lunawat bulletin january 2017

Serving Since 1968 Lunawat Bulletin

January 2017

Market Watch Sensex

31.12.2016 : 26626.46

30.11.2016 : 26652.81

Nifty

31.12.2016 : 8185.80

30.11.2016 : 8224.50

For Private Circulation Only

Lunawat & Co.

Chartered Accountants

Inside …..

Compliance Due

Dates 2

Income Tax 3-4

RBI 4-5

Service Tax, SEBI 5

Corporate Laws,

Press Release for

GST

6

Lunawat Update 7

PM announces various

initiatives on New Year

Eve

Tax treaty with Singapore Amended

India has amended its over two-decade old tax treaty with Singapore that will allow it to tax capital gains on investments from the South East Asian nation. The reworked treaty brings the treaty on par with that with Mauritius providing for taxation of investment in shares of Indian companies as per local rule from April 1, 2017.

For shares acquired on or after 1 April 2017, there will be a two-year transition period, during which

the capital gains from such shares will be taxed at 50% of India's domestic tax rate if the capital gains

arise during 1 April 2017 to 31 March 2019. Earlier DTAAs with the three countries (Mauritius, Cy-

prus and Singapore) gave complete exemption from payment of tax on profits made through capital

gains as there was no such levy in the host countries. The beneficiary did not pay any capital gains tax

in India.

PM Narendra Modi announced various initiates during the TV address to the nation on the New Year Eve. Major initiatives include:

• Home loans in villages up to Rs 2 lakh to get 3% interest exemption, available for building a new house or expanding an old one.

• 33% more homes to be built in rural areas under the Pradhan Mantri Awas Yojana (PMAY).

• 30 million Kisan credit cards will be converted into RuPay cards.

• The government will pay interest for 60 days on loans taken by farmers for Rabi farming from district cooperative banks and societies.

• The government will give Nabard Rs 20,000 crore for giving loans to cooperatives at low interest rates.

• Home loans for the urban poor up to Rs. 9 lakh will get 4% interest subvention, and loans up to Rs. 12 lakh will get 3%.

• The credit guarantee for micro, small and medium enterprises will be doubled to Rs 2 crore. This will also cover loans from NBFCs.

• Banks told to raise cash credit limit to small businesses from 20% to 25%.

• 8% interest on deposits of up to Rs 7.5 lakh for senior citizens for 10 years.

• The government to give pregnant women Rs 6,000, to be transferred into their bank accounts.

• PM Modi says the government cares about honest tax payers, who stand to benefit. But he also warned tax cheats against strong action. “This government is a friend of the honest and in favour of putting the dishonest in the path of truth.”

January 2017

Compliance Due Dates

Due Date Related to Particulars

06.01.2017 (Friday)

Service Tax Deposit Service Tax for the month of December 2016 for Company Assesses.

07.01.2017 (Saturday)

TDS/TCS (Income Tax)

Deposit TDS/TCS for deductions/collections made during the month of December 2016.

15.01.2017 (Sunday)

TCS

(Income Tax)

• Furnish quarterly statement u/r 37BB(7) by an authorized dealer in Form 15CC in respect of foreign remittances made during the quarter ended 31st December 2016.

• File Quarterly Statement of TCS for the quarter ending December 31, 2016

15.01.2017 (Sunday)

EPF Deposit PF under Employees Provident Fund & Misc. Provision Act, 1952 deducted for the month of December 2016.

15.01.2017 (Sunday)

DVAT/CST Deposit TDS under DVAT Act for the month of December 2016

21.01.2017 (Saturday)

ESI Deposit ESI under Employees State Insurance Act, 1948 deducted for the month of De-cember 2016.

21.01.2017 (Saturday)

DVAT Deposit of DVAT & CST Tax for December 2016.

22.01.2017 (Sunday)

DVAT Issue TDS certificate under DVAT Act for tax deducted and deposited for the month of December 2016 in Form DVAT-43.

25.01.2017 (Wednesday)

DVAT File DVAT & CST quarterly return in electronic form for the quarter ended December 2016.

28.01.2017 (Saturday)

DVAT Submit Return of TDS for December quarter in DVAT-48.

