13 December 2017
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  • Direct tax target raised to Rs.10L cr
    Dec 12, 2017
    Even as the Central Board of Direct Taxes (CBDT) finds it difficult to achieve the Budget Estimates (BE) of direct taxes at Rs.9.8 lakh crore for FY18, its target was revised upwards by Rs.20,000 crore to Rs.10 lakh crore.Sources in the apex body say the government was expecting a shortfall in indirect tax collections after the implementation of goods and services tax (GST).In an internal meeting held last week, the CBDT asked income-tax (I-T) departments of Mumbai and Delhi to contribute an additional Rs.10,000 crore each to bridge the gap, said a senior I-T official privy to the development. An internal circular of the revised target is expected to be sent out by CBDT shortly.
  • Direct tax collections increase 14 pct to Rs 4.8 lakh crore between April-November: CBDT
    Dec 11, 2017
    The Direct Tax Collections for Financial Year 2017-18 has shown the growth of 14.4 percent between the month of April-November this fiscal, the Central Board of Direct Taxes said. As per the board, the provisional figures of Direct Tax collections up to November 2017 have shown that the net collections stand at Rs 4.8 Lakh Crore which is 14.4 percent than the net collections for the same period last year. “The provisional figures of Direct Tax collections up to November, 2017 show that net collections are at Rs 4.8 lakh crore, which is 14.4 percent higher than the net collections for the corresponding period of last year,” Central Board of Direct Taxes said in the statement.
  • CBDT shoots off letter to taxmen, says don’t go overboard on fishing and roving inquiries in wake of demonetisation drive
    Dec 02, 2017
    The Central Board of Direct Taxes (CBDT) has sent a missive to all assessing officers (AOs) to stick to protocol while pursuing cases of “limited scrutiny” and not resort to “fishing and roving inquiries” in such cases. The move comes at a time when the tax department’s field formations have apparently been on an overdrive after the demonetisation move brought large chunks of supposedly tax-evaded cash into the banking system. The department selects cases of “limited scrutiny” — which restricts probe into a single aspect rather than a complete appraisal of tax liability — through Computer Aided Scrutiny Selection (CASS).
  • CBDT signs first ever two Indian APAs with Netherlands in Nov-2017
    Dec 02, 2017
    The Central Board of Direct Taxes (CBDT) has entered into 2 Bilateral Advance Pricing Agreements (APAs) during the month of November, 2017. These Agreements are the first ever Bilateral APAs with The Netherlands. With the signing of these Agreements, the total number of APAs entered into by the CBDT has gone up to 186. This includes 171 Unilateral APAs and 15 Bilateral APAs. These two APAs pertain to the Electronics and Technology sectors of the economy. The international transactions covered in these agreements include Distribution, Provision of Marketing Support Services, Provision of Business Support Services, etc.
  • To taxpayers’ relief, SC orders CBDT to apply this circular on tax cases retrospectively
    Nov 30, 2017
    The Supreme Court in a judgment last week clarified that the circular issued by Central Board of Direct Taxes (CBDT), which mandates that no appeal with tax implication of less than Rs 10 lakh should be filed in high courts, must be applied retrospectively. The tax department had contended that the circular was to be applied prospectively. The court order will benefit a large number of taxpayers besides reducing the pendency of disputes/litigation. “This Supreme Court decision provides a much awaited and welcome clarification that the revised monetary limits prescribed in CBDT circular dated February 09, 2011 be applied retrospectively, i.e. on all pending appeals as on date of issuance of this circular,” an expert at Nangia & Co said.
  • Govt eases transfer pricing dispute settlement
    Nov 28, 2017
    In a move to reduce litigation and boost investor confidence, the central government has decided to allow access to a bilateral forum for transfer pricing (TP) disputes, for all tax partner countries.The move to accept applications for bilateral advance pricing agreements (APAs) and mutual agreement procedures (MAPs) is expected to benefit a number of multinational companies that are based in important trade partners.The government has said that even if a tax treaty with another country does not contain the provision of corresponding adjustment in matters of TP, it would still entertain bilateral MAPs & APAs with such a country.
