person is penalised for violating a law, the penalty paid for the offence is not allowable as expenditure for the purpose of computing his income under the Income-Tax Act. The rationale behind this principle is that the income-tax law should not be seen supporting or encouraging people to violate the laws of the land.

However, in the past, the courts have drawn a distinction between fines that are compensatory in nature and those that are penal in nature. They have also held that the former can be allowed as deduction but not the latter. The ITAT, in a recent order, underlined this difference further in a case involving Bharat C Gandhi, proprietor of Darshan Roadlines.

PAN is mandatory to obtain new DIN for all Indian Nationals.

2011-04-10T08:05:00.000+05:30

PAN is mandatory to obtain new DIN for all Indian Nationals.

Registration of PAN for existing DIN is compulsory. Last date for registration of PAN is 31-05-2011 by filing DIN 4, otherwise existing DINs may not be active.

Enclosed MCA circular for reference

click here for Circular

Clarification regarding applicability of service tax exemption to Education Cess and Secondary and Higher Education Cess

2011-04-09T12:54:00.001+05:30

CIRCULAR NO. 134/3/2011 – ST [F.NO.354/42/2011-TRU], DATED 8-4-2011

Representations have been received from the field formations, seeking clarification regarding the applicability of service tax exemption to Education Cess (refers to both Education Cess leviable under Finance (No.2) Act, 2004 and Secondary and Higher Education Cess leviable under Finance Act, 2007), under notifications where ‘whole of service tax’ stands exempted. Apparently the doubt arises in the context of Tribunal’s Order in the matter of M/s. Balasore Alloys Ltd. Vs CCE, Customs and Service Tax, BBSR-I.

2. The issue has been examined. Though Tribunal’s Order referred above is in favor of revenue, it is inconsistent with the policy intention of the Government to exempt education cess in addition to service tax, where ‘whole of service tax’ stands exempted. According to section 95(1) of Finance (No.2) Act, 2004 and section 140(1) of Finance Act, 2007, Education Cess and Secondary and Higher Education Cess are leviable and collected as service tax, and when whole of service tax is exempt, the same applies to education cess as well. Since Education Cess is levied and collected as percentage of service tax, when and wherever service tax is NIL by virtue of exemption, Education Cess would also be NIL.

3. This being the principle, field formations are directed not to initiate proceedings to recover the education cess, where ‘whole of service tax’ stands exempted under the notification. Extending the same principle, where education cess has been refunded to exporters along with service tax, by virtue of exemption notifications where ‘whole of service tax’ is exempt, the same need not be recovered.

4. Field formations may be instructed accordingly.

How to convert HDFC Bank statement to excel

2011-04-04T12:01:00.000+05:30

How to convert HDFC Bank statement to excel which is downloaded in text file?

Dear members, most of us are using HDFC net banking in our day to day professional life. But this is something different from other banks. Almost all the banks allowing us to download our statement of accounts in MS Excel form. But HDFC will not allow in text file only.

Here I will explain you how to convert text statement to excel to use effectively.

As usually download your statement in text [notepad]. Select all [Ctrl+A] then copy [Ctrl+C] and paste [Ctrl+V] into new excel file. From here procedure will start.

click here to download pdf file

Cheque collection costlier from April 1, 2011

2011-04-02T11:26:00.001+05:30

Making payments through cheques may become a costlier affair from 01.04.2011, as RBI has allowed banks to levy higher service charges for their clearing, especially of high-value and outstation cheques. As per a RBI circular coming into effect from April 1, 2011, banks would be free to fix service charges on speed clearing of cheques of value above Rs 1 lakh.

At present, RBI does not allow banks to charge more than Rs 150 per cheque for speed clearing of cheques worth over Rs 1 lakh, while there are no charges for value up to Rs 1 lakh. However, speed clearing of cheques with value up to Rs 1 lakh would continue to remain exempt of any service charges. Speed clearing refers to processing of outstation cheques electronically and without movement of cheques from the presentation centre (city where the cheque is presented) to drawee centre (city where the cheque is payable).

For normal local clearing also, drawee bank can charge up to Rs 1.50 per cheque from 01.04.2011, as against Re 1 at present. For local clearing through cheque truncation system, which works electronically by processing the scanned image of the cheque, drawee bank can levy a service charge of Re 1 from 01.4.2011, up from 50 paise at present.

Besides, RBI has also given a free hand to the banks to decide on the service charge on outstation cheques of over Rs one lakh, as against a maximum limit of Rs 150 per cheque allowed currently. However, RBI has decided to lower the service charge for outstation cheques up to Rs 5,000, by allowing a levy of Rs 25, as against Rs 50 currently. The outstation cheques between Rs 5,000 and Rs 10,000 would continue to attract a fee of Rs 50, while those between Rs 10,000 and Rs 1 lakh would also continue to be levied a charge of Rs 100.

While fixing service charges not mandated herein, banks have been told to get approval from their boards for service charge structure. "Charges fixed should be reasonable and computed on a cost-plus-basis and not as an arbitrary percentage of the value of the instrument. The service charges-structure should not be open ended and should clearly specify the maximum charges that would be levied on customers including charges if any, payable to other banks," RBI has told the banks. The service charges by banks should be inclusive of all charges (postal, courier, handling, etc.) other than service tax, RBI said.

Pay your income tax from ATMs

2011-04-01T11:40:00.000+05:30

No forms, no queues. Just go to your ATM and pay your income tax. The government on Thursday launched the new facility for tax payment and said it was to begin with open only to Union Bank of India customers but will be extended to other banks.

Here's how it will work. The bank's debit cards holders will register on the lender's website. This site is in turn linked to the National Securities Depositories Ltd which will help validate the permanent account number (PAN) of individuals and the Tax Deduction Account Number (TAN) provided to taxpayers.

After the registration, a customer can go to a Union Bank ATM and can surf the income tax menu which will display his PAN number and ask for the tax amount that is to be paid along with item-wise details of any other amount the assessee may want to include in the tax payment.

On confirmation, the tax amount will be debited from the customer's account and the ATM will generate a receipt with a special number. After 24 hours, customers can log on to the bank's website, submit the special number and print a challan.

Up to eight family members of a Union Bank of India customer can pay tax through the bank's ATM even if they do not have an account with the public sector player.

At present, taxpayers have to go to a bank branch to pay tax after filling up a form and then collect a copy of the challan. At the end of every quarter, bank branches are overflowing with taxpayers trying to meet the deadline.

A tax department official said that other banks may be roped in but it was for the banks to come up with proposals. Increasingly, the tax department is pushing for electronic channels to collect taxes and returns. Special incentives such as early processing of returns have enticed taxpayers to avail of the electronic channels instead of queuing up at counters.

Seven Rules to Improve Your Cibil Credit Information Report

2011-03-31T12:36:00.001+05:30

Your Credit Information Bureau (Cibil) credit information report (CIR), other than your income, is the single most important tool used by a lender to evaluate your application for any loan or credit card application. Naturally, it's important that you understand your Cibil CIR and what it takes to maintain a credit history, so that it is viewed favourably by lenders. A good credit history can be maintained by following these seven simple rules:

RULE 1:

Always pay your bills on time. Late payments are viewed negatively by lenders and may affect the chances of your loan getting approved. In addition, if you do not make payments on loans for more than 180 days, the lender may Write Off the amount in question. The lender then proceeds to report this on your Cibil CIR. Moreover, in the event that you make a payment which is less than the amount the lender believes it is owed, the lender will report this as settled to Cibil. For example, if the lender tells you that you owe it. 100 but you pay only. 80 to the lender, it will then report your account as settled to Cibil. Both write off and settled accounts may be viewed negatively by lenders while evaluating your loan application because this status implies that you haven't been able to adequately repay your lender.

RULE 2:

Keep your balances low. Most lenders review the total outstanding debt of a potential borrower (across all types of accounts ) and the amount of debt used in proportion to the amount of debt sanctioned to the borrower by the lender. While the balances on your loans will only reduce over time as payments are made, you must be diligent about controlling your credit card utilisation. For example, if your Current Balance is.Rs.90, 000 with a High Credit of.Rs.1, 00, 000, this may be viewed negatively by a lender. While it is always prudent to not use too much credit, if you are already approaching the boundaries of your existing sanctioned amounts and credit limits the lender may be reluctant to provide additional loans to you.

RULE 3:

Maintain a healthy mix of credit. Your Cibil CIR should contain a mix of a home loan, auto loan and a couple of credit cards. A high number of just credit cards may affect the chances of a loan approval. You may wonder why. Although a credit card offers easy access to finance, it's also by far the most expensive form of credit. The more the number of credit cards with high utilisation, the larger are the payments resulting from the high interest rate charged on credit cards. This may affect your ability to service additional debt obligations.

RULE 4:

Apply for new credit in moderation. If you have made many applications for loans, or have recently been sanctioned new credit facilities, a lender is likely to view your application with caution. This credit hungry behaviour indicates your debt burden is likely to, or has, increased and you are less capable of honouring any additional debt.

RULE 5: Think twice before closing credit card accounts. While using credit cards may negatively impact your Cibil CIR, unused credit cards actually imply that you are financially secure. This makes lenders view your application more favourably.

RULE 6:

Monitor your co-signed and joint accounts monthly. In cosigned or jointly held accounts, you are held equally liable for missed payments. This is extremely important because your joint holder's negligence could affect your ability to access credit when you need it.

RULE 7:

Review your Cibil CIR frequently throughout the year. Unpleasant surprises in the form of rejected loan applications can be avoided by ensuring that your Cibil CIR accurately reflects your current financial status. So reviewing your Cibil CIR 3-4 times each year is important in order to keep you financial health in good stead. Though these general rules are important to keep in mind, each lender has its own policies to sanction a loan to an applicant. -

source: e-news paper

Get Monthly Provident Fund Statements from EPFO from next year onwards

2011-03-29T12:47:00.001+05:30

The Employees Provident Fund Organization [EPFO] has decided to give monthly updates of contributions instead of an annual statement.

At present, subscribers only get a small slip at the end of the fiscal with just the opening and closing balance and have no idea about how the amount has grown through the year.

Often subscribers do not calculate what the total amount should be and do not notice even if contributions have not been made in particular months. Once monthly data is available, omissions can be easily identified.

Every subscriber is expected to have a detailed statement from 2012-13.

Both employers and employees are mandated to contribute 12% of basic pay to the fund every month. The entire contribution to the fund is usually made by employers who deduct the employees share from their pay and add it their own contribution.

What is Form 26AS – How to access – Advantages

2011-03-25T11:27:00.001+05:30

Form 26AS is A consolidated tax statement of individuals compiled by the Tax Information Network for the I-T Department If you think keeping track of your tax details —tax deducted at source (TDS), paid or refunds received —involves a lot of paperwork, you are obviously not using Form 26AS.

The form, however, is no substitute for the advance tax, Form 16 and the TDS certificates that one needs to attach while filing higher income tax returns. If you need to file your returns, but haven’t received your TDS certificates on time, you could know the amount by looking up Form 26AS.

Accessing Form 26AS you can access the form online by registering on the National Securities Depository Limited’s TIN website. But this involves the need for verification and a fee. You could either visit the TIN office or verification or pay Rs. 17/-. Or, you could have a TIN official visiting you to conduct the verification. You would be charged Rs. 110/- in this case.

If you register with Income Tax department with your PAN you can access your 26As without paying anything. This is recent facility by Income Tax Department. Once you logged in go to ‘My Account’ option there you will find “View Tax Credit Statement”. By giving your date of birth you can access your form 26AS.

Some banks have started offering free access to Form 26AS on their websites. The bank’s customer simply uses his net banking facility to view the statement. At present, 16 banks have tied up to provide the service.

Suppose there is an error in the amount of advance tax, you can approach the bank for requisite changes well ahead in time. This exercise may save you from paying a penalty of one per cent monthly interest on the outstanding amount. However, one needs to remember that in case of any discrepancy in the receipt numbers of the advance tax paid by the individual, the one mentioned on the From 26 AS will be considered valid by the authorities.

Ensure a tax payer gets only one PAN: CAG to I-T dept

2011-03-19T21:40:00.001+05:30

Finding a huge mismatch between number of Permanent Account Number (PAN) holders and number of tax return filings , government auditor CAG has asked the Income Tax Department to ensure that a single tax payer is not issued multiple cards.

