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News Direct Tax-Misc. Direct Tax

  • Sep 30, 2019
  • Corporate tax rate cuts: New contract manufacturing units eligible for 15 per cent tax benefit

    New contract manufacturing outfits can avail of the 15% corporate tax scheme but companies that opt for the 22% tax regime won’t be eligible for accumulated minimum alternate tax (MAT) credit, a senior government official said. The finance ministry will clearly specify what constitutes reorganisation or reconstruction of an entity and new manufacturing eligible for the 15% rate as part of detailed clarifications on the new corporate tax framework to clear the air on a number of issues that have been raised by industry. Companies that opt for the reduced corporate tax rate of 22% cannot claim any exemption or incentives, including accumulated MAT credit. “Contract manufacturing will be eligible,” the official said. “Natural meaning of manufacturing that has emerged out of several Supreme Court judgments will apply.”

  • Sep 27, 2019
  • DeMo cases: CBDT extends taxman's deadline to Dec 31

    The CBDT on Thursday extended the deadline up to December 31 for the Income-tax department to complete the final assessment of about 87,000 entities that made suspicious deposits post-demonetisation. The existing deadline of September 30 is being "extended" by three months after considering "various difficulties" being reported by the field offices of the department in finalising assessments in OCM (operation clean money) cases, a senior official told PTI. An order was issued by the Central Board of Direct Taxes (CBDT) on Thursday, setting the new deadline on December 31, the official said. The CBDT frames a policy for the I-T department. This is the second extension given by the Board in this case after the first deadline of June 30 was extended up to September, the official said.

  • Sep 26, 2019
  • Corporate tax: Small firms await clarity on MAT credit

    The recent changes in the corporate tax structure abolished the requirement of minimum alternative tax (MAT) for firms that opt for the new low-rates regime but have left it ambiguous if they could utilise accumulated MAT credit in the new regime. Tax experts say if the credits are not made available to the firms, companies that carry MAT credit as assets will have to write these off and take a big hit on profits, negating the purpose of boosting the cash flows of firms and prompting them to invest. Corporate tax rate cut decoded! Why FM Sitharaman’s announcement is a Diwali bonanza for economy .A clarification is being eagerly awaited by firms and chartered accountants. A finance ministry official acknowledged the confusion but said as the Ordinance issued on Friday is silent on use of MAT credit for those migrating to the new regime, it meant that accumulated credits can’t be utilised. Of course, if a firm chooses to remain with the old tax structure, the credits will be available to it.

  • Sep 21, 2019
  • Corporate India’s tax burden may come down by 18%

    The corporate tax rate has hovered between 25% and 29% since FY14 at the aggregate level for a sample of 167 companies from the BSE 200 index that have domestic promoters. In FY19, the sample companies reported ?1.9 lakh crore of tax outgo on profit of Rs. 6.6 lakh crore before taxes (PBT). This implies a tax rate of 29.1%.

  • Aug 29, 2019
  • Balancing act: Direct tax Code to bring no relief to stock markets

    The Direct Tax Code draft proposed by a government panel earlier this month may have sought to substantially lessen the tax burden on individuals and corporates, but it won’t alter the current tax regime for participation in and gains from the stock markets. According to official sources, extant taxes on the short-term and long-term capital gains from sale of assorted assets, including the contentious LTCG tax introduced for listed equities in the Finance Act 2018, will not only remain but will be levied at the same rates as now, post-adoption of DTC. So will be the case of securities transaction tax (STT).

  • Aug 28, 2019
  • Direct tax code task force favours scrapping dividend distribution tax

    In what could come in as a big relief for capital market players, the task force on direct tax code has recommended abolishing the dividend distribution tax while retaining the longterm capital gains tax and securities transaction tax, a source in the know of the matter said. The panel, which submitted its report to financeNSE -2.28 % minister Nirmala Sitharaman last week, has also suggested reworking the personal income tax structure with lower rates in a bid to make India a more tax-c more tax-compliant country. “The idea behind removal of DDT is to remove the cascading impact of taxation and the panel favours no preferential treatment for any class of investor,” said the source.

  • May 22, 2019
  • CBDT for more exhaustive tax audit report for charitable trusts

    The Central Board of Direct Taxes (CBDT) has proposed amendments to the tax audit report for charitable trusts and institutions, which would require additional details from assessees in the form of status of registration under the Income Tax Act, compliance to conditions for application and registration status under the Foreign Contribution Regulation Act (FCRA), 2010, among others. The draft notification has been put in the public domain and stakeholders have time till June 5 to submit their views. The proposed changes will extend the audit form to 8 pages from 3 pages earlier.

  • Apr 25, 2019
  • 342 startups get angel tax exemption since February

    With the commerce and industry ministry taking steps to support budding entrepreneurs, as many as 342 startups have received intimation regarding exemption from angel tax since February, an official said. Giving a major relief to budding entrepreneurs, the government in February relaxed the definition of startups and allowed them to avail full angel tax concession on investments of up to Rs 25 crore.

  • Apr 25, 2019
  • Capital gains tax relief likely for investors under new government

    With a view to give a further boost to the startup ecosystem in the country, DPIIT is considering exempting investors from capital gains tax when they exit a startup. Once the new government takes over by the end of next month, the Department for Promotion of Industry and Internal Trade (DPIIT) is expected to moot the idea then.

