September Ease of Doing Business Has it become Easy!

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1 Serving Since 1968 Lunawat Bulletin Market Watch Sensex : : Nifty : : Inside.. Compliance Due Dates Lunawat & Co. Chartered Accountants 2 Income Tax 3-4 Corporate Law 5 RBI 5 Lunawat Updates 6 Ease of Doing Business Has it become Easy! After NDA coming to power one of the famous tag line used by it was Ease of Doing Business. Based on this theory it propagated Make in India too, as unless there is ease of doing business in India, no one would come to do business in India. Even after more than a year of NDA coming to power, businessmen are not finding anything easy to do business in India. Customary changes in few forms were done, but if we see the compliances, they have become more complicated and cumbersome. The fear of heavy penalties and prosecution due to non-compliances is looming large over businessmen. The cost of compliance has gone up tremendously. Government should act fast to make the term Ease of Doing Business a true reality and not just remain a slogan like Sawach Bharat Abhiyaan. Ease of doing business is a must for the businessmen to focus on business rather than compliances and contribute positively to the growth of the nation. What China s market crash means for Indian Economy With August 24 being termed 'Black Monday' as markets tumbled first in China and then in countries elsewhere. In China, the benchmark Shanghai Composite Index fell an astounding 8.49 per cent in one day. India s benchmark index, Sensex, saw its biggest-ever intra-day fall in absolute terms. The Chinese crisis is expected to put downward pressure on the yuan versus the US dollar while the rupee may be more resilient. This will result in Chinese imports into India becoming cheaper. The impact of China slowdown will be felt very differently on various economies developed versus developing there could be a divergence because most of the key developed economies do not have a huge exposure to China but for certain Asian economies, the exposure is primarily on the higher side. For India, again, it is not so much when we look at the domestic demand for China and even India's share in exports to China. So there will be a divergence from the China impact when it comes to the growth angle but when it comes to positioning, most of the correction is likely to be seen all across the board. As RBI Governor Raghuram Rajan has said recently, "India is better placed compared to other countries with low current account deficit, and fiscal deficit discipline, moderate inflation, low short-term foreign currency liabilities, very sizeable base of forex reserves." In the months ahead, the Federal Reserve's actions could have a great bearing on emerging market economies like India. Much will depend on the how well India is geared up to meeting these challenges. For Private Circulation Only

2 Lunawat Bulletin Compliance Due Dates Due Date Related to Particulars (Sunday) SERVICE TAX Deposit Service Tax for the month of August 2015 for Company Assessee (Monday) TDS/TCS (Income Tax) EPF Deposit TDS/TCS for deductions/collections made during the month of August Deposit PF under Employees Provident Fund & Misc. Provision Act, 1952 deducted for the month of August DVAT Deposit tax deducted at source under DVAT Act for the month of August 2015 INCOME TAX Deposit Advance Income Tax - 1st Installment (in the case of a non-corporate assessee) or 2nd Installment (in the case of a corporate-assessee) of advance for the assessment year (Monday) ESI Deposit ESI under Employees State Insurance Act, 1948 deducted for the month of August (Monday) DVAT Deposit DVAT and CST for the month ended August TDS/TCS (Income Tax) Issue of TDS Certificate for tax deducted under Section 194-IA in the month of August, (Wednesday) DVAT Issue of TDS certificates for the tax deducted at source under Rule 59(2). INCOME TAX Due Date of Audit report under Section 44AB for the AY in the case of a corporate-assessee or non-corporate assessee (who is required to submit his/its return of income). Annual return of income and wealth for the assessment year if the assessee (not having any international or specified domestic transaction) is (a) corporate-assessee or (b) non-corporate assessee (whose books of account are required to be audited) or (c) working partner (of a firm whose accounts are required to be audited) LIST OF HOLIDAYS DATE DAY HOLIDAY Saturday Shree Krishna Janamashtami Page 2

