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News Direct Tax-Misc. Direct Tax

  • Mar 22, 2019
  • CBDT gives 90 startups immunity from Angel Tax

    In what will give relief to 90 startups from taxman’s questioning their valuation during fund raising rounds and slapping angel tax, the Central Board of Direct Taxes (CBDT) has given them a written assurance and registered them for Startup India Action Plan, according to two people with direct knowledge of the matter. Under the Startup India Action Plan, a Department of Industrial Policy and Promotion (DIPP) initiative, the startups were asked to submit all details related to capital raising and promoters, and if accepted, they get an immunity from future tax demands under section 56(2)viib of the Income Tax Act.

  • Mar 19, 2019
  • Net direct tax collection crosses Rs 10 lakh crore mark

    The net direct tax collection figure has crossed the Rs 10 lakh crore mark as on March 16, helped by the fourth and final instalment of tax payment, sources said. The entire advance tax data from across the country has not come yet, the sources said. However, the preliminary assessment indicates that the net direct tax collection has crossed Rs 10 lakh crore, they said.

  • Mar 16, 2019
  • MNCs now won't have to file CbC report in India

    Indian arms of US MNCs will not have to file country by country or CbC report here. India has finalized bilateral competent authority arrangement for exchange of CbC reports with US. These companies would have had to file these here with Indian revenue authorities by March 31, 2019 in absence of such an agreement. They will now need to merely intimate them of such CbC reports having been filed by their respective parent entities in the USA.

  • Mar 11, 2019
  • CBDT allows offshore fund managers to operate from India

    The seeds that were sown by the government in ‘the 2015-16 Budget are starting to bear fruit. The Central Board of Direct Taxes (CBDT) has started paving the way for offshore fund managers to relocate to India for managing their offshore funds without having to face any adverse tax consequences. This is being done for the public markets space, mainly foreign portfolio investors (FPI) structures. Several fund managers have, in recent days, finally made the cut and got the pre-approvals from the CBDT (under Section 9A of the Income Tax Act). Approvals were given three days back for a set of FPI fund managers, said industry experts.

  • Mar 08, 2019
  • Finance Ministry stares at direct tax revenue shortfall by Rs 70,000 crore to Rs 1 lakh crore

    The government may be staring at higher-than-projected deficit for the current fiscal with country's direct tax revenue expected to fall short by Rs 60,000 to 70,000 crore over the revised target of Rs 12 lakh crore for FY19, officials privy to the numbers said. Direct tax revenue has totalled to Rs 8.4 lakh crore so far this fiscal and it is doubted if the target could be reached in the next three weeks even though collections pick up in the last few months of the fiscal.

  • Mar 08, 2019
  • Tax lens on 87,000 for failing to comply with demonetisation notices

    The Central Board of Direct Taxes (CBDT) has ordered “best judgment assessment” of individuals who failed to comply with the income tax department’s repeated alerts on bank deposits made soon after demonetisation. The income tax department had sent out SMSes, emails and also issued notices to around 300,000 individuals, who made substantial cash deposits after the November 2016 demonetisation, to furnish income-tax returns for the assessment year 2017-18. But, around 87,000 taxpayers failed to comply with those notices.

  • Mar 07, 2019
  • Angel tax: CBDT follows up on DPIIT relief, some concerns stay

    The Central Board of Direct Taxes (CBDT) On Wednesday gave effect to the conditional relief from angel tax to start-ups as notified by the Department for Promotion of Industry and Internal Trade (DPIIT) on February 19 by making the necessary changes in the Income Tax Act. In a substantial breather to thousands of start-ups, the DPIIT had raised the cap of funding by unlisted firms or individuals in a start-up that would be exempted from the angel tax to Rs 25 crore from Rs 10 crore and also relaxed a clutch of rules to ease investment flow into these. Investments by listed firms having a net worth above Rs 100 crore or annual turnover of Rs 250 crore will be exempted from any such limit, which will enable them to invest more without fears of the angel tax.