The Comptroller and Auditor General of India (CAG) report for 2010-11 on Direct Taxes, tabled in Parliament today, revealed that 958 lakh PANs were issued up to March 2010 but IT returns filed in the last fiscal were only 340.9 lakh.

The gap between PAN holders and the number of returns filed was 617.1 lakh, CAG said.

Suggesting the Central Board of Direct Taxes to identify the reasons for the gap and use the information to enhance the assessee base, CAG said it may be due to issuance of multiple PAN cards and death of some PAN card holders.

"The (IT) Department needs to put in place appropriate controls to weed out the duplicate PANs and also update the position in respect of deceased assessees," the report said.

It further said that it is significant to note that the number of PAN card holders has increased by 117.7 per cent between 2005-06 to 2009-10 whereas the number of returns filed in the same period has increased by 14.4 per cent only.

The total direct tax collection has increased by 128.8 per cent during the period.

There has been a robust growth in collection of direct taxes in the last five years, as it increased from Rs 1,65,216 crore in 2005-06 to Rs 3,78,063 crore in 2009-10.

"It is should be the constant endeavour of the Department to ensure that the entire assessee base, once correctly identified is duly meeting the entire tax liability," CAG said.

PAN allotted to a taxpayer, is the unique identification number that helps track individual tax compliance.

Streamlining procedure for scrutiny of income-tax returns

2011-03-15T11:31:00.000+05:30

No.402/92/2006-MC (07 of 2011)

Government of India / Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

***

New Delhi dated the 14th March 2011

PRESS RELEASE

Streamlining procedure for scrutiny of income-tax returns

Scrutiny of income tax returns is an important mechanism for ensuring taxpayer compliance and to counter tax-evasion. However, it has evoked some concern from small taxpayers and senior citizens about prolonged enquiries. Concerns have also been raised about selection of the same cases in scrutiny year after year.

Appreciating the concern of these taxpayers and with a view to mitigate their hardships, Central Board of Direct Taxes has reviewed its scrutiny selection procedure. In order to redress the grievance, it has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information.

Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more. Small taxpayers would be individual and HUF taxpayers whose gross total income, before availing deductions under Chapter VIA, does not exceed Rupees ten lakh.

Payment of MCA fees –electronic mode-regarding

2011-03-11T22:01:00.000+05:30

No. HQ/9/2002-Computerization

Government of India

Ministry of Corporate Affairs

5th Floor, A Wing, Shastri Bhavan

Dr. R.P. Road, New Delhi-110001

Dated 9th March, 2011

CIRCULAR

Sub: Payment of MCA fees –electronic mode-regarding

Ministry has reviewed the processes involved in delivery of important services to stakeholders, with a view to identify and improve the components causing delay in disposal of applications.
Payment confirmation is found to be a major bottleneck in delivery of services in respect of offline payment made by physical challans .It was found that often there was a delay in confirmation of payments by physical challans, as banks have been given a reporting time of ‘T’+3 days, as per payment procedure approved by C&AG,‘T’ being the transaction date. This leads to delay in creation of work item for disposal of an application/e-form, leading to inconvenience of stakeholders. On the other hand, it was found that wherever fees were paid online in the system, the work item was created faster and the approvals were speedier as banks are following’ T’+1 for reporting online payments.

2. In the interest of stakeholders, with a view to improving service delivery time, Ministry has decided to accept payments of value upto Rs.50,000, for MCA 21 services ,only in electronic mode w.e.f 27th March, 2011.

3. For the payments of value above Rs. 50,000, stakeholders would have the option to either make the payment in electronic mode, or paper challan. However such payments would also be made in electronic mode w.e.f .1st October’2011.

Yours faithfully,

( Nirupama Kotru)

Director

Process of incorporation of Companies ( Form-1) and establishment of principal place of business in India by Foreign Companies ( Form-44) - Procedure simplified

2011-03-10T20:30:00.000+05:30

CORPORATE LAWS

CIRCULAR/PRESS NOTE

Company Law : Process of incorporation of Companies ( Form-1) and establishment of principal place of business in India by Foreign Companies ( Form-44) - Procedure simplified

GENERAL CIRCULAR NO. 6/2011 [F. NO. 17/56/2011-CL-V], DATED 8-3-2011

I am directed to inform that Ministry has received various representations regarding time taken by the Registrar of Companies for registration of Form-1 and Form-44.

The Ministry has got the issue examined by Business Process Re-engineering Group under MCA-21 and in order to speed up and simplify the process of incorporation of Companies and establishment of principal place of business in India by Foreign Companies for reduction in time taken by Registrar of Companies, the below mentioned procedure have been recommended :

1. Only Form-1 shall be approved by the RoC Office. Forms 18 and 32 shall be processed by the system online.

2. There shall be one more category, i.e., Incorporation Forms (Form 1A, Forms 37, 39, 44 and 68) which will have the highest priority for approval.

3. Average time taken for incorporation of company should be reduced to one (1) day only.

4. A Notification to notify minor changes in e-Forms 18 and 32 to enable them to be taken on record through STP mode for aforesaid procedure is being issued separately.

Company Law : Section 266B of the Companies Act, 1956-DIN-Allotment of - DIN Process Simplified

2011-03-08T09:46:00.000+05:30

COMPANIES ACT

CIRCULAR/PRESS NOTE

Company Law : Section 266B of the Companies Act, 1956 - Director Identification Number (DIN) - Allotment of - DIN Process Simplified

GENERAL CIRCULAR NO. 5/2011 [F.NO.2/1/2011 CL.V], DATED 4-3-2011

I am directed to inform that the Ministry’s has re-examined the process of allotment of Directors Identification Number (DIN) to be obtained u/s 266B of the Companies Act, 1956. The present process is cumbersome and time consuming. Representations have been received in the Ministry that the documents required to be submitted should be simple to prove the existence/residence of a person, who intend to become a director of a company.

The Ministry has constituted a Group to examine the business process re-engineering under MCA-21. In order to speed up and simplify the process to obtain a DIN, the below mentioned procedure have been recommended.

1. Application for DIN will be made on eForm; No physical submission of documents shall be accepted and for this purpose Scanned documents along with verification by the applicant will be attached with the eForm. Only online fee payment will be allowed i.e. No challan payment

2. The application can also be submitted online by the applicant himself using his DSC.

3. DIN 1 eForm can be digitally signed by the professional who shall also confirm that he has verified the particulars of the Applicant given in the application.

4. Where the DIN 1 is verified by the professional, the DIN will be approved by the system immediately online.

5. In other cases the DIN cell will examine the application and same shall be disposed of within one or two days.

6. Companies (Directors Identification Number) Rules, 2006 are being amended on the above lines.

7. Penal action against the applicant and professional certifying the DIN application in case of false information/certification as per provisions of section 628 of the Act will be taken in addition to action for professional misconduct and revocation of DIN, allotted on false information.

8. The above procedures is expected to enable allotment of DIN on the same day.

9. The above procedures applies to filing of DIN 4 intimating changes in particulars of Directors.

A notification to notify the aforesaid procedure is being issued. After issue of necessary notification, the applicant/professionals/DIN Cell are advised to follow the notified procedures for allotment of DIN.

BUDGET 2011 - HIGHLIGHTS

2011-02-28T14:16:00.000+05:30

BUDGET 2011 - HIGHLIGHTS

Finance minister Pranab Mukherjee on Monday presented to Parliament India's budget for the coming financial year beginning in April.

Following are the highlights of the budget:

TAXES :

* Standard rate of excise duty held at 10 percent; no change in CENVAT rates

* Personal income tax exemption limit raised to Rs 180,000 from Rs 160,000 for individual tax payers

*For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.

*Citizens over 80 years to have exemption limit of Rs 5 lakh.

* To reduce surcharge on domestic companies to 5 percent from 7.5 percent.

* A new revised income tax return form 'Sugam' to be introduced for small tax papers.

* To raise minimum alternate tax to 18.5 percent from 18 percent

* Direct tax proposals to cause 115 billion rupees in revenue loss

* Service tax rate kept at 10 percent

* Customs and excise proposals to result in net revenue gain of 73 billion rupees

* Iron ore export duty raised to 20 percent

*Nominal one per cent central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.

*Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.

*Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.

*Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.

*Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat.

COMPANY MEETINGS - REQUIREMENTS UNDER COMPANIES ACT

2011-02-24T20:58:00.000+05:30

Protection of investors is one of the primary themes of the companies Act, 1956. The Act provides the shareholders a forum of self-protection and then leaves them to a large extent to take care of themselves. The forum is the general meeting of shareholders. Apart from this, having regard to the position and status envisaged for directors and the role that is assumed to them in the affairs of the company, it is also essential to hold meetings of the board at regular intervals and to discuss in these meetings, all major questions of policy. This enables the directors to be in touch with the management of Company affairs as often as they should be. The committees constituted by the directors shall also meet regularly as per the statutory requirements. There shall also be meetings of debenture holders and creditors of the Company in order to ensure the protection of their interest in the affairs of the Company.

Thus, the meetings in a Company can be either general meetings, meetings of directors, or meeting of other persons related to and interested in the affairs of the Company

GENERAL MEETINGS

General Meeting may take any of the following forms as and when required under the provisions of the Act:

• Statutory meeting

• Annual General Meeting

• Extraordinary general meeting

• Class meeting

STATUTORY MEETING

Statutory meeting is mandatory for every company limited by shares or limited by guarantee and having share capital It must be held within not less than 1month nor more than 6 months from the date entitled to commence the business. (Sec. 165(1))

Notice must be send to all the members entitled to attend the meeting 21 days prior to the date of meeting(Sec. 171)

Board of Directors shall forward the statutory report to every member at least 21 days before the date of meeting. (Sec. 165(2))

Proviso to Sec.165 (2) provides that if, all the members entitled to attend and vote at the meeting agree, statutory report may be forwarded even after this period. Report shall be certified as correct by at least 2 directors, one being a managing director (if there is one). (Sec. 165(4)).It shall also be certified by auditors as to allotment of shares and cash received on such shares and receipts and payments of the company. (Sec.165(4)). Copy of certified report shall be delivered to the RoC for registration. (Sec. 164(5)). Sec 165(6) mandates to prepare, produce and make accessible, at the meeting the register of members and particulars of their share holding.

Minimum 5 (public company) or 2 (any other company) members may be personally present within half an hour from the time for holding the meeting. (Sec.174 (1) and (3)). A chairman shall be elected by the members from themselves on show of hands. (Sec.175)

Discussion may be done on any matters relating to the formation of the company or arising out of the report. (Sec. 165(7)). Companies having share capital should also state in the notice that a member is entitled to attend and vote at the meeting and is also entitled to appoint proxies in his absence. A proxy need not be a member of that company. A proxy form should be enclosed with the notice. The proxy forms are required to be submitted to the company at least 48 hours before the meeting. (Sec.176). Resolutions shall be passed only after giving prior notice as per the Act. (Sec165 (7)).In case of any default of these provisions, every director or officer in default shall be punishable with fine up to Rs. 5,000. (Sec. 165(9))

These provisions shall not be applicable to private companies. (Sec.165 (10)).

ANNUAL GENERAL MEETING

An Annual General Meeting must be held by every type of company, once a year.(Sec.166(1)). Not more than 15 months must elapse between two annual general meetingsi. (Sec. 166(1)). Proviso to Sec.166(1) mandates that first annual general meeting must be held within 18 months from the date of its incorporation.

A notice of at least 21 days before the meeting must be given to members unless consent is accorded to a shorter notice by all the members entitled to vote thereat. (Sec.171(2)(i)). The notice of the meeting must be accompanied by a copy of the annual accounts of the company, director’s report on the position of the company for the year and auditor’s report on the accounts.(Sec.210)

Companies having share capital should also state in the notice that a member is entitled to attend and vote at the meeting and he is also entitled to appoint proxies in his absence. A proxy need not be a member of that company.A proxy form should be enclosed with the notice. The proxy forms are required to be submitted to the company at least 48 hours before the meeting. (Sec. 176).

