Adjustment of advance tax paid in respect of FBT against advance income tax

CBDT has decided that any instalment of “advance tax paid in respect of fringe benefits” for A.Y. 2010-11 shall be treated as Advance Tax paid by assessee concerned for A.Y. 2010-11. The assessee can adjust such sum against its advance tax obligation in respect of income for A.Y. 2010-11 or in case of loss etc claim such payment as refund as advance tax paid in A.Y. 2010-11.

Click here for the text of the CIRCULAR NO. 2/2010.

Due date for filing VAT audit report in form e-704 extended to March 31 2010

On the basis of representation from various trades and association, it has been decided to extend the due date for submission of audit report in form-704  for the year 2008-09 to 31st March 2010.

Click here for the text of the trade circular no. 5T of 2010.  

Due Date of filing ITR-V form extended

Press Release

Central Board of Direct Taxes has decided to extend the time limit for filing ITR-V form relating to income-tax returns filed electronically (without digital signature) on or after 1st April 2009, up to 31st March 2010 or within a period of 120 days from the date of uploading of the electronic return data, whichever is later. The ITR-V form should continue to be sent by ordinary post to Post Bag No.1, Electronic City Post Office, Bengaluru – 560100 (Karnataka). However, in cases where email acknowledgement for ITR-V form is not received by the taxpayer from the CPC Bengaluru, the taxpayer may send another duly signed ITR-V form by speed post to Centralized Processing Centre, Electronic City Post Office, Bengaluru, Karnataka – 560100.

This has been done in relaxation of the stipulation in Circular No. 3/2009 dated 21.05.2009 which allows taxpayers who file their income tax returns in electronic form without digital signature to submit their ITR-V form duly verified and signed, within a period of 30 days thereafter to Post Bag No.1, Electronic City Post Office, Bengaluru, Karnataka-560100, by ordinary post.

The relaxation has been made following requests from taxpayers that, as a one-time measure, the time limit for filing of ITR-V form may be extended to 31st March 2010 and that alternative modes of submission of ITR-V form may also be provided in cases where an ITR-V form has not been received at CPC, Bengaluru by ordinary post.

BSC/BY/GN-16/10

New TDS norms to be applicable from 1st April 2010

Press Release

A new provision relating to tax deduction at source (TDS) under the Income Tax Act 1961 will become applicable with effect from 1st April 2010. Tax at higher of the prescribed rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account Number (PAN) of the deductee is not available. The law will also apply to all non-residents in respect of payments / remittances liable to TDS. As per the new provisions, certificate for deduction at lower rate or no deduction shall not be given by the assessing officer under section 197, or declaration by deductee under section 197A for non-deduction of TDS on payments shall not be valid, unless the application bears PAN of the applicant / deductee.

2. All deductors are liable to deduct tax at the higher rate in all transactions not having PAN of the deductees on or after 1st April 2010. In order that there is no dispute regarding quoting / non-quoting of PAN or accuracy thereof, the law requires all deductees and dedutors to quote PAN of deductees in all correspondences, bills, vouchers and other documents sent to each other. All deductors are, therefore, advised to intimate their deductees to obtain and furnish their PAN so as to avoid TDS at a higher rate. All deductees, including non-residents having transactions in India liable to TDS, are advised to obtain PAN by 31st March 2010 and communicate the same to their deductors before tax is actually deducted on transactions after that date.

3. The procedure for obtaining PAN is simple, inexpensive and quick. Application for PAN can be filed in Form 49A to National Securities Depository Ltd. (NSDL) or Unit Trust of India Investor Services Ltd. (UTIISL) or their intermediaries. Non-residents can apply through the local embassy / consulate of India. Applications can also be filed, paid for or tracked online through the Internet on the following web-sites:-

http://incometaxindia.gov.in/

https://incometaxindiaefiling.gov.in/portal/index.jsp

http://www.tin-nsdl.com/

http://www.utitsl.co.in/

4. The Central Board of Direct Taxes (CBDT) has issued Notification No.94/2009 relating to taxation of perquisites / profits in lieu of salary and Circular No.1/2010 for the guidance of tax dedutors for salaries. These documents are available on the department’s web site at http://incometaxindia.gov.in/

Convergence of Indian Accounting Standards with IFRS

The Core Group, constituted by the Ministry of Corporate Affairs for convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRS) from April, 2011, that held its meeting on 11th January 2010 agreed that in view of the roadmap for achieving convergence, there will be two separate sets of Accounting Standards u/s Section 211(3C) of the Companies Act, 1956.