3 Income Tax Clarifications regarding on issues related to grant on approval and claim u/s 10(23C) of the Income Tax Act,1961: It is sufficient for the prescribed authority to consider the nature, existence for non-profit purposes and genuineness of the applicant institution or the conditions prescribed under various Provisos are also required to be considered at the stage of granting approval. CBDT amends Rules for computation of period of stay for ship crew CBDT amends Income Tax Rules for computation of period of stay of Individual who is citizen of India and crew member of ship: The period of stay shall be begin on the date entered into the continuous discharge certificate in respect of joining the ship by the said individual for the eligible voyage and ending on the date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage. Continuous discharge certificate shall have the same meaning assigned in the merchant shipping rules, 2001 made under the merchant shipping Act, Eligible voyage shall mean a voyage undertaken by a ship engaged in the carriage of passengers or freight in international traffic where- (i) for the voyage having originated from any port in India, has as its destination any port outside India; and (ii) for the voyage having originated from any port outside India, has as its destination any port in India. for the voyage having originated from any port outside India, has as its destination any port in India. In case trust or institutions having obtained registration u/s 12AA as well as approval us/ 10(23C), if registration is withdrawn at some point of time due to certain adverse findings, the withdrawal of approval u/s 10(23C)(vi) shall not be automatic but will depend upon whether these adverse findings also impact the conditions necessary to keep approval u/s 10(23C)(vi) alive. Mere generation of surplus by educational institution from year to year cannot be a basis for rejection of application u/ s 10(23C)(vi) if it is used for educational purposes unless the accumulation is contrary to the manner prescribed under law. Collection of small and reasonable amounts under different heads of fee which are essentially in the nature of fee connected with imparting education and do not violate any Central or State regulation does not, in general, represent a profit making activity. Hence there is no justification for treating these amounts as profit making activity. Denial of exemption would not be justifiable only on the ground of induction of new trustees or removal of existing ones. Unless the nature of activities of the trust or institution get changed or modified or no longer remain to exist 'solely for educational purpose and not for purposes of profit'. Do not Pray for an easy life, Pray for the strength to endure a difficult one - Bruce Lee Page 3

4 Lunawat Bulletin Income Tax CBDT Notifies higher Income Tax Benefits u/s 32 &32 AD of the Act. CBDT issues Guidelines for Selection of Cases for Scrutiny CBDT notifies 21 districts of Bihar as backward areas for higher Income Tax Benefits u/s 32 &32AD of the Act. The list of some of the notified districts is below: 1. Patna; 2. Muzaffarpur; 3. Gaya; 4. Aurangabad; 5. Darbhanga Etc.. CBDT notifies procedure for registration and submission of report- Annual Information Report: The statement referred to in sub-rule (7) of Rule 114G shall be furnished through online transmission of electronic data to a server designated for this purpose under the digital signature in accordance with the data structure specified in this regard by the Principal Director General of Income tax (Systems). CBDT has laid down the guidelines & selection criteria for manual selection of Scrutiny Cases for FY Cases involving addition in an earlier assessment year in excess of Rs. 10 lakhs where a substantial question of law or fact is pending 2. Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs. 10 crore or more 3. All assessments pertaining to Survey under section 133A of the Income-tax Act, 1961 ('Act') excluding those cases where books of accounts, documents etc. were not impounded and returned income (excluding any disclosure made during the Survey) is not less than returned income of preceding assessment year. 4. Assessments in search and seizure cases to be made under section(s) 158B, 158BC, 158BD, 153A & 153C read with section 143(3) of the Act 5. Returns filed in response to notice under section 148 of the Act 6. Cases where registration u/s 12A of the IT Act has not been granted or has been cancelled by the CIT/DIT concerned, yet the assessee has been found to be claiming tax-exemption under section 11 of the Act. 7. Cases where the approval already granted u/s 10 (23C)/35(1)(ii)/35(1)(iii)/10(46) of the Act has been withdrawn by the Competent Authority, yet the assessee has been found claiming tax-exemption/benefit under the aforesaid provisions. 8. Cases in respect of which specific and verifiable information pointing out tax-evasion is given by Government Departments/Authorities. The Assessing Officer shall record reasons and take prior approval from jurisdictional Pr. CCIT/CCIT/Pr. DGIT/DGIT concerned before selecting such a case for scrutiny. Time Limit for filing ITR extended for the State of Gujrat On consideration of reports of dislocation of general life due to recent disturbances in the State of Gujrat, CBDT has extended the Due Date for filing of ITR from 31st August to 7th. Page 4