The AGM must be held on a working day during business hours at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated. The Central Government may, however, exempt any class of companies from the above provisions.If any day is declared by the Central government to be a public holiday after the issue of the notice convening such meeting, such a day will be treated as a working day. (Sec. 166(2))

Minimum 5 (public company) or 2(any other company) members may be personally present within half an hour from the time for holding the meeting. (Sec174)

A company may, by appropriate provisions in its articles, fix the time for its annual general meeting and may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings. (Proviso, Sec.166(2))

In case of default in holding an annual general meeting, Any member of the company may apply to the CLB. The CLB may call, or direct the calling of the meeting, anD give such ancillary or consequential and fine which may extend to Rs. 5,000 for continuing default, a further fine of Rs. 250 per day. (Sec. 167)

The ordinary business at an AGM include:-

• Consideration of annual accounts, director’s report and the auditor’s report

• Declaration of dividend

• Appointment of directors in the place of those retiring

• Appointment of and the fixing of the remuneration of the statutory auditors.(Sec. 168)

In case any other business (special business) has to be discussed and decided upon, an explanatory statement of the special business must also accompany the notice calling the meeting.(Sec. 173(1)) A chairman shall be elected by the members from themselves on show of hands.(Sec. 173(2))

EXTRAORDINARY GENERAL MEETING

An extraordinary general meeting shall be called by the Board of Directors. (Sec. 169(1)) Such calling shall be on requisition by members of the company holding not less than 1/10 of such of the voting rights in regard to the matter to be discussed at the meeting ; or if the company has no share capital, the members representing not less than 1/10 of the total voting rights in regard to the said matter. (Sec. 169(4)) Such requisition must state the objects of the meeting, signed by the requisitionists and be deposited at the registered office. (Sec169 (2))

Directors should within 21 days, move to call a meeting and the meeting should be actually be held within 45 days from the date of the requisition. (Sec169 (6))

If the directors fail to call and hold the meeting as aforesaid, the requisitionists or, by such requisitionists as representing either a majority in value of paid up capital held by them all or members of the company holding at the date of making the demand for an EGM not less than 1/10 of such of the voting rights in regard to the matter; or if the company has no share capital, the members representing not less than 1/10 of the total voting rights at that date in regard to the said matter may themselves proceed to call meeting within 3 months from the date of the requisition, and claim the necessary expenses from the company. (Sec169 (6))

Minimum 5 (public company) or 2(any other company) members may be personally present within half an hour from the time for holding the meeting. (Sec.174)

A notice of at least 21 days before the meeting must be given to members unless consent is accorded to a shorter notice by members, holding not less than 95% of voting rights in the company. (Sec. 171(2) (ii))

A chairman shall be elected by the members from themselves on show of hands. (Sec. 175)

MEETINGS OF THE BOARD

In the case of every company, a meeting of its Board of directors shall be held at least once every three months and at least four such meetings must be held every year. (Sec.285)

Notice of every meeting of the Board of directors of a company shall be given in writing to every director for the time being in India, and at his usual address in India to every other director. (Sec 286(1))

Every officer of the company whose duty it is to give notice as aforesaid and who fails to do so shall be punishable with fine which may extend to one thousand rupees. (Sec 286(2))

The quorum for a meeting of the Board of directors of a company shall be one-third of its total strength (any fraction contained in that one-third being rounded off as one), or two directors, whichever is higher. (Sec 287(2))

where at any time the number of interested directors exceeds or is equal to two-thirds of the total strength, the number of the remaining directors, that is to say, the number of the directors who are not interested, present at the meeting being not less than 2 shall be the quorum during such time. (Proviso, Sec.287 (2))

If a meeting of the Board could not be held for want of quorum, then, unless the articles otherwise provide, the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place, or if that day is a public holiday, till the next succeeding day which is not a public holiday, at the same time and place. (Sec 288(1))

The Board of directors of a company shall exercise the following powers on behalf of the company, and it shall do so only by means of resolutions passed at meetings of the Board:-

• the power to make calls on shares holders in respect of money unpaid on their shares

• power to authorize buy-back referred to in first proviso to sec. 77-A(2)(b)

• the power to issue debentures

• the power to borrow moneys otherwise than on debentures

• the power to invest the funds of the company

• the power to make loans. (Sec 292)

The Board of directors of a public company, or of a private company which is a subsidiary of a public company, shall not, except with the consent of such public company or subsidiary in general meeting :-

• sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking of the company, or where the company owns more than one undertaking, of the whole, or substantially the whole, of any such undertaking

• remit, or give time for the re-payment of, any debt due by a director except in the case or renewal or continuance of any advance made by a banking company to its director in the ordinary course of business

• invest, otherwise than in trust securities, the amount of compensation received by the company in respect of compulsory acquisition of any such undertaking as is referred above or of any premises or properties used for any such undertaking and without which it cannot be carried on or can be carried on only with difficulty or only after a considerable time

• borrow moneys, where the moneys to be borrowed together with the moneys already borrowed by the company, (apart from temporary loans obtained from the company’s bankers in the ordinary course of business) will exceed the aggregate of the paid-up capital of the company and its free reserves

• contribute to charitable and other funds not directly relating to the business of the company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed fifty thousand rupees, or five per cent of its average net profits during the three financial years immediately preceding, whichever is greater. (Sec.293)

OTHER MEETINGS

MEETINGS OF DEBENTURE HOLDERS

A company issuing debentures may provide for the holding of meetings of the debenture holders. At such meetings, generally in matters pertaining to the variation in terms of security or to alteration of their rights are discussed. All matters connected with the holding, conduct and proceedings of the meetings of the debenture holders are normally specified in the Debenture Trust Deed. The decisions at the meeting made by the prescribed majority are valid and lawful and binding upon the minority.

MEETINGS OF CREDITORS

Sometimes, a company, either as a running concern or in the event of winding up, has to make certain arrangements with its creditors. Meetings of creditors may be called for this purpose. For eg u/s 393, a company may enter into arrangements with creditors with the sanction of the Court for reconstruction or any arrangement with its creditors. The court, on application, may order the holding of a creditors’ meeting. If the scheme of arrangement is agreed to by majority in number of holding debts to value of the three-fourth of the total value of the debts, the court may sanction the scheme. A certified copy of the court’s order is then filed with the Registrar and it is binding on all the creditors and the company only after it is filed with Registrar.

Not filed last year's tax return? Here’s what you can still do

2011-02-14T23:55:00.000+05:30

There are several excuses for not having filed your tax return by the due date (31 July of each year). You were travelling. Or you couldn’t find the time from work.

Maybe some documents were missing. Or perhaps you just forgot. Whatever be your reason, the tax department is willing to give you a second chance.

If you have not filed your tax return for 2009-10, you can file it by 31 March 2011 without any penalty.

If there is some tax due, you have to pay interest of 1%

If all your taxes are paid, there is no penalty for filing late. However, if there is some tax due, you have to pay interest of 1% per month of delay on the amount payable. The interest meter starts ticking right after the end of the financial year.

So, if you have to pay additional tax on income for the year ended 31 March 2010, better pay it right away. If the tax payable is Rs 10,000, along with 11% interest (for 11 months after March 2010), the total payment works out to Rs 11,100 plus a 3% education cess.

You can also file tax returns of two years ago (ie, for 2008-9). This will be treated as a belated return. If some taxes remain unpaid, you will have to pay them along with the penal interest (1% per month of delay). In addition to this, there is a possibility of a penalty of Rs 5,000 for not filing the return by the due date.

Some taxpayers might be tempted to brush the issue

Some taxpayers might be tempted to brush the issue under the carpet and start with a clean slate this year. This can be a costly mistake because failure to pay tax by the due date is tantamount to tax evasion.

The Income Tax Department picks up cases for scrutiny at random and if it is discovered that you have unpaid taxes, a penalty of up to 300% of the amount can be slapped on you. The minimum penalty is 100% of the outstanding tax.

If all taxes are paid and there is no penalty for late filing, why is there such a big rush to file tax returns by 31 July? This is because taxpayers who file belated returns forego some of their rights if they wake up late. For instance, you cannot carry forward losses for adjusting against future gains if you file late.

You can revise your income tax return

This is especially useful if you have incurred short-term capital losses from investments in stocks. These can be carried forward and set off against short-term or long-term capital gains made in subsequent years. Under current laws, such losses can be carried forward for up to eight years.

The Direct Taxes Code had originally proposed that losses be allowed to carry forward indefinitely. However, it has now reverted to the 8-year limit.

Besides, there is no room for rectifying mistakes. If you have made some calculation error while filling in the form or if some income or exemption escaped your mind at that time, you can file a revised return. You can revise your income tax return for up to two years after it has been filed.

The return can be revised any number of times

For instance, you can file a revised return for income earned during 2008-9 till 31 March 2011. The previous year's return can be revised till 31 March 2012.

What's more, the return can be revised any number of times - there is no limit. You need to quote the acknowledgement number and date of filing of original return to file a revised one.

So, if you suddenly find that you have not included any income or didn't avail of any tax benefit, file a revised return right away. However, you cannot file a revised return if your return has already been assessed. Also, as mentioned earlier, this window of opportunity is open only to taxpayers who filed their return by the due date.

Extra security layer added to phone banking users

2011-02-01T22:05:00.001+05:30

Credit card usage over phone will employ an additional security layer from tomorrow as the Reserve bank of India (RBI) has made it mandatory for customers to get a single-use password from banks for every transaction. Banks are required to comply with the new guidelines with effect from February 1, after which the customers would be declined any credit card related telephonic transaction without an additional one-time password (OTP).

RBI’s directive was earlier scheduled to come into effect from January 1. However, the deadline was extended by one month after some banks sought more time. After consultations among top officials, as also with the bank representatives, RBI gave banks time till February 1 for putting the new measure in place. OTP will be required for all credit card transactions over phone, including payments and automated IVR (Interactive Voice Response) services. OTP will be valid for a single use and would remain in effect for two hours. The customers would need to generate separate OTPs for each IVR transaction.

How to read CIN(Corporate Identification Number) of a company?

2011-01-30T19:39:00.000+05:30

1st digit = Listing status
Next 5 digit = Industry code
Next 2 digit = State code
Next 4 digit = Year of incorporation
Next 3 digit = Ownership
Last 6 digit = ROC reg.

total 21 digits

UNIQUE CODE NUMBERS TO CAS TO CHECK FRAUDULENT PRACTICES

2011-01-24T14:01:00.000+05:30

The Institute of Chartered Accountants of India (ICAI) will introduce Unique Code Numbers (UCD) from next month for Chartered Accountants (CAs) to help them check increasing incidents of fraudulent practices, including forged attestations.

Once introduced, ICAI would ask banks to insist on UCD, as people file different balance sheets for various purposes without the knowledge or approval of CAs. The institute is being assisted by the software giant Infosys in this endeavour. ICAI, as part of 'Project Parivarthan' has initiated several operational process to meet global benchmarks. One of these was virtual classrooms for coaching students, which would commence in February in 25 centres and be extended to 250 centres in the next six months. ICAI is geared to meet the deadline of convergence of the Indian Accounting Standards with the International Financial Reporting Standards (IFRS), effective from April 2011, in select entities as per the government roadmap.. To synergise the training process, ICAI has launched various programs with a view to familiarise the professions with IFRS and equip them with essential knowledge of the same. Special workshops have been organised with bodies like Indian Institute of Corporate Affairs and Standing Conference of Public Enterpriss on managing transition to IFRS that poses a great challenge to makers and users of financial statements and to the reporting authorities -- the practical implication of IFRS.

Salaried taxpayers may be spared filing returns

2011-01-19T20:38:00.001+05:30

Salaried taxpayers with no other income could get a respite from filing tax returns. The income-tax (I-T) department is open to examining a proposal to exempt them from the annual chore. Asked whether the department would think about doing away with income-tax returns for employees, who had no other income apart from salaries in a financial year, Central Board of Direct Taxes (CBDT) Chairman Sudhir Chandra said the department would certainly consider the proposal. He agreed that for a substantial chunk of salaried employees, savings bank interest is the only additional income and that in most cases, this not substantial. This proposal, if approved, will benefit a large section of people and would reduce the I-T department's workload in a big way. Of the country’s 35 million taxpayers, roughly half are salaried employees.

The proposal to do away with returns for salaried taxpayers was earlier internally mooted within CBDT a few years ago. The argument in favour of the proposal was that income records for this class of taxpayer were available with both employers and banks. In an interaction with mediapersons today, Chandra also promised small taxpayers another major relief. He said the I-T department is planning to release all small-value refunds before March 31. "I will ask my officials to give most refunds by the end of the current financial year," he said. “We will try to clear most refunds in a month. At least small refunds can be given by March 31,” Chandra added. The newly-appointed chairman said he would communicate this to his officials. Some of the refunds will be given to taxpayers directly through State Bank of India under the refund banker scheme. Under this, tax refunds are sent to taxpayers by SBI, either through the electronic clearing service mode or in physical form. The scheme was launched four years ago in Delhi and Patna and later extended to other cities.

