From the desk of Mukesh Raj

Income Tax refund without matching TDS upto 3 lakh -Fy 2009-10

mukeshrajco — Fri, 23 Jul 2010 03:28:59 +0000

As per new rule of Income tax ,Tds claimed in the income tax return must be matched with data uploaded by the Deductor and data posted in form 26AS(Pan ledger) .Due to these instruction ,many refund orders are pending without any fault of assessee. Moreover Income tax rule has not empower deductee to enforce deductor to file revised return or upload the original return so that mismatching can be removed .So department has issued a Internal Instruction to their officer to settle the small cases of refunds without matching the 100% tds details. New rules are reproduced hereunder.
Processing of returns of Assessment Year 2009-10 – Steps to clear backlog
Instruction No. 5/2010 [F.No.225/25/2010-ITA-II], dated 21-7-2010
The issue of processing of returns for Asst. year 2009-10 and giving credit for TDS has been considered by the Board. In order to clear the backlog of returns, the following decisions have been taken:
(i) In all the returns filed in ITR-1 and ITR-2, for the Asst. Year 2009-10, where the aggregate TDS claim does not exceed Rs. Three lakh (3 lacs) and where the refund computed does not exceed Rs. 25,000; the TDS claim of the tax payer shall be accepted at the time of processing of the return.

(ii) In all the returns filed in forms other than ITR-1 and ITR -2, for the Asst. Year 2009-10, where the aggregate TDS claim does not exceed Rs. Three lakh (3 lacs) and the refund computed does not exceed Rs. 25,000 and there is 10% matching of TDS amount claimed, the TDS claim shall be accepted at the time of processing of the return.
(iii) In all remaining cases, TDS credit shall be given after due verification

CBDT AMENDS RULES RELATING TO TDS

mukeshrajco — Thu, 03 Jun 2010 05:19:07 +0000

The Central Board of Direct Taxes (CBDT) have amended the Rules relating to TDS provisions date and mode of payment of tax deducted at source (TDS), TDS certificate and filing of ‘statement of TDS’ (TDS return) vide Notification No.41/2010; SO No.1261(E) dated 31.05.2010.

The amended rules will apply only in respect of tax deducted on or after 1st day of April 2010.

Forms for TDS certificate have been revised to include the receipt number of the TDS return filed by the deductor. Now the Tax-deduction Account Number (TAN) of the deductor, Permanent Account Number (PAN) of the deductee, and Receipt number of TDS return filed by the deductor will form the unique identification for allowing tax credit claimed by the taxpayer in his income-tax return.

Government Authorities (Pay and Accounts Officer or Treasury Officer or Cheque Drawing and Disbursing Officer) responsible for crediting tax deducted at source to the credit of the Central Government by book-entry are now required to electronically file a monthly statement in a new Form No. 24G containing details of credit of TDS to the agency authorised by the Director General of Income-tax (Systems).

Due date for furnishing TDS return for the last quarter of the financial year has been modified to 15th May (from earlier 15th June). The revised due dates for furnishing TDS return are

Sl.No.	Date of ending of the quarter of the f.y.	Due date
1.	30th June	15th July of the financial year
2.	30th September	15th October of the financial year
3.	31st December	15th January of the financial year
4.	31st March	15th May of the financial year Immediately following the financial year in which deduction is made

Due date for furnishing TDS certificate to the employee or deductee or payee is revised as under

Sl.No.

Company Law Settlement Scheme, 2010

mukeshrajco — Wed, 02 Jun 2010 06:27:28 +0000

The Ministry of Corporate Affairs has come out again with the much awaited Company Law Settlement Scheme in exercise of its powers under Section 611(2) and 637B (b) of the Companies Act, 1956 “Company Law Settlement Scheme, 2010.

Under the scheme an opportunity is given to the defaulting companies to make their default good by filing belated documents and to become regular compliant in future.

Reliefs provided in scheme are:

Condoning the delay in filing documents with the Registrar.
Granting immunity from prosecution and
Charging additional fee of 25 percent of actual additional fee payable for filing belated documents under the Companies Act,1956 and the rules made there under.

