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Companies (Auditor’s Report) Order, 2016 (Summarised Guidence) , Compiled By : CA RAMANDEEP SINGH BHATIA

Companies (Auditor’s Report) Order, 2016

COMPILED BY : CA RAMANDEEP SINGH BHATIA

 

The Central Government, in exercise of the powers conferred, under subsection (11) of section 143 of the Companies Act, 2013* (hereinafter referred to as “the Act”), issued the Companies (Auditor’s Report) Order, 2016, (CARO, 2016/ “the Order”) vide Order No. S.O. 1228(E) dated 29th March, 2016.

Please Download the PDF File attach in the Page for Details .

Thank You

 

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30-May-2016
The Finance Bill, 2016 HIGHLIGHTS OF DIRECT TAXES COMPILED BY: CA RAMANDEEP SINGH BHATIA

The Finance Bill, 2016

HIGHLIGHTS OF DIRECT TAX

COMPILED BY: CA RAMANDEEP SINGH BHATIA

(Download PDF file Attached)

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14-May-2016
CHHATTISGARH COMMERCIAL TAX UPDATE- BUDGET 2016

CHHATTISGARH  COMMERCIAL TAX UPDATE- BUDGET 2016

Extract of Chief Minister Speech on Chhattisgarh Budget 2016-17 on 09.03.2016

  • Cycle and spare part of cycle exempted from VAT.
  • Rate of VAT on mobile phones reduced from 14% to 5%.
  • Cleaning equipments Jadu, pochha (mop),brush and wiper are exempted from VAT.
  • Batter of idli and Dosa are exempted from VAT from existing 14%.
  • In order to promote steel industry of the state iron ore, pig iron, sponge iron, iron ore palates, ingot , billet, and ferroalloys Rate of VAT has been reduced from 5% to 2%.
  • In order to promote dairy industry of the state Ghee, paneer and khowa manufactured in Chhattisgarh are exempt from VAT.
  • Rate of VAT on wire nails reduced from 14% to 5%.
  • Rate on CST on electro forged grating reduced from 14% to 5%.
  • Purchase tax @5% on boilers pressure parts if VAT has not been paid on yhr same.
  • Now annual return can be revised once.
  • Interest on delay payment of Taxes will be charged at the rate of 1.5% (simple interest) per month instead of multiple rates of 2.5% and 1.5% earlier.
  • 90% of quarterly tax has to be paid within 15 days from the end of quarter.
  • For filling of First appeal now 15% amount has to be paid instead of 10%.
  • No input tax rebate would be allowed even on tax free item by notification like tax free goods.
  • On transfer of stock full input tax rebate has to be reversed instead of up to 5%.
  • Revision of Dealer is abolished, however revision by commissioner will continues.
  • In order to de motivate tax evasion and under assessment penalty and interest both will be levied and penalty would be one and half to two times instead of one to five times.
  • For compounding of tax interest amount would also be considered.
  • Coconut  oil is generally used as hair oil in Chhattisgarh, hence normal rate of tax would be levied instead of rate applicable to edible oil.
  • Entry tax on lime stone used for construction would be Rs. 45/- per ton instead of Rs. 30/- and Rs. 60/- per ton.
  • 14% rate of VAT would be now 14.50%.
  • Per liter tax levied on petrol and diesel w.e.f. 01/01/2016 will continue.

 

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11-March-2016
Changes under Service Tax Proposed in Finance Bill 2016

Changes under Service Tax Proposed in Finance Bill 2016:-

1) Service tax another surcharge from 01st June 2016- “Krishi Kalyan Cess” – 0.5 % . Thus Service tax now effectively will be 14%+0.5%+0.5% = 15 %

2) Legal Service now removed from Reverse Charge Mechanism and brought to direct Service Tax at above effective rate from 01st April 2016.

3) The services provided by mutual fund agent/distributor to a mutual fund or asset management company, are being made taxable under forward charge (removed from Reverse Charge Mechanism) with effect from 1st April, 2016, so as to enable the small sub-agents down the distribution chain to avail small scale exemption having threshold turnover of Rs 10 lakh per year. This will reduce burden of Mutual fund and other similar organisation.