Eight tax saving secrets you should know [5 & 8 of 8]

2011-01-14T20:31:00.000+05:30

5. Use education loan to lower tax

The rising cost of higher education is forcing people to borrow money to pay the fee of their children’s professional courses. The taxman is sympathetic and offers a deduction that can lower the cost of the loan. The interest paid on an education loan is fully deductible from taxable income under Section 80E. Till a few years back, this deduction was available only to the borrower. Now, even a parent or a spouse can avail of it. What’s more, this now includes loans taken for vocational courses. “If a parent or legal guardian takes the loan, he can claim deduction for the interest paid for up to eight successive years, starting from the year in which the interest is first paid,” says Shanbhag.

However, loans taken for siblings and other relatives do not qualify. Also, the lender must be a recognised financial institution; loans from employers or individuals do not count.

How much tax can you save: If you take a Rs 10 lakh education loan at 10% interest for 8 years, you can save Rs 1.41 lakh in tax in the highest tax bracket. This will bring down the effective cost of the loan to 7% per annum.

Proof required: Loan statement from lender.

6. Disabilities can be tax savers

There are other signs to suggest that the taxman is not the heartless Scrooge he is often made out to be. If a taxpayer suffers from a disability, he can claim deduction of Rs 75,000 under Sec 80U. If he has a disabled dependent, he can claim the deduction under Sec 80DD. Disability includes blindness, low vision, leprosy, hearing impairment, loco-motor disability, mental retardation and mental illness and deduction is available only if the impairment is at least 40%. If the disability is severe (80% or above), the deduction is Rs 1 lakh a year. The dependant could include the taxpayer’s spouse, children, parents and even siblings.

Incidentally, the deduction is offered as a lump sum and does not depend on the actual amount that the taxpayer may spend on himself or on the disabled dependent. However, the disabled person should be wholly or mainly dependent on the taxpayer for maintenance, and should not have claimed deduction for the disability under Section 80U separately.

How much tax can you save: A deduction of Rs 75,000 can cut tax by Rs 23,175 in the highest tax bracket. In case of severe disability, the tax is lower by Rs 30,900.

Proof required: A certificate of disability from a civil surgeon or the chief medical officer of a government hospital.

7. Take unlimited deduction for your second home loan

When it comes to buying a second house, the taxman can be very encouraging. Under Section 24b, one can claim deduction of up to Rs 1.5 lakh a lakh for interest paid on a home loan. But if the taxpayer buys a second house through another home loan and gives it on rent, the entire interest paid on the home loan during a given year can be claimed as a deduction. As Savla says, “If you have more than one house, any one is deemed to be rented out. So the interest income on the home loan for that house can be claimed entirely for deduction, provided the rental income or a deemed income is charged to tax.”

How much tax can you save: If you have taken a home loan of Rs 50 lakh at 9.5% for 20 years, your interest payment in the first year will be Rs 4.7 lakh and you can save tax up to Rs 1.09 lakh.

Proof required: Loan account statement from your lender

8. Claim HRA as well as home loan benefits

But you can claim both house rent allowance (HRA) exemption as well as the tax benefits on the interest paid on a home loan. Many organizations do not allow employees to claim both benefits. Their logic is that HRA is exempt if you are paying rent and home loan benefits apply only for a self-occupied house. You can’t be doing both at the same time. But this is a gray area in the Income Tax Act. “In legal terms, silence signifies approval.

In other words, the Act need not expressly allow something. The lack of express disallowance also signifies intention of approval,” says Shanbhag. So given this, HRA and interest on home loan are two separate provisions and claiming one of them as a deduction does not influence the other. As Shanbhag puts it, “The taxpayer may own any number of flats, either in the same city that he works in or anywhere else in the whole of India or for that matter abroad, but that in no way influences the HRA deduction that he is entitled to.”

There are many such examples in the tax laws. Let’s take for instance, Section 80C (PPF, NSC, ELSS etc.) and Section 80D (medical insurance premium). “Everyone will agree that both Section 80C and Section 80D can be separately claimed. But does it expressly say so anywhere?” asks Shanbhag.

How much tax can you save: In the highest tax bracket, a deduction for Rs 1.5 lakh will bring down your tax by Rs 46,350.

Proof required: Loan account statement from your lender

Section 192 of the Income-tax Act, 1961 - Deduction of tax at source - Salaries - Income-tax deduction from salaries during the financial year 2010-11

2011-01-14T16:38:00.000+05:30

Section 192 of the Income-tax Act, 1961 - Deduction of tax at source - Salaries - Income-tax deduction from salaries during the financial year 2010-11

CIRCULAR NO. 8/2010 [F.No. 275/192/2009-IT(B)], DATED 13-12-2010

Reference is invited to Circular No.01/2010 dated 11-1-2010 whereby the rates of deduction of income-tax from the payment of income under the head “Salaries” under section 192 of the Income-tax Act, 1961, during the financial year 2009-10, were intimated. The present Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head “Salaries” during the financial year 2010-11 and explains certain related provisions of the Income-tax Act. The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department.

attachemnt here

Apply for Importer Exporter Code online

2011-01-14T16:01:00.000+05:30

Apply for Importer Exporter Code online

All these day we need to apply for IEC in hard copy form with all cumbersome formalities.. as a new year gift DGFT has made provision to apply for Importer Exporter Code online.

Subject:- Provision of additional facility for filing Importer Exporter Code (IEC) applications “on-line”.

DGFT is introducing additional facility on DGFT’s website (http://dgft.gov.in/ ) for enabling members of trade to file their IEC applications ‘on-line” with effect from 1.1.2011.

2. Presently, the applications for obtaining an IEC are filed manually with the concerned Regional Authority of DGFT. The applications are filed in hard copy in the prescribed proforma with stipulated documents.

3. The additional facility of filing “on-line” application for obtaining IEC will reduce the transaction cost and time for the applicant, would ensure easy, flexible filing of application and reduce human interface and paper work in the process.

4. The existing system of filing the IEC application manually would simultaneously continue till further orders i.e. the applicant will have an option to prefer his application either manually or “on-line” as per his/her convenience.

5. The following guidelines and procedures are stipulated for the “on-line” system of filing, processing and issuance of IEC:-

(i) The applicant may file the IEC application for “on-line” through the link available on the DGFT’s website.

(ii) The fee in case “on-line” application for IEC has to be paid through Electronic Fund Transfer (EFT) mode only. The EFT link with necessary guidance for making payment through EFT is already available on DGFT’s website.

(iii) The prescribed documents, i.e. the Bank certificate, PAN copy and photograph, are to be scanned and attached with the ‘on-line’ application. Any other relevant documents for example Authority letter in respect of authorized representative, should be attached in the ‘pdf’ format.

(iv) Physical copy of application is not required to be submitted to the concerned Regional Authority(RA) in case of “on-line” applications.

(v) The status of IEC “on-line” application i.e. IEC number granted for accepted applications and deficiency in case of other approved applications will be available on DGFT’s website.

(vi) In case, an “on-line” application is found to be deficient and such deficiencies indicated ‘on-line’, additional information/documents against such deficiencies would need to be submitted physically (in hard copies) to the concerned RA.

(vii) The applicants are advised to be very careful while selecting jurisdictional RA for sending their applications, as selection of a wrong RA would require retransmission of application to the corrct destination and it is likely to cause delay in processing.

(vii) Comprehensive guidelines regarding filing of “on-line” IEC applications are available on DGFT’s server under the IEC “on-line” Help Icon.

6. Members of Trade are encouraged to take advantage of the “on-line” facility for IEC application and RAs are requested to disseminate the information about the facility among the Trade.

Sd/-

(Rajiv Arora)

Jt. Director General of Foreign Trade.

(Issued from File No.01/02/150/AM-11/EDI)

1. Pre-requisite

1. A scanned or digital copy of valid Permanent Account Number (PAN). Image file should consist of both side of PAN.

2. Scanned or digital photograph of applicant.

3. Scanned copy of Bank Certificate.

4. Scanned copy of PAN , applicant Photograph , Bank Certificate should in gif format. Exporters are advised to used the compressed version of gif formats.

5. Other mandatory documents as per the Para 2.9 of Handbook of Procedures of Vol I 2009-14. These documents must be in pdf format only. Please refer to Appendix A.

6. Make sure that size of individual document requires to be submit online in gif /pdf format should not exceed 300 KB.

7. Exporter must have a Net banking account with one of the following designated banks

a) HDFC BANK

b) ICICI BANK

c) BANK OF INDIA

d) STATE BANK OF INDIA

e) CENTRAL BANK OF INDIA

f) PUNJAB NATIONAL BANK

g) IDBI

h) UTI/AXIS BANK

i) UNION BANK OF INDIA

8. All date should be entered in DD.MM.YYYY format.

Amendments in Income tax Rules by notification no 85/2010

2011-01-11T20:05:00.000+05:30

Maximum Exemption limit for "Any allowance granted to an employee working in any transport system to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place, provided that such employee is not in receipt of daily allowance" has been increased from 6000/- to 10000/- with retrospective effect from 01.09.2008. vide notification no. 85/2010(Sub Rule 2 of Rule 2BB)

Eight tax saving secrets you should know [3 & 4 of 8]

2011-01-10T22:30:00.000+05:30

3. Pay lower tax if someone is ill

The treatment of a chronic illness can be a drain on the finances of a taxpayer. That’s why the Income tax Act allows a taxpayer to claim a deduction of Rs 40,000 if he has a dependent who suffers from any of the ailments specified under Section 80DDB. “The deduction is higher at Rs 60,000 if the patient is a senior citizen,” says chartered accountant Paras Savla.

The diseases include, neurological diseases (including dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and Parkinson’s disease), malignant cancers, full-blown AIDS, chronic kidney failure and haematological disorders (haemophilia and thalassaemia). Dependents can include spouse, children, parents and siblings. However, there are a few conditions.

The patient should be wholly or mainly dependent on the taxpayer and should not have separately claimed deduction for the disability. If the amount spent is reimbursed by the employer or an insurance company, there is no deduction. If the taxpayer gets a partial reimbursement of the expenses, the balance can be claimed as deduction.

How much tax can you save: If a dependent is a patient, the taxpayer’s liability comes down by 12,360 in the highest income bracket. If the patient is a senior citizen, the tax is lower by Rs 18,540.

Proof required: One needs a certificate of the illness from a specialist in a government hospital.

4. Claim benefits for your political affiliations

Can you lower your tax if you have political connections? Apparently you can. Any amount contributed to a recognized political party can be claimed as a deduction under Section 80GGC (80GGB for corporates). “This is a new deduction and was introduced in April 2010. The donation can also be made to the electoral trust which works for the purpose of conducting elections,” says Sheth. Interestingly, unlike other deductions, there is no ceiling on the amount that can be claimed as a deduction. Of course, the deduction is available only if the donation went into the party coffers.

Cash given to individuals doesn’t count. Other donations also get you tax benefits. Under Section 80G, donations to charitable organizations get deduction ranging from 50% to 100%. It’s a good idea to know how much deduction would be available before you write a cheque. However, There is a ceiling to the deduction a taxpayer can claim in a year. “The quantum of deduction is limited to 10% of the gross total income of the donor,” says Tapati Ghose, partner at Deloitte Haskins & Sells. Also, only cash donations are taken into account. Food, clothes and medicines do not qualify.

How much tax can you save: In the highest tax bracket, a donation of Rs 1 lakh to a political party can bring down your tax by Rs 30,900.

Proof required: You must have a stamped receipt of the payment from the political party.

ONLY ACCOUNT NUMBER FOR E-TRANSFERS

2011-01-10T14:42:00.000+05:30

Electronic fund transfers just got faster. Banks will henceforth only take customers account numbers for such transactions, ignoring other details such as names. The new mechanism, which came into effect on 1 January, is aimed at reducing the possibility of errors.

This is in line with a Reserve Bank of India directive under which customers must give their account numbers twice for every electronic fund transfer request made online as well as at bank branches. The new system would be applicable for all electronic payment gateways such as RTGS,NEFT,NECS and ECS, besides fund transfers initiated by customers at bank branches or over the internet.

