01/09/2010
India gets to access more Swiss bank data with new pact
India will now have the right to track banking information from Switzerland. Cases like the IPL scam or the Madhu Koda mining scam where the Indian revenue department could not get information about the numbered bank accounts of those prosecuted may now be investigated with ease, even though finance minister Pranab Mukherjee told Parliament on Tuesday that the “provision will be applicable only for prospective information and not for past information”. India and Switzerland on Monday signed a revised double taxation avoidance agreement which substantially expands the scope of information to be shared.
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30/08/2010
With Rs 75K crore stuck in disputes, tax department proposes e-solutions
The income-tax department has proposed a national e-management system for quick disposal of tax disputes, with more than Rs 75,000 crore, an amount close to a fifth of the government’s annual direct tax collections, locked in litigations. The new system will allow the tax department to make optimum use of its workforce, reduce painful wait for the disposal of tax appeals and free up resources quickly. The move is part of a series of steps planned by the government to make the tax system simpler. The new Direct Taxes Code Bill, cleared the Cabinet on Thursday, will be introduced in Parliament on Monday.
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28/08/2010
MAT reprieve for foreign companies
Is a non-resident foreign company liable for Minimum Alternate Tax (MAT)? In 1998, the Authority for Advance Rulings (AAR) rendered two decisions holding that Section 115JA of the Income-Tax Act, 1961 will apply to non-resident foreign companies. The Section was made applicable to companies generally and not to Indian or domestic companies only. Section 115JA spoke only of `every assessee, being a company`. The legislature did not intend that the Section will not apply to a foreign company. The foreign company is also under obligation under Section 594 of the Companies Act to deliver three copies of its world accounts to the Registrar of Companies (RoC). The Indian account has to be drawn up in rupees as per Schedule VI. The AAR also referred to the non-obstante clause in Section 115JA.
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27/08/2010
Wallet-friendly tax code gets Cabinet nod
THE Union Cabinet on Thursday approved a new set of direct tax rules that proposes to raise income tax exemption limit from 1.6 lakh to 2 lakh, leaving more money in the hands of individuals, and a lower tax rate for companies. The much-awaited Direct Taxes Code, or DTC, Bill, which seeks to replace the nearly 50-year-old income tax law, is likely to be introduced in Parliament on Monday and may then be referred to a select committee of members of both houses of Parliament.
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27/08/2010
Corporates to welcome 30% cap on tax but increase in MAT rate a dampener
With the draft bill for the Direct Taxes Code (DTC) now cleared by the Union Cabinet and set to be tabled before Parliament on Monday, it seems almost certain that the DTC deadline will be met. While the revised discussion paper released earlier for public discussion did indicate a calibration of tax rates to make up for the loss in the tax kitty, little did the individual taxpayer expect that the tax slabs would largely be aligned to the current slabs!
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26/08/2010
Sulking taxman refuses to go on raids
AN OUTSOURCING contract to Infosys, India’s second-largest software company, has resulted in an unexpected reprieve for those with income to hide from the taxman. Irked by the contract, under which Infosys is processing tax returns filed online, and rattled by the prospect of more outsourcing, officials of the investigation wing of the income-tax department, the arm of the tax administration that conducts raids, have refused to step out of their offices for at least a month. As a result, officials have not been able to conduct the socalled search and seizure operations, officialese for raids, during this period, even though many of these were in the works.
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25/08/2010
70% IT refunds elusive to tax payers
This is the time of the year when tax payers look forward to getting refunds from the IT Department if eligible. But for roughly seven out of 10 cases, income tax refunds have remained elusive for no fault of the tax payers.
The income tax department maintains that it is also not at fault. According to senior taxmen, they reject an overwhelmingly large number of eligible cases every year for what they call the incidence of missing entries.
Taxmen at the ground level claim that nearly 70% of individual tax payers face such cases.
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25/08/2010
SC remands I-T plea against Jindal Drugs to Bombay HC
The Supreme Court has asked the Bombay High Court to decide afresh the Income Tax Department's plea against chemicals and dyes manufacturer Jindal Drugs. In August last year, the high court had refused relief to the revenue department on the ground that the appeal was barred by limitation. Alleging that the high court erred in upholding the order of the Income Tax Appellate Tribunal (ITAT) that had written off Rs 3.25 lakh as business loss since it had accrued out of the commercial expediency, the department said the assessee was a manufacturer and exporter and was not a trader in the share market.
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23/08/2010
Onsite revenues of IT companies under tax scanner
When American Senator Charles Schumer described Indian software firms as `chop shops’, few imagined that the taxman back home could add salt to the slur. Indeed, Indian income-tax authorities are beginning to claim tax on the money that software firms make by sending their boys to work with companies in the US, Europe and other markets—a business that is known as onshore software development, or simply ‘body shopping’. For the I-T department, this is an activity that involves export of manpower and not export of software. Driven by the underlying argument, tax offices have sent notices to software companies. Close to 10 companies, including some of the big names, have received income-tax notices in the last few days, a senior I-T department official told ET.
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23/08/2010
SC admits I-T dept's plea against AAR in French firm case
The Supreme Court has admitted a plea of the Income Tax Department challenging an order of the Authority of Advance Ruling in a case related to long-term capital gains involving a French firm. A bench comprising Chief Justice S H Kapadia and Justice K S Radhkrishnan admitted the plea against the exemptions given to French firm Compagnie Financiere Hamon SA. The Authority of Advance Ruling (AAR) in an order in 2009, had allowed the French firm to pay capital gain tax at 10 per cent on the money received from selling of shares of an Indian firm instead of the department's claim of 20 per cent.
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