  • Apr 20, 2019
  • MNCs in India may face higher taxes

    The rules for attributing profits to multinational enterprises having a permanent establishment (PE) or business connection in India are set to significantly change if the draft report issued on Thursday night by a committee — appointed by the Central Board of Direct Taxes (CBDT) — is adopted. According to tax experts, MNCs carrying offshore operations in India, which also have sales revenue from the country, may find that higher profits that are attributed to Indian operations — under the prescribed formula-driven approach — will result in a higher tax outgo.

  • Apr 04, 2019
  • With Rs.3.52 lakh cr, Mumbai tops in tax collection for FY19

    Mumbai has once again emerged as the top contributor to the exchequer and accounted for 32 per cent of the overall tax collection in the financial year ended March. Shrugging aside concern over slower economic growth, the cumulative tax remittance under various heads, including corporate tax, income tax, fringe benefit tax and securities transaction tax, was up 17 per cent in FY19 at Rs.10.95 lakh crore against Rs.9.36 lakh crore logged in FY18. But this is lower than the targeted amount.

  • Apr 01, 2019
  • DPIIT working on definition of Accredited Investors for Angel Tax exemption

    The Department for Promotion of Industry and Internal Trade (DPIIT) is working on a definition of 'accredited investors', who could be provided tax incentives for investments in startups, an official said. The department, under the commerce and industry ministry, has already prepared a draft definition and is now seeking views of stakeholders. The official said these accredited investors, which can include trusts, individuals, family member of a startup and unlisted companies, may get exemption from angel tax under Section 56(2)(viib) of Income Tax Act, 1961, beyond the Rs 25 crore limit.

  • Apr 01, 2019
  • FY19 direct tax collections fall short by Rs 50k cr

    Direct tax collections have fallen short by Rs 50,000 crore thereby failing to meet the revised target of Rs 12 lakh crore for 2018-19 fiscal on account of poor personal income tax collections. "We will get close to most likely the earlier target of Rs 11.5 lakh crore for 2018-19 as calculations are at the final stage not beyond that... We will not meet upward revised target of Rs 12 lakh crore," an official source said.

  • Mar 29, 2019
  • CBDT asks I-T Department to probe about 3 lakh de-registered firms for money laundering

    The CBDT has issued directions to Income Tax offices across the country to probe financial transactions of about three lakh firms, de-registered by the government for their dubious financial credentials, for tax evasion and money laundering, especially during demonetisation. The board has asked the tax offices to undertake this special task and bring under their ambit the time period (over the last two years) when these companies were struck off from the records of the Ministry of Corporate Affairs (MCA).

  • Mar 22, 2019
  • CBDT gives 90 startups immunity from Angel Tax

    In what will give relief to 90 startups from taxman’s questioning their valuation during fund raising rounds and slapping angel tax, the Central Board of Direct Taxes (CBDT) has given them a written assurance and registered them for Startup India Action Plan, according to two people with direct knowledge of the matter. Under the Startup India Action Plan, a Department of Industrial Policy and Promotion (DIPP) initiative, the startups were asked to submit all details related to capital raising and promoters, and if accepted, they get an immunity from future tax demands under section 56(2)viib of the Income Tax Act.

  • Mar 19, 2019
  • Net direct tax collection crosses Rs 10 lakh crore mark

    The net direct tax collection figure has crossed the Rs 10 lakh crore mark as on March 16, helped by the fourth and final instalment of tax payment, sources said. The entire advance tax data from across the country has not come yet, the sources said. However, the preliminary assessment indicates that the net direct tax collection has crossed Rs 10 lakh crore, they said.

  • Mar 16, 2019
  • MNCs now won't have to file CbC report in India

    Indian arms of US MNCs will not have to file country by country or CbC report here. India has finalized bilateral competent authority arrangement for exchange of CbC reports with US. These companies would have had to file these here with Indian revenue authorities by March 31, 2019 in absence of such an agreement. They will now need to merely intimate them of such CbC reports having been filed by their respective parent entities in the USA.

  • Mar 11, 2019
  • CBDT allows offshore fund managers to operate from India

    The seeds that were sown by the government in ‘the 2015-16 Budget are starting to bear fruit. The Central Board of Direct Taxes (CBDT) has started paving the way for offshore fund managers to relocate to India for managing their offshore funds without having to face any adverse tax consequences. This is being done for the public markets space, mainly foreign portfolio investors (FPI) structures. Several fund managers have, in recent days, finally made the cut and got the pre-approvals from the CBDT (under Section 9A of the Income Tax Act). Approvals were given three days back for a set of FPI fund managers, said industry experts.

  • Mar 08, 2019
  • Finance Ministry stares at direct tax revenue shortfall by Rs 70,000 crore to Rs 1 lakh crore

    The government may be staring at higher-than-projected deficit for the current fiscal with country's direct tax revenue expected to fall short by Rs 60,000 to 70,000 crore over the revised target of Rs 12 lakh crore for FY19, officials privy to the numbers said. Direct tax revenue has totalled to Rs 8.4 lakh crore so far this fiscal and it is doubted if the target could be reached in the next three weeks even though collections pick up in the last few months of the fiscal.