Eight tax saving secrets you should know [1 & 2 of 8]

2011-01-09T11:38:00.000+05:30

The Income Tax Act 1961 is a voluminous piece of legislation. Taxmann Publications’ latest edition of the Act runs into 1,125 pages. It’s enough to intimidate even the most diligent law student and tax expert, leave alone ordinary taxpayers. But hidden away in the 300-odd sections and 14 schedules are clauses that can benefit ordinary taxpayers-provided they know how to claim those benefit.

Here are eight deductions that can help you save tax over and above the tax saving investments you make during the year.

1. Use losses in stocks to cut tax

Can you gain from the short-term losses you made on stocks? Yes, says the Income Tax Act. If you have made any long-term capital gains from sale of property, gold or debt funds, you can set them off against short-term capital losses made on stocks and bring down your tax liability. “Short term capital losses can be set off against both short term capital gains as well as taxable long-term capital gains,” says Sandeep Shanbhag, director of Wonderland Consultants, a Mumbai-based tax planning and financial consultancy. This can be especially useful for someone who has booked profits on gold ETFs and physical gold this year. Suppose you have sold a property and made a long-term capital gain of Rs 30 lakh after indexation.

At 20%, the tax payable on this long-term capital gain is Rs 6 lakh. However, if you have also sold some junk stocks during the year and made a short-term loss of Rs 3 lakh, you can set this off against the gains from the property. Then the gain from the property will get reduced to only Rs 27 lakh and the tax payable will be Rs 5.4 lakh. However, the law makes a distinction here. One cannot set off short-term gains from stocks against long-term capital losses from the other assets. “Long term capital losses can only be set off against taxable long-term capital gains,” says Shanbhag.

How much tax can you save: Setting off a short-term loss of Rs 3 lakh against long term gains can help you save Rs 60,000.

Proof required: Keep record of your equity trading account statement with details of the transactions that resulted in losses.

2. Get deduction for rent even without HRA

House rent can account for as much as 40-50% of the total household expense. That’s why the house rent allowance is exempt from tax to a certain limit. But what if your salary does not include an HRA component or you are a self-employed professional or businessman? Under Section 80GG, you can claim deduction of the rent paid even if you don’t get HRA. “Not many people are aware of this deduction,” says chartered accountant Mehul Sheth. But there are stiff conditions to be met. The least of the following three can be claimed as deduction: rent paid less 10% of total income; or Rs 2,000 a month; or 25% of total income. Also, the taxpayer should not be drawing any HRA or any housing benefit.

Besides, he or his spouse or minor child should not own a house in the city where he stays and he should not be claiming tax benefits for some other self-occupied house. Whew. Incidentally, if you are living in your parents’ house, you can pay rent to them. If your parent has no other income or pays a lower tax, this can bring down your tax liability significantly. However, the rent will be taxable as the income of the parent after a 30% standard deduction. This means, you can pay a senior citizen parent up to Rs 3.43 lakh a year.

How much tax can you save: Given the stiff conditions, one can’t claim more than Rs 2,000 as deduction per month under Sec 80GG. But this can bring down your tax by Rs 7,400 a year in the highest tax bracket.

Proof required: Taxpayer has to submit a declaration on form 10-BA that he is paying rent and not receiving HRA.

Interactive Meeting with Sri A.K.Basu, IRS; Chief Commissioner of Income Tax - Hyderabad

2011-01-06T21:04:00.000+05:30

THE FEDERATION OF A.P.CHAMBERS OF COMMERCE AND INDUSTRY

Interactive Meeting with Sri A.K.Basu, IRS; Chief Commissioner of Income Tax

Date: Janurary 8, 2011 (Saturday)

Time: 11-00 a.m (Registration at 10-30 a.m)

Venue: KLN Prasad Auditorium, Federation House,FAPCCI

FAPCCI is organizing an interactive meeting with Chief Commissioner of Income Tax- AP-I & II Sri A.K.Basu IRS, on January 8, 2011 pertaining to issues relating to Income Tax.

No Participation Fees

Sri Abhaykumar Jain, Chairman, Direct Taxes Committee, FAPCCI, requests you to avail this opportunity and get clarifications from the department

Contact: Mr. Abhay Kumar jain, 09246107073

EPFO plans to replace the PF account number with a unique identification (UID) number

2011-01-04T21:29:00.000+05:30

The Employees’ Provident Fund Organisation (EPFO) plans to replace the provident fund (PF) account number with a unique identification (UID) number, a move that would enable speedy transfer of subscribers’ funds in case of a job change and allow them to track their accounts online. At present, if a subscriber changes his job, it takes months to transfer PF money from one account to another, as a transfer of records from one office to the other is required. Under these circumstances, a large number of subscribers often withdraw the entire money in their account and go for a fresh account with the new employer.

The replacement of PF account number with the UID number will be done after inter-connecting all regional and sub-offices of EPFO by March 2012. “We are in the process of digitizing and inter-connecting all our offices. We plan to use UID as the subscribers account number after that,” Labour Secretary P C Chaturvedi said. In the first phase, EPFO has set a target of digitalizing the entire data in its regional and sub-offices by March this year. In the second phase, all offices would be inter-connected

HUFs will have to leave PPF after 15 years

2010-12-28T22:40:00.000+05:30

Hindu undivided families (HUFs) will now have to mandatorily exit from the public provident fund (PPF) on completion of 15 years. The move is aimed at checking misuse as several people were investing in PPF to earn 8% tax-free return as an individual as well as an HUF, which are set up by family members to avail of tax benefits. The head of the family is the karta or the main operator of the account, with the others being family members. While daughters can be members of an HUF, on marriage, they cease to be members of the one promoted by their fathers.

After the government stopped fresh investment by HUFs in PPF from May 2005, several of them continued to park funds in the popular savings scheme as it earned them a 8% tax-free interest. Some were older investments though they were yet to complete the 15-year period while others availed of a five-year extension.

But a recent finance ministry notification has said that money should be refunded as soon as the 15-year period ends for PPF accounts opened by HUFs before May 13, 2005. For the accounts where the 15-year period has already ended, the money will be refunded on March 31 next year.

This means accounts opened after the ban was imposed in 2005 will be allowed to continue only till the tenure ends, while the others will be terminated at the end of the current financial year.

There are many accounts which are running on a five year extension. But, with the current rule, they will be terminated by March end, no matter whether the extension period has ended or not, said a source dealing with PPF and other small savings schemes such as the National Savings Certificate ( NSC )) and post office deposits.

Fresh investments by HUFs into PPF was stopped as it was observed that the facility was being misused. Investments were made in the name of HUFs as well as individuals as both are considered as separate entities. This allowed the investors to earn 8% tax-free returns both as an HUF and an individual. This continued even after the ban came into place.

The philosophy of small savings is to provide a savings window to the middle class or those living in remote areas where banking services are not available.

CPC commences issue of refunds for AY 2010-11 returns.

2010-12-16T22:51:00.001+05:30

Centralized Processing Center (CPC), Bangalore has begun processing of returns for AY 2010-11. Till 10/12/2010 it has processed over 15 lakh e-filed returns of AY 2010-11 in ITRs 1, 2, 3, 4 and issued refunds in over 1.6 lakh cases. These returns were filed during this year from April to October 2010. Marking the advent of Income Tax department in digital era, all intimation orders are being sent by e-mail to taxpayers as a digitally signed password protected PDF document. SMS alerts (where mobile number is provided) to taxpayers on completion of processing and determination of refunds has been introduced for ITRs of AY 2010-11.

Soon, a demat account for insurance policies

2010-12-16T22:50:00.001+05:30

From January, you can handle your insurance needs with an insurance account number with more speed and convenience, thanks to a new initiative of the Insurance Regulatory and Development Authority (IRDA). The Authority is working on introducing insurance accounts for each and every buyer of insurance that would facilitate electronic issue and monitoring of both life and general insurance policies. “At present, we are talking to NSDL and several other players to launch the system by first week of January,”a senior IRDA official told Business Line. The modalities such as issuing account numbers to prospective insurance buyers and extending it to over 7 crore insurance policy-holders in the country, digital signatures are being firmed up, he added.

HASSLE-FREE

The proposed insurance account would be ‘customer-friendly' as it could be operated in a similar fashion to the demat accounts. The electronic issue of policies based on an account number would make buying travel or health insurance and even life insurance faster and simpler. “Once assigned an account number, a policy-holder will have ready-proof even if his/her policy document is lost. More importantly transactions such as changing nominations can be done easily,” the official said. From an insurer's perspective, the administrative costs could be cut down and the data storage/access could be hassle-free. “More importantly, implantation of Know Your Customer (KYC) norms and Anti- Money Laundering guidelines will be easy and transparent,” he added. One of the focus areas for IRDA of late has been preventing money laundering and insurance transactions based on unaccounted/black money.

NEED FOR CLARITY

According to Dr P. Nandagopal, Chief Executive Officer of IndiaFirst Life Insurance Company, the demat form would be beneficial for both the policyholders and the insurance companies as it will reduce transaction costs. “Customers can now have a single point of transaction for insurance. For companies, the advantages will be the reduction in costs on account of lesser paperwork and other administrative work,” he said. The procedures, however, need to be sound and clear. “Regulatory changes are expected for direct online models. There are still some issues like mobile money transfer and digital signatures where there is not much clarity,” said Mr Joydeep Roy, Chief Executive, L&T General Insurance. In most of the foreign countries, different types of policies such as motor, health, engineering and travel are sold online, he added.

Clarification regarding electricity meter installed in consumers' premises and hire charges collected - whether covered under exemption for transmission and distribution of electricity

2010-12-08T22:34:00.000+05:30

SERVICE TAX

CIRCULAR

Clarification regarding electricity meter installed in consumers' premises and hire charges collected - whether covered under exemption for transmission and distribution of electricity

Circular No. 131/13/2010-ST, dated 7-12-2010

A doubt has been raised whether renting of electricity meter by a service provider rendering the service of transmission or distribution of electricity, is covered by the exemption available under Notification No. 11/2010-ST dated 27.02.2010 and/ or 32/2010-ST dated 22.06.2010.

2. The matter has been examined. It is a general practice among electricity transmission (TRANSCO) / distribution companies (DISCOM) to install electricity meters at the premises of the consumers, to measure the amount of electricity consumed by them and ‘hire charges' are collected periodically. Supply of electricity meters for hire to the consumers being an essential activity having direct and close nexus with transmission and distribution of electricity, the same is covered by the exemption for transmission and distribution of electricity, extended under the relevant notifications.

3. Trade Notice/Public Notice may be issued to the field formations accordingly.

Tax solutions for globally mobile employees

2010-11-10T09:51:00.000+05:30

In view of economic developments, many companies are deputing their employees across locations for international assignments. Global mobility of the employees ensures creation of a globally-competitive team and best utilisation of expertise available within the group entities having a global presence. One of the major factors which worry an individual while deciding to take up an international assignment is cross-border taxation on his/her personal income. Since these assignments involve exercise of employment in different countries, the tax laws of such countries come into play in such cases.

International assignments may be categorised as long-term and short-term. While the former is typically for 3 to 5 years, the latter is generally for few months up to 2 years. The tax implications also depend upon the category of assignment taken up and the provisions given in the Double Taxation Avoidance Agreements (DTAAs) and domestic tax laws of the countries involved.

The first issue to consider is the residential status of the individual. In India, the residential status is divided into three broad categories: resident and ordinarily resident, resident but not ordinarily resident and nonresident. The residential status depends upon the number of days of stay in India. In case of an individual whose stay exceeds either 182 days during the financial year or 60 days during the financial year and 365 days during the past four financial years, s/he qualifies as ‘resident’.

The resident individual qualifies as ‘resident and ordinarily resident’ in case his/her stay in India during past seven years exceeds 729 days and s/he maintains a status of resident during any two out of past 10 financial years. However, if an Indian citizen leaves India for taking employment outside India, s/he qualifies as resident only if s/he stays in India for 182 days during that year.

Every international employee is required to keep a track of his/her residential status. Non-resident and resident, but not ordinarily resident, are generally taxable only on India-sourced incomes. Similarly, an individual who qualifies as resident and ordinarily resident is taxable on his/her worldwide income.

Many a times an individual satisfies residency conditions of both the countries and ends up qualifying as tax resident of both the countries where he/she worked prior to taking up international assignment and the country where s/he takes up employment. In such a situation, the tax treaties provide specific relief to individual in the form of tie-breaker rules to be satisfied to qualify as a tax resident of a specific country.