First set would comprise of the Indian Accounting Standards which are converged with the IFRSs which shall be applicable to the specified class of companies. The second set would comprise of the existing Indian Accounting Standards and would be applicable to other companies, including Small and Medium Companies (SMCs).

The first set of Accounting Standards (i.e. converged accounting standards) will be applied to specified class of companies in phases:

(a) Phase-I:- The following categories of companies will convert their opening balance sheets as at 1st April, 2011, if the financial year commences on or after 1st April, 2011 in compliance with the notified accounting standards which are convergent with IFRS. These companies are:-

a. Companies which are part of NSE – Nifty 50

b. Companies which are part of BSE - Sensex 30

c. Companies whose shares or other securities are listed on stock exchanges outside India

d. Companies, whether listed or not, which have a net worth in excess of Rs.1,000 crores.

(b) Phase-II :- The companies, whether listed or not, having a net worth exceeding Rs. 500 crores but not exceeding Rs. 1,000 crores will convert their opening balance sheet as at 1st April, 2013, if the financial year commences on or after 1st April, 2013 in compliance with the notified accounting standards which are convergent with IFRS.

(c) Phase-III :- Listed companies which have a net worth of Rs. 500 crores or less will convert their opening balance sheet as at 1st April, 2014, if the financial year commences on or after 1st April, 2014, whichever is later, in compliance with the notified accounting standards which are convergent with IFRS.

When the accounting year ends on a date other than 31st March, the conversion of the opening Balance Sheet will be made in relation to the first Balance Sheet which is made on a date after 31st March.

Companies which fall in the following categories will not be required to follow the notified accounting standards which are converged with the IFRS (though they may voluntarily opt to do so) but need to follow only the notified accounting standards which are not converged with the IFRS. These companies are: -

(a) Non-listed companies which have a net worth of Rs. 500 crores or less and whose shares or other securities are not listed on Stock Exchanges outside India.

(b) Small and Medium Companies (SMCs).

Separate roadmap for banking and insurance companies will be submitted by the Sub-Group I in consultation with the concerned regulators by 28th February, 2010.

The draft of the Companies (Amendment) Bill, proposing for changes to the Companies Act, 1956 will be prepared by February, 2010 incorporating the recommendation of Sub-Group 1 Report.

Revised Schedule VI to the Companies Act, 1956 according to the converged Accounting Standards has been submitted by the ICAI to NACAS which, after review, will submit to the Ministry by 31st January, 2010. Amendments to Schedule XIV will also be made in a time bound manner.

In respect of the converged Accounting Standards, the Chairman of the Accounting Standards Board of ICAI will submit the converged version of Accounting Standards to NACAS from time to time for recommendations and onward submission to Ministry. However, convergence of all the accounting standards will be completed by ICAI by 31st March, 2010 and NACAS will submit its recommendations to the Ministry by 30th April 2010.

Circular on refund of excess CENVAT credit to exporters

Click the title for the full text of the circular.

Announcement on – Requirement to include the registration number of the firm as allotted by ICAI, in the audit reports signed by members of the ICAI - (19-01-2010)

The Council of the Institute of Chartered Accountants of India (ICAI), at its 292nd meeting held on January 13, 2010 has decided to require the members of the Institute of Chartered Accountants of India to:

• Include, in addition to the other requirements relating to signature on the audit report, as prescribed under the relevant Standard on Auditing, the registration number of the firm as allotted by ICAI, in the audit reports signed by them ; and
  
• Ensure that the resolution passed by the company regarding appointment of the statutory auditor of the company under section 224 of the Companies Act, 1956, also contain the registration number of the firm of the auditor(s) with the ICAI.

• These requirements would come into effect from April 1, 2010.

