Official Blog

Clarification on regulation of interest rates for small savings scheme

2012-02-08T21:56:00.000-08:00

RBI/2011-12/359
DGBA.CDD. No.H- 4836 /15.02.001/2011-12

January 20, 2012

The Chairman and Managing Director/Managing Director
Head Office, Government Accounts Department
State Bank of India/State Bank of Patiala/
State Bank of Bikaner & Jaipur/State Bank of Travancore/ State Bank of Hyderabad/
State Bank of Mysore/ Andhra Bank/ Allahabad Bank/Bank of Baroda/Bank of India/
Bank of Maharashtra/Canara Bank/Central Bank of India/
Corporation Bank/Dena Bank/Indian Bank/ Indian Overseas Bank/
Punjab National Bank/Syndicate Bank/UCO Bank/
Union Bank of India/United Bank of India/ Vijaya Bank/IDBI Bank Ltd./ICICI Bank Ltd.
Dear Sir/Madam,
Clarification on regulation of interest rates for Small Savings Schemes
As per the decision of the Government on the recommendations of the Committee for Comprehensive Review of National Small Savings Fund (NSSF), the rate of interest on small savings schemes will be aligned with G-Sec rates of similar maturity with a spread of 25 basis points (bps), with two exceptions. The spread on 10 year National Savings Certificate (NSC) will be 50 bps and on Senior Citizens Savings Scheme, 2004 (SCSS, 2004) 100 bps. The interest rates for every financial year will be notified before April 01st of that year. Notifications on changes in the interest rates, in various small savings schemes with effect from December 01, 2011 have already been issued by Government of India. We have also, vide our circular No. RBI/2011-12/291 dated December 05, 2011 circulated Government’s Notification dated November 25, 2011 indicating change in the interest rate on Public Provident Fund Scheme, 1968 (PPF, 1968).
2. It is observed that news items are appearing in certain sections of the press, which convey an impression that the interest rates on small savings schemes linked to G-Sec rates, are floating in nature and will undergo change depending on the yields on G-Sec during the currency of an instrument.
3. As per the rules of small savings schemes, the rate of interest on an investment made in all schemes except PPF, 1968 on a particular date, remains unchanged for the entire duration of the investment, till maturity, irrespective of the revisions in subsequent years.
4. The above clarification may be brought to the notice of the branches of your bank operating the PPF Scheme, 1968 and SCSS, 2004 advising them to display the same on their notice boards.
Yours faithfully

(P S Ranga Rao)
Assistant General Manager

(http://www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=6951)

Challan Correction Mechanism

2012-02-06T20:29:00.000-08:00

Under OLTAS (On Line Tax Accounting System), the physical challans of all Direct Tax

payments received from the deductors / taxpayers are digitized on daily basis by the

collecting banks and the data transmitted to TIN (Tax Information Network) through link

cell. At present, the banks are permitted to correct data relating to three fields only i.e.

amount, major head code and name. The other errors can be corrected only by the

assessing officers.

New Procedure of challan correction by banks (for physical challans):

To remedy this situation, a new Challan Correction Mechanism for physical challans has

been put in place. Under this mechanism, for income tax payments made on or after

1.9.2011, the following fields can be got corrected through the concerned bank branch:

_ Assessment Year

_ Major Head Code

_ Minor Head Code

_ TAN/PAN

_ Total Amount

_ Nature of payment (TDS Codes)

The time window for the correction request by tax payer is as follows :

S.No Correction required in

Field name

Period of Correction Request

(from Challan Deposit Date)

1 TAN/PAN 7 days

2 Assessment Year 7 days

3 Amount 7 days

4 Other fields (Major

head, Minor head,

Nature of payment)

Within 3 months

The time window for correction by the bank is 7 days from the date of receipt of

correction request from the tax-payer.

Conditions:

The changes can be made by the banks, subject to following conditions:

i. Correction in Name is not permitted.

ii. Any combination of correction of Minor Head and Assessment Year together

is not allowed.

iii. PAN/TAN correction will be allowed only when the name in the challan

matches with the name as per the new PAN/TAN.

iv. The change of amount will be permitted only on the condition that the

amount so corrected is not different from the amount actually received by

the bank and credited to Govt. Account.

v. For a single challan, correction is allowed only once. However, where 1st

correction request is made only for amount, a 2nd correction request will be

allowed for correction in other fields.

vi. There will be no partial acceptance of change correction request, i.e. either

all the requested changes will be allowed, if they pass the validation, or no

change will be allowed, if any one of the requested changes fails the

validation test.

Procedure:

i. The tax-payer has to submit the request form for correction (in duplicate) to

the concerned bank branch.

ii. The tax-payer has to attach copy of original challan counterfoil.

iii. In case of correction desired for challans in Form 280, 282, 283, the copy of

PAN card is required to be attached.

iv. In case of correction desired for payments made by a tax-payer (other than

an individual), the original authorization with seal of the non-individual taxpayer

is required to be attached with the request form.

v. A separate request form is to be submitted for each challan.

Procedure of challan correction by Assessing Officers

(both physical and e-payment challans)

After the window period available to banks for challan correction, the assessee can

make a request for correction to his or her assessing officer, who is authorized under

the departmental OLTAS application to make such correction in challan data in bonafide

cases, to enable credit of the taxes paid, to the concerned assessee.

