Capitis Consultant Private Limited

30/09/2017

27/03/2017

Bankruptcy Norms for Individuals in the Works
WIDENING THE AMBIT Insolvency & Bankruptcy Board is working on guidelines to allow voluntary liquidation by companies
The Insolvency and Bankruptcy Board of India (IBBI), the newly-established regulator to reorganise insolvency laws in the country, is working on guidelines for individuals who want to declare bankruptcy and will also allow voluntary liquidation by companies, Chairperson Madhusudan Sahoo said in an exclusive interaction with ET.
The IBBI is the nodal agency for implementing the new bankruptcy law under The Insolvency an n d Bankruptcy Code, 2016, which consolidated and amended laws relating to insolvency of companies, partnership firms and also individuals in a time-bound manner. Laws providing for individual declaration of bankruptcy are currently state-specific but have been seldom used because of the tedious process associated with it.
“Individual bankruptcy is our next immediate priority.Any citizen will be able to use it. Unlike companies which have homogeneous legal structure, individuals are not that homogenous. We really need to think through. It is difficult to give a timeline but it will be faster than you think,“ Sahoo said.
So far, the IBBI has notified laws for companies which have been declared insolvent. Before the end of the current fiscal, guidelines providing for liquidation of solvent companies, also known as voluntary liquidation will also be notified. “This will complete the regulatory framework for corporate insolvency and liquidation,“ Sahoo explained.
IBBI has also created a special entity called Insolvency Professional Entity to facilitate speedy recoveries of high-value loan defaults.
Sahoo said it is likely that the cases may take some time to be disposed of because the process is new. “When you start something new, it takes time for stakeholders to understand, particularly creditors who have to trigger the process. They need to have a mechanism within the organisation before they trigger the process. It should pick up soon, now that the entire ecosystem and regulatory framework is in place, “he said.
( Sources: The Economic Times New Delhi, 27th December 2017 )

14/03/2017

Loan Lifeline of up to Rs 5 cr. Likely for Startups

Startups will soon be able to take loans of up to Rs 5 cr. without collateral through a credit guarantee scheme prepared by the government.

The scheme is awaiting cabinet approval and is likely to become functional soon under the supervision of the Department of Industrial Policy and Promotion.

“The scheme will help us address the most basic challenge of startups: access to capital. The corpus of the fund will also be guaranteed by the government, " a senior official told ET.

The government is looking at ways to increase availability of finance to startups. The credit guarantee scheme would help the flow of “venture debt from the formal banking system."

The government will provide up to 80% risk cover for collateral-free credit given by banks to startups.

The department had invited suggestions from stakeholders including startups, venture capital funds and angel investors on ways to increase availability of credit for startups.

The Startup Action Plan announced by Prime Minister Narendra Modi in January 2016 mentioned that a credit guarantee mechanism through the National Credit Guarantee Trust Company or the Small Industries Development Bank of India will have a budgetary corpus of Rs 500 cr. per year for the next four years.

The idea of such a fund was to leverage the institutional credit structure to reach out to underserved sectors, including Scheduled Castes and Scheduled Tribes and women entrepreneurs.

Startups must meet the criteria defined for them by the department to access any benefit announced in the Startup India Action Plan last year, including loans under the credit guarantee scheme.

The government relaxed tax conditions for startups in the budget for FY 2017-18, allowing companies incorporated after March 31, 2016, to avail of a three year tax holiday in the first seven years of their existence. Earlier, this facility could be availed only for the first five years.

The government is talking to public sector units to ensure that startups are not excluded from their procurement tendering process for lack of experience. The department is also monitoring the disbursal of money from the fund of funds by SIDBI for startups.

( Source : 13TH MARCH, 2017, THE ECONOMIC TIMES, NEW-DELHI )

07/03/2017

New trademark rules ease filing regulations, halve fees
The government on Monday brought down the number of forms required for filing an application from 74 to eight and almost halved the application fees.
Monday´s notification replaced the Trade Mark Rules, 2002.
It brought down the application fees for individuals, startups and small enterprises to Rs.4,500, the Commerce and Industry Ministry said in a press release.
To promote efiling of applications, the fee for online filing has been kept at 10 per cent lower than that for physical filing.
Overall fees have been rationalised by reducing the number of entries in Schedule from 88 to just 23. To boost ease of doing business, the method to determinate well-known trademarks has been clarified for the first time.
Also, provisions relating to the expedited processing of an application for registration of a trademark have been extended right up to the registration stage.
It was only up to the examination stage.
Steps for service of documents from applicants to the registry and vice versa through electronic means have been introduced to expedite the process; email has been made an essential part of the address for service to be provided by the applicant or any party to the proceedings so that an office communication can be emailed.
The government has brought down the examination time for an application from 13 months to just 1 month in January 2017. Figures suggest that filings have jumped 35 per cent in 201516 against the previous year.
Sources: Business Standard New Delhi, 07th March 2017

