CAduniya.com : CA India Blog

RBI/2007-08/280

DGBA.GAD. No. H. 10875 / 42.01.038 /2007-08 April 10, 2008

As you are aware, the Central Board of Direct Taxes vide their Notification No. 34/2008 dated 13-3-2008 (copy enclosed) have made electronic payment of taxes mandatory for the following categories of tax payers w.e.f. 01.04.2008 :

a. A company

b. A person (other than a company), to whom provisions of Section 44AB are applicable.

2. In this regard the following instructions may be kept in mind while implementing the Government Notification:

i) the status of all corporate taxpayers can be identified from the name itself. Further, the 4th digit of the PAN of all corporate assessee would necessary be “C”. Physical challans from such assessees shall not be accepted across the counter.

ii) In case of tax payers covered under Section 44AB, there should be no insistence of any proof of eligibility to pay tax through physical challans at the bank counters. The responsibility of making e- payment rests primarily with the taxpayer. Hence, the word of taxpayers should be taken as final.

iii) the acknowledgement for e-payment should be made available immediately on screen by the bank concerned.

iv) the transaction id of e-payment should be reflected in the bank’s statement.

v) each bank should prominently display on its e-payment gateway page, the official /s to be contacted in case the taxpayer faces any difficulty in making the payment, completing the e-transaction, generating the counterfoil etc.

vi) each bank should give the ITD and NSDL a list of officials with contact particulars, to be contacted if required for any problems faced by ITD or taxpayers.

4. Necessary instructions may be issued to your branches concerned.

Yours faithfully,

(M.T.Varghese)

General Manager

Export oriented units get extension of I-T benefit

Duty entitlement passbook scheme to continue for another year

A slew of measures to pep up export of traditional industries hit by the rupee appreciation, major spurs to cut down transaction costs, procedural simplification, extension of the popular duty neutralisation DEPB (Duty Entitlement Pass Book) scheme till May 2009 and also a one-year extension beyond March 2009 in income-tax benefit to 100 per cent export units are outlined in the annual supplement to Foreign Trade policy.

Releasing the final year supplement to the FTA (2004-09) here on Friday, the Union Commerce and Industry Minister, Mr Kamal Nath, announced an export target of $200 billion for the current fiscal, against $155 billion export performance achieved in 2007-08.

He said the achievement fell short by $5 billion due to the effect of an appreciating rupee by more than 12 per cent against the dollar in 2007. If trade in services were added, India’s commercial engagement with the world would be $525 billion, he said.

In order to achieve the export target, Mr Nath announced tax refunds and interest subsidies to a spate of export segments that are labour-intensive in nature such as marine products, leather, textiles and handicrafts and 5 per cent additional duty credit for export of toys and sports goods.

Source and more details at: The Hindu Business Line

The Institute of Cost and Works Accountants of India on Saturday said it is launching a ‘Certificate Course in Accounting Technician’ to cater to junior accounting job requirements in rural areas.

The course is being introduced in both English as well as Hindi languages and the fee is Rs 8,600, the institute said in a statement.

The course has a duration of one year and would have six papers, practical training, orientation programme and computer training.

It is divided into two parts. In the first part, called the Entry Level, a student has to appear for four papers and in the second part — Competency Level — a student has to take two papers.

The first entry level examination will be held in December 2008, it said.

Any student who has completed 10+2 will be eligible for examination at entry level. Commerce graduated would be exempted from entry level.

To meet the growing demand for chartered accountants, the Institute of Chartered Accountants of India (ICAI) has upped its intake of students.

It admitted a record 125,000 students last year. This year, after exams are conducted in May and November, the institute plans to take an even higher number of students.

As a result, ICAI hopes there will be an annual addition of around 25,000 to the army of chartered accountants in the country from 2010 onwards. This is more than double the 10,000 to 12,000 chartered accountants it churned out annually between 2001 and 2006. The student intake then averaged between 35,000 and 40,000.

With the boom in the corporate sector, there has been an unprecedented rise in the demand for chartered accountants in the last few years and this has improved their remuneration manifold. The average annual pay packages in the last round of placements at the ICAI too touched a new high of Rs 5.94 lakh, compared with Rs 4.79 lakh in 2007.

Aware of the growing demand for skills commensurate with basic tasks like accounting and book keeping, the ICAI recently launched a two-year course aimed at creating a second tier of accountants. This will lead to another 50,000 accountants being produced annually, taking the total number of accountants to around 75,000.

While there are no definite numbers on the shortage of accountants, experts say the deficit will be massive. “Given the current boom in the economy, along with other reasons like increasing financial norms and risk management in companies, the need for skilled accountants is bound to rise,” an expert said.