4) From 1st March 2016 Contract pertaining to monorail or metro construction, erection, commissioning or installation of original works will now be liable at 5.6% effective rate plus two surcharge.

5) Service provided by ropeway, cable car or aerial tramway for transport of passenger will now be liable to service tax @ above rate from 01st April 2016.

6) Service tax on transportation of passengers by Air-conditioned Stage carrier will be liable to tax from 01st June 2016 @ 5.6% effective rate plus two surcharge.

7) Impose Service Tax on services provided by them by way of transportation of goods by a vessel from outside India up to the customs station in India with effect from 1st June, 2016 so as to complete the credit chain and enable Indian Shipping Lines to avail and utilize input tax credits.

8) With effects from 01st April 2016, the following service are now exempted ---Service provided by:-a) Pension Fund Regulatory and Development Authority (PFRDA) b) Employees’ Provident Fund Organisation (EPFO) c) Insurance Regulatory and Development Authority (IRDA) d) Securities and Exchange Board of India (SEBI) e) services of general insurance business provided under ‘Niramaya’ Health Insurance scheme f) National Centre for Cold Chain Development under Department of Agriculture, Cooperation and Farmer’s Welfare, g) Biotechnology Industry Research Assistance Council (BIRAC) h) way of skill/vocational training by training partners under Deen Dayal Upadhyay Grameen Kaushalya Yojana i) Directorate General of Training, Ministry of Skill Development & Entrepreneurship j) a performing artist in folk or classical art forms of music, dance or theatre is being enhanced from Rs 1 lakh to Rs 1.5 lakh.

9) From 1st March 2016 the construction service in respect of housing project (Urban) Mission/Pradhan Mantri Awas Yojana; low cost houses up to carpet area 60 sq.metres=(645 Square feet) under “Affordable housing in Partnership” ; low cost houses up to a carpet area of 60 square metres in a housing project under any housing scheme of the State Government is exempted from service tax.

10) From 01st April 2016 Service Tax on single premium annuity (insurance) policies is being reduced from 3.5% to 1.4% of the premium.

11) From 01st March 2016 services provided by Indian Shipping lines by way of transportation of goods by a vessel to outside India, will be entitle for Cenvat credit on inputs; input services and capital goods credit.

12) Benefit from retrospective effect i.e. 01st April 2015 (earlier withdrawn from that date) - Exemptions on services of: a) construction provided to the Government, a local authority or a governmental authority, in respect of construction of govt. schools, hospitals etc. b) construction of ports, airports. Thus reduce service tax from 5.6 % to “zero”.

13) Services provided by way of construction, maintenance etc. of canal, dam or other irrigation works provided to bodies set up by Government but not necessarily by an Act of Parliament or a State Legislature, during the period from the 1st July, 2012 to 29th January, 2014, are being exempted from Service Tax with consequential refunds, subject to the principle of unjust enrichment. Thus reduce service tax from 5.6 % to “zero”.

14) Services provided by the Indian Institutes of Management (IIM) by way of 2 year full time Post Graduate Programme in Management (PGPM) (other than executive development programme), Integrated Programme in Management and Fellowship Programme in Management (FPM) are being exempted from Service Tax with effect from 1st March, 2016. Now exempted.

15) “One Person Company” and HUF can from 01st April 2016 pay quarterly Service tax.

16) Interest rates on delayed payment of duty/tax across all indirect taxes are being rationalized and made uniform at 15%, except in case of Service Tax collected but not deposited to the exchequer, in which case the rate of interest will be 24% from the date on which the Service Tax payment became due.---( In case of assessees, whose value of taxable services in the preceding year/years covered by the notice is less than Rs. 60 Lakh, the rate of interest on delayed payment of Service Tax will be 12%.) – with effect from Finance Bill receives the assent of the President.

