MCA extend last date for filing DPT4 without additional fee upto August 30,2014
30 June 2014
27 June 2014
CBDT releases E-filing Utility of ITR-5 for AY 2014-15
After Long Wait CBDT has Finally Released ITR 5 which is applicable for Income Tax Return (ITR) of firms, AOPs, BOIs and LLPs for Assessment year 2014-15. CBDT has Released Java Utility of ITR-5 and we expect Excel Utility also to be released soon.![]()
The Recent Clarifications issued by MCA on 25th June 2014
The Recent Clarifications issued by MCA on 25th June 2014 and Notification is reproduced below for your ready reference:
1. General Circular no. 24/2014 :
In continuation of the General circular No. 20/2013 dated 2711212073, it is clarified that the shares held by a company in another company in a 'fiduciary capacity' shall not be counted for the purpose of determining the relationship of 'associate company' under section 2(6) of the Companies Act, 2013.
2. General Circular no. 23/2014 :
it is clarified that there is no bar in the new Act for a company incorporated outside India to incorporate a subsidiary either as a public company or a private company. An existing company, being a subsidiary of a company incorporated outside India, registered under the Companies Act, 1956, either as private company or a public company by virtue of section 4(7) of that Act, will continue as a private company or public company as the case may be, without any change in the incorporation status of such company.
3. General Circular no. 22/2014 :
It is, clarilied that Form MGT-7 shall not apply to annual returns in respect of companies whose financial year ended on or before 1st April, 2014 and for annual returns pertaining to earlier years. These companies may file their returns in the relevant Form applicable under the Companies Act, 1956.
It is clarified that until the requisite fee is specified by companies, inspections could be allowed wlthout lely of fee.
4. Notification : Companies (Management and Administration) Amendment Rules, 2014.
In the Companies (Management and Administration) Rules, 2014, in rule 20,
(i) in sub-rule (1), the following shall be inserted, namely:-"Provided that the Company may provide the facillty referred to in this sub rule on or before 1st Day of January 2015.
(ii) in sub-rule (3), for the words "which opts to provide", the words "which
provides" shall be substituted.
26 June 2014
Govt extends excise duty sops for capital goods & auto sector for six more months
Govt extends excise duty sops for capital goods & auto sector for six more months
[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification No. 06/2014-Central Excise
New Delhi, the 25th June, 2014
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2012-Central Excise, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 163(E), dated the 17th March, 2012, namely:-
In the said notification, in the opening paragraph, in the second proviso, for the figures, letters and words “30th day of June, 2014”, the figures, letters and words “31st day of December 2014” shall be substituted.
[F.No. 354/85/2014-TRU]
(Akshay Joshi)
Under Secretary to the Government of India
25 June 2014
e Wealth Tax Return Mandatory
WEALTH-TAX (FIRST AMENDMENT) RULES, 2014 - SUBSTITUTION OF RULE 3 AND INSERTION OF FORM BB
NOTIFICATION NO.32/2014 [F.NO.143/1/2014-TPL]/SO 1576(E), DATED 23-6-2014
In exercise of the powers conferred by clause (ba) and clause (bb) of sub-section (2) of section 46 read with section 14A and section 14B of the Wealth-tax Act, 1957 (27 of 1957), the Central Board of Direct Taxes hereby makes the following rules further to amend the Wealth-tax Rules, 1957, namely:—
1. (1) These rules may be called the Wealth-tax (First Amendment) Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Wealth-tax Rules, 1957 (hereinafter referred to as the "said rules"),—
(i) for rule 3, the following rule shall be substituted, namely:—
"3. FORM OF RETURN OF NET WEALTH.—(1) The return of net wealth referred to in section 14 shall—
| (a) | in respect of assessment year 2013-14 and earlier assessment years in the case of individuals, Hindu undivided families and companies, be in Form BA and shall be verified in the manner specified therein. | |
| (b) | in respect of the assessment year 2014-15 and any other subsequent assessment year in the case of individuals, Hindu undivided families and companies be in Form BB and shall be verified in the manner specified therein. |
(2) Subject to the provisions of sub-rule (3), for the assessment year 2014-15 and any other subsequent assessment year, the return of net wealth referred to in sub-rule (1) shall be furnished electronically under digital signature.