  • Mar 06, 2019
  • Corporate tax cut hinges on GST revenue: Arun Jaitley

    Stating that the NDA government, if voted back to power, would consider reducing the corporate tax rate for all firms to 25% provided the goods and service tax (GST) collections improve, finance minister Arun Jaitley on Tuesday told industry captains to pass on the benefits of recent GST cuts to consumers by lowering prices. Presenting a paper ‘Agenda for Growth and Shared Prosperity’ before the minister, industry chamber FICCI’s president Sandip Somany sought reduction of the corporate tax rate for all companies irrespective of their turnovers. In Budget for FY16, the government had unveiled a plan to reduce the corporate tax rate from 30% to 25% “in four years” to make India’s tax rates globally competitive. However, its implementation has been partial due to concerns on revenue front. It has since cut the corporate tax rate to 25% for those companies which reported a total turnover of up to `250 crore, largely benefiting MSMEs.

  • Feb 20, 2019
  • Angel tax exemption cap hiked, definition of startup widened

    In a two-pronged move to improve the fledgling startup eco-system, India on Tuesday raised the limit of angel tax exemption for startups, while revising the definition of such an enterprise. Angel tax, the focus of a recent controversy, which has come to be called so since it largely impacts angel investments in startups, refers to income tax payable on capital raised by unlisted companies via issue of shares, where the share price is seen in excess of the fair market value. Section 56(2)(viib) of the Income Tax Act provides that the amount raised by a startup in excess of its fair market value is taxable at over 30 per cent.

  • Feb 19, 2019
  • Breather for startups: Govt raises investment cap for angel tax concession

    Giving a major relief to startups, the government has decided to relax angel tax norms for startups, including increasing the investment limit to Rs 25 crore for availing income tax concessions by startups, an official said Tuesday.Currently, startups avail tax concession only if total investment, including funding from angel investors, does not exceed Rs 10 crore.A notification regarding simplifying the process for startups to get exemptions on investments under section 56(2)(viib) of Income Tax Act, 1961, will be issued shortly, the official said.

  • Feb 16, 2019
  • CBDT issues guidelines for defending cases at CIT (appeals)

    The Central Board of Direct Taxes (CBDT) has issued guidelines for the department to properly defend cases at the CIT (appeals) level, since a recourse would not be available for a further appeal in the tribunal in case of a loss, given the threshold for the revenue consideration has been raised to Rs 20 lakh by the government last year. In a bid to unclog judicial forums of pending tax cases, the government last year raised the monetary threshold for further appeals in tax cases. The department can now appeal in tribunal against a CIT(A) order only if the revenue consideration is above Rs 20 lakh. It was earlier Rs10 lakh.

  • Feb 14, 2019
  • Centre collects Rs 550 crore from equalisation levy in FY18

    The Centre has collected more than Rs 550 crore in FY18 from the equalisation levy, MoS for finance Shiv Pratap Shukla said in in Parliament on Tuesday. Currently, a 6% tax is charged on consideration exceeding Rs 1 lakh in a year for digital services provided to Indian resident by a firm not having permanent establishment (PE) in the country. “Further, the introduction of taxation based on significant economic presence is also expected to increase tax collection as it seeks to widen the tax base in India by establishing business connection and charging to tax income earned by digital businesses which operate out of jurisdictions with which India has not entered into a Double Taxation Avoidance Agreement (DTAA),” he said.

  • Feb 09, 2019
  • Govt raises limit beyond which employees need to show stock, MF investments

    The Centre has increased the over 26-year-old monetary limit on disclosure of investment in shares and mutual funds by employees to six months of their basic pay, according to an order issued by the Personnel Ministry. According to the earlier rules, Group 'A' and 'B' officers were to disclose such details if the total transaction in shares, securities, debentures or mutual fund schemes etc. exceeded Rs 50,000 during the calendar year. The upper limit was Rs 25,000 for those working in Group 'C' and 'D'.