  • CBDT relaxes norms for MAP & APAs
    Nov 28, 2017
    The income tax department will continue to receive applications for bilateral advance pricing agreement (APA) and mutual agreement procedures (MAP) from companies despite the absence of a particular clause — corresponding adjustment — in the double taxation avoidance agreement (DTAA) with the countries concerned, the Central Board of Direct Taxes (CBDT) said on Monday.The clarification would likely encourage more MAPs and provide consistency in the country’s direct tax regime, experts said.
  • To avoid double-taxation CBDT says no tax at upstream foreign fund if local fund paid already
    Nov 09, 2017
    The Central Board of Direct Taxes (CBDT) on Wednesday said the income accruing to non-residents due to indirect transfer or redemption of shares in a mulit-tier investment fund in India, held through upstream companies based abroad, will not be taxed, provided the fund already pays taxes on income. The idea is to avoid double taxation. N BHowever, the board said benefit will be applicable only in those cases where the proceeds of redemption or buyback arising to the non-resident do not exceed the pro-rata share of the non-resident in the total consideration realised by the specified funds from the transfer of shares or securities in India.
  • Amazon, Microsoft and Apple to seek clarity on Google tax
    Nov 06, 2017
    Online firms are planning to meet finance ministry officials this week to seek clarity on the applicability of general anti-avoidance rules (GAAR) in cases where the websites use patents based out of an offshore jurisdiction. The move comes after the recent Bengaluru Income Tax Appellate Tribunal (ITAT) judgment against Google India, asking it to pay up taxes on Rs 1,457 crore of income that the Indian arm had transferred to its Ireland unit pertaining to Google’s AdWords service, used by advertisers to display ads. Lawyers preparing the representation
  • CBDT signs 7 more unilateral APAs with taxpayers
    Nov 03, 2017
    The Central Board of Direct Taxes (CBDT) has signed seven more advance pricing agreements (APAs) with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.The seven APAs signed over the last month pertain to sectors like FMCG, semi-conductor, information technology, travel and leisure, office furniture and engineering. "The Central Board of Direct Taxes (CBDT) has entered into seven more Advance Pricing Agreements (APAs) during October 2017. All these agreements are unilateral," the CBDT said in a statement.
  • India adopts reporting rules to crack aggressive corporate tax planning
    Nov 02, 2017
    India on Wednesday notified final rules for multinational group companies (MNCs) in India to report specifics of their global parents’ operations as part of a global initiative to end instances of aggressive corporate tax planning.Details filed by the multinational company’s local arm in India, together with the finer details of the parent’s operations in every market which Indian authorities can source from the group’s home country under tax treaties, will help the government know how businesses manage flow of funds across borders to keep tax outgo low.
  • MNCs get resident taxation relief
    Oct 24, 2017
    Routine administrative functions by the regional headquarters in India of multinational corporations (MNCs) have been exempted from taxes under the rules on Place of Effective Management (PoEM). PoEM is a test of residential status of companies, triggered by the practice of some companies effectively operating out of India but incorporating themselves abroad, to exploit a low or zero tax environment.The Central Board of Direct Taxes (CBDT) has said functions such as payroll, accounting, human resources or routine banking by these headquarters will not lead to a PoEM in India.However, this is subject to a condition that regional headquarters should be functioning according to global policies of the parent entity and not be specific to any entity or group of entities.
  • Direct tax collection rises 16% to Rs3.86 trillion in April-September
    Oct 12, 2017
    Net direct tax receipts in the first half of 2017-18 jumped to Rs3.86 trillion, a 15.8% growth from a year ago, adding up to about two-fifths of the targeted direct tax collection for the full year, the Central Board of Direct Taxes (CBDT) said Wednesday.In the 2017-18 budget, the finance ministry had set a direct tax collection target of Rs9.8 trillion.Prior to adjusting for refunds, gross direct tax receipts during the April-September period stood at Rs4.66 trillion, showing a growth of 10.3% from a year ago. The tax department has issued refunds of Rs79,660 crore so far this financial year.
  • CBDT signs 2 more APAs with taxpayers in September
    Oct 07, 2017
    The Central Board of Direct Taxes (CBDT) today said it has signed two more advance pricing agreements (APAs) in September with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing. The two APAs signed during September, 2017 pertain to automobile and healthcare consulting sectors. "With the signing of these two agreements, the total number of APAs entered into by CBDT till date has reached 177. This includes 164 unilateral APAs and 13 bilateral APAs. "In the current financial year, a total of 25 APAs (2 bilateral and 23 unilateral) have been signed till date," the CBDT said in a statement.
