Income Tax
Direct Taxes: Recent News Snippets
New Draft Direct Taxes Code released
As promised by the finance minister in his Budget Day speech in July, the New Draft Direct Taxes Code was released for public discussion on August 12. The stated intent is to fulfil the long-standing and ambitious plan of simplifying the country’s complex direct tax laws — to make it simpler and easier for tax payers to comply with. The stated focus of the code is to improve the efficiency and equity of the Indian tax system, by introducing moderate levels of taxation and expanding the tax base. The code also brings all other direct taxes like wealth tax under its purview. If enacted in the current state, the code will come into effect from April 1, 2011.
Income tax dept. to introduce centralized processing of returns
Income tax (I-T) department has decided to move towards centralized mass processing of returns, said government. Finance Minister, Pranab Mukherjee said there is a huge pendency of over 20 million income tax returns for processing as on April 1 this year. He said a pilot project for mass processing of salary returns has been completed at Mumbai. Based on these, a centralized processing centre is being set up at Bangalore. The Finance Minister said the entire process will be completed in the current financial year.
Nandan Nilekani takes over as Chairman of Unique Identification Authority of India (UIADI)
23-Jul-09: Shri Nandan Nilekani took over as Chairman of Unique Identification Authority of India (UIADI) here today. Interacting with the media on the occasion, Shri Nilekani said Unique Identification Number will ensure multifarious benefits by enabling different applications. Unique number will include personal and demographic detail of the residents. Common man will be empowered by establishing his identity across the country through a unique number. Replying to queries of the media persons, Shri Nilekani said that data base of residents from various sources will be used for biometric identification. Authority will include best available technical experts from private and Government sector both. He expressed the hope that first set of Unique Identification Numbers will be issued within next 12-18 months.
Three years on, govt. yet to fill several posts of I-T Ombudsman
Three years after setting up of the office of Income Tax Ombudsman for taxpayers to address grievances against the IT department, the government is yet to find enough suitable persons to fill up the posts which are lying vacant across the country.
Pranab asks CBDT to raise direct tax collection target
The unanticipated drought and the likely adverse impact on Government finances has compelled the Finance Minister, Mr Pranab Mukherjee, to tell the Central Board of Direct Taxes (CBDT) to raise the direct tax collection target for 2009-10 to Rs 4 lakh crore from Rs 3.7 lakh crore. Mr Mukherjee said that the tax base in India was “still small” and that there was “still substantial tax evasion or underpayment of taxes.” The tax net, therefore, needs to be deepened further, he said.
Cyber forensic labs in pipeline to help taxman retrieve deleted data
Income tax sleuths, investigating cases of tax evasion anywhere in the country, may soon be armed with cyber forensic lab facilities by which deleted files and emails from assesses’ computers can be recovered. Such facilities are now available only in Delhi and Mumbai where taxmen have succeeded in retrieving such deleted files involving a transaction worth Rs 200 crore during the last few months. Cyber forensic labs would soon be set up in the rest of the 12 directorates of Income Tax investigation.
Tax board orders scrutiny of firms taking AS-11 relief
The Central Board of Direct Taxes (CBDT) has advised its field formations to scrutinise all cases in which companies have amortised foreign exchange losses under the one-time discretion allowed by the government through an amendment to Accounting Standard 11 (AS-11). The scrutiny will assess the nature of foreign exchange losses typically on overseas borrowings. The CBDT think the amendment has substantial revenue implications on corporate earnings since this option, once exercised, is irrevocable. Since almost every company has forex exposures, the losses could have run into thousands of crores. "One has to see whether these borrowings are for the acquisition of capital assets or a part of speculative or treasury operations just to manage currencies," a source said. There have been several reports of positions being taken on currency movements just for speculative gains, officials said. In that case, they pointed out, there is no justification for the company to take advantage of this one-time relief granted by the government. "The amortisation will be allowed if the reason is genuine; otherwise or the amortisation will be cancelled," they added.
State-wise Wealth Tax collections - Maharashtra tops
The latest state-wise wealth-tax data available with the government for the financial year 2007-08 revealed that Maharashtra has collected the maximum wealth-tax in the country. Delhi is a close second followed by Tamil Nadu. The other states on the top-10 list are Gujarat, Uttar Pradesh, Punjab, Rajasthan and Haryana. According to finance ministry officials, efforts are on to increase wealth-tax collections in the country. The government is working on simultaneous scrutiny of wealth-tax returns with income-tax returns, they said.
Dry run prompts FM to revise growth projection to 6% plus
An errant monsoon has cast a dark cloud over the economy’s growth prospects with finance minister Pranab Mukherjee paring the 7% GDP growth rate he had projected at the time of the Budget to a more modest “6% plus’’.
High court gives settlement commission a lease of life
In a major relief to over 3,000 companies all over India seeking arbitration in tax cases with the Settlement Commission, the Bombay High Court has termed as "unconstitutional" the government’s decision to suggest a cut off date of March 31, 2008, for all cases filed before June 1,2007. This sets to rest a major fear that arose among companies after Budget 2007 announced the commission would be wound up after March 31, 2008 since the Finance Bill had provided cases and disclosures to be passed back to the income tax department if the commission fails to settle the cases.
Now, pay income-tax at Corporation Bank ATMs
Corporation Bank’s retail customers with debit cards can now make income-tax payments through any of the 1,037 ATMs of the bank. To avail this facility, after a one time registration process with the bank, the customer can go to any Corporation Bank ATM, select the tax payment option in the main menu and opt for “direct tax payment”. Once details such as assessment year, name are confirmed, the customer’s account will be debited and a message conveying that the transaction was successful will be displayed on the screen. ATMs will generate an acknowledgement for the tax payment. The customer will also get an SMS and instantaneously receive an e-mail with the details.
I-T department vets previous returns of charitable trusts for commercial activity
In a move that could lead to some charitable trusts losing their registration, the income-tax (I-T) department has started scrutinizing the returns they had filed earlier, two officials said. This follows a government directive last year to these trusts to pay income tax on the revenue they earn from commercial activities.
Bill to free private trusts invest in specified securities
The Centre has taken one more step towards enabling private trusts to invest in listed shares and specified debt securities. The Finance Minister, Mr Pranab Mukherjee, introduced a Bill in the Lok Sabha that seeks to amend the Indian Trusts Act, 1882 to empower the Government to notify a class of securities as eligible for investment by private trusts.
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