What if an individual becomes taxable in both the countries of origin because of residency and the country of rendering services? To protect the individual in such situations, the DTAAs provide for the specific provisions as per which the individual is not subject to double taxation on the same income. The resident country provides foreign tax credit of the taxes paid in other country on the doubly taxed income.

The DTAA provides two methods of foreign tax credit — the exemption method and credit method. Under the exemption method, the state of residence does not tax the income which, according to DTAA, may be taxed in the other state. Under the credit method, the state of residence calculates its tax on the basis of taxpayer’s total income, including the taxable income from the other state, and then allows a deduction from its own tax in respect of the tax paid in the other state. Even with countries, like Hong Kong, which does not have a DTAA with India, the domestic tax laws provide protection to the resident from paying double taxes.

Keeping in view the changing economies, social values, frequently changing tax laws and multiple exposures under both tax and regulatory systems of countries involved, the relocation and taxation issues are increasingly getting complicated. The payment of salary in India/outside India for an international assignee taking up employment in India is governed under exchange control laws (Foreign Exchange Management Act). Therefore, all such arrangements among employee, overseas employer and Indian employer will need to be analysed for strict compliance.

IFRS draft Ready

2010-11-06T17:26:00.000+05:30

Press Information Bureau
Government of India
Ministry of Corporate Affairs

National Advisory Committee on Accounting Standards Almost Finalizes Drafting of the Converged Accounting Standards

Converged Standards will have to be Followed by Phase-I Companies W.E.F. 01.04.2011

Ministry of Corporate Affairs, after wide consultations with all stakeholders and regulators, has drawn up a clear roadmap for implementation of Indian Accounting Standards converged with IFRS. Converged Standards will have to be followed by Phase-I companies w.e.f. 01.04.2011. The Phase I group excludes banks, insurance companies and smaller companies. National Advisory Committee on Accounting Standards (NACAS) has almost finalized drafting of the converged accounting standards. Under the Converged Accounting Standards, the Schedule VI will have two parts viz. Part-A and Part-B. Part-A will be as per the existing notified accounting standards and Part-B will be based on converged accounting standards. The NACAS has also finalized and recommended Part-A and Part-B of the Schedule-VI.

One of the issues raised by stakeholders is the tax implications in following converged standards. ICAI had set up a Group for identifying tax issues arising on convergence. The group includes nominees from Ministry of Finance. The Group has prepared a draft report identifying certain options which could be adopted to achieve tax neutrality. Secretary, MCA held a meeting with members of the Group, and instructed it to come up in a time bound manner with a specific proposal which will be revenue neutral and acceptable to the Ministry of Finance, while also compatible with IFRS and meeting the needs of the Corporate sector. The implementation of converged accounting standards with IFRS will go on as per schedule..

CBDT clarification on tax benefits for institutions

2010-11-05T09:20:00.000+05:30

The government has clarified that institutions like NGOs, charitable institutions and others who are eligible for tax benefits and can also issue tax benefit receipts to those paying donations would not need to renew their status unless it is withdrawn by the tax authority.

The move is in line with the mandate of the proposed Direct Taxes Code (DTC) that aims at reducing administrative burden on the income tax department and also the taxpayer. The Central Board of Direct Taxes (CBDT) on Wednesday clarified that the approvals under sub-clause (vi) and (via) of section 10(23C) granted on or after December 2006 shall be valid until withdrawn. Similarly approvals under clause (vi) of sub-section (5) of section 80G granted on or after October 2009 shall be valid until withdrawn. "These approvals will be one-time approvals unless withdrawn by the income-tax authority empowered to grant them," the CBDT said in a clarification.

Company Law - Amendment in Form No 1

2010-11-02T12:11:00.001+05:30

COMPANIES ACT

RULES/AMENDMENT RULES

Companies (Central Government’s) General Rules and Forms (Third Amendment), 2010 - Amendment in Annexure ‘A’

Notification No. G.S.R. 848(E), dated 15-10-2010 issued by Ministry of Corporate Affairs

In exercise of the powers conferred by sub-section (1) of section 642 read with section 61OB of the Companies Act, 1956, the Central Government hereby makes the following rules further to amend the Companies (Central Government's) General Rules and Forms, 1956, namely:—

1. (1) These rules may be called the Companies (Central Government's) General Rules and Forms (Third Amendment), 2010.

(2) These rules shall come into force on the 5th day of December, 2010.

2. In the Companies (Central Government's) General Rules and Forms; 1956, in Annexurer ‘A’,—

(i) in Form No. 1,—

(a) in serial number 8, under the heading, Particulars of Promoters (first subscribers to the MOA), at the bottom after the entry Name of the company, the following shall be inserted, namely:—

"Whether the subscriber has been convicted by any court for any offence involving moral turpitude or economic or criminal offences or for any offences in connection with the promotion, formation or management of a company Yes No If yes, provide details."

(b) in Declaration, after serial number (vi), the following Declarations as serial numbers (vii and viii) shall be inserted, namely:—

"(vii) That the subscribers have given declaration of details of his/her conviction by any court for any offences involving moral turpitude or economic or criminal offence or for any offences in connection with the promotion, formation or management of a company;

(viii) That the subscribers have given declaration that he/she has not been declared as proclaimed offender by any Economic Offence Court or Judicial Magistrate Court or High Court or any other Court."

(ii) In Form No. 32, —

(a) in Verification I, after serial number 3, the following Verification as serial number 4, shall be inserted namely:—

"4. It is also confirmed that the appointed director (s) whose particulars are given above, has given a declaration to the company that he/she has not been declared as proclaimed offender by any Economic Offence Court or Judicial Magistrate Court or High Court or any other Court."

Banking : Opening of bank accounts - salaried employees

2010-10-29T12:31:00.001+05:30

Banking : Opening of bank accounts - salaried employees

Circular No. DBOD. AML. BC. No.50/14.01.001/2010-11, dated 26-10-2010

Please refer to our Master Circular on Know Your Customer (KYC) norms /Anti-Money Laundering (AML) standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under PMLA, 2002 issued to banks vide DBOD.AML.BC.No.2/ 14.01.001 / 2010 – 11 dated July 01, 2010. In Annex I to the circular an indicative list of the nature and type of documents/ information that may be relied upon for customer identification and address verification for opening bank accounts has been given.

2. It has been brought to our notice that for opening bank accounts of salaried employees some banks rely on a certificate/letter issued by the employer as the only KYC document for the purposes of certification of identity as well as address proof. Such a practice is open to misuse and fraught with risk. It is, therefore, clarified that with a view to containing the risk of fraud banks need to rely on such certification only from corporates and other entities of repute and should be aware of the competent authority designated by the concerned employer to issue such certificate/letter. Further, in addition to the certificate from employer, banks should insist on at least one of the officially valid documents as provided in the Prevention of Money Laundering Rules (viz. passport, driving licence, PAN Card, Voter’s Identity card etc.) or utility bills for KYC purposes for opening bank account of salaried employees of corporates and other entities.

3. These guidelines are issued under Section 35A of the Banking Regulation Act, 1949 and Rule 7 of Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005. Any contravention thereof or non-compliance shall attract penalties under Banking Regulation Act.

Multi User Tally Slows Down : Some Solutions

2010-10-25T12:48:00.000+05:30

In multi user environment Tally gets slow down due to several reasons. Sometimes the problem is related to network connectivity and sometimes it is due to Tally itself. Before getting to solutions we should identify the reasons of slow down.

To find out if it is due to networking only then you should check for following:-

1. Network computers are easily accessible to each other. Files can be transferred from one computer to another easily.

If it is not so then you have to do networking again.

2. Check the connectivity by using ping command.

In case of wireless networking the ttl field of ping command should not be higher than 10ms. The command is ping 192.168.0.1 -t where 192.168.0.1 is the ip of machine which you are pinging.

3. Check if this problem is in Tally only and not in other softwares which are used over network.

If the problem is in all applications then you may need to upgrade your hardware or do the networking again. Try increasing RAM. It would help.

4. Check if memory utilization for each computer is proper.

Delete the unwanted programs from system tray or startup lists.

5. Are you using Hubs?

Switch is better option. Change it immediately.

Now comes the Tally part.

1. Check if ip's of each machine are defined.

Each machine should has separate IP in same range.

2. Your company is having more then one year data?

Split the company data and work in only current year data.

3. Tally.ini setting are correct?

IP of Tally server and proper port no. should be there for each node.

e.g. Tallylicenceserver = 192.168.0.1:9000 (server ip: port no.)

4. More than one company are opened while working?

While opening Tally Default Company automatically opens. We forget to shut it down before working and open our current company. Put Load Default= No in Tally ini file.

5. Is the best machine in organization is Tally server?

If no then make the fastest machine your Tally server. It would help a lot. If not working then keep the company shut.

7. What is the level of entires? How many entries you daily feed?

This thing decides a lot if number of entries are too much. In that case either switching to Tally 8.1 can help or you have to use thin client environment to work faster.

These steps would help to solve your networking problem

Avoid stress, track Tax Credit with Form 26AS

2010-10-21T08:11:00.000+05:30

Sanjay was sipping his coffee and enjoying the pleasant summer morning. With a happy frame of mind, he opened the letter from the tax office. Anger and confusion took over as he saw a hefty demand from the tax office.

Sanjay remembered the assurance he was given by his former employer that all tax dues had been deducted from his salary and remitted to the treasury. Then why this huge liability, wondered Sanjay!

When he approached the tax authorities, he was told that the tax credit was based on the amount reflecting in the system against his name and not what he claimed. “Haven’t you checked your 26AS?” the officer asked. The term sounded familiar. Did I miss something that I should have done — thought Sanjay recalling the advertisements and messages relating to 26AS. He decided to explore and started browsing the net.

The first question Sanjay asked was: What is this 26AS?

To his surprise, there was a plethora of information available on this. He read on to find that 26AS was the tax credit statement in a consolidated form that captured all tax deductions, collections and advance/self-assessment taxes for a taxpayer relating to a tax year. The system matched the details furnished by the deductor in the quarterly returns with that provided by the banks accepting tax payments. Once this online verification is completed, Form 26AS is generated/updated.

It was an effort by the tax authorities, designed to give tax payers a heads up on the tax credit available to them.

Having understood the basics of Form 26AS, Sanjay decided to check out his own statement but didn’t know how to proceed. The online portal of the tax office came to his rescue once again and provided him a step-by-step guide on the registration process. Sanjay entered his Permanent Account Number (PAN) and registered on the portal. After authentication of his credentials, Sanjay was able to view his own Form 26AS and was surprised that it did not show the taxes that were deducted on his salary. The page also hinted at possible corrective action.

“Now, what corrective action can I take for omissions in the tax credit statement?” thought Sanjay. He found that tax payers need to take up the case with their employers/deductors for rectification of the error/deficiency to get their share of tax credit. If the advance tax payments are not reflected, then they would need to speak to the bankers.

He realised that had he been proactive, he could have avoided the mess that he had landed himself in.

He spoke to the tax officer and explained his case and was asked to file a letter capturing the details. He did so but was not sure it would alleviate the tax liability he was facing.

If only I knew what has happened to my letter, thought Sanjay and felt that the authorities would do well to put in place an online tracking mechanism wherein individuals can find out the status of their tax claims and action taken on their submissions. This will make the system transparent besides assuring individuals that their grievances are being addressed.

Sanjay decided to share his experience with his friends and colleagues and to educate them about the new system. By this, they can avoid the mental and physical stress endured by him. He told them that the first step has been taken by the authorities and now it was in their own interest to use the facility and derive maximum benefit.

Seminar on e-REGISTRATION & e-FILING of DIRECT & INDIRECT TAX COMPLIANCES

2010-10-13T22:17:00.000+05:30

SEMINAR ON E-REGISTRATION & E-FILING

OF DIRECT & INDIRECT TAX COMPLIANCES

Thursday, 11-Nov-2010 at 09.30 AM

At Surana Udyog Auditorium, FAPCCI, Hyderabad

TOPICS

A. Service Tax

a. Complete Procedure for Online Registration

b. How to Amend registration

c. Filing or periodical Returns

d. Trouble shooting

B. A. P. Commercial Tax [VAT]

a. Complete Procedure for Online Registration

b. Filing VAT Returns

c. Getting C/ F Forms online

d. Trouble shooting

C. Income Tax

a. Registration Procedure for PAN & Form 26 AS

b. Preparation & Filing of TDS & Income Tax Returns

c. Trouble shooting in PAN registration & Filing Returns

Fee: Rs. 1,000 /- [per participant]

Including material, software CD, Tea-Snacks & Lunch

Restricted to 100 participants

For Registration

Purna Chandra Rao

Mob: 0 99 66 00 89 00

e-mail: purna@taxnlaw.info

Changes In Q2 eTDS Statement Filing Requirements : Very Imp

2010-10-13T12:25:00.000+05:30

Changes In Q2 eTDS Statement Filing Requirements :

NSDL has notified changes in data structure and validations for filing eTDS statement for FY 2010-11. These changes are effective for the forthcoming second quarter statement filing due on Oct 15, 2010. The changes are primarily to give effect to Notification 41.

