CBDT has issued circular number 7/2011 dated 27.9.2011 which seeks to amend circular number 7/2007 dated 23.10.2007. If a deductor has deducted tax as per Double Taxation Avoidance Agreement (DTAA) and this rate of tax is higher than that prescribed under the Income Tax Act then the dedcutor can claim the difference between the lower income tax rate and DTAA rate as refund. This amendment is made to avoid hardship to the resident deductor where deduction is made under a higher rate of DTAA
Friday, December 16, 2011
Order No.2/2011 - Service Tax dated 13.12.2011 issued under F.No.137/120/2011 of Ministry of Finance provide the following documents as mandatory for issuing registration under Service Tax Rules, 1994
- Copy of Permanent Account Number (PAN)
- Proof of Residence
- Constitution of Applicant
- Power of Attorney in respect of the Authorised Person
The above documents should be filed within 15 days of submitting of application for registration. Within Seven days of submission of the application and all the above documents the Central Excise Officer should provide registration under Service Tax.
Procedure for exports to Nepal & Bhutan from India slightly departed from general export Rules 18 & 19 of Central Excise Rules, 2002 and where specified in notification number 45/2001-CE (N.T.) dated 26.6.2001. Now Nepal has been removed from the ambit of the above mentioned notification and therefore procedure for export to Nepal will also comply with Rule 18 & 19 of Central Excise Rules 2002.
The Ministry of Finance has issued a series of notifications from numbers 24 to 29 /2011 (N.T.) dated 5.12.2011 to be effective from 1st March 2012 so that exports to Nepal is not governed under specific procedures but general procedures as followed for exports to all other countries.
This change comes in the backdrop of the recent Treaty between India and Nepal
However Bhutan continues to have special treatment for exports and not covered under Rule 18 & 19
Saturday, December 10, 2011
With effect from 1.10.2009, Finance Act (2) of 2009 has provided that no TDS needs to be deducted on payments made to Transporters who provide service of Plying, hiring or leasing goods carriage. The Caveat here is that these service providers should provide their PAN number to the deductor, if not deduction will be made at 20%.
Even though TDS is not deducted on transport charges these transport charges has to be furnished in the Quarterly eTDS return with tax deduction shown as "NIL".
To quote the words in the Finance Act (2) of 2009
"(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.
(7) The person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income-tax authority or the person authorised by it, such particulars, in such form and within such time as may be prescribed."
There are instances where the transport charges are not forming part of the quarterly e-returns which is a violation, so please ensure that your e-returns capture the same
Thursday, December 8, 2011
Question : Can a director remain outside state forever
Yes there is no restriction in the location of a Director. Section 252 to Section 284 of the Companies Act, 1956 deals with appointment, qualification, disqualification, restriction etc of Directors, which does not specify any conditionality on location of directors
As the director is overseas care should be taken under section 283(1)(g) which states that a director shall vacate office if
"he absents himself from three consecutive meetings of the Board of directors, or from all meetings of the Board for a continuous period of three months, whichever is longer, without obtaining leave of absence from the board"
So it should be ensured that this directors attends the board meetings or takes a proper leave of absence.
Thursday, December 1, 2011
A good news for people bent on investing in Public Provident Fund (PPF), from 1.12.2011 the limit of maximum investment of Rs.70,000 per year has been increased to Rs.1,00,000. Another announcement from Ministry of Finance dated 25.11.2011 says that interest rate on PPF subscriptions after 1.12.2011 will be 8.6% p.a. - not a bad rate considering the tax saving option also which PPF provides.
The natural question to all of us will be why PPF? I recommend PPF for long term investment. The following are its features :
- Minimum investment per year is Rs.500 subject to a maximum Rs.1,00,000 (from 1.12.2011 - earlier Rs.70,000)
- The account can be opened with Post Offices and notified Scheduled Banks
- Tax benefit under section 80C of the income tax act, also interest accrued is exempt from tax.
- Withdrawals from PPF is also exempt from income tax - this adds much to the flavour
- The only flip side is one has to be invested for 15 years, but there are some ways of withdrawing before 15 years as explained in the subsequent points
- After expiry of 5 years from the date of initial subscription an amount equal to 50% of balance outstanding as on end of the 4th year is allowed as a withdrawal
- Loans also can be taken from this account from the end of 1 year from initial subscription, interest on loan is 2% p.a. from 1.12.2011 (earlier 1% p.a.)
- Nomination facility is available for PPF
Some do's and don't of PPF
- Treat this as a long term investment and invest regularly do not withdraw or take loan unless it is absolutely necessary
- PPF cannot be opened in the name of a HUF
- PPF can be opened in the name of a minor by either of the parents (not both)
Ministry of Corporate Affairs has vide their Circular number 69/2011 dated 30.11.2011 extended the due date for filing of XBRL returns by eligible companies either within 60 days of their due date of filing of the returns or by 31.12.2011 whichever is later. Technically the last date will be 31.12.2011 for all companies required to file XBRL returns this year.