Fwd: TaxGuru.in : Legal & Tax Updates

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From: LEGAL & FINANCIAL UPDATES FROM TAX GURU <info@taxguru.in>
Date: Fri, Sep 3, 2010 at 9:48 AM
Subject: TaxGuru.in : Legal & Tax Updates
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TaxGuru.in : Legal & Tax Updates

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• ESIC Amendment Act, 2010- Key Highlights
• Expression 'liable to tax' in contracting State as used in Article 4(1) of Indo-UAE-DTAA not necessarily imply that person should actually be liable to tax in that contracting State
• It is obligatory on part of assessee to deduct TDS at the time of credit of interest income to account of payee or at time of payment thereof
• Provisions of section 194C not attracted to finance agreements between financing company and producers/directors of films/TV serials
• Reopening beyond 4 years on the basis of Supreme Court's judgement not justified if assessee not failed to disclose material facts
• DTC: Investment in Pension Products may get tax exemption
• DTC: LTA may be exempted
• FM calls for concrete steps to recover Rs 38K cr tax arrears
• Panel recommends allow companies to donate more to political parties
• Advanced Economies Need Long-Term Efforts to Tame Public Debt, IMF Studies Find
• Direct tax code: Impact on Indian Companies
• DTC: LIC wants tax breaks on policies primarily used for investment rather than protection retained
• DTC: Its better to opt for higher basic Salary
• DTC: Money received or receivable from transfer of carbon credits will be treated as business income and taxed
• Direct Tax Code: Provisions merit your attention
• Penalty under section 271(1)(c) leviable, even if no tax is payable by an assessee
• AO cannot act u/s. 147 merely because he happened to change his opinion or to hold an opinion different from that of his predecessor on same set of facts
• For the purpose of computing deduction u/s 10B, speculation business cannot be considered as business of undertaking
• Penalty imposable under main provisions of section 271(1)(c) and there is no need to refer to any Explanations
• Merely because for purpose of stamp duty, property is valued at higher cost, it cannot be said that assesses has made more payment than what is stated in sale deed
• Assessee not expected to demonstrate that contracts are not artificially split
• Extension of CFC-MCA21 Scheme
• ICAI Presidents Message – September 2010
• Relevance Of OECD Guidelines: Department's View
• FM meets Income Tax officials and discussed investigation in tax evasion cases
• IFRS may not put an end to the accounting scams : ICAI President
• IDBI done away with the concept of minimum balance
• Government Proposes 5 Percent tax on Dividend distributed by mutual fund or life insurer
• Both Houses of Parliament Pass Twenty four bills during Monsoon Session
• Non Resident women not entitled to Higher exemption limit

ESIC Amendment Act, 2010- Key Highlights Posted: 02 Sep 2010 08:43 PM PDT The Government of India has notified ESIC Amendment) Act 2010 vide official gazette dated 25 May 2010. The Employees State Insurance Act, ESI Act for short, was enacted by the Government of India in 1948. The Government of India through notification... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Expression 'liable to tax' in contracting State as used in Article 4(1) of Indo-UAE-DTAA not necessarily imply that person should actually be liable to tax in that contracting State Posted: 02 Sep 2010 07:54 PM PDT To claim benefit of Article 13(3) by a tax resident of UAE, it is enough if other contracting State has right to tax such person, whether or not such a right is exercised [[ This is a content summary only. Visit www.taxguru.in for full article ]]

It is obligatory on part of assessee to deduct TDS at the time of credit of interest income to account of payee or at time of payment thereof Posted: 02 Sep 2010 07:42 PM PDT Application of payees in Form No. 13 to jurisdictional AOs for issuance of authorization etc., cannot in any stretch of imagination, be construed as an authorization to assessee not to deduct TDS for interest due to payees. [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Provisions of section 194C not attracted to finance agreements between financing company and producers/directors of films/TV serials Posted: 02 Sep 2010 07:41 PM PDT In this bunch of four appeals, the assessee has challenged the impugned common order of the Learned CIT(A) for the A.Y. 2003-04 to 2006-07 dated 24.11.2006 and all these four appeals are arising out of the orders passed by the I.T.O.(TDS) - 3(1),... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Reopening beyond 4 years on the basis of Supreme Court's judgement not justified if assessee not failed to disclose material facts Posted: 02 Sep 2010 07:33 PM PDT The judgment of the Supreme Court is an expression of opinion on the interpretation of statute. Merely because a judgment has been rendered, the same cannot be a ground for reopening the assessment u/s 147 as it amounts to a change of opinion.... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