08/01/2016

Now, you can file cheque bounce cases in your city

Govt notifies amended Negotiable Instruments Act; move will make life easier for those who have deposited cheques in a different city

Filing a cheque- bouncing complaint has become easier. The government has notified the Negotiable Instruments (Amendment) Act, which allows the complainant to file a complaint in the city, where he is based or where the cheque has been deposited. The Act was passed by Parliament in its winter session that concluded in December 2015. The ordinance to the Act was promulgated in June 2015.

While complainants whose cheques have bounced will be happier, people who are issuing them also have to be more careful because in the absence of sufficient amount or diverse signature, they will have to go through the pain of travelling to another city repeatedly to fight their case.

The Amendment is expected to clear the pending cases of cheque bouncing, as it will be easier for complainants to follow up as they no longer will have to travel. On the other hand, it could also deter those issuing cheques issuing to ensure that the cheques don’t bounce, because they will be forced to travel in case a complaint is filed.

“The Amendment will deter people from issuing cheques without sufficient funds. Until now, they were not bothered because they knew that complainants would not bother travelling far to file their complaint and to follow up the case,” says Amit Maheshwari, managing partner, Ashok Maheshwary & Associates, an accounting firm.

Earlier, cheque bouncing complaints could be filed in places where the cheque was deposited. But in 2104, The Supreme Court had ruled, in the case of Dashrath Roopsingh Rathod versus State of Maharashtra & Another, that for bounced cheques, cases have to be filed only at the place where the branch of the bank on which the cheque was drawn was located.

“This created considerable problems especially in respect of cheques issued from an outstation branch. The payees of such bounced cheques had to travel to a different city to fight their case in the court having territorial jurisdiction over the cheque issuing branch,’’ says Rakesh Nangia, managing partner, Nangia and Company, Chartered Accountants.

For instance, if cheques issued by a Delhi- based firm to vendors in Mumbai and other cities bounced, it meant that vendors had to travel all the way to Delhi for filing their complaints. Now, the issuer of the cheque has to travel to the cities where the cheque has been deposited and the complaint has been filed.

A lot of cases of cheque bouncing were withdrawn due to the confusion over jurisdiction, because it became cumbersome for people to travel to file complaints, says Anshuman Jagtap, an advocate with Hariani and Company. “ For institutions like banks, it became very difficult to travel to follow up cases of cheque bouncing. And alot of security money is collected in the form of postdated cheques.

Recovering the money became very expensive for institutions, especially in case of cheques of small amounts,’’ says Jagtap adds. The punishment for cheque bouncing includes both imprisonment and penalty. Such cases tend to go on for a long time. There are estimated two million cases of cheque bouncing in courts, of varying amounts.

Business Standard, New Delhi, 8th Jan. 2016

06/01/2016

Taxpayers need not worry about tighter PAN norms

Most of the changes rationalise earlier rules

The income tax department recently changed the regulations that require individuals to quote their Permanent Account Number ( PAN) for certain high- value transactions. The rules, applicable from January 1, rationalise the earlier law and benefit taxpayers in many ways.

Says Tapati Ghose, partner at Deloitte Haskins & Sells: “The government has upped the limit for some transactions that needed individuals to quote PAN and also brought in some more high- value transactions under its ambit.” For example, earlier when a person purchased property worth Rs.5 lakh or more, quoting of PAN was mandatory. It is now Rs.10 lakh. Also, one doesn’t have to quote PAN for deposits above Rs. 50,000 in post office savings bank accounts. Ditto with new telephone or mobile phone connections. Earlier, hotel and restaurant bills above Rs.25,000 needed PAN for payment through any mode. Now, only cash payments exceeding Rs. 50,000 need PAN.

The government has also developed a PAN activity monitoring and analysis software that will help the department to view, in chronological order, the entire ‘PAN life cycle summary’ of an individual. This means the taxman can know an individual’s entire transaction history where a PAN has been quoted, in any part of the country. The tool will also allow the taxman to view and capture various events of an assessee such as death, liquidation, fake PAN, amalgamation of PAN, etc, which can be used for investigations.