Defaulting company shall mean a company registered under the Companies Act, 1956 and a foreign company falling under section 591 of the Act, which has made a default in filing of documents on the due date(s) specified under the Companies Act, 1956 and rules made there under;

The scheme is valid from 30th May, 2010 to 31st August, 2010.

The Scheme shall not apply to following:

Filing of documents for incorporation or establishment of place of business in India
Where specific order for condonation of delay or prior approval under the provisions of the Companies Act, 1956 is to be obtained from the Company Law Board or the Central Government or Court or any other Competent Authority is required.
Companies against which action under sub-section (5) of section 560 of the Act has been initiated by the Registrar of Companies
Any defaulting private company or public company which has not increased its paid capital up to the threshold limit of rupees one lakh and rupees five lakh respectively as provided in sub section (3) and (4) of section 3 of the Companies Act, 1956.

How the Scheme will function

The defaulting company shall pay statutory filing fees as prescribed under the Companies Act and rules made there under along with an additional fee of 25 percent of the actual additional fee standardized under sub-section (2) of Section 611 of the companies Act, 1956,payable on the date of filing of each belated document;

The application for seeking immunity in respect of belated documents shall be made electronically in the Prescribed Form.

Delhi High Court grant the stay on service tax on renting of immovable property

mukeshrajco — Sun, 23 May 2010 07:40:54 +0000

The Hon’ble Delhi High Court in the aforesaid Writ Petition filed by Home Solutions Retail Ltd. has granted a stay from recovery of Service tax under the newly amended taxing entry of “Renting of Immovable Property service”, which amendment was made retrospective w.e.f. 01.06.2007 by the Finance Act, 2010.

Conditions of listing for issuers seeking listing on SME Exchange

mukeshrajco — Tue, 18 May 2010 09:15:19 +0000

In recognition of the need for making finance available to small and medium enterprises, SEBI has decided to encourage promotion of dedicated exchanges and/or dedicated platforms of the exchanges for listing and trading of securities issued by Small and Medium Enterprises (“SME”). Consequently, SEBI amended SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“SEBI (ICDR) Regulations”) by inserting a Chapter XA on “Issue of specified securities by small and medium enterprises”, through notification dated April 13, 2010. In continuation of the same and to facilitate listing of specified securities in the SME exchange, “Model Equity Listing Agreement” to be executed between the issuer and the Stock Exchange, to list/migrate the specified securities on SME Exchange, is specified through this circular.

The full text of “Model Equity Listing Agreement – for SME Exchange” is given at Annexure A. This agreement shall be executed for listing of specified securities issued or migrated on SME exchange, in terms of Chapter XA of the SEBI (ICDR) Regulations.

Certain relaxations are provided to the issuers whose securities are listed on SME exchange in comparison to the listing requirements in Main Board, which inter-alia include the following:

a. Companies listed on the SME exchange may send to their shareholders, a statement containing the salient features of all the documents, as prescribed in sub-clause (iv) of clause (b) of proviso to section 219 of the Companies Act, 1956, instead of sending a full Annual Report;

b. Periodical financial results may be submitted on “half yearly basis”, instead of “quarterly basis” and

c. SMEs need not publish their financial results, as required in the Main Board and can make it available on their website.

The above listing conditions are specified in exercise of the powers conferred under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992.
The Model SME Equity Listing agreement specified in the „Annexure A‟ shall come into force with immediate effect. 6. All Stock Exchanges are advised to:

(i) execute the Listing Agreement with the issuing companies in line with the Model Listing agreement specified in the Annexure, without limiting or diluting any of the requirements thereof;

(ii) make necessary and consequential amendments, if any , to their bye-laws for the implementation of the above decision;

(iii) disseminate the same on their website for easy access to the Issuers and investors; and

