Lunawat Bulletin. India displaces Japan to become third-largest world economy in terms of PPP: World Bank

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1 Serving Since 1968 Lunawat Bulletin Market Watch India displaces Japan to become third-largest world economy in terms of PPP: World Bank Sensex : : Nifty : : Inside.. India has displaced Japan to become the world's third biggest economy in terms of purchasing power parity (PPP), according to a World Bank report. The 2011 round of the bank's International Comparison Program (ICP) ranked India after the US and China. The last survey in 2005 had placed the country on 10th place. PPP is used to compare economies and incomes of people by adjusting for differences in prices in different countries to make a meaningful comparison. India's share in World GDP in terms of PPP was 6.4% in 2011 compared with China's 14.9% and the US' 17.1%, the latest ICP showed. "The United States remained the world's largest economy, but it was closely followed by China when measured using PPPs. India was now the world's third largest economy, moving ahead of Japan," the report said. Despite high inflation in India in recent years, prices in the country are still well below those in advanced economies, explaining the higher raking for India on the PPP measure. But according to the International Monetary Fund (IMF), India's economy is 12th largest and only about a third of Japan's in terms of absolute unadjusted dollars. Compliance Due Dates 2 Income Tax 3 DVAT 4 Corporate Laws 4 & 5 SEBI & Others 5 Lunawat Update 6 Lunawat & Co. Chartered Accountants Government readies plan to counter impact of weak monsoon rains The agriculture ministry is making unprecedented preparations to counter impact of weak monsoon rains, which will be the top priority for the new government. Concerned that retail prices of pulses and rice have already risen 10% to 27% in past four months due to unseasonal rain and hailstorms, the agriculture ministry is working hard to make sure that food production is not badly hit by the weather as monsoon rainfall is likely to be weak this year. Unlike earlier years, when officials denied any problem even if the month of June went without rain, Agriculture Secretary Ashish Bahuguna is on a whirlwind tour of state capitals for consultations on drought preparedness and looking at - -options such as use of seeds that are less water intensive as well as contingency plans. "We know that the southwest monsoon will be below normal. With two-thirds of the arable land rainfed, we have to do a lot of groundwork," said Agriculture Commissioner JS Sandhu whose travel plans include a trip to Odisha. He said plans include recommending shortduration crops in some regions, or planting Basmati, which needs lesser water than regular grades of rice. Further, states were being asked to coordinate with different departments like irrigation and power to ensure supply of canal water and electricity. Also advise to prepare for subsidised diesel supply if there is a drought. Good Teachers Teach.. But Great Teachers Transform For Private Circulation Only

2 Lunawat Bulletin Compliance Due Dates Due Date Related to Particulars (Monday) (Wednesday ) Service Tax Deposit Service Tax for payments received by Companies from to In case of deposit compulsory through electronic mode, the due date is TDS/TCS Deposit TDS for payments of Salary, Interest, Commission, Rent, Professional, etc. during month of April Deposit TCS for collections made under section 206C during the month of April 2014 Deliver copy of Form 15G/15H to CCIT/CIT for forms received in month of April DVAT File and furnish hard copy of return verification Form 56 for the quarter ended March (The dealers filling the returns online using digital signature need not to submit hard copy of such documents with the Department.) DVAT Deposit DVAT TDS for the month of April 2014 TDS/TCS File quarterly tax TDS / TCS statements for tax deducted / collected during the quarter ended 31 st March (Wednesday) EPF ESI Deposit PF under Employees Provident Fund & Misc. Provision Act, 1952 deducted for the month of April 2014 Deposit ESI under Employees State Insurance Act, 1948 deducted for the month of April (Wednesday) (Sunday) DVAT Deposit DVAT and CST for the month ended April DVAT Issue DVAT TDS Certificates for the Tax deducted during April 2014 in Form DVAT 43. EPF File monthly return under Employees Provident Fund & Misc. Provision Act, 1952 for the month of April LLP Annual return to be filed within 60 days from the end of Financial Year in Form 11 TDS / TCS TDS Issue TDS certificates in Form 16A / 27D for tax deducted / collected during the quarter ending 31 st March Issue Certificate of TDS to Employees in respect of Salaries paid and tax deducted during in Form 16 and 12BA. Furnish LIST statement OF of HOLIDAYS deduction of tax from contributions paid by trustees of approved superannuation fund. DATE DAY HOLIDAY Wednesday Buddha Purnima Page 2