  • Feb 09, 2019
  • Direct tax collection during April-January stands at Rs 7.89 trn: Govt

    Net direct tax collection during the April-January period of current financial year stood at Rs 7.89 trillion, Parliament was informed on Friday. In a written reply to a question in the Lok Sabha, Minister of State for Finance Shiv Pratap Shukla said there were 9.92 crore direct taxpayers in Assessment Year 2016-17, which increased to 7.41 crore in 2017-18. A taxpayer is a person who either files a return of income or in whose case tax has been deducted or paid.

  • Feb 08, 2019
  • 27-year-old rule changed: Disclosure limit on MF, stock investment up for bureaucrats

    The government on Thursday revised a 27-year-old cap on investment in the stock markets by bureaucrats to six months of basic pay. Under the 1992 rule, Group A and B officials had to intimate the government in a form if the total transaction in shares, debentures or mutual funds exceeded Rs 50,000 in a financial year. The limit has now been raised to over five-six times, considering the salary structure of government executives. The limit was Rs 25,000 for Group C and D officers. New orders have revised these limits, saying the intimation should be sent to the prescribed authority by government servants if the total transactions in shares, securities, debentures and mutual funds exceeds six months of basic pay of the government servant in a calendar year (to be submitted by January 31 of the subsequent calendar year).

  • Feb 07, 2019
  • Relief for startups: Angel tax exemption limit may be hiked to Rs 25 crore

    In a move aimed at providing succour to start-ups, most of which have been slapped with tax notices, the government is considering raising the funding limit in a start-up that would be exempted from the so-called angel tax to Rs 25 crore from the current Rs 10 crore. Sources told FE that the department for promotion of industry and internal trade (DPIIT) could also recognise companies that are in operation for up to 10 years as start-ups (instead of the current seven years), if they fulfil other criteria on innovation and turnover.

  • Feb 05, 2019
  • Worry lines for Modi govt: Direct tax collection could fall short by Rs 65,000 crore

    While the Interim Budget estimate of 13.5% growth in gross tax revenue for FY20 — this is to come on a robust base of 17.2% growth in FY19 (revised estimate or RE) — appears a bit too optimistic, the collection this year could turn out to be Rs 65,000 crore or 5.45% less than the RE, on account of the possible shortfalls in direct taxes alone. If the historical mop-up trend serves any guidance, some 65% of the annual direct taxes get collected in the first nine months of a fiscal year and the balance in the fourth quarter.

  • Feb 02, 2019
  • Government allows reinvestment of capital gains in two homes

    Among a slew of tax concessions announced in the Interim Budget 2019 that will help home owners is the one where income tax that is levied on notional rent accruing from a second self-occupied house will be done away with. “Considering the difficulty of the middle-class having to maintain families at two locations on account of their job, children’s education, care of parents, etc., I am proposing to exempt levy of income tax on notional rent on a second self-occupied house,” finance minister Piyush Goyal said.

  • Feb 02, 2019
  • TDS limit on interest from deposits hiked to Rs 40,000

    Depositors have been given some relief in the Union Budget 2019, which proposed to increase the TDS threshold on interest earned on the deposits with banks and post office to Rs 40,000. The Budget tabled before the Parliament on Friday calls for quadrupling the TDS limit on interest from deposits from Rs 10,000 to Rs 40,000. In case of senior citizens, the limit has been increased to Rs 50,000. The proposal will cover interest earned on savings deposits, fixed deposits, as well as other deposit schemes in banks and post offices.

  • Feb 02, 2019
  • Budget 2019: Piyush Goyal hikes tax-free gratuity limit to Rs 30 lakh

    Interim Finance Minister Piyush Goyal announced that the tax-free gratuity limit will be increased to Rs 30 lakh during his budget speech on Friday. Presenting the Union Budget for FY20, Goyal said that the gratuity limit will be hiked from Rs 20 lakh to 30 lakh. The government had doubled the limit for tax-free gratuity to Rs 20 lakh in the private sector back in March last year.