5 Corporate Law MCA amends Rules to substitute Annual Return Form MGT 7 Detection and Reporting of Counterfeit Notes MCA, through a notification, has amended Companies (Management & Administration) Rules 2015 for substitution of Form No. MGT-7 of Annual Return of companies. RBI RBI grants in-principle approval to 11 Banks for Payments Banks The Reserve Bank of India has decided to grant in-principle approval to set up payments banks under the Guidelines for Licensing of Payments Banks issued on November 27, 2014 (Guidelines). Details of in-principle approval. The in-principle approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank. On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of in-principle approval, the Reserve Bank would consider granting to them a licence for commencement of banking business under Section 22(1) of the Banking Regulation Act, Until a regular licence is issued, the applicants cannot undertake any banking business. Detection 1. Detection of Counterfeit Notes i. Over the Counter Banknotes tendered over the counter should be examined for authenticity through machines and such of these determined as a counterfeit one, shall be stamped as "COUNTERFEIT NOTE". ii. Bulk Receipts at Back Office / Currency Chest. 2. When a banknote tendered at the counter of a bank branch or treasury is found to be counterfeit, an acknowledgement receipt in the format must be issued to the tenderer, after stamping the note. The receipt, in running serial numbers, should be authenticated by the cashier and tenderer. Notice to this effect should be displayed prominently at the offices / branches for information of the public. The receipt is to be issued even in cases where the tenderer is unwilling to countersign it. 3. No credit to customer s account is to be given for counterfeit notes, if any, in the tender received over the counter or at the back-office / currency chest. 4. In view of the revision in the system of detection of counterfeit notes by banks, the following changes may be noted with respect to existing compensation and penalty for nondetection of counterfeit notes: Compensation The instructions on compensation to banks at 25% of the notional value of counterfeit notes detected and reported and the system of lodging claims for compensation by Forged Note Vigilance Cell of banks stand withdrawn. Penalty Penalty at 100% of the notional value of counterfeit notes, in addition to the recovery of loss to the extent of the notional value of such notes, will be imposed under the following circumstances: a) When counterfeit notes are detected in the soiled note remittance of the bank. b) If counterfeit notes are detected in the currency chest balance of a bank during Inspection / Audit by RBI. Page 5

6 Lunawat Update Presentations During August 2015, our partner CA. Pramod Jain gave following presentations: Directors Report under Companies Act 2013 at Tri Nagar Keshav Puram CPE Study Circle. Practical aspects of Finalization of Audits under Companies Act 2013 at Urban Estate CPE Study Circle, Faridabad. Finalization of Audits for FY under Companies Act 2013 at Pune Branch of WIRC of ICAI. Conversion of Company into LLP at Pune Branch of WIRC of ICAI. During August 2015, our partner CA. Rajesh Saluja gave following presentations: Financial Statement Analysis at Yes Bank Ltd, Gurgaon. Financial Statement Analysis at Yes Bank Ltd, Chennai. Commercial Thinking at Bharti Infratel Ltd, Noida Raising Financial and Commercial Quotient at Pragati Technologies Private Ltd.(UK based MNC), Mumbai. Commercial Thinking at Bharti Infratel Ltd, Noida We may be contacted at: 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: We also have ASSOCIATES at : Chennai, Kolkatta, Ludhiana, Pune, Chandigarh, Udaipur, Vadodara, Bangalore, Cochin, Indore, Jodhpur, Jaipur, Bharatpur, Hyderabad, Jharsuguda, Panipat, Ranchi & Ghaziabad. Our Services Audit and Assurance International Taxation Indian Direct Tax Laws VAT/Sales Tax Service Tax Corporate Laws Limited Liability Partnership (LLP) NGOs/Societies and Trusts Compliance Audits Investigations Outsourcing Services Setting up Business in India Consulting Services Trainings Valuations XBRL Trade Marks Disclaimer 2015 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 using this material. Editorial Team: CA. Vikas Yadav, CA. Samta Jain, Raman Goel and Shyam Karwa Page 6