17) Cenvat credit on input service will now be available on following abatements ( From 01st April 2016)

a) Credit of input services is being allowed on transport of passengers by rail

b) Credit of input services is being allowed on transport of goods, other than in containers

c) Credit of input services is being allowed on transport of goods in containers by rail at a reduced abatement rate of 60%. (In effect tax will first increase by 1.4 % and then cenvat credit available)

d) Credit of input services is being allowed on transport of goods by vessel

18) The abatement rate in respect of services by way of construction of residential complex, building, civil structure, or a part thereof, is being rationalized at 70% by merging the two existing rates. Thus effective rate 4.2 % plus above two surcharges. From 1st April 2016

19) The abatement on shifting of used household goods by a Goods Transport Agency (GTA) is being rationalized at the rate of 60%, without CENVAT credit on inputs, input services and capital goods. Thus the effective tax rate is 5.6 % . From 1st April 2016.

20) The abatement rate on services of a foreman to a chit fund is being rationalised at the rate of 30%, without CENVAT credit on inputs, input services and capital goods. Thus the effective tax rate is 9.8 % . From 1st April 2016.

21) A condition mandating inclusion of cost of fuel in the consideration for availing abatement on the services by way of renting of motor-cab is being prescribed with effect from 1st April, 2016.

22) Indirect tax Dispute Resolution Scheme, 2016, wherein a scheme in respect of cases pending before Commissioner (Appeals), the assessee, after paying the duty, interest and penalty equivalent to 25% of duty, can file a declaration, is being introduced. In such cases the proceedings against the assessee will be closed and he will also get immunity from prosecution.

23) The annual return will also have to be filed by Service Tax assessees, above a certain threshold, taking total number of returns to three in a year for them. This change shall come into effect from 1st April, 2016.

24) Section 73 of the Finance Act, 1994 is being amended so as to increase the limitation period from 18 months to 30 months for short levy/non levy/short payment/non-payment/erroneous refund of Service Tax.

25) The power to arrest in Service Tax is being restricted only to situations where the tax payer has collected the tax but not deposited it to the exchequer, and that too above a threshold of Rs 2 crore. The monetary limit for launching prosecution is being increased from Rs. 1 crore to Rs. 2 crore of Service Tax evasion.

Yet to Announce :-

a) Point of Taxation Rules, 2011 is being amended

b) Cenvat Credit Rules

c) Service tax rules on Compliances

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01-March-2016
Tax Saving Options : Since march is approching, some options for saving your Income Tax are discussed below,

Since march is approching, some options for saving your Income Tax are given,   

Tax Saving under Sec 80C

The maximum deduction under 80C combining all investment all investment deduction is Rs 1,50,000/-. Maximum Saving in Tax @ 30% : Rs.45,450/-

Fixed Income

(investment – Debt)

Market Linked

Expenditures

PROVIDENT FUND (EPF/VPF)


LIFE INSURANCE PREMIUM

TUITION FEE FOR 2 CHILDREN

PUBLIC PROVIDENT FUND (PPF)

NEW PENSION SCHEME(NPS)

STAMP DUTY AND REGISTRATION COST OF THE HOUSE

NATIONAL SAVING CERTIFICATE (NSC)

TAX SAVING MUTUAL FUNDS(ELSS)

HOME LOAN PRINCIPAL PAYMENT

TAX SAVING 5 YEARS FD FROM BANKS


PENSION PLANS FROM INSURANCE COMPANIES

 

FIVE YEARS POST OFFICE TIME DEPOSIT(POTD)


UNIT LINKED INSURANCE PLAN(ULIP)

 

SENIOR CITIZEN SAVING SCHEME(SCSS)

   

NHB SUVRIDDHI

   

SUKANYA SAMRIDDHI ACCOUNT

   

Tax Saving under Sec 80D

The maximum deduction under 80D combining all investment all investment deduction is Rs 30,000/- (Family) + Rs 30,000/- (Parents) .Maximum Saving in Tax @ 30% : Rs.18,180/-

Health Insurance Premium of Your Family

Maximum Rs 25,000/-

For self and family

Maximum Rs 30,000/-

 Senior citizen,

The Health Insurance Premium of Your Parents

Maximum Rs 25,000/-

Parents are
not a senior citizen

Maximum Rs 30,000/-

Parents are a senior citizen

Preventive Health Check Up Tax Deduction

 Maximum Rs 5,000/-

Aggregate expense on health checkups of your family. 