(3) In case of individual or Hindu undivided family to whom the provisions of section 44AB of the Income-tax Act, 1961 (43 of 1961) are not applicable, the return of net wealth referred to in sub-rule (1) may be furnished for assessment year 2014-15 in a paper form.
(4) The return of net wealth required to be furnished in Form BB shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax and interest paid, or any document or copy of any account or form of report of valuation by registered valuer required to be attached with the return of net wealth under any provisions of the Act.
(5) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the returns in the manners specified in sub-rule (2)."
3. In the said rules, in Appendix, after Form BA, the following Form shall be inserted; namely :—
| FORM BB RETURN OF NET WET WEALTH [See rule 3(1)(b) of Wealth-tax Rules, 1957] |
24 June 2014
Chapter XII, section 185 Shall not apply to Private companies
Proposed notification includes: Relaxation given for deposits from shareholders. Provisions Shall not apply to private companies having 50 or less number of members if they accept monies from their members not exceeding twenty five per cent of aggregate of the paid up capital and free reserves or one hundred per cent of the paid up capital whichever is lower.
Private limited companies limit of 20 audits not 2 apply
Chapter XII, section 185 Shall not apply to Private companies - (a) which have borrowings from banks or financial institutions or any bodies corporate not more than twice of their paid up share capital or Rs. 50 crore, whichever is lower; and (b) in whose share capital no other body corporate has invested any money”.
22 June 2014
SECTION 143(3)(i) OF THE COMPANIES ACT 2013 AND THE RELATED RULES 20-06-2014
APPLICABILITY OF THE PROVISIONS OF SECTION 143(3)(i) OF THE COMPANIES ACT 2013 AND THE RELATED RULES
20-06-2014
Section 143(3)(i) of the Companies Act 2013 requires the auditors of the companies to report as whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
The Council of the Institute of Chartered Accountants of India, at its adjourned 333rd meeting held on 18th June 2014, considered the issue of applicability of the provisions of sections 143(3)(i) of the Companies Act 2013 and the related Rules to the audits of the periods beginning on or before 31st March 2014.
The Council noted that the sections 143(3)(i) had come into force in respect of financial years beginning on or after 1st April 2014. The Council was of the view that the provisions of sections 143(3)(i) of the Companies Act 2013 applied to the auditors appointed under the Companies Act 2013 to audit the financial statements for the year beginning on or after 1st April 2014. As a corollary, the requirements of these sections and related Rules would not apply to audits of financial statements of the periods beginning on or before 31st March 2014, even if the audits therefor were actually carried out and auditor’s report thereon issued on or after 1st April 2014. These would continue to be done as per the requirements of the Companies Act 1956.
The Council also decided that as a corollary, the provisions of section 143(3)(i) of the Companies Act 2013 would apply to the audits of the financial year beginning on or after 1st April 2014.
This Announcement has been issued by the President, ICAI under the authority of the Council of the Institute of Chartered Accountants of India.
20 June 2014
Mobile mandatory by ITD
From today ITD made mandatory updation of mobile no and email id of all assessees to make website more secure. All assessees to update their credentials this will be used for recreation of passwords in case it is misplaced or forgotten. Information from CPC call centre password regeneration request will be sent on registered new email id
19 June 2014
Annual Return-FLA
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17 June 2014
TARC Report
First Report Of The Tax Administration Reform Commission
It may be recalled that the Tax Administration Reform Commission, headed by Dr. Parthasarathi Shome, was set up in August 2013 to suggest core reforms to the tax administration set-up in the Country. The TARC has now issued a report dated 30.05.2014 called the "First Report of the Tax Administration Reform Commission (TARC)". The said report makes several critical and far-reaching suggestions which are intended to radically change the working of the Income-tax and other Revenue departments.