Format of application to bank for challan correction to be requested by the taxpayer

The Branch Manager,

--------------------------- (Address of Branch)

Taxpayer Details :

Taxpayer Name :

Taxpayer Address :

Taxpayer TAN/PAN :

Name of Authorized Signatory :

(in case of non-individual taxpayer)

Sub : Request for Correction in Challan No: 280/281/282/283 [Strike out which ever is not

applicable]

Sir/Madam,

I request you to make corrections in the challan data as per following details :

Challan Details:

BSR Code Challan Tender Date (Cash/Cheque Deposit Date) Challan Sl. No.

Sl. No. Fields in which correction required Please Tick Original Details Modified Details

1. TAN/PAN (10 digit)

2. Assessment Year (YYYY)

3. Major Head code (4 digit)

4. Minor Head code (3 digit)

5. Nature of Payment (3 digit)

6. Total Amount (13 digit)

Note: Please tick against the relevant fields where changes are required.

Tax payer/Authorized Signatory

Date

Note:

1. Attach copy of original challan counterfoil.

2. In case of correction to challan 280, 282, 283 attach copy of PAN card.

3. In case of a non-individual tax payer, attach the original authorization with seal of the

non-individual tax-payer.

4. The request form for correction is to be submitted in duplicate to the bank branch.

5. A separate request form is to be submitted for each challan.

Centralised Processing of Returns Scheme,2011

2012-02-04T01:43:00.000-08:00

(http://www.simpletaxindia.net/2012/01/centralised-processing-of-income-tax.html)

TO BE PUBLISHED IN THE GAZETTE OF INDIA

EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

[CENTRAL BOARD OF DIRECT TAXES]

Notification

New Delhi, the 4th January, 2012

INCOME-TAX

S.O. 16 (E). - In exercise of the powers conferred by sub-section (1A) of section 143 of Income Tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby specifies the following scheme for processing of returns of income, namely:-

1. Short title and commencement.

(1). This Scheme may be called the Centralised Processing of Returns Scheme, 2011.

(2). It shall come into force on the date of its publication in the Official Gazette.

2. Definition. - In this scheme, unless the context otherwise requires –

(a) ‘Act’ means the Income Tax Act, 1961. (43 of 1961).

(b) ‘Board’ means Central Board of Direct Taxes constituted under the Central Board of Revenues Act, 1963(54 of 1963).

(c) ‘Centre’ means the Centralised Processing Centre having jurisdiction over such return of income as may be specified by the Board.

(d) ‘Commissioner’ means the Commissioner of Income-tax, Centralised Processing Centre.

(e) ‘Director General’ means the Director General of Income-tax (Systems).

(f) words and expressions used herein but not defined and defined in the Act shall have the meaning respectively assigned to them in the Act.

3. Scope of the Scheme. This scheme shall be applicable in cases where return of

income has been furnished in,-

(i) electronic form; or

(ii) paper form, in case of a class or classes of persons, as notified by the Board in this

behalf.

4. Receipt and Acknowledgement of Return of Income.

(1) Where a return of income is filed electronically with digital signature, on

successful transmission of the data, an acknowledgement as generated by the server of

the Central Government shall be available to the person in printable format.

(2) The acknowledgement shall contain the acknowledgement number of the

electronic transmission and the date of transmission as an evidence of filing of the return.

(3) A copy of the electronic transmission of filing the return of income shall be

downloaded and kept by the person.

(4) Where a return of income is filed electronically without digital signature, on

successful transmission of the data, an acknowledgement in Form ITR-V as provided in

rule 12 of the Income Tax Rules, 1962 shall be generated by the server of the Central

Government and available to the person.

(5) The Form ITR-V shall also contain the acknowledgement number of the

electronic transmission and the date of transmission as an evidence of filing of the return.

(6) A copy of ITR-V shall be downloaded and after taking a printout of such a form,

it shall be physically verified under the signature of the person and forwarded to the

Centre.

(7) The Form ITR-V duly verified shall be sent to the Centre, either through ordinary

or speed post, within such period of uploading the electronically filed return as may be

specified by the Director General in this behalf.

(8) The date of transmitting the data electronically shall be the date of furnishing the

return if the Form ITR-V is furnished in the prescribed manner and within the period

specified.

Updates- 1301/2012

(9)

In case Form ITR-V furnished after the prescribed time is rejected on account of it being unsigned, illegible, mutilated, bad quality or not as per specification, it shall be deemed that the return in respect of which the Form ITR-V has been filed was never furnished and it shall be incumbent on the person to electronically file the return of income again followed by submission of the new Form ITR-V.

(10)

The Form ITR-V shall be submitted at the address, in the mode and within the period or extended period specified by the Commissioner in this behalf.

(11)

The Commissioner may, in order to avoid hardship in a case or class of cases, condone the delay in receipt of Form ITR-V.

(12)

The Commissioner may call for fresh Form ITR-V in special circumstances, where the Form ITR V earlier submitted cannot be considered for technical reasons.

5. Revised return of income.

(1) If the original return of income is an electronically filed return, the revised return shall be filed through electronic mode only.

(2) The Centre will process only the revised return and no further action will be taken on the original return if it has not already been processed.

6. Invalid or defective return.

(i) The Commissioner may declare-

(a) a return invalid for non-compliance of procedure for using any software not validated and approved by the Director General.

(b) a return defective under sub-section (9) of section 139 of the Act on account of incomplete or inconsistent information in the return or in the schedules or for any other reason.