Suresh Surana, founder of RSM Astute Consulting Group, says while this might result in more tax notices, those filing a return need not worry. He compares it to the time when the government had introduced the annual information return and asked financial companies to report transactions beyond a certain limit. For example, a bank is required to report if a person makes a payment of Rs. 2 lakh or more for his/ her credit card dues. During the initial years, the department sent out notices frequently. But, it only asked to explain the source of funds and if the assessee had filed tax returns. If the source of funds was the income on which tax was paid, there was no further inquiry.

The only thing experts worry is the new provision requiring PAN for purchase or sale of goods and services exceeding Rs.2 lakh per transaction. This is required even if the person is paying through cards. Surana says items such as gold and jewellery are high- value and in the specified limit. It’s also the source of investment for poor and rural households.

Today, it’s not uncommon for households to buy television sets costing Rs.2 lakh. Keeping a tab on such spends and asking to explain source of funds for such transaction has nuisance value. If the person doesn’t have a PAN, they will need to give a declaration, using Form 60, explaining the reason for not having one. If you quote an incorrect PAN, the department can levy a penalty of Rs. 10,000 under Section 272B. And if the taxpayer is selected for scrutiny and is unable to explain the source of high- value investments, deposit, or expenditure, there can be penalty of up to 300 per cent of the unpaid tax.

Business Standard, New Delhi, 5th Jan. 2016

19/12/2015

From Jan 1, PAN mandatory for transactions above Rs.2 lakh

In a bid to curtail domestic black money flow, the finance ministry on Tuesday announced mandatory furnishing of permanent account number ( PAN) for all transactions above Rs.2 lakh through all payment modes with effect from January 1, 2016. This is a relaxation from an proposal to make PAN mandatory for sale and purchase of items above Rs.1 lakh.

“We have received a lot of representations. We will give breathing time to taxpayers,” said revenue secretary Hasmukh Adhia.

Accepting the recommendations of the special investigation team on black money, finance minister Arun Jaitley had in the 2015- 16 Budget proposed to make PAN details mandatory for all sale and purchase of Rs.1 lakh and above. However, it met with resistance from trade and industry associations that argued the lower limit would affect business.

“The government has received numerous representations from various quarters regarding the burden of compliance this proposal will entail. Considering the representations, PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment,” Central Board of Direct Taxes ( CBDT) said in a statement on Tuesday.

Besides, the ministry rationalised monetary limits for certain transactions requiring mandatory quoting of PAN. The monetary limits for sale or purchase of immovable property has been raised from Rs.5 lakh to Rs.10 lakh, and that for hotel / restaurant bills raised from Rs.25,000 to Rs.50,000. Sale or purchase of shares of an unlisted company has been raised from Rs.50,000 to Rs.1 lakh.

In line with the government’s thrust on financial inclusion, opening of a nofrills bank account such as Jan Dhan will not require PAN. The requirement of PAN applies to opening of all bank accounts including in co- operative banks .

Installation of cellphone and telephone connections will not require quotation of PAN anymore

08/12/2015

Govt orders quick issue of I-T refunds under Rs.50,000

In good news for thousands of taxpayers awaiting their income tax refunds, the government has directed the taxman to “ expeditiously” settle claims involving less than Rs.50,000.

According to government data, around Rs.5,400 crore is locked in pending refunds, which has become a major grievance for taxpayers.

Officials said instructions in this regard were issued early this week after a review meeting was held by Revenue Secretary Hasmukh Adhia with senior Central Board of Direct Taxes ( CBDT) officials as part of finance ministry’s drive to ensure a taxpayer- friendly regime following a call by Prime Minister Narendra Modi for steps to address their grievances and cut down on complaints.

The directive issued by the CBDT, the apex policy- making body of the Income Tax department, to all principal chief commissioners asks them to direct the assessing officers to expedite the process and issue refunds of less than Rs.50,000 and not facing scrutiny “ as early as possible.” According to the order, as of November 1, refunds have to be made on 2.07 lakh IT returns involving ? 659 crore for assessment year (AY) 2013- 14 and another set of 12.90 lakh returns pertaining to Rs.4,837 crore for AY 2014- 15 which are pending.

The total amount involved is Rs.5,496 crore and a large number of refunds are for less than Rs.50,000 and constitute about 70- 80 per cent of the total kitty of pending refunds for the two AYs, a senior official said.