One of the important recommendations is that the department should treat the taxpayer as a "customer" and have "customer focus" in its attitude, which is totally lacking at present. One of the important "fault lines" identified by the TARC is that there is extreme "risk aversion" amongst the officials with the result that it leads to infructuous tax demands and the filing of frivolous appeals. The TARC has also come down strongly on the rude and arbitrary behaviour of officers and their total lack of accountability. It has noted with regret that taxpayers are totally helplessness against such an attitude and this leads to non-compliance of tax laws.
It may be noted that several recent judgements such as Sairang Developers (Bom High Court), Bharti Airtel (ITAT Delhi) &Growel Energy (ITAT Mumbai) bear out the reality of what the TARC has stated.
Applicability of PAN Requirement for Foreign National
Applicability of PAN Requirement for Foreign National
Ministry has issued a circular dated 10th June, 2014 clarifying that foreign nationals, who are subscribers/promoters of a company are not required to furnish their PAN details, in case they are not allotted a PAN. They may provide a declaration instead in the prescribed proforma.
The corresponding notifications and circulars are available on the Ministry’s website at www.mca.gov.in.
Ministry of Corporate Affairs
13-June-2014 13:00 IST
13 June 2014
Sale of Malba (Scrap) on demolition of structure thereon is a Capital Gain
Sale of Malba (Scrap) on demolition of structure thereon is a Capital Gain and not income from other sources, held by High court of P. & H. in the case of CIT, Jalandhar V. Ribu Saggi. The 'a' sold land and malba after demolition of structure. AO treated sale of malba as income from other sources. It was held by HC that there was extinguishment of right of the assessee, in superstructure leading to transfer of the super structure, within the meaning of Sec. 2(47). Capital gain was to be computed by deducting indexed cost of structure from sale value of malba. In the same case capital gain on sale of land was computed by under estimating Fair market value of land as on 1.4.1981 at Rs. 21000/- per Marla only, by AO, Tribunal directed to take FMV at Rs. 125000/- per Marla, after considering valuation by DVO and valuation got done by 'a'. HC held that valuation of land is question of fact based on material on record and there arise no question of law. Hence upheld the order of Tribunal to value FMV as on 1.4.81 at Rs. 125000/- per Marla. [2014] 45
taxmann.com 371
CA. Vinay Mittal, Ghaziabad
12 June 2014
Sec 7 clarification about foreign national
SECTION 7 OF THE COMPANIES ACT, 2013 - INCORPORATION OF COMPANY - APPLICABILITY OF PAN REQUIREMENT FOR FOREIGN NATIONALS
GENERAL CIRCULAR NO.16/2014[F.NO.01/12/2013 CL-V], 2014- 06 -10
In continuation of the General Circular No. 12/2014 dated 22.05.2014 regarding the above subject, it is clarified that the provisions of the said Circular are applicable to a Foreign National who is a subscriber/promoter at the time of incorporation of the Company.
2. In case the said subscriber/promoter, does not possess Permanent Account Number (PAN), he/she shall furnish a declaration in the prescribed proforma, as an attachment to the Incorporation Form (INC-7).
3. Further, it is clarified that, in case of a Resident Director of the proposed company he/she shall be required to submit PAN details at the time of incorporation.
4. This issue with the approval of the Competent Authority.
Undertaking
I. . . . . . . . . . . . . (name) . . . . . . . . . . . . ., son of . . . . . . . . . . . . . (father's name) . . . . . . . . . . . ., citizen of . . . . . . . . . . . . . (nationality) R/o (Address) . . . . . . . . . . . . . having passport No. . . . . . . . . . . . . . (passport Number) . . . . . . . . . . . . . hereby declare as under:
(i) That I am not required to obtain Income Tax Permanent Account Number (PAN) under the provisions of Income Tax Act, 1961;
(ii) That in view of the above I have not been issued any PAN; and
(iii) That I undertake to furnish to the Registrar of Companies (mention jurisdiction) details of my PAN as soon as a Permanent Account Number is allotted to me.
Date:
Place: (Signature)
Name of the Person
■■
Update in ITR form
FYI - Please find updates in the ITR form of Financial year 2013-14 (AY 14-15) as under:
1. There are no refund by Cheque and only e-refund will be allowed
2. Claim of TDS/TCS credit of earlier years - Hence if we don't have sufficient income we can carry forward the credit benefit.