(ii) In case of a defective return, the Centre shall intimate this to the person through e-mail or by placing a suitable communication on the e-filing website.

(iii) A person may comply with the notice regarding defective return by uploading the rectified return within the period of time mentioned in the notice.

(iv) The Commissioner may, in order to avoid hardship to the person, condone the delay in uploading of rectified return.

Updates- 1301/2012

(v) In case no response is received from the person in reply to the notice of defective return, the Commissioner may declare a return as not having been uploaded at all or process the return on the basis of information available.

7. Centralised Processing Centers.

(1) The Board may set up as many Centralised Processing Centers as it may deem necessary and specify their respective jurisdictions.

(2) The processing of the returns shall be undertaken at the Centralised Processing Centre.

8. Processing of Returns.

(i) The Centre shall process a valid return of income in the following manner, namely:-

(a)

the sum payable to, or the amount of refund due to, the person shall be determined after credit of such Tax collected at Source (TCS), Tax Deducted at Source (TDS) and tax payment claims which can be automatically validated with reference to data uploaded through TDS and TCS statements by the deductors or the collectors, as the case may be, and tax payment challans reported through authorised banks in accordance with the procedures adopted by the Centre in this regard.

(b)

an intimation shall be generated electronically and sent to the person by e-mail specifying the sum determined to be payable by, or the amount of the refund due to, the person; and

(c)

any intimation to the person to pay any sum determined to be payable shall be deemed to be a notice of demand as per the provisions of section 156 of the Act and all other provisions of the Act shall be applicable accordingly.

(ii) The Commissioner may, –

(a) adopt appropriate procedure for processing of returns; or

(b) decide the order of priority for processing of returns of income based on administrative requirements.

Updates- 1301/2012

(iii) Wherever a return cannot be processed in the Centre for any reasons, the Commissioner shall arrange to transmit such return to the Assessing Officer having jurisdiction for processing.

9. Rectification of mistake.

(i) With a view to rectifying any mistake apparent from the record under section 154 of the Act, the Centre, on its own or on receiving an application from the person, may amend any order or intimation passed or sent by it under the provisions of the Act.

(ii) An application for rectification shall be filed electronically to the Centre in the format prescribed and will be processed in the same manner as a return of income-tax.

(iii) Where the rectification order results in a demand of tax, the order under section 154 of the Act passed by the Centre shall be deemed to be a notice of demand under section 156 of the Income-tax Act.

(iv) In case of error in processing due to an error in data entry or a software error or otherwise, resulting in excess refund being computed or reduction in demand of tax, the same will be corrected on its own by the Centre by passing a rectification order and the excess amount shall be recovered as per the provisions of the Act.

(v) Where a rectification has the effect of enhancing an assessment or reducing the refund or otherwise increasing the liability of the person, an intimation to this effect shall be sent to the person electronically by the Centre and the reply of the person has to be furnished through electronic mode only.

10. Adjustment against outstanding tax demand.

The set-off of refund, if any, arising from the processing of a return, against tax remaining payable will be done by using the details of outstanding tax demand lying against the person as uploaded onto the system of the Centre by the Assessing Officer.

11. Appellate Proceedings.

(i) Where a return is processed at the Centre, the appeal proceedings relating to the processing of the return shall lie with Commissioner of Income-tax (Appeals) [CIT(A)] having jurisdiction over the jurisdictional Assessing Officer and any reference to 5

Updates- 1301/2012

Commissioner (Appeals) in any communication from the Centre shall mean such jurisdictional CIT(Appeals).

(ii) Remand reports, giving effect to appellate order and any other reports to be furnished before the CIT (Appeals) shall be submitted by the Assessing Officer having jurisdiction as regards the person.

12. No personal appearance in the Centre.

(i) A person shall not be required to appear either personally or through authorised representative before the authorities at the Centre in connection with any proceedings.

(ii) Written or electronic communication from such person or authorized representative in the format specified by the Centre in this respect shall be sufficient compliance of the query or clarification received from the Centre.

(iii) The Centre may call for such clarification, evidence or document as may be required for the purpose of facilitating the processing of return and all such clarification, evidence or document shall be furnished electronically.

13. Service of notice or communication.

(i) The service of a notice or order or any other communication by the Centre may be made by-

a. sending it by post;

b. delivering or transmitting its copy thereof, electronically to the person sent by the Centre’s e-mail;

c. placing its copy in the registered electronic account of the person on the official website ; or

d. any of the modes mentioned in sub-section (1) of section 282 of the Act.

(ii) The date of posting of any such communication on official website, email or other electronic medium shall be deemed to be the date of service.

(iii) The intimation, orders and notices shall be computer generated and need not carry physical signature of the person signing it.

Updates- 1301/2012

14. Power to specify procedure and processes. The Director General may specify procedures and processes from time to time for effective functioning of the Centre in an automated and mechanised environment, including specifying the procedure and processes in respect of the following :-

(i) receipt and processing of electronic rectification applications in the Centre.

(ii) the address or place, the mode and the period or the extended period within which the acknowledgement in Form ITR-V shall be accepted.

(iii) validating any software used for e-filing the return.

(iv) call centers to answer queries and provide taxpayer services which may include outbound calls to persons requesting for clarification to assist in the processing of their returns of income.

(v) managing tax administration functions such as receipt, scanning, data entry, processing, issue of refunds, storage and retrieval of income-tax returns and documents in a centralised manner or receipt of paper documents through authorized intermediaries.