“There is no estimate as of now but a report of the Ministry of Human Resource Development has put the shortage of finance professionals in the country at around 200,000 by 2009,” Amit Azad, a consultant said.

Besides opening up computer labs across the country to impart IT training to CA students, ICAI is also coming up with a 25-acre campus at Jaipur that will be developed into a centre of excellence where students will be taught management skills in a three-month residential programme.

Encouraged by the rising student registration, both in the country as well as abroad, the ICAI has, from this year, allowed articleship training overseas as well. Earlier, a student pursuing the chartered accountant course abroad had to come to India for a three-year articleship training.

“ICAI is conscious of the need for skilled as well as employable workforce. We are confident that we will meet the requirement of the growing economy. There is no restriction on the student intake and with our teaching expertise, infrastructure and growing membership, we are hopeful to bridge the skill gap in future,” ICAI president Ved Jain said.

ource: Business Standard

NEW DELHI: Underwriting could become mandatory for the initial public offers (IPOs). The proposal is part of the initiatives which are under consideration of the market regulator to discipline the primary market and ensure quality paper.

An underwritten issue, it is understood, would also give confidence to investors that the issue has been vetted by domain experts after considering the risk factors. It could help obtain better pricing as institutions would not want to underwrite issues that are over-aggressively priced and run the risk of devolving substantially. The move comes in the backdrop of some of the big IPOs - Emmar MGF, Wockhardt etc - being called off. In February, these issues were called off by the promoters after failing to woo investors following cut in price band and extension of deadline.

The proposal has already been given an in-principle go-ahead by the Primary Market Advisory Committee, which is at present discussing the issue of making the IPO process more efficient and transparent. The nitty-gritty of its implementation, however, is yet to be firmed up, sources told ET. However, the proposal will finally have to be cleared by the SEBI board before it is implemented.

Source

Allocation List of Branch Statutory Auditors of Public Sector Banks for the year 2007-08

Click here for Allocation List

Inflation based on the wholesale price index (WPI) increased to 5.11% for the week ended March 1, 2008 when compared with 5.02% in the previous week on higher prices of food items and manufactured products.

Inflation stood at 6.51% in the corresponding week of the previous year.

Prices of pulses, fruit and vegetables, condiments and spices increased during the week ended March 1. Prices of edible oil increased 2.1% during the week. The index for the fuel group rose 0.1% due to the higher price of turbine fuel.

The government revised the inflation rate for the week ended January 5, 2008 to 4.26% from the earlier reported level of 3.79%.

The Income Tax Department has put on its website the list of income tax refunds of all salary tax payers which could not be sent to the concerned persons for want of correct address.

Salary taxpayers who have not received refunds for assessment years 2003\04 to 2006\07 can click on the link below and query using the PAN number and assessment year whether any refund due to them has been
returned undelivered from the menu `undelivered salary refund management system’. If any refund has been returned undelivered due to change in address, then the taxpayer can enter the present address and the refund will be sent to the taxpayer at the new address.

The link to the website is as under:

http://www.incometaxindia.gov.in/CCIT/refundsearch.asp

Simplification of tax administration has been high on the government’s agenda. Various measures have been taken by the government over the past few years.

These include introduction of PAN as the sole identification number for income tax transactions, electronic payment of taxes, electronic filing of income tax returns, and so on. The tax department plans to concentrate on more efficient and effective work.

In the current year, the tax-GDP ratio is at an all-time high of 12.5 percent. Direct tax collections touched Rs 3 lakh crores for the first time. The Department has been disposing off about 2.60 crore tax assessments every year. The cost of collections is already going down and stands at 0.74 percent of the total collections.

Addressing members of the Bharat Chamber of Commerce and Merchants Chamber, besides captains of industry, at an interactive session on ‘Direct Taxes: Policies and Prescriptions’, here on Monday, Mr R. Prasad, Chairman, Central Board of Direct Taxes (CBDT), Union Ministry of Finance, clarified that activities of Chambers of Commerce will not be brought under the tax net, under the new proviso to Section 2 (15) in the Union Budget.(As per the changes proposed in the Finance Bill with regard to direct tax provisions under Section 2(15) of the I-T Act, it is proposed that the concept of general public utility for a charitable purpose shall not apply if the job involved carrying on of “any activity in the nature of trade, commerce or business”.)  — March, 11th 2008

US Dollar Gains From 5-day Low Versus Indian Rupee [USD/INR]

3/12/2008 1:03:32 AM The US dollar gained ground against the Indian rupee after hitting a 5-day low of 40.1050 at about 8:00 pm ET Tuesday. Currently, the dollar-rupee pair is trading at 40.33, compared to yesterday’s North American close of 40.2250.

Rules for advance pricing arrangements are likely to be introduced in India with an eye on reducing transfer pricing litigation between corporations and tax authorities.