3. CIN/LLPIN in ITR has to be filled by Company/LLP
4. Buy back of shares must be reported in the ITR by CHC
5. PAN of Debtors has to be provided if the assessee is claimed Bad debts
6. In Capital gain Computation
- Details U/s. 50 C is required to be reported
- Sale of securities by FII's
7. Gains U/s. 43CA under PGBP
8. Special income tax Return has to be shown separately
9. Payment details to Non-residents required to be reported in ITR
10. Changes in ITR5/7
- ITR 5 includes Private discretionary trust
- In ITR 7 following details has to be reported:
a. Registration No. & Registration Authority
b. Accumulation of Income details
c. Voluntary contribution like whether from foreign or anonymous
11. Additional details U/s. 36/37
12. Transactions with Cyprus has to be reported if any.
Changes in tax returns
Now in the Income tax return form it will be necessary to show Property's
guideline value and transaction value separately U/s 50C
Now builders and colonizers will also have to show amount of difference in
property sold by them at less than guideline value U/s 43CA
Earlier State Govt. Undertakings used to save tax by making payment of
royalty, fees, charges, licence fee to its own State Government, now U/s
40(a) (iib) they are not allowed any deduction of such expenses, thereofre
in the ITR FORMS such payments will have to be sepaprately shown for
disallowance.
Now credit of unused TDS can be carried forward and brought forward if
the corresponding income is not taxable in the current year.
Now charitable and religious trust will have to give break up of corpus and
non corpus donation from local and foreign nations.
In case of bad debts exceeding 1 Lakh PAN No. will have to be given.
Payments to Non Residents will have to be shown separately by way of Royalty, Commission, Interest, Fees etc. So that it will be checked that Withholding tax U/s 195 has been deducted or not ?
Cost Inflation Index is 1024 for this year
Cost Inflation Index for calculation of Capital Gains for FY 2014-15 is 1024. Notification 31/2014 [F No 142/3/2014-TPL] of 11-6-2014.
05 June 2014
Maharashtra BUDGET
The Maharashtra BUDGET for 2014-2015 is announced today 5th June, 2014 and the main tax proposals in respect of Maharashtra VAT and Profession Tax are -
Registration limit increased to 10 lakhs
VAT Audit limit raised to 1 crore from FY 2013-2014
Late Fee reduced to Rs.2,000/- for late upto 1 month in filing Return
Pending Returns can be filed with Tax, interest and Late Fee of Rs.1,000/-.
Retailer composition @1% of total turnover or @1.5% of taxable turnover
No 30(4) penal interest if additional demand as audit or investigation is less than 10% of tax paid with returns.
Rate of Tax on Cotton reduced to 2%
Profession Tax limit for salaried persons increased to Rs.7,500/-
Representation on Companies Act,2013
Companies Act Needs Comprehensive Review: CII President Jun 04, 2014 | |
| CII has called for a comprehensive review of the Companies Act 2013 and Companies Rules, 2014 issued thereunder. "Due to the hurried pace in which the Companies Act, 2013 and the Companies Rules, 2014 were implemented, the industry barely got an opportunity to absorb and understand the provisions or their impact in their entirety. Many new concepts are being introduced in the legislation for the first time, and practices with respect to these need to be allowed to evolve over time. However, the rush to notify the Act has introduced disruptive features making it harder for corporates to ensure compliance", said Mr Ajay Shriram, President, CII, referring to the fact that the final set of Rules were released in the last week of March 2014 to be implemented from April 1, 2014.
Mr Shriram further added that "the Government needs to trust Industry. One or two incidence of corporate malfeasance should not lead to mistrust of the entire spectrum of corporate India and should not make normal business activities difficult. While the country is looking to improve its image after a series of setbacks like retrospective changes to tax laws, poor economic conditions, etc, an unclear and cumbersome Companies Act would make things worse. India already ranks very low in terms of ease of doing business and the new act will further add to the cost and complications of doing business".