[Notification No.02 /2012/ F.No.142/27/2011- SO (TPL)]

(Pawan K. Kumar)

Director (TPL-IV)

Updates- 1301/2012

Reserve Bank of India (RBI) has been announcing very customer friendly Guidelines to Banks.

2011-11-08T21:29:00.000-08:00

1. Customer Service - Non-Issuance of Passbooks to Savings Bank Accountholders (Individuals):

It has come to RBI's notice that some banks are not issuing pass books to their savings banks account holders (individuals) and only issue a computer generated account statement even when the customer desires pass book facility.

RBI has advised banks to invariably offer pass book facility to all its savings banks account holders (individuals) and in case banks offer the facility of sending statement of account and the customer chooses to get statement of account, banks must issue monthly statement of account. The cost of providing such pass book or statements should not be charged to the customer.

2. Repayment of Term/Fixed Deposits in banks:

It has come to RBI's notice that some banks insist on the signatures of both the depositors to allow repayment of money in fixed/term deposits, though the deposit account is opened with operating instructions (sometimes called ‘repayment instructions’), ‘Either or Survivor’ or ‘Former or Survivor’.

RBI has clarified that if fixed/term deposit accounts are opened with operating instructions ‘Either or Survivor’, the signatures of both the depositors need not be obtained for payment of the amount of the deposits on maturity. However, the signatures of both the depositors may have to be obtained, in case the deposit is to be paid before maturity.

3. Validity of cheques/drafts/pay orders/banker’s cheques:

RBI has directed banks that, with effect from April 1, 2012, banks should not make payment of cheques/drafts/pay orders/banker’s cheques bearing that date or any subsequent date, if they are presented beyond the period of three months from the date of such instrument.

ETDS Return Due Date Extended

2011-11-03T04:32:00.001-07:00

Income Tax department has changed the date for filing of quarterly E TDS return vide notification 57/2011 dated 24.10.2011.In this notification due date to filing etds returns has been extended by 15 days for first three quarters of the Financial year but remains the same for last quarter ending 31st March. These amendment is applicable form 01.11.2011 so applicable from 3rd quarter of F.Y. 2011-12.This amendment is applicable ONLY FOR GOVERNMENT OFFICES.

For Complete notification visit http://ca-recentupdates.blogspot.com/2011/10/etds-return-due-date-extended.html

Extension of date of submission of service tax half yearly returns

2011-11-03T04:29:00.000-07:00

F. No. 137/99/2011 – Service Tax
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
***
New Delhi dated the 20th October 2011

ORDER NO. 1 /2011 – Service Tax

In exercise of the powers conferred by Rule 7(4) of the Service Tax Rules 1994 read with notification No. 48/2011-Service Tax dated 19th October 2011, Central Board of Excise and Customs hereby extends the date of submission of half yearly return for the period April 2011 to September 2011 from 25th October 2011 to 26th December 2011.

This is being done in view of the fact that the e-filing of service tax returns for all class of service tax assesses has been made mandatory for the first time vide notification no. 43/2011- Service Tax dated 25.8.11, as such leaving less time for the trade to adjust to the requirement of e-filing.

Director (Service Tax)
CBEC, New Delhi

Corporate Accounts: Accounting substandard

2011-10-21T22:38:00.000-07:00

Companies are able to hide more than they reveal and auditors are strangely comfortable with that

There is an organisation called the Institute of Chartered Accountants of India (ICAI). It is supposed to set standards for fair accounting and transparency in communication of financial information to anyone who reads an audited annual report. It is also obliged to make written comments on any aspect that it finds unreasonable or not satisfactorily explained. Under law, chartered accountants are supposed to be appointed as auditors by shareholders of companies. In practice, it is the promoter who appoints them. At every annual general meeting, a routine resolution is approved by shareholders, appointing the auditor chosen by the promoter. The shareholder is not given any information about the audit firm, its capabilities or its size. In reality, the shareholder has no control or clue about who the company’s auditor is.

Over the years, there has been total laxity and dilution of accounting standards in India, under the guise of ‘conforming’ to international standards. I have been analysing balance sheets for a long time and I can see disclosure standards falling dramatically. Let me start with subsidiary companies. In the past, the annual report would have the full accounts, with schedules, of the subsidiary companies. Today, these are missing. If the company is somewhat generous, it may put up the subsidiary companies’ accounts on its website. This presumes that every shareholder has Internet access. However, the Web does not allow for a friendly read or enable you to move from page to page, quickly. Unless you sit down with a detailed paper report in your hand, you cannot see the accounting interconnections easily.

Companies have abused the Internet to upload accounts in various formats that are difficult to read and engage in cross-reference. Now, one understands that there is a move to make reporting in one uniform language, but it seems unlikely that things will get any better. I see that companies have managed to lobby with the government, in the garb of the ‘green’ movement, and move to electronic delivery of annual reports. I do hope this will not become mandatory because it is sheer nonsense. Unless one has a printed annual report, it is impossible to analyse the books of accounts. One would have to take a printout of the soft copies in any case—which undermines the whole ‘green’ concept. And don’t forget that companies do print fancy and glossy annual reports for giving to fund managers and the media.