(iv) communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

SME Listing agreement

pricing guidelines for transfer of equity instruments from a resident to a non-resident and vice versa

mukeshrajco — Mon, 10 May 2010 03:29:15 +0000

In terms of Schedule 1 of the Notification, an Indian company may issue equity shares/compulsorily convertible preference shares and compulsorily convertible debentures (equity instruments) to a person resident outside India under the FDI policy, subject to inter alia, compliance with the pricing guidelines. Further, in terms of the A. P. (DIR Series) Circular No.16 dated October 4, 2004 and A. P. (DIR Series) Circular No. 63 dated April 22, 2009, general permission is available for transfer of equity instruments, by way of sale, from residents to non-residents (including transfer of subscriber’s shares) of an Indian company in sectors other than financial service sector (i.e. Banks, NBFCs, Insurance, Asset Reconstruction Companies, Infrastructure companies in securities market namely, Stock Exchanges, Depositories and Clearing Corporations, Credit Information Companies and Commodity Exchanges) from residents to non-residents and vice versa. NEW_PRCING_GUIDELINES

The extant guidelines have been reviewed in consultation with the Government of India and accordingly the pricing guidelines in respect of issue of shares including preferential allotment have been revised

Paragraph No.

Existing Provisions

Revised Provisions

2.2

Transfer by Resident to Non-resident (i.e. to incorporated non-resident entity other than erstwhile OCB, foreign national, NRI, FII)

Transfer of shares by way of sale, by resident to non-resident shall be at a price not less than

a) the ruling market price, in case the shares are listed on stock exchange,

b) fair valuation of shares done by

Transfer by Resident to Non-resident (i.e. to foreign national, NRI, FII and incorporated non-resident entity other than erstwhile OCB)

(a) where shares of an Indian company are listed on a recognized stock exchange in India, the price of shares transferred by way of sale shall not be less than the price at which a preferential allotment of shares can be made under the SEBI Guidelines, as applicable, provided that the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date of purchase or sale of shares.

(b) where the shares of an Indian

2.3

Transfer by Non-resident (i.e. by incorporated non-resident entity, erstwhile OCB, foreign national, NRI, FII) to Resident.

Sale of shares by a non-resident to resident shall be in accordance with Regulation 10 B(2) of Notification No. FEMA 20/2000-RB dated May 03,2000 which is as below:

a) Where the shares of an Indian company are traded on stock exchange

i) The sale is at the prevailing market price on stock exchange and is effected through a merchant banker registered with the SEBI or through a stock broker registered with the stock exchange.

ii) if the transfer is other than that referred to in clause (i), the price shall be arrived at by taking the average quotations (average of daily high and low) for one week preceding the date of application with 5 per cent variation.

Where, however, the shares are being sold by the foreign collaborator or the foreign promoter of the Indian company to the existing promoters in India with the objective of passing management control in favour of the resident promoters the proposal for sale will be considered at a price which may be higher by up to a ceiling of 25 per cent over the price arrived at as above.

(b) Where the shares of an Indian company are not listed on stock exchange or are thinly traded,

i) if the consideration payable for the transfer does not exceed Rs.

20 lakh per seller per company, at a price mutually agreed to between the seller and the buyer, based on any valuation methodology currently in vogue, on submission of a certificate from the statutory auditors of the Indian company whose shares are proposed to be transferred, regarding the valuation of the shares, and

ii) if the amount of consideration payable for the transfer exceeds Rs.20 lakh per seller per company, at a price arrived at, at the seller’s option, in any of the following manner, namely:

A) a price based on earning per share (EPS) linked to the Price Earning (P/E) multiple ,or a price based on the Net Asset Value (NAV) linked to book value multiple, whichever is higher,

B) the prevailing market price in small lots as may be laid down by the Reserve Bank so that the entire shareholding is sold in not less than five trading days through screen based trading system

C) where the shares are not listed on any stock exchange, at a price which is lower of the two independent valuations of share, one by statutory auditors of the company and the other by a Chartered Accountant or by a Merchant Banker in Category 1 registered with Securities and Exchange Board of India.

Transfer by Non-resident (i.e. by incorporated non-resident entity, erstwhile OCB, foreign national, NRI and FII) to Resident

Price of shares transferred by way of sale, by non-resident to resident shall not be more than the minimum price at which the transfer of shares can be made from a resident to a non-resident as given in para 2.2 above.

(b) where the shares of an Indian company are not listed on a recognized stock exchange in India, the transfer of shares shall be at a price not less than the fair value to be determined by a SEBI registered Category-I-Merchant Banker or a Chartered Accountant as per the discounted free cash flow method.