DTC: Investment in Pension Products may get tax exemption Posted: 02 Sep 2010 07:04 PM PDT Pension products offered by insurers and mutual funds could be included in the long-term savings schemes eligible for tax concession available to individual under the new Direct Taxes Code provided they meet the norms laid out by the government. [[ This is a content summary only. Visit www.taxguru.in for full article ]]

DTC: LTA may be exempted Posted: 02 Sep 2010 07:00 PM PDT The government may allow the Leave Travel Allowance (LTA) to be exempted from taxation once the Direct Tax Code (DTC) comes into effect. The directive to this extent will figure in the rules to be framed by the finance ministry after the DTC is... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

FM calls for concrete steps to recover Rs 38K cr tax arrears Posted: 02 Sep 2010 06:55 PM PDT Concerned over Rs 38,000 crore in tax revenue being locked up in legal disputes, Finance Minister Pranab Mukherjee today asked the authorities to step up efforts to realise the taxes. "Rs 28,046 crore is blocked in appeal before CIT (Appeal) and Rs... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Panel recommends allow companies to donate more to political parties Posted: 02 Sep 2010 06:50 PM PDT A Parliamentary Standing Committee has recommended raising the limit of donations a company can make to the political parties in a year from 5 per cent to 7.5 per cent of the average net profits in three immediate past financial years. [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Advanced Economies Need Long-Term Efforts to Tame Public Debt, IMF Studies Find Posted: 02 Sep 2010 06:41 PM PDT Advanced economies must pursue long-term policy reforms to reduce public debt levels over the coming decades and ensure future fiscal sustainability, according to three papers published today by the International Monetary Fund (IMF). In order to... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Direct tax code: Impact on Indian Companies Posted: 02 Sep 2010 06:26 PM PDT Monday's announcement of the new Direct Taxes Code (DTC) proposals is among the two far-reaching reforms that will help India sustain high growth rates. For the capital markets, the Bill is positive, says Rakesh Arora, associate director, Macquarie... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

DTC: LIC wants tax breaks on policies primarily used for investment rather than protection retained Posted: 02 Sep 2010 06:20 PM PDT The Life Insurance Corporation of India has made a strong case for continuing tax breaks on life insurance policies bought with an investment objective. Referring to the Direct Tax Code proposal that extends tax-breaks to only those policies that... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

DTC: Its better to opt for higher basic Salary Posted: 02 Sep 2010 05:50 PM PDT If the Direct Taxes Code Bill does not undergo further changes, employees in the lower tax bracket will get more retirement benefits, provided they opt for a higher basic salary. "Contributions made towards retirement benefits are linked to the... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

DTC: Money received or receivable from transfer of carbon credits will be treated as business income and taxed Posted: 02 Sep 2010 05:42 PM PDT Sale proceeds of carbon credits will not escape tax when the new Direct Taxes Code comes into effect from April 1, 2012. This is because the DTC Bill 2010 has explicitly stated that money received or receivable from transfer of carbon credits will... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Direct Tax Code: Provisions merit your attention Posted: 02 Sep 2010 04:04 PM PDT TAXATION OF EMPLOYMENT INCOME AND DEDUCTIONS: There is an increase in exemption limit for medical reimbursement from Rs 15,000 to Rs 50,000. On making contributions to any approved fund for himself/spouse/child, an individual is allowed a deduction... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Penalty under section 271(1)(c) leviable, even if no tax is payable by an assessee Posted: 02 Sep 2010 02:44 PM PDT Even if assessee has disclosed nil income and on verification of the record, it is found that certain income has been concealed or has wrongly been shown, in that case, penalty can still be levied. [[ This is a content summary only. Visit www.taxguru.in for full article ]]

AO cannot act u/s. 147 merely because he happened to change his opinion or to hold an opinion different from that of his predecessor on same set of facts Posted: 02 Sep 2010 02:44 PM PDT Where it was clear from the original assessment orders as well as order made by the appellate authority that the Assessing Officer was well aware about the primary facts, viz., the claim made by the assessee, the circumstances under which the claim... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