File of DVAT Return Verification Form for the quarter ended December 2016 in Form DVAT-56.

30.01.2017 (Tuesday)

TCS (Income Tax)

Issue Quarterly TCS Certificate for the quarter ending December 31, 2016

31.01.2017 (Tuesday)

TDS (Income Tax)

File Quarterly Statement of TDS for quarter ending December 31, 2016 in return Form No.24Q, 26Q & 27Q.

31.01.2017 (Tuesday)

TDS (Income Tax)

Returns by banks for interest upto Rs. 5000 for December quarter in Form 26QAA.

31.01.2017 (Tuesday)

Income Tax Banks/ Post Offices to furnish details of cash deposited in accounts for the period from 9th November 2016 to 30th December 2016 in Current Account for amount exceeding Rs. 12.50Lakhs and for other than current account for amounts exceeding Rs. 2.50 Lakhs

DATE DAY HOLIDAY

14.01.2017 Wednesday Makar Sankranti

26.01.2017 Thursday Republic Day

LIST OF HOLIDAYS

Lunawat Bulletin

Income Tax

• The Bureau of Indian Standards (BIS), set up by the Bureau of Indian Standards Act, 1986 in respect of the following specified

income arising to that Bureau, namely:-

(i) Certification fee;

(ii) Sale of standards, provided there is no profit involved; and

(iii) Income from interest.

• It shall be applicable for the A.Y. 2017-18 to 2021-22.

• It shall be effective subject to the specified conditions.

Bureau of Indian Standards (BIS) Income Exempt

• Presumptive Taxation u/s 44AD for receipts through banking or digital channel for FY 2016-17 to be reduced from 8% to 6%

• CBDT issues a much needed clarification that for reporting in AIR for cash received in excess of Rs. 2 Lacs would be required

on per transaction basis and not in aggregate.

• CBDT amends Rule 114F related to FATCA & CRS

• Ministry of Finance extends the ending date of Direct Tax Dispute Resolution Scheme from 31st December 2016 to 31st Janu-

ary 2017

• CBDT issues clarifications through FAQs on Direct Tax Dispute Resolution Scheme 2016

• Ministry of Finance amends Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules

• CBDT issues Explanatory Notes on Pradhan Mantri Gramin Kalyan Yojna 2016

• CBDT issues clarifications on Indirect Tax Transfer provisions i.e. Explanations 5, 6 & 7 to s. 9(1)(i) of Income Tax Act, 1961

• Any person who fails to deduct whole or part of tax on the sum paid or credited to a resident shall not be deemed to be an as-

sessee in default if :

1. Has furnished his return of income (ROI) under section 139;

2. Has taken into account such sum for computing income in such ROI; and

3. Has paid the tax due on income declared by him in such ROI;

4. And the person furnishes a certificate to this effect from an accountant in prescribed form.

• As per sub-rule (1) of Rule 31ACB of Income Tax Rules, 1962, the certificate from an accountant in Form 26A shall be fur-

nished after following prescribed procedure with Director General of Income Tax or any person authorized by him. • The procedure for electronic filling of Form 26A is as follows:

• Get details of Short Deduction by submitting request at TRACES portal.

• Deductor need to enter details of no-deduction transaction at TRACES.

• On submitting request, a unique request number will be generated. For short deduction transactions a unique DIN will be gener-

ated and for no-deduction transactions an Alpha-numeric strings will be generated.

• The deductor will communicate the DINs and/or Alpha-numeric strings to the accountants for certification in Annexure-A.

• On E-filling portal, locate DIN and/or no transaction transactions on which Form 26A is in effect.

• Deductor needs to authorize accountant certifying the Annexure-A of Form 26A by entering his membership number.

• On successful authorization by deductor, the accountant may fill and digitally certify Annexure-A of Form 26A.

• Once request has been processed, short deduction will be re-calculated along with interest.

• Deductor needs to pay the above calculated interest on TRACES/NSDL portal.

Other Important Income Tax News

Procedure for Removal of Default through furnishing Form 26A.