“An I- T refund is not only the right of the taxpayer but also cherished by them very dearly. The CBDT gets to see the maximum number of grievances from taxpayers on this front and hence it has been desired by the Finance Ministry that these refunds be issued to their rightful claimants as soon as possible.

“Only those cases which are chosen for scrutiny are not included under this drive. A number of refunds have an amount of less than Rs.50,000 and it has been instructed that such cases shall be issued refunds promptly and those exceeding this amount should also be issued as soon as verification has been done,” the official said.

According to government data, over Rs.5,400 crore is locked in pending refunds, which has become amajor grievance for taxpayers.

Business Standard, New Delhi, 7th Dec. 2015

11/11/2015

Wishing you a happy Diwali

01/09/2015

Addressing to faculties of Loreto House on Taxation & e-Filling.

21/01/2015

Tax evaders could soon face jail term
SIT Wants Govt To Decide By March 31
Tax evasion could soon become a prosecutable offence inviting jail term for offenders as the
Supreme Court appointed special investigation team (SIT) on black money has suggested this to
the government and sought a decision by March 31. “The Central Board of Direct Taxes (CBDT) is examining which particular provisions of the Income
Tax Act should be brought within the ambit of predicate offences and the said examination should
be complete by March 31, 2015,“ the SIT told the SC on Tuesday .
It was followed by an important clarification. “To prevent any hardship to salaried and small tax
payers, the government can prescribe a high threshold of say , more than Rs 50 lakh of tax
evasion which could be considered as being a predicate office under Prevention of Money
Laundering Act,“ it said.
As of now, tax evaders can admit their wrongdoing to the authorities when caught and escape jail
term by agreeing to pay the evaded tax along with hefty penalty under the Income Tax Act. If the
person fails to pay the tax and penalty for evading tax, then the authorities can seize his/her assets
for realization of the dues.
The SIT, headed by Justices M B Shah and Arijit Pasayat, has suggested making tax evasion a
crime under PMLA, 2002. Former attorney general Soli J Sorabjee, who appeared on behalf of the
SIT, told the court that ‘tax evasion’ was not a predicate offence under the list of prosecutable
offences in the PMLA list. In a written submission, Sorabjee said, “It is recommended that ‘tax
evasion’ be made a predicate offence in India following the example of the US, Canada and
Australia.” The SIT also informed a three-judge bench comprising Chief Justice H L Dattu and
Justices Madan B Lokur and A K Sikri that it was difficult for the government to take effective
measures under Foreign Exchange Management Act, which provided for confiscation of property
held by an Indian abroad for evasion of tax in relation to the money stashed abroad. In its 40-odd
page report submitted to the SC, the SIT also proposed a limit for holding cash by an individual. “Cash holding is one of the primary modes in which black money is held in this country. Legitimate
transactions can be made through the use of cheques bank transfers, all of which can be traced.
The use of cash for executing transactions makes the source of money difficult to trace,” it said. “The SIT recommends that a ceiling be imposed on the maximum cash currency that an
individual entity is allowed to possess at a particular point of time.
SIT has recommended Rs 15 lakh as the permissible limit, however, even a higher threshold may
be fixed,” it added.
For the full report, log on to Times of India, New Delhi, 21-01-2015

03/01/2015

Pre-2005 Note Cut-off may Get an Extension

The Reserve Bank of India (RBI) may extend the deadline for exchanging currency notes printed before 2005. The existing deadline is January 1, 2015.

The central bank may come out with a formal directive on this within the next few days, according to RBI sources. RBI had in January this year announced it would withdraw from circulation notes printed prior to 2005. It has so far shredded 144.66 crore such notes valued at .Rs.52,855 crore since the launch of the drive.

The central bank has incorporated additional security features in notes printed since 2005 to curb the menace of fake currency. One way to recognise pre-2005 notes is they do not have the year of printing on the reverse side. In new notes, the year of printing is visible at the bot tom on the reverse.

The finance ministry recently said the withdrawal exercise was in conformity with the standard international practice of not having multiple series of notes in circulation at the same time.

RBI has asked banks not to issue pre-2005 series notes over the counter or through ATMs. In terms of de nomination, RBI has shredded 73.2 crore notes of Rs.100 (Rs.7,320 crore),Rs. 51.85 crore pieces of Rs.500 (Rs.25,925 crore) and Rs.19.61 crore notes of Rs.1,000 (Rs.19,610 crore) till October end. The volume of the banknotes printed prior to 2005 today , still in circulation, is not significant enough to impact the general public in a large way, according to RBI.

The Economic Times, New Delhi 23-12-2014