An announcement to this effect is expected either in Budget 2008-09 or in the direct tax code that is likely to be introduced later.

Transfer pricing legislation was introduced in India in 2001 and has emerged as the single biggest source of courtroom battles between Indian tax authorities and companies, a large number of which are multinationals with operations in India.

Tax specialists and industry have been demanding clear-cut advance pricing mechanisms that will allow them to determine the valuation of related party transactions.

Read the rest of this entry »

What will be cheaper

* Pharma goods excise duty cut to 8%
* Anti-Aids drug gets excise duty exemption
* Custom duty for phosphoric acid custom duty reduced to 5%
* Custom duty on some bulk drugs cut from 10% to 5%
* Custom duty on steel scrapped
* Custom duty on vitamin pre-mixes to lower from 30% to 20%
* Excise duty reduced from 16 to 8 per cent on water purification items.

What will cost more* Excise on packaged software to go up from 8% to 12%
* No excise duty on refrigerating equipments
* Duty on non filter cigarettes to be raised

The government on Friday proposed to increase service tax revenues by bringing in services companies like
1) stock and commodity exchanges,
2) asset management firms offering unit-linked insurance plan,
3) clearing houses
4) and customised software makers under the levy.

• 5 year tax holiday to 2, 3 & 4 star hotels in UNESCO declared heritage site areas
• 5 year tax holiday for hospitals especially in tier 2 and tier 3 cities

Why Silent for STPI, Sofware Export units?

The STPI scheme which is set to expire in 2009, provides a 10-year income tax exemption for units situated in software technology parks.

“We have sought a blanket continuation,’ said Lakshmi Narayanan, chairman of National Association of Software and Service Companies.

With STPI scheme coming to an end in March 2009, investors could avoid India as an offshore destination, opting instead for places like China, Sri Lanka and Philippines, BPIAI (Business Process Industry Association of India (BPIAI). ) president Samir Chopra said. 

• Budget: Excise on small cars cut to 12 pct from 16 per cent
• Budget: Sixth Pay Commission report by March 2008
• Budget: Defence allocation up by 10% from Rs 96,000 cr to Rs 1,56,000 cr 
• Budget: PAN sole identification in securities market