To explain what the disclosure standards have come down to, let me take the annual report of Reliance Industries Ltd (RIL), one of the most widely-tracked companies in India. I read from the P&L (profit & loss) account that the sales for the year 2010-11 were Rs2,48,641 crore. However, what product/s the company sold cannot be fathomed from the accounts. There is no schedule that gives the break-up of sales. Of course, one schedule mentions ‘production meant for sale’, listing different products and quantities, but not their value. Whether they were sold and what they contributed, the accounts do not tell me. The same is the case with purchases. Manufacturing & other expenses were Rs2,11,823 crore. The explanatory schedule gives one line saying ‘raw material consumed’ at Rs1,93,234 crore! Wonder what this is. The term is in the singular, so it must be one mighty raw material! A small item of Rs68 lakh of lease rent is detailed in this schedule but something that is thousands of times more in value is dismissed in one line!

If I go to the balance sheet, it is very impressive, indeed. Net worth of Rs1,51,548 crore. The net block of fixed assets is slightly larger than this. Investments made by the company are Rs37,651 crore. If I go to the ‘consolidated’ accounts, this figure drops to Rs21,596 crore. I see that the company has listed 142 ‘related parties’! It will take expert scanning and working to fathom how much money is invested in any associate, what stake the company has, etc. Again, different year-end dates for many subsidiaries/associates add to the confusion. There are three pages in small print which give ‘financial information’ of 120 subsidiaries! The size of the letters bothers me and I give up on reading the balance sheet.

I am sure RIL discloses everything to the research analysts or on its websites. But the point is that 200+ pages of the mandatory financial disclosures are not enough to apprise you about the company’s operations. This is so different from the past, when there would be detailed schedules from which one could work out the unit costs, unit realisations, etc. Today, in the name of saving on postage, printing, etc, reporting standards have gone to the dogs.

About accounting standards, the less said the better. Companies are allowed to follow different standards if they go to a court of law. Even if they do, it should be the job of ICAI to qualify and quantify the issue. It rarely does so. The balance sheet of Tata Steel also throws up an interesting issue as far as accounting standards are considered. The notes to the accounts (page 160 of the annual report) show an ingenious accounting of the interest on ‘perpetual’ debentures. Here is an excerpt:

“c) The Company has raised Rs1,500 crores through the issue of Hybrid Perpetual Securities in March 2011. These securities are perpetual in nature with no maturity or redemption and are callable only at the option of the Company. The Distribution on the securities, which may be deferred at the option of the Company under certain circumstances, is set at 11.80% p.a., with a step-up provision if the securities are not called after 10 years. As these securities are perpetual in nature and ranked senior only to share capital of the Company, these are not classiﬁed as ‘debt’ and the distribution on such securities amounting to Rs4.54 crores (net of tax) not considered in ‘Net Finance Charges’.”

When the company has an option to repay at the end of 10 years, how can it not be considered as debt for the first 10 years? Or is the company so sure of its abilities that it assumes the entire amount will never have to be repaid? And how can the interest on that be classified as something else? The company distorts its financial cover ratios if it does not include the amount under interest. Who knows? Maybe after 10 years, the entire debt can be converted into ‘other income’!

These two are only broad examples of what our disclosure standards have come to. Balance sheets are getting difficult to read and understand. This is surely not the road to increased transparency. The ICAI seems to be on a mission to help promoters to bring in opacity in the only formal communication that is made to the shareholders. And to think that under law, it is the shareholders who appoint the auditors!

I would urge that SEBI (the Securities and Exchange Board of India) look into the accounting (sub)standards that are currently being followed with regard to listed companies. Left to the ICAI, we will never achieve any transparency in reporting.
R Balakrishnan

Google launches 'self-driving' car technology

2011-10-21T02:38:00.000-07:00

Search giant Google has now unveiled a self-driving car technology that is designed to help people with mobility issues and to combat congestion.

The website's co-founder, Sergey Brin, recently announced that ten percent of the company is working on innovative projects outside the web domain, the first of which is the building of "autonomous" cars.

The driverless vehicles would travel through normal roads under the instruction of computers and would help people to combat congestion.

"There are a lot of people who can't get around, whether you have a disability, whether you're old or you're young," Fox News quoted Brin, as saying.

"There's also just incredible urban congestion caused by the need for parking. There's highway congestion because humans don't accurately drive on roads with smaller spacing. There's a tremendous opportunity to improve the world," he added.

According to the report, the car works using a rotating 75,000-dollars laser on its roof called a "lidar" that gives a 360-degree, 3D understanding of the car's surroundings that is accurate to two centimeters.

A computer in the trunk compares this information with known maps, and as a result, the car knows every road and traffic light.

The car is also capable of reacting to other cars and pedestrians, in any weather conditions and at any time of day.

Brin said that autonomous cars successfully completed a "1,000-miles challenge," in which they drove through a complex route including city streets and fast highways without human intervention.

But he also said the project remains in the research and development stage and will not go on sale for some time. (ANI)

Euro zone must assess solvency issues first - Mukherjee

2011-10-19T01:25:00.000-07:00

NEW DELHI (Reuters) - The G-20 nations believe that the euro zone should first "credibly assess" their own solvency issues before the international community could extend any help, Finance Minister Pranab Mukherjee said on Wednesday.

"The overwhelming consensus in the G-20 is that euro zone should first identify and cridibly assess their own solvency problems before the international community can step in," Mukherjee told reporters.

Finance ministers and central bankers of the Group of 20 major economies pressed Europe last week to act decisively within eight days to resolve the euro zone's sovereign debt crisis which is endangering the world economy.