Lunawat Bulletin

Income Tax RBI

Pradhan Mantri Garib Kalyan Yojana

(PMGKY), 2016

1. PMGKY has come into force from the 17th day of De-cember, 2016 and ends on 31st day of March, 2017.

2. The salient features of the PMGKY Deposit Scheme are as under:

• Any person can declare any amount of undisclosed income in the form of cash or deposit into bank ac-count or post office or any other office.

• Tax @30% of the undisclosed income, surcharge @33% of tax and penalty @10% of such income is payable besides mandatory deposit of 25% of the un-disclosed income in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The deposits are interest free and have a lock-in period of four years.

• The income declared under the Scheme shall not be included in the total income of the declarant under the Income-tax Act for any assessment year.

• The declarations made under the Scheme shall not be admissible as evidence under any Act (eg. Central Excise Act, Wealth-tax Act, Companies Act etc.). However, no immunity will be available under Crimi-nal Acts mentioned in section 199-O of the Scheme.

3. Non declaration of undisclosed income under the Scheme will be liable to tax, surcharge and cess totaling to 77.25% of such income, if declared in the return of in-come. In case the same is not shown in the return of in-come a further penalty @10% of tax shall also be levied followed by prosecution.

4. The penalty in respect of search and seizure has been rationalized to 30% of income, if the income is admitted and taxes are paid. Otherwise a penalty @60% of income shall be levied.

Prudential Norms– Income Recognition,

Asset Classification and Provisioning

Earlier as per RBI circular, 60 additional days were provided for small borrowers to repay their loan dues that were payable between November 1, 2016 and December 31, 2016 for recognition of a loan account as substandard. Whereas now 30 days were provided in addition to the 60 days for the following categories of loan:

• Running working capital accounts (OD/CC)/crop loans, with any bank, the sanctioned limit whereof is Rs.1 crore or less;

• Term loans for business purposes, secured or otherwise, the original sanctioned amount whereof is Rs.1 crore or less, on the books of any bank or any NBFC, including NBFC (MFI). This shall include agriculture loans.

RBI has permit all REs to defer the down grade of an account that was standard as on November 1, 2016, but would have become NPA for any reason during the period November 1, 2016 to December 31, 2016, by 90 days from the date of such downgrade in the following categories of accounts:

• Running working capital accounts (OD/CC)/crop loans, with any bank, the sanctioned limit whereof is Rs.1 crore or less;

• Term loans for business purposes, secured or

otherwise, the original sanctioned amount

whereof is Rs.1 crore or less, on the books of

any bank or any NBFC, including NBFC

(MFI). This shall include agriculture loans.

Clarification issued by Ministry of Finance on Taxation of Political Parties

There have been some newspaper reports which seem to wrongly suggest that there cannot be any scrutiny of Income-tax returns of political parties registered with the Election Commission in the context of deposits of old currency notes. This inference seems to have been drawn because of the fact that the income of the political parties is exempt from Income - Tax. In this context, the following clarification need to be kept in mind : • The exemption from Income Tax is given to only registered political parties subject to certain conditions, which in-

cludes keeping and maintaining books of accounts and other documents as would enable the Assessing Officer to compute its income there from;

• In respect of each voluntary contribution in excess of Rs. 20,000, the political party will have to maintain a record of such contributions along with the name and address of such person who has made such contribution;

• The accounts of each such political party is to be audited by a Chartered Accountant; and • The political party has to submit a report to the Election Commission about the donations received within a

timeframe prescribed.

January 2017

RBI

Special measures upto March 31, Ra-

tionalisation of MDR for transactions

upto ₹ 2000/-

Banks were advised to cap the Merchant Discount Rate (MDR) for debit card transactions at not exceeding 0.75% of the transaction amount for value upto Rs.2000/- and not ex-ceeding 1% for transaction amount for value above Rs.2000/-.This shall not apply to ATM transactions and shall be appli-cable with effect from January 1, 2017 to March 31, 2017. Following the withdrawal of legal tender characteristics of existing Rs.500/- and Rs.1000/- Bank Notes (Specified Bank Notes – SBN), in order to facilitate wider acceptance of card payments, the following special measures for debit card transactions (including for payments made to Government), are being introduced for a temporary period:

• For transactions upto Rs.1000/-, MDR shall be capped at 0.25% of the transaction value.

