Direct Tax Code

Direct Tax Code has been introduced in the Parliamant.
Some of the Highlights are as follows:

1.Common threshold limit of Rs. 2,00,000. For resident senior citizens,
threshold increased from Rs. 2,40,000 to Rs. 2,50,000.

2.Deduction for interest on housing loan/loan taken for repair or renovation of house property upto limit of Rs. 1,50,000 in respect of one house pro-perty not let out. No deduction for re-payment of principal under the Code.

3.Limit for tax audits for professionals increased from Rs. 15 lakhs to Rs. 25 lakhs. Limit for tax audit for business increased from Rs. 60 lakhs to Rs. 1 crore.

4.MAT rate - Increased from 15% of book profits to 20%. MAT Credit carry forward period increased from 10 years to 15 years.

5.Wealth tax - threshold increased from Rs. 30,00,000 to Rs. 1 crore. Tax rate will be 1% of net wealth in excess of Rs. 1 crore.

6.DDT on dividend of domestic company - 15%.

7.DDT on income distributed by mutual fund/life insurance to unitholder/policy holder - 5%

8.TDS of 10% on payments in respect of life policies which are not exempt from tax from code.

Income Tax Return

File the Income Tax Return for the Financial Year ending 31st March 2010
by 31st July 2010.
Applicable to Individual and other assessee whose accounts are not
requried to be audited under the Income Tax Act 1961 or any other Act.

CBDT Circular on 26AS TDS Credit

CBDT come forward and issued circular on bindings of 26AS verysoon. Now imposes duty on the deductee to approach to deductor in case of any deficiency on the part of deductor, Like non filing of TDS return, mentioning wrong PAN or wrong credit entries.

Release of Redrafted Direct Tax Code

The FM has released the redrafted Direct Tax Code.

TDS Notification dated 31.05.2010

TDS Notification dated 31.05.2010 whereby following changes has been made:

1. Last quarter TDS return date has been changed from 15th June to 15th May.
2. Due date of deposit of TDS: in respect of 31st March from 31st May to
30th April and in respect of 1st to 30th March from 7th April to 30th
April.

ICAI President Message June 2010

ICAI President Message June 2010

Late Date for Filing of Income Tax Return for A.Y 2008-09

File your Income Tax Return for the A.Y.2008-09 latest by 31st March 2010.
Don't wait for the last date.

Budget 2010

1.
Turnover over which accounts need to be audited has been enhanced to Rs. 60 Lakhs for Business and Rs. 15 Lakhs for the profession. Similarly the turnover limit for the presumptive taxation has also been increased to Rs. 60 Lakhs.

2.
Surcharge on domestic companies has been reduced from 10% to 7.5%. The lower rate of surcharge will be applicable in case of MAT u/s 115JB.

3.
Rate of Minimum Alternative tax has been increased from current rate of 15% to 18% of the book profits.

4.
Direct Tax Code and Goods & Service Tax is likely to implement w.e.f 1st April 2011.

5.

IFRS in also going to implement w.e.f 1st April 2011.

Therefore this is a transition period of economy as well as professionals.

Difference between slowdown and recession

For Example
"If in the last year economy GDP was growing @3% and whereas in the current year economy GDP is growing @2% this is called slowdown."

on the otherhand
"If in the last year economy GDP was growing @3% and whereas in the current year economy GDP is declining @2% this is called recession."

Service Tax Notification

This is in relation to recent notification (Notification No. 01/2010 – Service Tax) issued under the Service tax Rules, 1994 in respect of deposit of service tax and filing of returns. The notification provides the following:

An assessee is required to deposit Service tax electronically (through internet banking) if the amount of service tax deposited (through cash and credit) in the preceding financial year is Rs.10 lacs or more (earlier this limit was Rs 50 lacs for the preceding financial year or the current year);
Service tax return is to be filed electronically by an assessee, if the amount of service tax deposited (through cash and credit) in the preceding financial year is Rs.10 lacs or more.
The notification is effective from 1 April 2010.

Bad debts need not be proven to be irrecoverable u/s 36(1)(vii). It is sufficient if they are written off

TRF Limited vs. CIT (Supreme Court)
Bad debts need not be proven to be irrecoverable u/s 36(1)(vii). It is sufficient if they are written off



The Supreme Court had to consider whether after the amendment to s. 36 (1) (vii) w.e.f. 1.4.1989, an assessee had to establish, as a matter of fact, that the debt advanced by the assessee had, in fact, become irrecoverable or whether writing off the debt as irrecoverable in the accounts was sufficient. HELD deciding in favour of the assessee:

Budget 2010

It is expected that this year the tax burden either remain as neutral or my increase.
Further Govt may decline the susidies on some sectors to reduce their dependent on the government.
It is further expected that some of the provisions or developments related to the Direct Tax Code is likely to announce in the upcomming budget.

Section 211(3c) of the Companies Act 1956

TWO SEPARATE SETS OF ACCOUNTING STANDARDS (AS) U/S 211(3C) OF COMPANIES ACT AGREED UPON BY CORE GROUP FOR CONVERGENCE OF INDIAN AS 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.

GST Deadline has been extended

Deadline for GST implemantation has been extended from April 1, 2010. New date will be announced in April 2010.

FBT Advance For AY 2010-11

Fringe benefit advance tax paid for the financial year 2009-10 to be allowed as adjustment against the corporate advance tax liability for the financial year 2009-10. Further, in case of loss, refund for the same can be claimed. Please find attached the circular No. 02/2010 dt. 29 Jan’ 2010 notifying the same