3 Income Tax It is clarified that total income of the firm for sub section (2A) of section 10 of the Act, as interpreted contextually, includes income which is exempt or deductible under various provisions of the Act. Accordingly, the entire profit credited to the partners accounts in the firm would be exempt from tax in the hands of such partners, even f the income chargeable to tax becomes NIL in the hands of the firm on account of any exemption or deduction as per the provisions of the Act. Depreciation/Amortisation of Intangible Assets The board by its circular has dealt with the important issue of treatment of expenditure incurred for development of roads & highways in Build-Own-Transfer (BOT) agreements. The board has clarified that the entire cost of construction and development of the infrastructure facility has to be amortized evenly over the period of the concessionaire agreement and allowed as business expenditure u/s 37(1) of the Act because the assessee cannot be treated as the owner of the property and cannot be allowed depreciation u/s 32(1)(iii) of the Act. CBDT issues press note on issuing instruction instructions to AO laying down SOP Detailed instructions have been issued by the CBDT to all the assessing officers laying down a Standard Operating Procedure (SOP) for verification and correction of demand by the AOs. As per this SOP, the taxpayers can get their outstanding tax demand reduced/deleted by applying for rectification along with the requisite documentary evidence of tax/demand already paid. The CBDT has further noted that many taxpayers are committing mistakes while furnishing their tax credit claims in the return of income and such mistakes lead to the credit mismatch. The CBDT desires the taxpayers to verify if the demand in their case is due to tax credit mismatch on account of such incorrect particulars and submit rectification requests. CBDT issues clarification on taxation of amounts received by partners from Firms where firms have exempt income. CBDT Notifies ITR-1, 2, 4S, & ITR- V for AY CBDT in exercise of Powers conferred by section 295 of the I.T. Act, has notify ITR-1, 2, 4S, & ITR-V for AY CDBT issues instruction on opposing Mergers Amalgamations De-Mergers before HC by CIT MCA has issued circular No.1/2014 dated to Regional Directors which lays down that while furnishing any report regarding reconstruction or amalgamation o companies under the Companies Act, comments and inputs from the Income Tax Department may invariably be obtained so as to ensure that the proposed scheme of reconstruction or amalgamation has not been designed in such a way as to defraud the Revenue and consequently being prejudicial to public Interest. Such circular was issued because It was noted by the department that the scheme of amalgamation was designed seeking amalgamation with retrospective dates so as to claim set off of losses of loss-making Companies against the profits of profit making Companies of the group and thus impacting adversely the much needed public revenue. If you don't have a vision for FUTURE, Then your future is threatened to be a repeat of the PAST The CBDT has clarified that the income of a firm is to be taxed in the hands of the firm only and the same can under no circumstances be taxed in the hands of its partners. Page 3

4 Lunawat Bulletin DVAT Notices regarding disposal of objections/assessments to be issued through System Module All orders, including issuance of notice, regarding objection disposal/ assessment shall be issued by the objection Hearing Authorities, Spl. Objection Hearing Authorities and Assistant Commissioner (VAT) & AVATOs only through the Systems module. The notices may additionally issue through registered post, if required. Any order not issued through System Module would not carry the Unique Reference No. & Bar Code and hence would be suspicious and hence treated as an invalid order that cannot be acted upon by other authorities. Such invalid issuance shall be viewed adversely against the officer under whose authority such order is issued. Online filing of Returns etc. by using Digital Signatures All the registered dealers can avail the facility of online filling of application/returns using digital signatures also they can obtain digital signatures from any of the certifying authorities. The dealers filling the returns online using digital signature need not to file return verification form in form DVAT -56. The hard copy of such documents need not be filed with the Department if a document/return/application etc. is submitted using digital signature. Last Date of Filing DVAT Returns Extended The last date of online filing of fourth quarter return for the year , in form DVAT-16, DVAT-17 and DVAT-48 along with required annexure and submission of hard copy has been extended till 09/05/2014. Corporate Law Money Grows on the Tree of PATIENCE New Provisions of Companies Act 2013 not applicable to Financials related to FY MCA issued a General Circular which states that as a number of provisions of Companies Act 2013 including those relating- Page 4