• For transactions above Rs.1000/- and upto Rs.2000/-,

MDR shall be capped at 0.5% of the transaction value.

SEBI

Closure of the scheme of exchange from

30.12.2016

• All banks should report information on collection of SBNs on December 30, 2016.

• All bank branches (other than those of DCCBs) who have accumulated SBNs as at the close of business on December 30, 2016 are required to deposit the same in any Issue Office of the Reserve Bank or a currency chest on 31 December, 2016 itself.

• SBNs cannot form part of banks’ cash balances from the close of business as on December 31, 2016.

Continuous disclosures and compliances

by REITs

System-driven Disclosures in Securities

Market

• SEBI, vide circular dated December 01, 2015, had intro-

duced the system-driven disclosures in securities market

detailing the procedure to be adopted for its implementation

with effect from January 01, 2016.

• The Depositories provide daily trade data of the promoters/

promoter group to the Registrar and Share Transfer Agents

(RTAs) and the RTAs provide the necessary information to

the stock exchanges for dissemination of disclosures to the

public

• The depositories shall provide the transaction data of pro-

moters/promoter group on a daily basis directly to the stock

exchanges for dissemination of the necessary disclosures.

Upto Rs. 2000/- Payment, no Service Tax

on Debit/Credit card

Service Tax

When a customer uses Credit Card, Debit Card or any payment card for purchase of goods or services, some amount on that payment has been charged by merchant banks. Hence, to pro-mote Digital transactions and encourage the banks, Government has waived service tax on such amount charged while making payments through Credit Card, Debit Card or any payment card. However, this waiver is limited to payment upto amount of Rs 2000 in a single transaction.

SEBI prescribe disclosures (Financial (Disclosure in Annexure-

A) and non-financial (Disclosure in Annexure-B)) to be made by

a REIT to the Stock Exchange(s) where its units are listed.

Issue of Invoice by person in non taxable

territory without Digital Signature

A person who is located in non-taxable territory providing online information and database access or retrieval services to a non-assesse online recipient can issue online invoices not au-thenticated by means of a digital signature for a period up to 31st January, 2017

January 2017

Corporate Laws

Some of the important decisions taken in the last six Meetings of the GST Council are:

• The threshold limit for exemption from levy of GST would be Rs 20L for normal states

• The threshold for availing the composition scheme would be Rs 50L , service providers are kept out of the composition scheme.

• To compensate states for 5 years for loss of revenue due to implementation of gst , the base year for revenue of the state would

be 2015-16 and a fixed growth rate of 14 % will be applied to it.

• Bands of rates of goods under GST shall be 5 % , 12% , 18 %, and 28 % and in addition there would be a category for exempt

goods.

• Further a Cess would be levied on certain goods such as luxury cars , aerated drinks , pan masala , and tobacco products , over

and above the rate of 28 % for payment of compensation to the states.

Procedure for application with respect to closure of defunct company under Fast Track Exit Scheme (FTE) is ceased and re-

placed by new a rule which has been notified by MCA on 27th December, 2016 i.e. Companies (Removal of Names of Compa-

nies from the Register of Companies) Rules, 2016 pursuant to applicability of sections 248 to 252 of Companies Act 2013.

• ROC may remove Company's name from Register on sue-moto pursuant to Section 248(1) of Companies Act, 2013.

• An application can be made by Company for removing its name from Register under Section 248(2) of the Act by submit-

ting Form STK-2 alongwith fee of Rs 5,000.

• Form STK 2 shall be soon available on MCA portal

• Such application shall be accompanied by following documents

• Indemnity Bond from Director in Form STK-3

• Statement of Accounts certified by CA

• An Affidavit from Director in Form STK-4

• Notice of striking off shall be given by ROC in STK-7.

Page 7

Removal of Name of Companies from Register of Companies

Press Release for GST

Important Notifications in Corporate Laws

• INC-2 is deprecated and INC-7 shall be used for incorporating Part I Companies and companies with more than seven subscrib-ers only. The revised INC-7 shall be made available on the portal for filing purposes w.e.f 15th January 2017. SPICe (INC 32) would be used for incorporation of all other companies including OPC and Section 8 Companies. The filing fee for SPICe has also been reduced from Rs.2000 to Rs.500 and number of resubmissions from three to two.