The price per share arrived at should be certified by a SEBI registered Category-I-Merchant Banker / Chartered Accountant.

ESI coverage limit increased from 10,000 to 15,000 w.e.f 01-05-2010

mukeshrajco — Wed, 28 Apr 2010 02:45:27 +0000

The ESI Corporation has approved to enhance wage ceiling from Rs 10,000 per month to Rs15,000 per month for coverage of employees under the ESI Scheme in its 149th meeting held on Friday under the chairmanship of Union Minister of Labour and Employment Mallikarjun Kharge.

Union Minister of State for Labour and Employment Harish Rawat and the vice-chairman, ESIC, were also present in the meeting.

Keeping in view the increase in cost of living index and recommendations of the Parliamentary Standing Committee on Labour, the corporation increased the wage ceiling limit for coverage of the employees under the ESI Scheme.Notification

This will help the corporation to provide social security net to more and more employees of the organised sector.

New Income Tax Return Form SARAL II for Assessment Year 2010-11

mukeshrajco — Tue, 27 Apr 2010 04:05:39 +0000

CBDT notifies New Income Tax Return Form SARAL II (ITR 1) for Assessment Year 2010-11 for Individuals having income from Salary/Pension/Income from One House Property (Excluding loss brought forward from previous years) / Income from Other Sources (Excluding winning from Lottery and Income from Race Horses). CBDT also notifies Income Tax Return Verification Form ITR-V for Assessment Year 2010-11 for SARAL II (ITR-1) ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 & ITR-8 transmitted electronically without digital signature. notification new saral-II

How to open a Bank account for Sole Proprietorship

mukeshrajco — Sat, 27 Mar 2010 12:59:47 +0000

RBI/2009-10/362
DBOD.AML.BC.No.80/14.01.001/2009-10

March 26, 2010

The Chairmen and Chief Executive Officers

All Scheduled Commercial Banks excluding RRBs/
All India Financial Institutions/Local Area Banks

Dear Sir,

Know your Customer (KYC) guidelines – accounts of proprietary concerns

A reference is invited to Para 2.4(a) of the Master Circular on KYC/AML/CFT/Obligation of banks under Prevention of Money laundering Act (PMLA), 2002 issued to banks vide DBOD.AML.BC.No.2/14.01.001/2009-10 dated July 1, 2009. It has been advised to banks that internal guidelines for customer identification procedure of legal entities may be framed by them based on their experience of dealing with such entities, normal bankers’ prudence and the legal requirements as per established practices. If the bank decides to accept such accounts in terms of the Customer Acceptance Policy, the bank should take reasonable measures to identify the beneficial owner(s) and verify his/her/their identity in a manner so that it is satisfied that it knows who the beneficial owner(s) is/are

2. For sake of clarity, in case of accounts of proprietorship concerns, it has been decided to lay down criteria for the customer identification procedure for account opening by proprietary concerns. Accordingly, apart from following the extant guidelines on customer identification procedure as applicable to the proprietor, banks / financial institutions should call for and verify the following documents before opening of accounts in the name of a proprietary concern:

i) Proof of the name, address and activity of the concern, like registration certificate (in the case of a registered concern), certificate/licence issued by the Municipal authorities under Shop & Establishment Act, sales and income tax returns, CST/VAT certificate, certificate/registration document issued by Sales Tax/Service Tax/Professional Tax authorities, Licence issued by the Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc.

ii) Any two of the above documents would suffice. These documents should be in the name of the proprietary concern.

4. These guidelines will apply to all new customers, while in case of accounts of existing customers, the above formalities should be completed in a time bound manner and should be completed before December 31, 2010.