  • Who'll pay this hedge fund tax? Customers?
    Oct 03, 2017
    Ambiguity over how domestically-run hedge funds would be taxed is prompting their managers to take a rather unusual stance on the matter. Various hedge fund managers are putting the onus on their well-heeled clients to pay the tax on returns from these specialised products, contrary to the tax department's instructions asking these investment vehicles to deduct taxes and then distribute the profits. The move raises the possibility of litigation in case the taxman decides to contest this move. Hedge funds, those secretive investment pools that dominated Wall Street last decade are mushrooming in India. These funds have seen their assets more than double to Rs 15,000 crore from last year but their popularity is constrained compared to other equity products because of higher taxation.
  • CBDT proposes self-reporting for advance tax payment: All you need to know
    Sep 20, 2017
    The central board of direct taxes (CBDT) has proposed a self-reporting mechanism for reporting estimates of current income, tax payments and advance tax liability by taxpayers who are required to get their account audited under the Income Tax Act, 1961. According to the draft rules, a taxpayer needs to furnish an intimation of estimated income and payment of taxes as on September 30 of the previous year, on or before November 15 of the previous year in the newly proposed form. Further, if the income estimated as on September 30 of the previous year is less than the income of the corresponding period of the immediately preceding previous year by an amount of Rs 5 Lakh or 10%, whichever is higher, then the assessee will be required to explain the reasons for the same by January 31 of the previous year, the CBDT said.
  • Direct tax revenue grows 17.5 per cent to Rs 2.24 lakh crore
    Sep 12, 2017
    Net direct tax collections for April-August grew 17.5 per cent from last year to Rs 2.24 lakh crore, amounting to 22.9 per cent of the total Budget estimate for direct taxes for 2017-18, data released by Central Board of Direct Taxes (CBDT) showed. Corporate tax collections, however, grew at a slower pace in April-August, with net collections growing 18.1 per cent from the same period last year and gross collections growing 5 per cent year-on-year.In April-July, net corporate tax collections, after adjusting for refunds, had grown 23.2 per cent year-on-year, while gross corporate tax collections had increased by 7.2 per cent from the same period last year.
  • CBDT worried over GST impact on advance tax kitty
    Sep 11, 2017
    The Central Board of Direct Taxes (CBDT) is worried about the impact of the Goods and Services Tax on the advance tax collections. It has asked Income Tax officers to regularly engage with top 100 tax payers in each range and understand their difficulties in paying the taxes, sources in the IT department said.At a recent conference of CBDT members and IT Commissioners, solutions were discussed to enhance advance tax and overall revenue collections. Advance tax is paid in instalments every quarter by the assessees and September 15 is the due date for the second instalment. However, the GST rollout has been a major disruptor in the market impacting revenues.
  • Here's how Direct Taxes Code can simplify taxation and reduce your tax outgo
    Sep 11, 2017
    The Finance Ministry is planning to revamp the direct tax structure. Previous attempts to overhaul direct taxes were not successful. In 2009, the Direct Taxes Code had suggested radical changes, including the removal of many exemptions and generous tax slabs. Under DTC, income from all sources, including capital gains from stocks, maturity proceeds of insurance policies and even the PPF, was proposed to be taxed. There was also no distinction between short-term and long-term capital gains.DTC will not only simplify the financial lives of Indians but even reduce their tax outgo. We looked at the finances of a person with a gross annual income of Rs 15 lakh (including capital gains and interest income).
  • CBDT signs 4 more APAs with taxpayers in August
    Sep 05, 2017
    The Central Board of Direct Taxes (CBDT) signed four more advance pricing agreements (APAs) in August with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing. The four APAs entered into during August, 2017 pertain to various sectors of the economy like telecom, banking, manufacturing and education, an official statement said today."Out of these four agreements, three are unilateral and one is a bilateral," it said.According to the statement, the bilateral APA is for international transactions between an Indian company and a UK-based company and this is the eighth bilateral APA with the United Kingdom and 13th overall (the other five being with Japan).With the signing of these four agreements, the total number of APAs entered into by CBDT has reached 175, the statement said, adding, "this includes 162 unilateral APAs and 13 bilateral APAs."
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