Changes

100% Valid PANs

Reporting of Transport Contract payments without deduction of TDS

Flagging penal rate deductions

Mandatory Contact details of Deductor

Reporting requirements for Govt Deductors

100% Valid PANs

Existing Rule

At present a minimum percentage of valid PAN is mandatory in any eTDS statement. This is 95% for Form 24Q and 85% for others

Changed Rule

Form 24Q/26Q/27Q

All deductee records must have valid PANs. Even deductee records where tax has been deducted at lower/NIL rate must have valid PAN

Only exception is deductee records where tax has been deducted at higher rate u/s 206AA

Form 27EQ

The existing rule of 85% continues

Reporting of Transport Contract payments without deduction of TDS

Finance Act 2009 had made an important change in respect of applicability of TDS on transport contractors. Section 194C was replaced and the following two sub sections provided for non deduction of TDS on transport contractors

(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

(7) The person responsible for paying or crediting any sum to the person referred to in subsection (6) shall furnish, to the prescribed income-tax authority or the person authorised by it, such particulars, in such form and within such time as may be prescribed.

In terms of sub section (7), now such transactions are to be reported in regular eTDS statement.

All such deductions to transport contractors where tax has not been deducted are to be marked “T” in the column Reason for Non-deduction / Lower Deduction, if any in the deductee details

Penal rate deductions

All deductions where tax has been deducted at hiigher rate in terms of section 206AA are to be marked “C” in the column Reason for Nond eduction / Lower Deduction, if any in the deductee sheet .Such transactions need not have valid PAN.

For records marked with higher rate only below mentioned fields can be updated:

· PAN

· Amount of payment

· Date of payment

Mandatory Contact details of Deductor

In the deductor details , contact details of deductors are provided

Email-Id of deductor / responsible person is now mandatory

Field for mobile number of responsible person has been added.

Any one of the contact details of deductor is mandatory:

Deductor telephone no. along with STD code

Responsible person telephone no. along with STD code

Mobile no. responsible person

Reporting requirements for Govt Deductors

· For TDS deposited by book entry, 7 digit number generated by TIN for accepted Form 24G statement to be quoted in BSR code field. This value will be provided by the Accounts Officer to the deductor.

· For TDS deposited by book entry, 5 digit number generated by TIN for DDO record of accepted Form 24G statement will be quoted in Transfer voucher field. This value will be provided by the Accounts Officer to the deductor

Form No 27EQ

Form No 27EQ is to be filed for tax collection at source

Validation for no/lower/higher deduction will not be applicable for Form no. 27EQ

PAN compliance validation of 85% will be applicable for Form no. 27EQ

New File Validation Utility : FVU 3.0

Quarterly e-TDS statements (regular and correction) upto FY 2009-10 should be validated with FVU version 2.129. There is no change in the validations for statements upto F.Y. 2009-10

Quarterly e-TDS statements (regular and correction) for FY 2010-11 should be validated with FVU version 3.0.

Status of FY 2010-11 Q1 statements

If statement for Q1 FY 2010-11 is being filed late , does it need to be validated with FVU 3.0 ?

The answer is Yes. it needs to be validated with FVU version 3.0.

eTDS Statements are accepted at TIN-Centres by SAM software. Latest SAM will not accept any statement for FY 2010-11 , unless it is validated with FVU 3.0

Longer stay in India to increase NRIs’ tax liability

2010-10-12T10:32:00.000+05:30

Domestic households savings contribute significantly to India’s overall domestic savings rate. The credit goes to the Indian tax laws to a certain extent, as they provide tax incentives to individuals to invest in some specified tax-saving instruments. Section 80C of the Income Tax Act (Act) provides for a deduction of `1 lakh in certain investments (tax saving instruments)/payments made during the year.

The various investments which are eligible for deductions under Section 80C are equity-linked savings schemes (ELSS) offered by LIC and mutual funds, unit-linked insurance plans (Ulips) for self and/or spouse, children, life insurance policies for self, and/or spouse, children, employees’ contribution to recognised provident funds (PF), approved super-annuation fund, contribution to public provident fund (PPF); deposits in post office schemes such as National Savings Certificate (NSC), Senior Citizen Savings Scheme (SCSS), if it applies and the post office five-year time deposits, term deposit with a scheduled bank for a period of at least five years, investments made in bonds issued by the National Bank for Agriculture and Rural Development (Nabard) and debentures issued by specified companies.

In addition to the above investments, the following payments also qualify for deduction under Section 80C: payment of tuition fees for full-time education in any Indian university, college, school, educational institution (available for any two children), and repayment of the principal portion of a housing loan.

Besides Section 80C, one can also make an investment up to `20,000 in specified infrastructure bonds to save tax. Further, an individual gets a deduction of up to `15,000 (`20,000 where the individual is a senior citizen) for the health insurance of self and his family. There is an additional deduction of `15,000 where the health insurance is taken for the parents (`20,000 where any of the parents is a senior citizen).

However, the situation may undergo dramatic changes after the Direct Taxes Code (DTC) comes into play. DTC, 2010, proposes to restrict the deduction of `1 lakh only to some approved fund(s)— such as an approved provident fund, pension fund, super-annuation fund, PPF among others. However, an additional deduction of `50,000 has been proposed to cover payments such as life insurance premiums (premium not to exceed 5% of sum insured), health insurance premiums and the tuition fee. That means an individual won’t get any tax incentives for existing tax-saving instruments other than those covered in the DTC.

Non-resident Indians (NRIs) visiting India, will need to be more vigilant, post the DTC regime. Under DTC, if their stay in India exceeds 60 days during a year and 365 days for the past four tax years, then they may be considered as residents of India. Currently, they become residents only when their stay exceeds 182 days. Once they become a resident, they may have to pay tax on their global income, if their stay in India for the past seven tax years exceeds 729 days and if they are residents in two out of the past 10 tax years. In a nutshell, NRIs run the risk of triggering worldwide taxation soon if they spend a significant time in India.

The DTC proposals relating to individual taxation have undergone significant change since the DTC was proposed in August 2009. One will really need to wait for the final bill, which will become operational from April 1, 2012.

New service tax payment scheme for lottery ticket distributors

2010-10-11T14:04:00.000+05:30

The Finance Ministry has come up with an optional composition scheme for service tax payment on promotion or marketing of lotteries. Budget 2010-11 had introduced service tax levy on the services of promoting, marketing, or organising of games of chance, including lottery.

Service tax

Under the composition scheme, a distributor or lottery selling agent who is liable to pay service tax, can opt to pay flat service tax of Rs 6,000 on every Rs 10 lakh of aggregate face value of lottery tickets printed by the organising State for a draw.

This rate will apply in those lottery schemes where the guaranteed prize payout is more than 80 per cent, the Finance Ministry has said.

Prize payout

For lottery schemes where the guaranteed prize payout is less than 80 per cent, a distributor or selling agent will have to pay service tax of Rs 9,000 on every Rs 10 lakh of aggregate face value of lottery tickets printed by the organising State for a draw.

One month time

The Finance Ministry has stipulated that a distributor or selling agent of lotteries should decide on the option within one month of the beginning of each financial year. Once opted for a composition scheme, it cannot be withdrawn during the remaining period of the financial year. Lotteries in India are conducted by various State Governments, and are regulated by a central legislation — Lotteries (Regulation) Act 1998.

Changes in computing rent

2010-10-09T12:15:00.000+05:30

Provisions for the computation of income from house property are to be found in Part B of Chapter III of the DTC Bill. Sections 24 to 29 lay down the mode of computation. A perusal of these provisions will show that there has been a big climb-down from the provisions thought of in DTC-I. DTC-I tried to fix the gross rent of the property as the higher of the two amounts, namely a) contractual rent for the financial year and b) the presumptive rent calculated at 6 per cent per annum of the rateable value fixed by the local authority.

If there is no rateable value fixed, the 6 per cent shall be calculated with reference to the cost of construction or acquisition. Determination of notional rent on a presumptive basis was considered inequitable. It can discriminate against recent owners as cost is a function of inflation. Such determination has been a cause of much litigation. The government, therefore, reconsidered the matter afresh. The DTC Bill therefore proposes modifications in the original concept. As per the Bill, gross rent will be the amount of rent received or receivable for the financial year. The idea of a presumptive rate has been given up once and for all. In the case of property which is not let out, the gross rent will be nil and no deduction for taxes or interest will be allowed.

DEDUCTIONS

From the gross rent, deductions are allowed for amount of taxes paid to the local authority. As much as 20 per cent of the gross rent will be deducted for repairs and maintenance of the property. It should be borne in mind that this deduction of 20 per cent is statutory. It is allowed irrespective of whether it is actually incurred or not. Section 27 also allows deduction for the amount of interest on loan taken for the purposes of acquisition, construction, repair or renovation of the property, or even on loan taken for the purposes of repayment of an earlier loan on the property. It should be noted that there is no limit placed on the amount of interest that could be claimed as deduction in the case of any property let out. Interest in respect of a period prior to the financial year in which the house property has been acquired or constructed can be claimed as deduction in five equal instalments, beginning from the financial year in which the property has been acquired or constructed [Section 27(2)].

SELF-OCCUPIED PROPERTY

In the case of self-occupied property, deduction can be claimed up to Rs 1.5 lakh for interest paid on loan taken for acquisition or construction or repair or renovation. The property for this purpose should be owned by the person concerned and not let out during the financial year. If an individual owns more than one property, deduction towards interest will be restricted to only one house. The present law allows deduction up to Rs 1 lakh on repayment of the principal amount of the loan taken. No such deduction is contemplated under the DTC Bill.

ARREARS AND ADVANCE RENT

Section 28 takes into account rent in advance for calculating gross rent of the financial year to which the rent relates. Section 29 deems amount of rent received in arrears to be the income from the house property of the financial year in which such rent is received. Such arrears of rent will be included in the total income of the person in receipt, irrespective of whether he is the owner of the property in that year or not. At the same time, a sum equal to 20 per cent of the arrears of rent shall be allowed as deduction towards repair and maintenance.

CO-OWNERS

When the property income is owned by two or more persons with definite and ascertainable shares, income shall be computed separately for each such person in respect of his share. If the shares are not definite and ascertainable, the co-owners shall be assessed as an association of persons in respect of such property. To this extent the DTC Bill supersedes the ruling of the Supreme Court in the well-known CIT vs Indira Balakrishna (39 ITR 546) case. Provisions for computation of income from house property cannot be invoked in respect of a property used as hospital, hotel, and convention centre or cold storage. Nor can they be invoked in respect of property forming part of SEZ. Income from such property will be assessed as income from business. These provisions will also not be applicable to a property which is not ready for use during the financial year. In many ways, the provisions in the DTC Bill are beneficial to property owners and avoid the rigid stance of presumptive rent. It is notable that there is no reference to the concept of annual value at all in these provisions. The scope for litigation is immensely reduced.

Do’s and Don’ts TDS/ TCS

2010-10-06T22:19:00.000+05:30

DOs

i. Use Challan type 281 for deposit of TDS/TCS.

ii. Quote the correct 10-digit Tax Deduction Account Number (TAN), and name & address of the deductor on each challan used for depositing tax. You may verify your TAN details from Income Tax Department web-site (www.incometaxindia.gov.in) prior to depositing TDS/TCS.

iii. Use separate challans to deposit tax deducted under each section and indicate the correct nature of payment code in the relevant column in the challan. (For example, 94C for payment to contractors and sub-contractors, 94I for rent. List of codes is mentioned at the back of challan 281).

iv. Use separate challans to deposit tax deducted for different types of deductees,i.e. Corporate or Non Corporate, and indicate the type of deductees in the relevant column in the challan. (For example, in challans to deposit tax deducted from corporate deductees, indicate “COMPANY DEDUCTEES - 0020” and for non corporate deductees indicate “NONCOMPANY DEDUCTEES - 0021”).