5. Please acknowledge receipt.

Yours faithfully,

(Vinay Baijal)
Chief General Manager

Delhi VAT Budget 2010 Proposals

mukeshrajco — Tue, 23 Mar 2010 12:15:38 +0000

Ca. Vinay Bhushan

VAT rates of various commodities in Delhi, which are less than the rates suggested by the Empowered Committee of State Finance Ministers, are termed as deviations. A number of deviations have been done in the past. On account of these deviations Delhi Government have incurred losses in revenue collection as well as reduced compensation from the Central government. It has been proposed to remove such deviations on items / commodities and levy VAT as follows:-

From exempted 0% to 5%

1. Compressed natural gas (CNG) for use in transport sector

2. Rassi, Ban & Newar

3. Bio inputs like Fertilizers and Micro-nutrients and plant growth promotors

4. Kerosene stoves, lanterns and petromax and their spares

5. Embroidery and zari items

From exempted (0%) to 12.5%.

1. Motion Picture distribution when treated as right to use goods

2. Plastic scrap/ glass scrap.

From 5% to 12.5%

1. All other scraps

2. Dry fruits and kesar and magaj of all kind

3. Desi Ghee

4. Household plastic items

5. Plastic and tin containers including barrels

6. Wood and timber and plywood and laminated boards

7. Fitting for doors and windows and furniture

8. Wire mesh and metal mesh

9. Paintbrushes

10. Tractor tyres and tubes

11. Cocoa and coffee including coffee beans

12. Invertors

13. All Utensils and cutlery items (including Pressure cookers / Pans) except those made of precious metals

14. Fertilizers, pesticides, weedicides, insecticides, herbicides, rodentecides and plant growth regulators (other than those covered in First Schedule)

15. Glucose D

16. Locks

17. Weights and Measures

18. Fibre Board and particle board

19. Tea

Diesel From 12.5% to 20%

Concessions continue on following items :

1. Kirana Items except dry fruits, kesar and magaj of all kind

2. Foodgrains, Atta, Maida, Suji

3. Amla, Harad, Bahera, Shikakai, Supari, Ratanjot, Khusak, Pudina

4. Hawan Samagri and Incense Sticks

5. Unbranded goli and toffee

6. Midday Meal supplied by agencies approved by the Delhi Govt. and Local Bodies to schools

7. Jute and all kind of jute products including natural dyes and bleached, diversified, plain and laminated jute products

8. School Bags with MRP upto Rs.300/-

9. Tricycles meant for use by persons with disability

10. Blood filters

11. Compact Fluorescent Lamp and electronic Choke

12. Natural Gas and R-LNG (Re-gassified Liquid Natural Gas) sold to power generation companies owned by Government of NCT of Delhi for generation of power meant for sale in Delhi)

13. Piped Natural Gas

Luxury Items :- It is proposed to increase VAT on writing instruments costing above Rs.1,000/- from present 5% to 12.5%, watches above Rs.5,000/- from 12.5% to 20%, Mobile Phones and all mobile accessories above Rs.10,000/- from 5% to 12.5%, readymade garments above Rs.5,000/- from 5% to 12.5%. This measure is likely to generate approximately Rs.100 crores as additional revenue.

It is proposed to enhance VAT on aerated drinks from 12.5% to 20% as a measure to generate additional revenue to the tune of Rs.10 crores.

To give relief to Thalesemia patients we have already exempted “Desferrioxamine” “Deferiprone” and Blood Filters (Lucocites Filter) used for treatment of Thalassemix. I also propose to exempt new Oral Iron Chelator Defarasirox by including it in the First Schedule of the Act.

Government of Delhi has constituted the Delhi Dispute Resolution Society with the objective to establish institutionalized mechanism of alternate dispute resolution. I propose to frame a mechanism of mediation to resolve disputes of Sales Tax / Value Added Tax cases by appropriately amending the DVAT Act, 2004.

Subsidy on Domestic LPG:-

Due to subsidy of Rs.40/- on domestic LPG cylinder (14.2 Kg.), Government of Delhi is bearing a burden of approximately Rs.160/- to Rs.170 crores per annum. It is proposed to withdraw this subsidy.

Stamp & Registration

The registration fee charged on various documents under Indian Registration Act, as applicable to Delhi, is meager. The maximum registration fees is Rs.100/- in NCT of Delhi. It is proposed to bring it at more realistic level by raising maximum registration fee to Rs.500/- and registration fees in other slabs will also be enhanced proportionately. It is likely to generate additional revenue of Rs.6 crores.

(Please note that these are only proposals and will be effected only after passing of the budget and notification)