In absence of any unambiguous clarifications from the Ministry of Corporate Affairs, companies are resorting to different interpretations of the provisions. There is no uniform interpretation of even items of ordinary business such as appointment of Independent Directors. CII has made detailed representation to the Government on the subject. Some of the key issues highlighted include:
One, clarity is required vis-Ã -vis transitional provisions. For example, while the Act provides transitional period of one year for the appointment of independent directors, constitution of Audit Committee and Nomination & Remuneration Committees is mandatory with effect from 1 April 2014. The two requirements need to be aligned.
Two, Directors of the Nomination and Remuneration Committee are expected to prescribe the criteria for evaluation of all directors; carry out evaluation of every director's performance and recommend the appointment and removal of directors. It is also required to lay down remuneration policies. Provisions such as this could make board's functioning difficult resulting in break-down of trust and too much caution. The Act should lay down specific and objective parameters in this regard.
Three, provisions pertaining to Related Party Transactions indirectly seeks to vest power in minority in most of cases which is against the fundamental principle of shareholders' democracy and majority rule. Legislation should balance interests of multiple stakeholders and equity must apply to both big and small shareholders to avoid misuse of the provisions by any class – majority or minority Further, the compliance requirement to obtain prior approval of audit committee for all related party transactions is too onerous and may result in Audit Committees not being able to give due focus to key items. .
Further, transactions between a holding company and its 100% subsidiary does not compromise interests of any stakeholders. However, it still has to comply with all procedural requirements as transactions with other parties.
Four, a careful review of the mandate of the Audit Committee is also required. It is for the auditors to monitor and confirm the effectiveness of the systems, processes and controls to the Audit Committee. A reverse obligation on the Audit Committee is clearly unwarranted. Requiring the Audit Committee to evaluate risk management system is also unreasonable.
Five, corporates should be allowed adequate legroom to comply with the CSR provision in a self-responsible manner. Incidental and supplementary activities even if related to Company's business should be allowed as CSR so long as they fall in the activities specified in schedule VII. Onerous provisions would hold back innovation, defeat legislative intent and shift the focus from 'comply with conscience' to 'tick-box compliance.' Government had in fact assured that it will authorize the Boards to choose the scope of CSR activities as it deems fit – this power has not been given in the Act as of now.
Six, private companies which are neither subsidiaries of listed companies nor have substantial borrowings from banks or financial institutions should be exempted from certain provisions of the Act. Such companies should not be treated at par with other public interest entities.
Seven, applicability of the requirement of rotation of auditors for companies other than listed companies is also prescribed under the Act. CII strongly suggests that private companies and public companies which do not have substantial public funding be exempted from this requirement.
In addition to the above, there are several inconsistencies between the Act and Rules and at times within the Act itself. CII has highlighted these anomalies in its detailed representation.
CII has all along underscored the need for ensuring that the new law aims at progression and development of business instead of impeding it. Law needs to contemplate and weigh up the interests not just of stakeholders but also take forward the business objects of the corporates. At a time when the situation warrants decentralisation of decision making to lower levels, the new act is proposing more centralization at Board levels.
CII hopes that the new government would take into consideration the difficulties being faced by corporates and take corrective steps in consultation with all | |
04 June 2014
PF Contribution capped at Rs.6,500
The Provident Fund Office has allowed companies to cap their monthly Provident Fund contribution to employees at Rs. 6,500. At present, companies contribute an amount equal to at least 12 per cent of an employee's basic salary towards his/her PF.
Now, when an employer deducts and deposits Employees' PF contributions upon more than the prescribed salary, it can be reduced to Rs. 6,500 per month and in that event, section 12 of the Employees' Provident Funds & Miscellaneous Provisions Act providing bar for not reducing wages will not be attracted unless the terms of the employment specifically provide so.
The full text of the circular is enclosed.
Hope you find the update useful.
Note: The above update is just for reference. User discretion and professional assistance is highly recommended before acting on the above.
LRS Limit Increased to USD 125,000
 | |
| Date: Jun 03, 2014 | |
| Liberalised Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000 | |
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