5 -to the preparation of financials etc. w.e.f. 1st April The ministry has clarified that the financial statements (and documents required to be attached thereto), auditors report and Board s report in respect of financial years that commenced earlier than 1st April 2014 shall be governed by the relevant provisions/schedules/rules of the Companies Act, 1956 and that in respect of financial year starting on or after 1st April 2014, the provisions/schedules/rules of the new Companies Act 2013 shall apply. For example, if any company s FY started from 1st January 2014, it shall be governed by Companies Act And if the financial year starts from 1st April 2014, New Act shall apply. MCA introduces 46 e-forms and replaces earlier e-forms MCA has introduces 46 e-forms which have replaced all the earlier e-forms. Out of these, 13 are new e-forms. However, there are 19 of the earlier e-forms which shall continue to be available for filing as these have not been replaced by new forms.. Apart from these, there are 17 other forms which the department has issued which shall be used as annexure to the General e- Forms GNL-2, CG-1 & RD-1. All these are available w.e.f. 28th April 2014 for e-filing. In an earlier notification MCA has said that the forms shall be phased out in instalments, however, for convenience of all concerned, the same has been replaced in a single phase roll-out. MCA amends Companies (Registration of Offices & Fees) Rules MCA has amended rules to give exemption of Pre-certification by Professionals in case of One Person Companies & Small Companies. Earlier, all forms where pre certification by CA, CS or CMA was required, were required to be pre-certified by these professionals in case of OPC & Small Companies too. Now the relaxation to OPC & Small Companies has been given by the ministry in this regard. MCA issues list of Sections of Companies Act 1956 which are still applicable MCA has issued a table which contains a list of provisions of Companies Act 2013 which have been notified till date, corresponding provisions of Companies Act 1956 and corresponding provisions of Companies Act 1956 which shall remain in force even today. MCA notifies various rules, schedules w.e.f. 1st April 2014 MCA has notified various rules & schedules to be and made them applicable w.e.f. 1st April There are total 19 rules which have been notified including Schedule II & Corrigenda on Schedule VII. Earlier, these rules were issued by MCA as Final Rules but date of their coming into effect was not notified. SEBI SEBI amends clauses 35B & 49 of the Equity Listing Agreement To align with the provisions of the Companies Act, 2013, to adopt best practices on corporate governance and to make the corporate governance framework more effective, SEBI has amended clauses 35B & 49 of the listing agreement. The revised Clause 49 would be applicable to all listed companies with effect from October 01, However clause 49 is not applicable to Mutual Funds The revised Clause 35B would be applicable to all listed companies and the modalities would be governed by the provisions of Companies (Management and Administration) Rules, Circular No. CIR/CFD/ DIL/6/2012 dated July 13, 2012 stands amended to that extent. The monitoring cell formed by the Stock Exchanges in terms of Circular No. CIR/CFD/POLICYCELL/13/2013 dated November 18, 2013 shall also monitor the compliance with the provisions of the revised Clause 49 on corporate governance for all listed companies. Others Ministry of Commerce & Industry issues Consolidated FDI Policy Department of Industrial Policy and Promotion under the Ministry of Commerce and Industry has issued Consolidated FDI Policy which is effective from 17th April The very comprehensive policy includes separate chapters on Definitions of the important terms, General Conditions on FDI, Calculation of Foreign Investment, Matters related to Foreign Investment Promotion Board, Sector Specific conditions on FDI and Remittance, Reporting and Violation. Page 5

6 Lunawat Update Presentations During April 2014, our partner CA. Pramod Jain gave following presentations: 1. Fund Raising in Current Scenario at Tri Nagar Keshav Puram CPE Study Circle of NIRC of ICAI. 2. Critical Issues in Companies Act 2013 other than Accounts, Audit, Loans, Advances etc. at Patparganj CPE Study Circle of NIRC of ICAI. 3. Companies Act 2013: Overview & some specific aspects at Gurgaon. 4. Overview of Companies Act 2013 at West Delhi Study Circle of NIRC of ICAI. Our another partner, CA. Rajesh Saluja, gave the following presentations during the month: 1. Concept of One Person Company under Companies Act 2013 at West Delhi Study Circle of NIRC of ICAI. 2. Financial Planning at Hero Moto Corp., Daruhera, Haryana. We may be contacted at: Latest Book authored by our Partner CA. Pramod Jain Daryaganj, New Delhi 54, Daryaganj, New Delhi Tel: dgoffice@lunawat.com Paschim Vihar, New Delhi A-2/132, Prateek Apartments, Paschim Vihar, New Delhi Tel: pvoffice@lunawat.com Karampura, New Delhi 109, Magnum House-1, Karampura Complex, New Delhi Tel: karampura@lunawat.com Mumbai Office No. 9, First Floor. Star Trade Centre, Chamunda Circle, Near Station, Borivali (W), Mumbai Tel: mumbai@lunawat.com Keshopur, New Delhi WZ-339, 2nd Floor, Street No. 19, Santgarh, Keshopur, Outer Ring Road, New Delhi Tel: Fax: keshopur@lunawat.com We also have ASSOCIATES at : Chennai, Kolkatta, Ludhiana, Pune, Chandigarh, Udaipur, Vadodara, Bangalore, Cochin, Indore, Jodhpur, Jaipur, Bharatpur, Hyderabad, Jharsuguda, Panipat, Ranchi, Ghaziabad and Tezpur. Our Services Audit and Assurance International Taxation Indian Direct Tax Laws VAT/Sales Tax Service Tax Corporate Laws NGOs/Societies and Trusts Limited Liability Partnership (LLP) Compliance Audits Investigations Outsourcing Services Setting up Business in India Consulting Services Trainings Valuations Disclaimer 2014 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 initiating action on specific issues. Lunawat & Co. does not take any responsibility for any loss arising from any action taken or not taken by anyone Editorial Team: CA. Vikas Yadav, Yamini Arora, Sanchit Matta & Harshit. Page 6