For the purpose of computing deduction u/s 10B, speculation business cannot be considered as business of undertaking Posted: 02 Sep 2010 02:34 PM PDT We have heard both the parties. A forward contract is an agreement between a buyer and a seller obligating the seller to deliver a specified asset of specified quality and quantity to the buyer on a specified date at a specified place and the buyer... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Penalty imposable under main provisions of section 271(1)(c) and there is no need to refer to any Explanations Posted: 02 Sep 2010 02:34 PM PDT The assessee has challenged the levy of penalty on three grounds. Firstly, the assessee has argued that the penalty proceedings have been initiated for concealing the particulars of income but the penalty has been imposed for furnishing inaccurate... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Merely because for purpose of stamp duty, property is valued at higher cost, it cannot be said that assesses has made more payment than what is stated in sale deed Posted: 02 Sep 2010 01:44 PM PDT These seven appeals by different assessee are arising out of order of Commissioner of Income-tax (Appeals)-IV, Surat in appeal Nos. CAS-IV/100-106/ 2008-09 dated 12-10-2009. The assessments were framed by ACIT, Circle-7and ITO Ward-7(2) Surat vide... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Assessee not expected to demonstrate that contracts are not artificially split Posted: 02 Sep 2010 12:52 PM PDT 8. We find that there is no dispute about applicability of India Mauritius tax treaty on the facts of the present case, as also about the fundamental position that the provisions of the said treaty being beneficial to the assessee, the same will... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Extension of CFC-MCA21 Scheme Posted: 02 Sep 2010 05:42 AM PDT Cost Accountants in practice who meet the eligibility criteria prescribed under CFC-MCA -21 Schemes launched by MCA for a period of 2 months w.e.f 01.07.2010 has been extended for a period of three months w.e.f. 01.09.2010 [[ This is a content summary only. Visit www.taxguru.in for full article ]]

ICAI Presidents Message – September 2010 Posted: 02 Sep 2010 05:37 AM PDT According to the UN, a 'discrimination between human beings on the ground of race, colour or ethnic origin is an offence to human dignity and shall be condemned…as a violation of the human rights and fundamental freedoms… as a fact capable of... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Relevance Of OECD Guidelines: Department's View Posted: 02 Sep 2010 05:34 AM PDT In reply to a RTI application, the department has provided answers to questions on the OECD Guidelines and the effect of the same on the AO and the TPO. [[ This is a content summary only. Visit www.taxguru.in for full article ]]

FM meets Income Tax officials and discussed investigation in tax evasion cases Posted: 02 Sep 2010 05:31 AM PDT Finance Minister Pranab Mukherjee on Wednesday held a closed-door meeting with officials of the Income Tax department in Mumbai in view of the increasing number of tax evasion cases being reported from the financial metropolis. The meet assumes... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

IFRS may not put an end to the accounting scams : ICAI President Posted: 02 Sep 2010 05:24 AM PDT Corruption in the corporate world, the ones like the Satyam scam that shook the Indian corporate sector, cannot be eliminated using any accounting standards nor by an accountant as it happens due to the greed of the people at the helm and not due... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

IDBI done away with the concept of minimum balance Posted: 02 Sep 2010 05:15 AM PDT In a move aimed at increasing its share of current and savings account (CASA) deposits, IDBI has done away with the concept of minimum balance on these accounts and has waived off most service charges except those pertaining to bounced cheques. [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Government Proposes 5 Percent tax on Dividend distributed by mutual fund or life insurer Posted: 02 Sep 2010 04:17 AM PDT Investment in equity-linked mutual fund schemes and ULIPs will now be less profitable for investors, with the government proposing to levy a 5 per cent tax on the dividend paid by these entities. [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Both Houses of Parliament Pass Twenty four bills during Monsoon Session Posted: 02 Sep 2010 04:13 AM PDT The Monsoon Session, 2010 of Parliament which commenced on Monday, the 26th of July, 2010, concluded on Tuesday, the 31st of August, 2010. The Session was originally scheduled to conclude on Friday, the 27th of August, 2010 but the sittings of both... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

Non Resident women not entitled to Higher exemption limit Posted: 02 Sep 2010 03:58 AM PDT The Finance Act prescribes a higher exemption limit of Rs. 1.90 lakh only for "every individual, being a resident women in India" vide Item No. II of Part I of the First Schedule of the Finance Act. My non-resident cousin swears by para 16 of the... [[ This is a content summary only. Visit www.taxguru.in for full article ]]

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