(b) Advance Tax / Self-assessment Tax / Tax on Regular Assessment / Surtax / Tax on Distributed Profits of Domestic Companies / Tax on Distributed Income to Unit holders.

Use challan type 280 for all the above mentioned tax payments.

Quote the correct Permanent Account Number (PAN) and name & address on each challan used for depositing the tax. PAN is a unique 10-digit alphanumeric number allotted by ITD to all taxpayers.

Use Separate challans to deposit taxes for each of the above-mentioned tax and indicate the relevant code (for example 100 for advance tax, 300 for self assessment tax).

DON’Ts

i) Do not use incorrect type of challan.

ii) Do not make mistake in quoting PAN / TAN..

iii) Do not give PAN in place of TAN or vice versa.

iv) Each branch / division of an entity will have a separate TAN if it is filing separate TDS/TCS returns. However, there will be only one PAN for a legal entity.

v) Do not use a single challan to deposit tax deducted under various sections.

vi) Do not use a single challan to deposit tax deducted for corporate and non corporate deductees.

vii) Do not use same challan for depositing various types of tax like advance tax, self assessment tax etc.

viii) Do not make mistake in the F.Y. and A.Y. to be indicated in the challan.

ix) If you have multiple TANs for the same division filing TDS statements, do not use different TANs in different challans. Use one consistently and surrender the others.

x) Do not use the preprinted Challans you receive without verifying whether the TAN / PAN quoted in these challans belongs to you. You can verify the same from the allotment letter you have received from NSDL or from ITD website.

New keyword search or contain search feature in tally ERP-9

2010-10-05T23:01:00.000+05:30

Tally enhances its existing table search feature for faster data entry, easy finding of ledgers, groups, stock item from a long list. It allows you to search an item from any part of the name and can search the products if you remember the number of stock quantity available.

Disadvantages of existing “begins with ‘search facility in tally

In existing search facility you must know the exact name of ledger or stock item or at least you should know the beginning of the ledger name. You can’t find out the ledger if you remember only a part of the name. Because the existing search feature uses the criteria “begins with”. For example to find out ledger ‘Vardhman Health Specialties’ You must type ‘Va ‘to highlight the ledger and words like like ‘health’ &, ‘specialties’ will not help you to find out the ledger in old search feature.

Benefits of new ‘contains’ search features

New search feature uses the criteria “contains”. It allows user to search from any part of the name. When you type a word; the list automatically reduces and display result that matches search criteria. For considering the above search when you type “Va” the list reduces and display the ledgers which contain “Va” from the below picture you can see all the legers displayed in new search contains “Va” somewhere in the name.

If you remember only a part of the ledger name say health, no issue type it the name will be in front.

Most people uses M/S in front of a Debtor/Creditor Name .In such cases it will be difficult if you forget that the salutation is typed with ledger name. In old search you must type M/S to find out the ledger. But new search feature allows you to find out the ledger with the name.

Another instance is that you remember the number of stock in hand of a particular product but you cannot remember the ledger name .here also new table search feature will give a hand to help you .Type the number of stock item. The list will display all items that have typed stock quantity.

How to activate deactivate Table search feature in tally erp9

Table search feature is active by default in tally erp9 from ver 1.61. No need to activate it. If you want to deactivate the feature,

Press Alt+Ctrl+F12 from the gateway , you will have the following screen

Type ‘No’ to Use Reducing list for table

You can do the same from F12: Configuration »General

This advance feature definitely will help you in busy work environment.

TDS rate doubles if you fail to mention your PAN

2010-10-05T15:35:00.000+05:30

If you run a glance through your pay slip, you will come across something called TDS, which is tax deduction at source. In most cases, the employer deducts this amount at the time of payment of salary itself and pays the total tax amount to the government on behalf of all the employees. If you are a self- employed or practising professionals, you have to pay this amount yourself. Tax deducted at source is one of the modes of income tax collection by the government.

Under the income-tax laws, income tax at specified rates is required to be deducted while making certain payments. The rate of deduction of tax at source on interest and rent payment is 10%. For salary payments, the employers deduct income tax at source on a monthly basis after computing income tax liability on estimated annual taxable income of the employee. Tax benefits on housing loan, investments, etc are considered while estimating annual taxable income. If the PAN card number is not furnished to the person making payment, the rate of deduction of tax increases to 20%. However, if the actual rate of deduction on salary is higher than 20%, then the tax on salary deducted at source is at such higher rate.

The deductor issues a certificate in Form No 16 or 16A to the payee, which forms a basis for claiming credit for tax deducted while filing income tax return. One should also check his Form 26AS (which can be accessed from NSDL’s website) to cross-check if the TDS amount as mentioned in Form 16 or Form 16A is tallying (tying) up with the TDS amount against the PAN card as per the income tax department’s records. If the total amount of TDS for a year is higher than your actual tax liability, a refund of excess tax deducted can be claimed by filing a return of income. One can furnish a declaration in form 15G for non-deduction of income tax at source on interest income. Only those who expect their taxable income of the year to be below the basic exemption limit are eligible to furnish Form 15G. Non-residents cannot furnish form 15G. Senior citizens can furnish Form 15H instead of form 15G. In other cases, an application is made to the income tax officer (in Form No 13) to issue a certificate of non-deduction of tax (or for deduction of income tax at a rate lower than the prescribed rate). If PAN card no is not furnished, then rate of TDS doubles to 20% from 10%.

Set-off and carry-forward provisions

2010-10-05T15:33:00.000+05:30

When income from a particular head and a loss from another head or same head is adjusted, it is called ‘set off of loss against income'. A loss when not set off due to legal bar or due to insufficiency of income from other eligible source or head, it may be carried forward to a subsequent year for set off against income of that year. This write-up discusses how the Direct Taxes Code (DTC) has been drafted with regard to ‘set off and carry forward of losses'.

Income from ordinary sources
Though DTC uses the expression ‘income from ordinary sources', it is not defined in Section 314. However, from a reading of Sections 60 to 62 it can be understood that all incomes chargeable to tax except ‘income from special sources' fall in the category of ‘income from ordinary sources'. What follows are some of the salient features proposed in the new dispensation. No discrimination in set off of losses: Any loss from business, house property or residuary source is eligible for set off against ‘income from employment' or capital gain from any investment asset (it may be noted that any gain or loss from business capital asset is treated as part of business income/loss). However, no loss from any ordinary source is eligible for set off against income from any of the special sources Sub-classification within ordinary source: The DTC classifies income from ordinary sources with some sub-classification, such as (i) capital gain/loss from investment asset; (ii) income or loss from speculative business; and (iii) income or loss from the activity of owning and maintaining race horses. Losses from these sources are to be adjusted only against the respective incomes and cannot be adjusted against other incomes. Liberal set off benefits: In view of the above classification with riders thereon given above, loss from house property is eligible for set off even after carry forward against any income, except income from special sources. Similarly, loss from business could be set off against salary income, which is contrary to Section 71(2A) of the Income-Tax Act, 1961. Absence of transition provisions: One conspicuous absence in the DTC is the transition provisions to address the issues relating to carry forward of losses under the present I-T Act and the fate of such losses with the tenure for carry forward rights or benefits in the DTC regime. No time limit for carry forward and set-off: No time limitation is put for carry forward of losses for set off in the subsequent financial years in the DTC and hence it seems that a loss quantified under DTC under any head is eligible for carry forward and set off indefinitely without any time limitation. However, the eligibility for carry forward of loss is subject to filing of return within the prescribed ‘due date' mandated by Section 67 of the DTC. Expressions used with or without caption: A look at Section 60 of the DTC would show that various expressions have been used with caption in one place and without it in another, in spite of having a specific definition for each of them. Examples are Section 60(4) vis-à-vis Sections 60(8) and 60(10). Definitions not appropriately depicted: All the incomes from ordinary sources are aggregated with internal set off subject to certain exclusions and the resultant is called ‘gross total income from ordinary sources'. The meaning of the expressions ‘gross total income' and ‘gross total income from ordinary sources' are defined in Sections 314(109) and 314(110) respectively though such expressions have not been given in the caption in Sections 61(2) and 61(3) to show proper usage .

Income from special sources

Income from special sources are clearly spelt out in Part 3 of the First Schedule to DTC and it covers winnings from lottery or crossword puzzle, income from horse racing, card game or any other game, gambling or betting. Additionally, the schedule covers income of non-residents from income by way of interest, dividend (on which no DDT was paid), non-resident sportspersons who are not citizens of India and non-residents sports association or institution. Incomes from special sources are liable for flat rate of tax similar to present status with no basic exemption limit whatsoever. The accompanying table shows the broad coverage of DTC provisions with regard to aggregation of income with set off and carry forward of losses.

Finance Ministry to soon announce tax exemption on 9.5% PF returns

2010-10-01T09:59:00.000+05:30

The is believed to have agreed to modify its notification for exempting from tax the entire 9.5 per cent interest on provident fund deposits for 2010-11, and will soon announce the good news for EPFO's six crore depositors.

The Finance Ministry will soon revise the notification brought out on August 26, for giving exemption on returns on provident fund deposits up to 9.5 per cent (rate of return) for this fiscal.

The new notification would be out in next 10 days as the ministry has already initiated the process of revising the earlier notification.

The Finance Ministry had on August 26 - before the of the recommended the interest rate hike to 9.5 per cent for the current fiscal - came out with a notification that said the returns of up to 8.5 per cent on provident fund deposits would enjoy tax exemption.

The notification became effective from September 1, 2010. Unless the notification is amended, the additional one per cent interest on provident fund would be subjected to income tax affecting 80 per cent of subscribers who otherwise do not pay taxes.

Earlier EPFO's Central Provident Fund Commissioner Samirendra Chatterjee had indicated that he would take up this matter with the Finance Minister through to get the issue resolved.

Under Schedule IV of the Income Tax Act, 1961, there is provision for exempting returns on retirement fund from taxes.

EPFO's apex decision making body Central Board of Trustees headed by Labour Minister Mallikarjun Kharge on September 15 decided to give a return of 9.5 per cent on the provident fund deposits, up from 8.5 per cent during the last five years.

Earlier, the exemption was provided on interest income of provident fund up to 12 per cent, though only 8.5 per cent was paid to the subscribers.

"This had never happened in the history of the EPFO. The rate announced by the EPFO has been the benchmark rate for exemption. The Finance Ministry will have to revise its notification", A D Nagpal, secretary Hind Mazdoor Sabha and member of the CBT had said.

Apprentices are ‘regular employees' for EPF coverage

2010-09-29T23:32:00.001+05:30

A decision of the EPF Appellate Tribunal, North Delhi, that the term “employee” was defined in the Payment of Bonus Act as regular workers which included apprentices, was upheld by the Madurai Bench of the Madras High Court. Rejecting the contention of M/s Sree Mangayarkarasi Mills (P) Ltd, Madurai, that just because their workers were given attractive package, including bonus, that should not be put against the management, the Court ruled that there was no case made out to interfere with the findings of the Tribunal in agreeing with the proceedings issued under Section 7A of the Employees Provident Funds & Miscellaneous Act, 1952 for deposing the PF dues. In their writ petition, the management challenged the order dated July 23, 2010, passed by the Tribunal.

The first respondent (Asst PF Commissioner, Madurai) initiated proceedings against petitioner for depositing the PF dues, under Section 7A. The petitioner, it was stated, was covered under the Act and was making contribution only to 225 eligible employees. Apart from these employees, they had also engaged number of persons as trainees. The petitioner contended that their standing order provided for such employment, and they were not eligible for PF coverage. R-1 claimed that it was only a camouflage to label them as trainees. They were regular employees, the respondent claimed. The Tribunal, while rejecting the case of petitioner, ruled they were regular employees. It cited a decision of this Court in NEPC Textiles Ltd vs Regional PF Commissioner reported in 2007 LLR 535 wherein it was held that though persons were engaged as apprentices, they were required to do work of regular employees, and hence they could be deemed to be employees of the mill.

The Tribunal further submitted that workers of the Company were receiving bonus under Section 2(13) of Bonus Act. The term ‘employee' was defined which included apprentice. Therefore, they should be considered as employees of the Company. For purpose of Bonus Act, they could not treat non-covered workers as employees and for purpose of EPF Act, they would be treated as non-employees. Mr Justice K. Chandru held that this Court was unable to agree with the petitioner's submission. The writ petition would stand dismissed