Countries outside the euro zone have warned of damage the European crisis was already doing to their economies and underlined the urgent need for action by the 17-nation single currency area.

Smartphones increasing global cyber crime

2011-10-18T04:41:00.000-07:00

Cyber security experts have warned that the world is facing a wave of cyber crime, and blame it on our newly found addiction to the smartphone for the cause.

"This is a fully fledged computer that's sitting in your pocket," Sky news quoted Henry Harrison, from UK cyber security experts Detica, as saying.

The flaw in the smartphone is that it is too useful and too user friendly - for users who trade convenience for security.

They collect our emails, store our bank details, we tweet and use Facebook on them. They are our bank vault, our confidante, and our guide.

Criminals use Wi-Fi connection to harvest passwords and other sensitive data from smartphones or computers - often giving their Wi-Fi hotspots fake names familiar to punters at cafes and in airports.

Many smartphones are set up to automatically leap on to available Wi-Fi hotspots and start downloading emails.

Forty per cent of mobiles sold this year have been smartphones - and this has been a bumper year for malware developers who have focussed their attention on smartphones.

Those running Google's Android system have been especially targeted.

Bitdefender's Catalin Cosoi said: "We have investigated applications for Android devices and basically, based on our statistics, we've seen a 2,000 percent increase of malicious applications compared to the last year...Our prediction is that in the following 6 months, we will have a 6,000per cent increase in malicious applications."

Smartphones are becoming the gateway for cyber criminals and cyber spies into sensitive personal data, industrial and state secrets.

"Once you have a smartphone, you probably can't go back to an older version of a phone now that you have access to a computer, social media, emails, pictures and so on. You sort of get addicted, so smartphones are becoming very important," Cosoi added.

"On the other hand, it's very, very easy to create malware for smartphones.

"Sometimes you can take a malicious part from one application and insert it into another and start propagating an application on the web. So smartphones are increasing and also, it's very easy to create malicious applications for smartphones," he added.(ANI)

Bring public expenditure under purview of audit: CAG

2011-10-17T01:35:00.000-07:00

Shimla, Oct 16 (IANS) Comptroller and Auditor General (CAG) Vinod Rai Sunday underlined the need for amending the CAG's mandate to bring all public expenditure within the purview of public audit.

He highlighted that audit laid great emphasis on interaction with the institution under audit.

'Dialogue is absolutely essential both for the smooth conduct of audit and for successful outcome from the audit,' Rai observed at a two-day seminar on 'CAG's audit mandate' that concluded at the National Academy of Audit and Accounts here Sunday.

In his inaugural address Saturday, Union Rural Development Minister Jairam Ramesh had advised the auditors to appreciate and be sensitive to the genuine constraints faced by the executive in implementation of government programmes.

'While the executives should interact with the auditors and use the audit recommendations as an input for good governance, the auditors should also be sensitive and appreciate the genuine constraints faced by the executive in implementation of the programmes,' he said.

Seven secretaries of the government of India, principal secretary (finance) of some states and higher officials of the CAG across the country participated in the seminar.

India sees 8.5-9% growth in medium-to-long term

2011-10-17T01:30:00.000-07:00

Finance Minister Pranab Mukherjee said India is on track to achieve growth of up to 9 percent in the medium-to-long term and should invest in quality infrastructure to keep up momentum in the economy.

Learn from India, put economics in foreign policy: Hillary Clinton

2011-10-15T11:30:00.000-07:00

New York, Oct 15 (IANS) The United States should take a cue from the leaders of emerging powers like India and Brazil who put economics at the centre of their foreign policies, Secretary of State Hillary Clinton has urged policymakers.
'When their leaders approach a foreign policy challenge -- just as when they approach a domestic challenge -- one of the first questions they ask is, 'how will this affect our economic growth?'' she told the Economic Club of New York Friday in what was billed as a major economics and foreign policy speech.
'We need to be asking the same question -- not because the answer will dictate our foreign policy choices, but because it must be a significant part of the equation,' she said declaring she is updating US foreign policy priorities to include economics 'every step of the way.'
The United States must position itself to lead in a world 'where security is shaped in boardrooms and on trading floors -- as well as on battlefields,' Clinton said noting 'We have seen governments toppled by economic crisis.'
The United States is 'modernising (its) agenda on trade, investment and commercial diplomacy to deliver jobs and growth for the American people,' she said. But Washington cannot compete if it is frozen in domestic political fights.
'Washington has to end the culture of political brinksmanship -- which, I can tell you, is raising questions around the world about our leadership.'
Asked how corporate strength could be used to benefit the creation of jobs and enhance economic growth in the United States, Clinton acknowledged 'It's not as though American companies go invest in China or India or Brazil and there's no benefit back home. there is.'
'But the quality of the benefit, the amount of the benefit, and the durability of the benefit depend upon decisions we make here as to how we think about our competitive stance in this new challenging environment.'

The world's 'strategic and economic centre of gravity is shifting east', she said and the United States is now focusing more on the Asia-Pacific region.

Govt unveils export sops in trade policy

2011-10-14T00:37:00.000-07:00

Commerce minister Anand Sharma (centre) is flanked by commerce secretary Rahul Khullar (right) and director general of foreign trade Anup K Pujari as they release booklets on the foreign trade policy in New Delhi on

BS REPORTER New Delhi, 13 October

FEARINGa slowdown in exports due to external headwinds, the government today announced a slew of measures to boost exports from the highvalue engineering, pharma and chemical sectors as well as traditional textile items.