Deduction under Section 80CCD (1B)

Contribution to NPS (New Pension Scheme) Rs 50,000/- (From AY 16-17 ) Maximum Saving in Tax @ 30% : Rs. 15,150/-

The minimum contribution is Rs. 6,000 per year. There is no limit on maximum contribution. But whatever amount you invest in the scheme ,only 50000 is maximum allowed to deduction under section 80CCD of the Income Tax Act,1961.This proposes to give NPS, an additional tax benefit on investments of up to Rs 50,000 a year, over and above Rs. 1.5 lakh a year under section 80C, for financial year 2015-16.

 

Disclaimer : Please go through the Scheme as per your suitability , we do not advise any specific mode. 

.SRKN & ASSOCIATE 

 

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27-February-2016
The Definitive Guide to Why You Need Health Insurance

With the rise of growing health care sector and the technology it has developed, the health care has become increasingly expensive. An average lower-middle-class man might just find himself in the midst of the most terrible crisis in case he faces a situation where he has to pay the hospital bills. A single visit to the doctor costs more than an average person’s income per day. While there are government hospitals that have the cutting edge medical technology, the large number of patients they look after and the endless queue to get the paperwork done is just not worth taking the risk for.

Health Insurance sector in India is booming with the growing demand for top-notch medical care. While it protects you from a financial crisis, it is beneficial in many more terms. Let’s have a look at some reasons as to why do you need Health Insurance.

 

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09-February-2016
Process and Checklist For Secretarial Audit

ecretarial Audit a Governance measure that will have a positive effect on corporate entity. It is Compliance Audit system that used to carrying out auditing of compliances along with all Rules and Regulation made there under. It is a process to check compliances made by the Company under various Law, Rules, Regulation, and Procedure.

APPLICABILITY OF SECRETARIAL AUDIT

According to section 204 of Companies Act, 2013 and Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, company required to obtain Secretarial Audit Report from independent practicing company Secretary.

a). All Listed Company

b). every public Company having Paid up Share Capital of Rs 50 crore or more; or,

c). every public company having a Turnover of Rs. 250 crore or more.

SECRETARIAL AUDIT – THE PROCESS

SECRETARIAL AUDIT PROCESS

CHECKLIST FOR SECRETARIAL AUDIT

Act Covered Under the Secretarial Audit

Act Covered Under Secretarial Audit

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17-December-2015
Changes to the Indian exchange regulations relating to the receipt and remittance of remuneration outside India

The Reserve Bank of India released a Notification in early December  which amended the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations 2000 affecting both:

  • Payment of salary outside India to employees of a foreign company who are on secondment to an office, branch, subsidiary or joint venture in India (Indian entity) of the foreign company.
  • The remittance of salary received by foreign nationals whilst resident in India who are employees of Indian companies.

The Notification replaces the earlier sub-regulation (8) of regulation 7 and now allows an approved category of persons who are on secondment in India or employed there to receive or remit their entire post-tax salary outside India.

 

Background

Prior to this amendment, an employee of a foreign company, who was on secondment to an Indian entity could receive up to 75% of his salary into a foreign currency bank account outside

India subject to the following conditions:

  • The remaining salary was paid in India in Indian rupees.
  • Indian income tax was paid on the entire taxable salary

 

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17-December-2015
Taxation of Agricultural Income- Detailed Analysis

1. Agricultural Income in India is Exempt from Income Tax u/s 10(1) of Income Tax Act, but agricultural income from outside India is taxable. As per entry number 82 of Union List, Central Govt. shall have the powers to levy income tax on any income except agricultural income.

Ex:-     Mr. X has agricultural income in India, it is exempt from income tax but if he has agricultural income from Nepal, then it is taxable.

As per entry number 82 of Union List, Central Govt. shall have the powers to levy income tax on any income except agricultural income.

As per entry number 46 of State List, State Govt. shall have the power to levy tax on agricultural Income.