• National Company Law Tribunal Rules has been amended on 20th December 2016

• MCA notifies Companies (Transfer of Pending Proceedings) Rules 2016 related to winding up, amalgamation, etc.

• MCA notifies most of the remaining sections (related to NCLT, amalgamation, winding up etc) to be effective from 15th De-cember 2016

• Standing Committee on Finance issues its Report on Companies (Amendment) Bill 2016

• MCA notifies Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 w.e.f. 15th December 2016

• MCA notifies National Company Law Tribunal (Procedure for reduction of share capital of company) Rules 2016

• MCA notifies 26th December 2016 to be date to commence sections 248 to 252 of Companies Act 2013

• MCA amends Schedule II to provide for depreciation of Intangible Assets where company is following Ind AS

© 2017 Lunawat & Co. All Rights Reserved

Information in this document is intended to provide only a general outline of the subjects covered. We recommend that you seek professional advice prior to initiat-

ing action on specific issues. Lunawat & Co. does not take any responsibility for any loss arising from any action taken or not taken by anyone using this material.

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Presentations

During December 2016, our partner CA. Pramod Jain gave fol-

lowing presentations:

• “Taxation (2nd Amendment) Bill 2016 & Penny Stocks” made

at North Campus Study Circle of NIRC of ICAI

• “Taxation Laws (2nd Amendment) Bill 2016” made at Advo-

cate Forum

• “Taxation (2nd Amendment) Act 2016, Presumptive Taxation

& Penny Stock Assessments” made at District Centre Ja-

nakpuri CPE Study Circle of NIRC of ICAI

• “Taxation of Demonetization” made at Shivaji Marg CPE

Study Circle of NIRC of ICAI

• “Demonetization, AIR, TCS, Presumptive Income, Penny

stock assessment” at Jalandhar Branch of NIRC of ICAI

• “Taxation of Demonetization” at South Delhi CA Study Cir-

cle of NIRC of ICAI

Editorial Team: CA. Vikas Yadav, ,Srishti Jain , Mayank Jain, Abhinav Saboo, Dishanka Khanna,

We may be contacted at:

We also have ASSOCIATES at : Chen-

nai, Kolkatta, Ludhiana, Pune, Chandi-

garh, Udaipur, Vadodara, Bangalore,

Cochin, Indore, Jodhpur, Jaipur, Bha-

ratpur, Hyderabad, Jharsuguda, Panipat,

Ranchi & Ghaziabad.

• “Taxation Laws (2nd Amendment) Act 2016, PMGKDS,

Assessment” at Nehru Place CPE Study Circle of NIRC of

ICAI

• “Taxation aspects for Demonetization & Penny Stocks” at

Panchkuin Road CPE Study Circle of NIRC of ICAI

During December 2016 , our partner CA. Rajesh Saluja gave

following presentations:

• “Finance for Non Finance Executive” at Quislux Legal

Services Pvt Ltd., Hyderabad.

• “GST” at HMCL at Dehradun.

• “Commercial Thinking” at Bharti Infratel Ltd., Noida

Daryaganj, New Delhi

54, Daryaganj, New Delhi – 110 002 Tel: +91 11 23270624 + 91 11 23279414 Email: [email protected]

Paschim Vihar, New Delhi

A-2/132, Prateek Apartments, Paschim Vihar, New Delhi – 110 063 Tel: + 91 11 25278405 + 91 11 25278406 + 91 11 45581263 + 91 11 45581264

Email:[email protected]

Karampura, New Delhi

109, Magnum House-1, Karampura Complex, New Delhi-110 015 Tel: + 91 11 41427356 + 91 11 42068101

Email: [email protected]

Mumbai

Office No. 9, First Floor. Star Trade Cen-tre, Chamunda Circle, Near Station, Borivali (W), Mumbai - 400 092

Tel: + 91 22 28954451 Email: [email protected]

Keshopur, New Delhi

WZ-339, 2nd Floor, Street No. 19, Santgarh, Keshopur, Outer Ring Road, New Delhi - 110 018 Tel: +91 11 28333914 Fax:+ 91 11 28331602 Email: [email protected]