Application of certain provisions of Companies Act, 1956 to Limited Liability Partnerships

Through the Notification No. G.S.R.6(E) dated 6th January, 2010, the Central Government in exercise of powers conferred by sub-section (1) of section 67 of Limited Liability Partnership Act 2008 (6 of 2009), made applicable the provisions of sections 441, 443, 445, 446, 448, 450, 451, 453, 454, 455, 456, 457, 458, 458A, 460, 463, 464, 465, 466, 467, 468, 471, 474, 476, 477, 478, 479, 481, 482, 483, 484, 486, 487, 488, 494, 497, 511, 511A, 512, 514, 515, 517, 518, 519, 528, 529, 529A, 530, 531, 531A, 532, 533, 534, 535, 536, 537, 538, 539, 540, 541, 542, 543, 544, 545, 546, 547, 548, 549, 550, 551, 552, 553, 554, 555, 556, 558, 559, 560 and 584 of the Companies Act, 1956 to a limited liability partnership, except where the context otherwise requires, with certain modifications.

Click the title for the text of the Notification No. G.S.R.6(E).

LLP (AMENDMENT) Rules, 2010

In excercise of the powers conferred by sub section (1) and (2) of section 79 of the Limited Liabilty Partnership Act, 2008 (6 of 2009), the Central Government hereby makes Limited Liability Partnership (Amendment) Rules, 2010 to ammend the Limited Liability Partnership Rules, 2009 vide Notification No. G.S.R. 24 (E) dated 11/01/10.

Click the title for the text of the Notification no. G.S.R. 24 (E). 

TDS Circular

TDS Circular 1/2010 for Income-tax deduction from salaries during the financial year 2009-2010 under section 192 of the Income-tax act, 1961 is released.

Click the title for the text of the circular.

Corrigendum to Income-tax (Thirteenth Amendment) Rules, 2009

Corrigendum to Income-tax (Thirteenth Amendment) Rules, 2009

Notification No. 2/2010 [F.NO.142/25/2009-SO(TPL)], dated 12-1-2010

In the notification of the Government of India, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes), number 94/2009 dated 18-12-2009 bearing S.O. 3245(E) and published in the Gazette of India, Extraordinary, Part II Section 3, Sub-section (ii), dated 18th December, 2009 –

(i) at page 15 of the Gazette Notification, in first line of para 1, for ‘sub-section (2)”, read “clause 2”,

(ii) at page 20 of the Gazette Notification, in sixth line of clause (B) of sub-rule 2, for “amount attributable to official use of the vehicle provided that the following conditions are fulfilled”, read “amount of charges met or reimbursed by the employer as reduced by such higher amount attributable to official use of the vehicle provided that the following conditions are fulfilled ”,

(iii) at page 21 of the Gazette Notification, in first line of sub-rule (7), for “clause (viii) of sub-section (2)”, read “sub-clause (viii) of clause 2”,

(iv) at page 23 of the Gazette Notification, in second line of clause (v) of sub-rule (7), for “credit care”, read “credit card”,

(v) at page 24 of the Gazette Notification, in first line of clause (i) of sub-rule (8), for “clause (vi) of sub-section (2)”, read “sub-clause (vi) of clause 2” and

(vi) at page 25 of the Gazette Notification, in first line of sub-rule (9), for ‘clause’ (vi) of sub-section (2)”. read “sub-clause (vi) of clause 2”

2. The other contents of the Gazette Notification shall remain unchanged.

Change in Definition of PIO (Persons of Indian Origin)

Purchase of Immovable Property in India by Persons of Indian Origin (PIOs) – Amendment of the definition

RBI has amended definition of Persons of Indian Origin (PIOs)  vide circular no. 25 A.P. (DIR Series) dated January 13, 2010.

 

Click the title for the text of the circular.

Communication from Commssioner of sales tax - Maharashtra

MVAT department has started email facility on mahavat.gov.in. whereby every dealer will be provided with email id based in its VTIN. This will enable dealers to receive e-notices in their email account, communicate with respective officer etc.

Click here for the text of the communication from Commissioner. 

Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2010

In exercise of the powers conferred by Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, namely : the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2010.

Click here for the text of the SEBI regulation no. LAD-NRO/GN/2009-10/26/190146

Tax treatment of goods sent to other states

MVAT department has issued a trade circular, whereby it has been made mandatory to issue form F for all transactions of inter state transfers (not by way of sale) including job work and goods return.

Click here for the text of the trade circular. Trade Circular No. 2T of 2010

Listing Agreement for Debt Securities

Listing Agreement for Debt Securities amended till January 07, 2010.

Simplified Debt Listing Agreement for Debt Securities - Amendments

SEBI vide circular SEBI/IMD/DOF-1/BOND/Cir-5/2009 dated November 26, 2009 amended the Simplified Listing Agreement for Debt Securities.

In continuation thereof, it has been decided to amend the Simplified Listing Agreement for Debt Securities with immediate effect as per the Circular attached.

Click the title for the full text of the circular. SEBI Circular : SEBI/IMD/DOF-1/BOND/Cir-1/2010

Section 194A of the Income-tax Act, 1961- Notification

Section 194A of the Income-tax Act, 1961- Deduction of tax at source - Interest other than interest on securities - Notified institution

NOTIFICATION NO. 1/2010 [F.NO. 275/12/2009-IT(B)], DATED 4-1-2010

In exercise of the powers conferred by sub-clause (f) of clause (iii) of sub-section (3) of Section 194A of the Income Tax Act, the Central Government hereby notifies the Rural Electrification Corporation Ltd., New Delhi for the purpose of said clause.

Scheme for Filing of Statutory documents and other transactions by companies in Electronic mode (Second Amendment), 2009

GOVERNMENT OF INDIA ,MINISTRY OF CORPORATE AFFAIRS - NOTIFICATION

In exercise of the powers conferred by sub-section (2) of section 610B of the Companies Act, 1956, the Central Government hereby makes the following Scheme to amend the Scheme for Filing of Statutory Documents and other Transactions by Companies in Electronic Mode, namely  the “Scheme for Filing of Statutory Documents and other Transactions by Companies in Electronic Mode ( Second Amendment), 2009.

Click the title for the text of the notification. Notification No. S.O. 3314 (E)

Internal assignments in banks by statutory auditors

RBI/2008-09/ 335


Ref.DBS.ARS.No.BC. 02/ 08.91.001/ 2008-09

Internal assignments in banks by statutory auditors - All Scheduled Commercial Banks

1. We invite a reference to RBI circular DBOD.No.App.BC.118/C.452(K)-89 dated April 22, 1989, wherein it was clarified to banks that any audit firm which has been assigned internal audit assignments during a financial year should not be considered for statutory audit assignments during that year and the following year.

2. The issue relating to the internal assignments allotted to the audit firms at the time of their appointment as statutory auditors has been examined afresh and it has been decided as under:

“Audit firms should not undertake statutory audit assignment while they are associated with internal assignments in the bank during the same year. In case the firms are associated with internal assignment it should be ensured that they relinquish the internal assignment before accepting the statutory audit assignment during the year.”

3. The above instructions may be implemented with immediate effect.

List of Banks which can accept Applications Supported by Blocked Amount (ASBAs)

List of Banks which can accept Applications Supported by Blocked Amount (ASBAs) from investors in issues w.e.f January 1, 2010

SEBI, vide its press release dated December 10, 2009 had informed that ASBA facility shall be extended to all investors other than QIBs, in all public issues with effect from January 1, 2010. It was also informed that SEBI would be displaying names and other relevant details of banks (Self Certified Syndicate Banks (SCSBs) which will be authorized to accept ASBAs w.e.f. January 1, 2010, on the website http://www.sebi.gov.in/

The SEBI has issued press release containing list of Banks which have been authorized to accept ASBAs in all issues w.e.f. January 1, 2010.

Click the title for the text of the press release (PR No.422/2009)

Master Circular for Mutual Funds

For effective regulation of the Mutual Fund Industry, Securities & Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable the industry and other users to have an access to all the applicable circulars at one place, Master Circular for Mutual Funds has been prepared.

