Category: Direct Taxation

/ Direct Taxation

Start-ups get partial exemption from angel tax

Since a start-up gets high investment because of its idea, applying Section 56(2)(viib) to recover the tax on pretext of inflated valuation would be prejudicial to the interest of the start-up. Startups to file new Form-1 and Form-2 in order to claim tax incentives.
The application in Form-1 shall be filed along with prescribed documents before CBDT to obtain a tax exemption certificate under Section 80-IAC. The Form-2 shall be filed by the start-up to claim exemption from the applicability …

Continue Reading
/ Direct Taxation

LTCG tax benefits for unlisted stocks

The Lok Sabha on Wednesday passed the Finance Bill 2018, allowing the benefit of inflation adjustments to stocks that were unlisted till January 31 while levying long-term capital gains (LTCG) tax. The move might provide tax benefits to shareholders of the National Stock Exchange (NSE), others who have invested in employee stock ownership plans (ESOPs), and in certain merger and acquisition cases. The Bill retained the LTCG tax without removing the securities transaction tax (STT) and the indexation benefits provided
…
Continue Reading
Pre-2016 Startups may Get Breather from Angel Tax
/ Direct Taxation

Pre-2016 Startups may Get Breather from Angel Tax

India could shield startups floated prior to 2016 from the socalled angel tax to boost entrepreneurship in the country. The finance ministry has started discussions with the Department of Industrial Policy and Promotion (DIPP) on the certification of genuine startups to help with this.
The government has also asked tax officials not to pursue cases against startups.
“We had (earlier) said we will recognise startups only after 2016. We have sent a proposal to the DIPP. If DIPP agrees, then …

Continue Reading
/ Direct Taxation

CBDT Signs Bilateral APA With Japanese Firm

The Central Board of Direct Taxes has signed a bilateral Advance Pricing Agreement (APA) with the subsidiary of a Japanese company as it looks to reduce litigations by providing certainty in transfer pricing. The total number of bilateral APAs signed with various Japanese subsidiaries has thus reached five, all with rollback provisions, a Finance Ministry statement said.
Four APAs out of these five have been signed in the current financial year, it added GST registration online. 
The APAs are …

Continue Reading
/ Direct Taxation

Cash Transaction Limit Lowered To Rs 2 lakh.

The Rs 3-lakh limit proposed for cash payments in the Budget for 2017-18 would be brought down to Rs 2 lakh as part of an unprecedented 40 amendments to the Finance Bill. Finance Minister Arun Jaitley moved the amendments in the lower House on Tuesday. This is aimed at tightening the noose on those dealing in cash.Most other amendments — making Aadhaar mandatory for filing tax returns, applying for permanent account numbers (PAN) and allowing payments by only non-cash modes …

Continue Reading
/ Direct Taxation

Tax Free Limit For Qraturity Hiked To Rs. 2 Million

Formal sector workers may soon be eligible for up to Rs 2 million tax-free gratuity as central trade unions have agreed on the proposal in a tripartite consultation with the Labour Ministry.
The central trade unions have agreed on doubling gratuity amount ceiling as an interim measure in a tripartite meeting on the proposed amendment to Payment of Gratuity Act conducted by the Labour Ministry. gst consultants in Delhi

“While accepting the maximum payment limit of Rs 2 million as …

Continue Reading
/ Direct Taxation

Poem Rules Only For COS Earning Over Rs 50 CR.

The Central Board of Direct Taxes, the apex direct taxes body, has issued a circular clarifying that the provisions relating to place of effective management (POEM) will apply to companies with over Rs. 50-crore turnover.
The clarificatory circular comes after a CBDT press release specified this but the circular issued omitted a mention in chartered accountant firms in mumbai.
“…it is clarified that provisions of Sec 6(3)(ii) relating to place of effective management (POEM) won’t apply to companies having …

Continue Reading
/ Direct Taxation

New Tax Norms Target Shell Firms

The government on Tuesday issued guidelines to plug tax evasion by shell companies or foreign firms set by groups in India to retain income outside the country, dashing hopes ofindustryThe rules outline companies incorporated overseas but with effective control of that implementation of these norms would be deferred to next year.The rules will affect companies in industries like pharmaceuticals, automobiles, energy, manufacturing and software. The guidelines have a few safeguards that were not present in draft norms issued in 2015 …

Continue Reading
/ Direct Taxation

Startup Brace For Legal War With I-T

Startups that have been ordered to pay tax despite valuations being marked down in recent funding rounds are challenging the demands, complaining that the move runs counter to the government’s campaign to encourage entrepreneurial spirit.
With startup fever having waned over the past year or so amid concerns over profitability and competition, valuations have declined sharply. Last month, the tax consultancy firms in Delhi department challenged such reductions at about 100 startups and issued orders seeking 33% tax at the …

Continue Reading
/ Direct Taxation

Two More Advance Pricing Agreements Signed By The CBDT

The Central Board of Direct Taxes (CBDT) has closed the year 2016 by entering into two more unilateral Advance Pricing Agreements (APAs) today. The APA Scheme was introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014. The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance in chartered accountant firms in mumbai. Since its …

Continue Reading