*Banking transaction tax to be removed
*Reduce central sales tax to 2%
*Increase in short term capital gains tax to 15%
*5-yr tax holiday for setting up hospitals in tier-II, tier III regions
*Excise duty of Rs 1.35/litre on unbranded petrol
*Excise duty of Rs 4.6/litre on unbranded diesel
*Commodities Transactions Tax to be introduced
*Securities Transaction Tax to be treated like deductible expenditure
*5-yr tax holiday to 2,3,4-star hotels in UNESCO’s heritage sites
*NO FBT on creche, employee sports, guest houses facilities
*No change in corporate income tax rate
*No change in corporate surcharge tax
*Duty on two wheelers reduced from 16 to 12 pc
*Tax slab for Rs 3-5 lakh is 25 pc
*Senior citizens’ exemption hiked from Rs 1,95,000 to 2,25,000
*Women exemption threshold hiked from Rs 1,45,000 to 1,80,000
*Tax exemption hiked from Rs 1,10,000 to Rs 1,50,000
*Duty on non filter cigarettes to be raised
*Excise duty slashed to 8% on water purification items
*Duty withdrawn on naptha for production of polymers
*Refigeration components to become cheaper
*Reduce excise duties on anti-AIDS drugs
*Tax-GDP ratio up at 12.5%
*Excise on paper and paper products reduced
*Excise duties on buses, chassis slashed
*Excise on small cars to 14%
*Excise on pharma goods slashed to 14%
*General CENVAT rate on all goods from 16% to 14%
*Customs duty on few bulk drugs cut to 5%
*Customs duties on crude sulphur reduced to 2%
*Exempt on duties on coral
*Duties on convergence products slashed to 5%
*Fully exempt duties on Set top boxes
*Reduce duties on steel melting scrap, aluminum scrap
*No change in peak rate of customs duties
*Revenue Deficit will be 1.4 % agt Budget Estimate of 1.5%
*Planning Commission to evaluate major schemes
*Sixth central pay commission to submit report by March 31, 2008
*Grant of Rs 50 cr to Natl Tiger Conservation Authority
*Rs 75 cr to ICCR for cultural development
*Defence allocation hiked by 10% to Rs 1,05,600 cr
*Rs 32,676 crore as subsidy to PDS
*Smart-card based PDS system in Haryana, Chandigarh
*Allocation of Rs 44 cr to 22 Sainik schools each
*Rs 75 cr to Agri Ministry for soil testing labs in 250 districts
*Rs 15,000 cr for non-profit body for skilled dev programme
*Launch a world-class skilled development programme
*PAN requirement for all securities transactions
*To start a forex derivative market
*More transparency in the derivative market
*Risk Capital Fund to be set up in SIDBI
*National Highway Dev programme gets Rs 12,966 cr
*Accelerated power development programmes to get Rs 8,000 cr
*Ultra mega power project at Tilana shortly
*Rs 12,956 Cr for NHDP
*Banks to be encouraged to embrace total financial inclusion
*Foreign invt up to $8 bn expected for oil block exploration
*Coal regulator to be set up
*17 lakh families of weavers under Health Insurance
*State data centres scheme approved and get Rs 275 cr
*1 lakh broadband-enabled common service centres in villages
*Enhance allocation of NHDP programme
*Rs 800 cr for power reforms
*Manufacturing growth rate to be taken to double digit
*RIDF corpus to be hiked to Rs 14,000 cr
*Total estimate of loans being waived is Rs 50,000 cr
*Implementation of debt waiver scheme to end by June 30
*Waiver amounts to 4% of total bank loans
*Rescheduled farm loans eligible for waiver
*Din in House over PC’s relief plans to farmers
*Marginal, small farmers to get full waiver on all loans
*500 soil testing labs to be set up in the country
*Scheme of debt waiver and debt relief for farmers
*Allocation for NRHM increased to Rs 12,050 cr
*National Horticulture Mission gets Rs 1,100 cr
*Weather-based crop insurance scheme to get Rs 50 cr
*Rs 20,000 cr for irrigation projects under AIPB
*Special grant of Rs 20 cr to Tea Research Association
*Rs 500 cr to be allocated for micro irrigation schemes
*More funds for cardamom, coffee growing
*Rashtriya Krishi Vikas Yojana to get Rs 2,80,000 cr
*53 minor irrigation programmes to be implemented
*Target of Rs 2.80 lakh cr for agri-credit in 2008-09
*Ministry of Woman and Child Dev gets Rs 7,200 cr
*24% increase in allocation for child development
*Rs 500 cr for development of border areas
*Rs 1,042 cr for anti-Polio drive
*Jawaharlal Nehru Urban Renewal Mission to get Rs 6,865cr
*Growth of agri-credit impressive
*Allocation for ICDS increased to Rs 6,300 cr
*Minority Affairs Ministry fund doubled to Rs 1,000 cr
*288 PSU bank branches in minority districts
*Rs 540 cr for development plan for minority districts
*Rs 500 cr for corpus fund to subsidise all women
*LIC to cover all women Self-help Groups linked to banks
*Rs 200 crore for potable water in schools
*Rs 12,050 cr for strengthening rural health services
*Sanitation programmes to get Rs 1200 cr
*More minority recruitments in central para-military forces
*ICDS allocation hiked to Rs 6,300 cr
*Rs 300 cr for desalination plant near Chennai
*Rs 75 cr for Rajiv Gandhi Natl Fellowship Prog
*Natl Handicap Development Corp to get Rs 9 cr
*Natl Minorities Development Corp to get Rs 75 cr
*Allocation for NE schemes up from 14,365 cr to 16,400 cr
*Rajiv Gandhi Drinking Water mission allocation hiked
*NREG scheme to be rolled out in 596 districts
*National Rural Health Mission allocation hiked by 15%
*Remuneration of Anganwadi helpers hiked to Rs 750
*Remuneration of Anganwadi workers hiked to Rs 1,500
*3 IIScs in Bhopal and Trivandrum
*National Programme for the Elderly to be set up
*Rs 30,000 health cover for every worker in unorganised sector
*2 schools of Planning and Architecture
*Secondary education Scheme Rs 4,554 crore
*Rs 100 cr to Ministry of Science and tech for Natl Knowledge Network
*All knowledge bodies to be connected via broadband
*Rs 85 crore to building a knowledge society
*Scholarships for science and research
*Education and Health allocation up 20%
*Service Sector to grow at 10.7%
*3 IITs in AP, Bihar and Rajasthan
*16 central universities to be set up
*Mid-day meal scheme extended to upper primary classes
*Budgetary allocation for mid-day meal scheme Rs 8,000
*Rs 10 cr for Nehru Kendras in 110 districts

Chidambaram announced major – and arguably populist - changes in the Income Tax slab. He said the threshold of exemption for all Income Tax assesses will be raised from Rs 1,10,000 to Rs 1,50,000, eliciting applause from the Parliamentarians. Personal income tax exemption slab for women will be at Rs 1.8 lakh

* Every income tax assessees to get relief of minimum of Rs 4,000.
* No change in rate of surcharge.
* New tax slabs will be: 10 per cent for 150,000 to 300,000, 20 per cent for 300,000 to * 500,000 and 30 per cent above 500,000.
* No change in corporate income tax.