This Master Circular is a compilation of all the circulars issued by SEBI on the above subject, which are operational as on date of this circular.

Click the title for the full text of the circular.

Establishment of Branch Office (BO)/Liaison Office (LO) in India by Foreign Entities - Eligibility Criteria and Procedural Guidelines

Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to Notification No. FEMA 22/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Establishment in India of Branch or Office or other place of business) Regulations, 2000, as amended from time to time, in terms of which a person resident outside India requires prior approval of the Reserve Bank for establishing Branch Office (BO) / Liaison Office (LO) in India.

Under the current regulations, the applications from foreign companies (a body corporate incorporated outside India, and includes a firm or other association of individuals) (foreign entities) for establishing BO / LOs in India are considered by the Reserve Bank under two routes:

a)Reserve Bank Route — Principal business of the foreign entity falls under sectors where 100 per cent foreign direct investment (FDI) is permissible under the automatic route.

b)Government Route — Principal business of the foreign entity falls under the sectors where 100 per cent FDI is not permissible under the automatic route. Applications from entities falling under this category and Non - Government Organisations / Non - Profit Organisations / Government Bodies / Departments are considered by the Reserve Bank in consultation with the Government of India, Ministry of Finance.

With the objective of achieving greater transparency, it has been decided to place the eligibility criteria and the procedural guidelines for establishment of BO and LO in India, in the public domain. Accordingly, the broad criteria regarding eligibility for opening of BO / LOs, documentation, etc., are given in Annex A of the circular and the scope of activities permitted and other procedural guidelines regarding functioning of the BO / LO in India are given in Annex B of the circular.

The application for establishing BO / LO in India may be forwarded by the foreign entity in Form FNC (Annex C of the circular) through a designated AD Category - I bank (i.e. an AD Category – I bank identified by the applicant with whom they intend to pursue banking relations) to the Chief General Manager-in-Charge, Reserve Bank of India, Foreign Exchange Department, Foreign Investment Division, Central Office, Fort, Mumbai-400 001, along with the prescribed documents. The designated AD Category - I bank should exercise due diligence in respect of the applicant’s background, antecedents of the promoter, nature and location of activity, sources of funds, etc. and also ensure compliance with the KYC norms before forwarding the application together with their comments/ recommendations to the Reserve Bank.

Click the title for the full text of the circular.

Establishment of Branch/Liaison Offices in India by Foreign Entities- Delegation of Powers

Attention of Authorised Dealer Category – I banks is invited to Notification No. FEMA 22/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000 as amended from time to time, in terms of which a person resident outside India requires prior approval of the Reserve Bank for establishing Branch (BO)/ Liaison Offices (LO) in India. As announced in the Mid-term Review of the Annual Policy Statement for the Year 2008-09 (para 143), the draft circulars regarding delegation of powers to Authorised Dealers for extension of the validity period of LOs, closure of BO / LOs of foreign entities in India and the eligibility criteria and procedural guidelines for BO / LOs of foreign entities in India were placed on Reserve Bank’s website for public comments. On the basis of the feedback received from the public, the final guidelines have been issued vide our A. P. (DIR Series) Circular No.23 dated December 30, 2009.

Clcik the title for the text of the circular.

Assignment of Tax audit work by nationalised banks

RBI/2009-10/281


Ref.DBS.ARS.BC.No.09/ 08.92.001/ 2009-10

December 31, 2009


The Chairman & Managing Director, all Nationalised Banks and The Managing Director, Associate Banks of SBI

Dear Sir/Madam,

Remuneration payable to the Statutory Central and Branch Auditors of Public Sector Banks from the year 2006-07

1.Please refer to our circular DBS.ARS.No.BC.3/08.92.001/2007-08 dated July 25, 2007 on the captioned subject.

2. The matter regarding assignment of the tax audit work to one of the SCAs and fee payable to SCA so selected was reviewed and it has been decided that PSBs may appoint at the Head office level also any chartered accountant firm as their tax auditor at a reasonable fee with the approval of their Board /ACB.

3. Please acknowledge receipt.

Yours faithfully

(P.S. Sharma)

General Manager