The measures, announced by commerce minister Anand Sharma at a review of the Foreign Trade Policy, will have revenue implications of

`800900 crore this fiscal. Along with atwo per cent interest subvention on rupee export credit to some labour intensive sectors announced by the Reserve Bank two days back, these steps will hit the exchequer by

`1,700 crore this fiscal. The sops will allow exporters in these areas to get cheaper imports, depending on the value of their exports.

Turn to Page 16

SPECIAL BONUS BENEFIT SCHEME: Concession on duty rates on imports to the tune of 1% of export value (freight on board) to 50 products in engineering, pharma and chemical sectors

SPECIAL FOCUS MARKET SCHEME: Concession of 1% of value of freight-on-board exports for exporting to countries in South America, Africa and Confederation of Independent States

SUPPORT TO APPAREL SECTOR: Apparel sector exports will get benefits to the tune of 2% of their exports to the US and EU

FOCUS PRODUCT SCHEME: Concession of 2% of freight-on-board value of exports

MARKET-LINKED FOCUS PRODUCT SCHEME: Scrip to the tune of 2% of freighton-board value of exports

NEW MEASURES

1 Q & A1

We’ll meet $300 bn export target, says Sharma ?5

Govt unveils..

Stating that it was difficult to put a number on revenue implications, commerce secretary Rahul Khullar said, “In a ballpark range, excluding interest subvention, it will be `800-900 crore. For interest subvention, it will be `800-1,000 crore... a total of about `1,700 crore.” Sharma said, “I have taken up the issue of extending a scheme for the import of capital goods at zero duty for exports of certain items and the status-holder incentive scheme beyond March 31, 2012 with the finance minister.” Sharma said the finance minister was receptive to the idea and a decision could come soon. He said a committee was set up to address the issue of dollar availability for exporters. The committee comprises the secretaries of finance, commerce and financial services.

The measures annnounced today include providing scrips to the value of one per cent of the freight-on-board value of exports, which could be used while importing goods. The special bonus benefit scheme will be provided to the engineering, pharmaceutical and chemical sectors.
The scheme would come into effect from October 1 to March 31, 2012. However, commerce ministry officials believe exporters will start to benefit from November onwards. Though the scheme is for six months, officials do not rule out an extension.
Engineering goods were the success story behind good exports during the first six months of this fiscal, growing 103 per cent at more than $42 billion.

Repaying a personal loan!

2011-10-13T02:52:00.000-07:00

If you are stuck in a personal loan debt, here are some ways to free yourself:

Asset monetization

If you have one or more of these assets such as car, home, life insurance policies, tax saving certificates, shares, bonds and debentures, or gold jewelry, bank fixed deposits, or mutual funds, you could monetize them to pay off your debt. In fact, some banks offer loan against assets that carry a lower rate of interest which could be used to settle your personal loan.

Consider debt consolidation

Another effective way of dealing with your debts is through what is called debt consolidation. In this method, you could pay a relatively lower installment every month over a longer tenure to the lender who will combine all the components of your debt portfolio into one. Debt consolidation is an effective option if you have too many loans to take care of and not enough monetary capacity for astute financing as this method will give you a built-in view of your credit worthiness. Though beware that when you calculate the total loan cost in the long run, it might become expensive. However, the idea is to obtain a short term relief under the current circumstances. Once your finances improve aim to close the loan earlier than planned.

Top up or convert to a secured loan

If you had taken a home loan you can move to a lower cost credit by going for a top up on your current loan. Another viable option would be to talk to your bank and if they agree convert the current loan into a secured loan against your vehicles, house, but only if the property is free from debts, liens or mortgages. This way you can restructure the loan for a lower monthly payment after taking into consideration the loan tenure and the interest rate.

Perhaps, the only drawback in converting a personal loan into other loans having collateral is that you stand to lose the collateral at risk in case of default on your loan amount, which could mean a lot when there is a contingency in the future. Hence, it is advisable to convert your current debt into a secured loan only after analyzing your capacity to repay the secured loan so that you don’t stand to lose the collateral at risk.

Remember that even a single default on your personal loan could trigger unexpected after effects in the repayment of your current loan and getting a future loan. In cases of the first default, it is ideal for you to talk to your lender and find a way out. Under normal circumstances the lender could impose a penalty of roughly around 2% on the default amount, which will only add to your current burden! So strive to discuss any problems you face with the lender to seek advise on possible solutions.

A personal loan is always a risky alternative finance with a higher rate of interest and it is better to close the loan as early as possible.

Evaluate other options before you take up a personal loan

In a case of any eventuality you could try the other time tested avenues of finding emergency funds. Monetizing your assets, or selling off your shares, bonds or debentures or premature closing of your fixed deposit could help! If you are a salaried individual the best way to get funds to meet a contingency is to approach the bank where your salary credit is done. Having known your track record and your exact income and withdrawal transactions, the banks are the best option available for you to secure a loan. The rate of interest could be relatively lower for you, as you bank with them. The same option holds good for any businessman having a current/savings account with a bank.

You should opt for a personal loan only if you do not have any assets to monetize or other options don’t work for you as interest rates are the highest next to only credit cards!

New telecom policy puts roaming to rest

2011-10-12T05:15:00.000-07:00

Extra charges to end in single-licence regime; operators can share, trade spectrum; infra status for telcos; stocks rise.