2. If any person has agricultural income as well as non-agricultural income, in such cases, his taxability shall be computed as per “Partial Integration Method” given below;

i) Compute Income Tax on the total of agricultural income plus non-agricultural income but without education cess.

ii) Compute Income Tax on the total of agricultural income plus exemption limit (say 2,00,000 i.e. upto which Income is not taxed) but without education cess.

iii)  Deduct tax at step # (ii) from tax at step # (i) and apply education cess (3%).

iv) Partial integration is not applicable in case of Long-Term Capital Gains/Short-Term Capital Gains u/s 111A/Casual Income.

v) If agricultural income is upto Rs. 5,000/- or non-agricultural income is upto exemption limit, in that case, Partial Integration is not applicable.

vi) Partial Integration is not allowed in case of Partnership Firm or Company. Therefore it is applicable on slab rate only.

3. Agricultural Income is defined in 3 parts under Income Tax Actu/s 2 (1A)

i) Income from letting out of Agricultural Land u/s 2 (1A) (a).

ii) Income from Agricultural Operations u/s 2 (1A) (b).

iii) Income from a Farm Building u/s 2 (1A) (c).

i) INCOME FROM LETTING OUT OF AGRICULTURAL LAND:-

If any person has let out agricultural land, rent received shall be considered to be agricultural income. Ex. Mr. X has 10 acres of agricultural land and it has been let out at Rs. 2,00,000/- p.a., in this case rent received shall be considered to be agricultural income. If in this case, assessee has received rent in kind, even in that case, income shall be considered to be agricultural income and if such agricultural product has been sold in the market by the receiver of rent in kind, even in that case, it will be considered to be agricultural income.

If the amount of rent is in arrears and the assessee has received interest, in that case such interest shall not be considered to be agricultural income rather income is taxable u/h Other Sources.

ii) INCOME FROM AGRICULTURAL OPERATIONS:-

If any person has incomes from agricultural operations, it will be called agricultural income.

If any company is engaged in agricultural operations, income of company shall also be considered to be agricultural Income and shall be exempt from Income-Tax and if such company has distributed dividend to the shareholders, it will not be considered to be agricultural income of the shareholder, rather it will be considered to be his dividend income but if such dividend has been received from a domestic company, it will be exempt u/s 10(34) and the domestic company has to pay Additional Income-Tax.

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17-December-2015
Vodafone – Overseas transactions between two foreign companies cannot be taxed in India under present Income Tax Act

Resuming its arguments against Rs 11,000-crore tax demand by the Income Tax (I-T) department, the British telecom giant Vodafone today contended before the Supreme Court that the present Indian income tax laws do not cover gains from overseas transactions. Senior advocate Harish Salve appearing for Vodadfone submitted before the apex court that under the present Income Tax Act, overseas transactions between two foreign companies cannot be taxed and it could be done by only by bringing a new law by Parliament

“The I-T department cannot do it. It would have to be done only by Parliament by enacting a new law,” said Salve. The telecom giant further submitted that by showing a mere “nexus” between the two companies, the I-T department cannot say that transfer of shares of Hutchison Communication International to Vodafone International Holding BV would be taxed. “You cannot use a nexus only to create a charge [of tax],” said Salve, adding that Parliament would have to define the territorial capacity as how it would be taxed and authority of the nation on such transaction. “Transfer of control is not taxable [under the I-T Act]. For that you would have to make fixtures [law]. And even the Parliament make law, then some one have to show nexus,” said Salve adding that “it has to be done by law and not by sudden invocations”. He also refereed to sale of stake by Tata and global telecom major AT&T in Idea Communication and it was not taxed. Referring section 9 of the I-T Act, which defines Income deemed to accrue or arise in India, Salve said it does not mention any such transfer of control to be taxed. “Even the Indian firms which pays their dividends outside India are non-taxable under the Act,” said Salve. Vodafone is contesting I-T department’s demand of Rs 11,000 crore as capital gains tax over its buy out of Hutchison’s 67% stake in Essar-Hutchison joint venture for $11 billion. The hearing would resume on Tuesday. The British telecom company had purchased 67% stake of Hutchison in Hutchison—Essar for over $11 billion. Following this, the I-T department raised a tax demand of about $2 billion on the company as it had failed to deduct (withhold) capital gains tax at the time of stake purchase. - See more at: http://taxguru.in/income-tax/vodafone-overseas-transactions-foreign-companies-taxed-india-present-income-tax-act.html#sthash.ADxqhwJF.dpuf

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27-November-2015



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