Consumers will not have to pay roaming charges and mobile number portability will be available nationwide under a new telecom policy draft released by communications minister Kapil Sibal on Monday.

The policy envisages a ‘one nation-one licence’ regime: companies will not have to apply for separate licences in every circle/service area and users will not have to pay roaming charges. A single licence will do across all the 22 service areas in the country.

The policy will allow mobile operators to share, pool and trade spectrum. Spectrum will, in fact, be delinked from licences in future and priced at market value. In the existing policy, start-up spectrum of 4.4 MHz is bundled with the licence.

The department of telecommunications (DoT) will unveil an exit policy for operators. It has been referred to the Telecom Regulatory Authority of India (Trai) for formulation. That should aid consolidation in the industry, which has 12-13 players in each circle. DoT will also seek Trai recommendations on the new licensing framework and migration of licences. An additional 300 MHz of spectrum will be made available by 2017 and another 200 MHz by 2020. The telecom sector will get infrastructure status under the new policy.
“We’ll ensure adequate availability of spectrum and its allocation in a transparent manner through market-related processes. We’ll prepare a road map for the availability of additional spectrum every five years,” Sibal said.
The minister ruled out the auction of broadband wireless access spectrum in the current fiscal. “We’ll audit spectrum and its use,” he said. “In achieving the goals of the national telecom policy 2011, revenue generation will play a secondary role. Our vision is to have broadband on demand.”
DoT had started work on the new telecom policy - 2011 in January in the wake of the 2G spectrum allocation controversy. Former telecom minister A Raja and officials of various companies are in judicial custody in connection with that. Operators battling intense competition and low tariffs will be hit by the end of roaming charges. According to industry estimates, roaming charges account for eight per cent of telecom players’ revenues.
“There will only be a short-term impact on revenues because of no roaming charges. But, it will definitely increase the usage of services, voice or data,” said KPMG’s Romal Shetty.
Bharti Airtel stocks closed 2.38 per cent higher at Rs 363.25 on the Bombay Stock Exchange on Monday. Idea closed 2.33 per cent higher at Rs 92.40 while Reliance Communications was up 1.72 per cent at Rs 74.05.
Cellular Operators Association of India director general Rajan Mathews said, “The draft policy has given clarity and a direction to the industry. But, details will have to be worked out. On the abolishment of roaming charges, how the existing licensees will be able to make their licenses pan-India, the new numbering plan, how the networks will be configured — all these issues will have to be sorted out before any plan.”
The policy aims to provide on-demand broadband for all citizens and increase rural teledensity to 100 per cent by 2020 and 60 per cent by 2017 (it is 35 per cent at present). There will be focus on the convergence of TV, internet and internet services. Broadband download speed will be revised to 512 kbps from 256 kbps currently. The policy also aims to make India a hub for telecom equipment manufacturing.
Reacting to the policy draft, Bharti Airtel said in a statement, “It signals the government’s focus on future growth areas such as broadband and convergence. Infrastructure status for the sector and rationalisation of taxes and levies will provide relief.” “The policy will take the country into the next stage of inclusive growth. We’ll actively participate in the government’s consultative process with various stakeholders,” said a statement by Idea Cellular.

BSE Sensex ends down 21 points

2011-10-11T08:32:00.000-07:00

MUMBAI (Reuters) - The BSE Sensex erased early gains to end down 0.13 percent on Tuesday, as investors turned cautious ahead of the start of the quarterly earnings parade and the release of industrial production data.

The main 30-share BSE index ended down 20.76 points at 16,536.47, with 16 of its components closing higher.

The 50-share NSE index fell 0.11 percent to 4,974.35 points.

(Reporting by Prashant Mehra; Editing by Aradhana Aravindan)

PM to mediate in DIPP, PlanCom slugfest on pharma FDI

2011-10-09T23:34:00.000-07:00

The Department of Industrial Policy & Promotion (DIPP) and Planning Commission member Arun Maira are sticking to their guns on foreign direct investment (FDI) in the pharmaceutical sector. Prime Minister Manmohan Singh will hold a meeting with the stakeholders on Monday to sort out the differences.
The Maira Committee draft recommends the rules guiding 100 per cent FDI in pharma through the automatic route should not be changed, but the Competition Commission of India (CCI) should vet all mergers and acquisitions (M&As).

However, four of the eight panel members, representing the ministries of health (two members), commerce, and science and technology (one each), have opposed the report.

The DIPP, on its part, has submitted a dissent note against the contents of the draft, which is being added to the report. Singh will consider the report on Monday.
On allowing 100 per cent FDI in acquiring pharma companies, the DIPP said: “We are worried a stage may come when we may not have a company ready to manufacture drugs on behalf of the government, even if the provision of compulsory licence is invoked.”
A senior official from the health ministry said the report had failed to recognise the difference between sectors where 100 per cent FDI was allowed and the health sector. “It’s not just an issue of competition,” he said. Favouring 100 per cent FDI, Maira wants monitoring of this overseas investment through the CCI. “We still believe the CCI should be used to keep a tab on M&As in the pharmaceutical sector as it is a competent body,” Maira told Business Standard.
The DIPP, however, has raised serious questions on the roles and powers of CCI, which, it says, were approved recently and would take substantial time before being effectively implemented. It said the CCI had been mandated to work on anti-competitive practices and, thus, it would not be able to address public interest issues on health.
The health ministry official said the country’s health care security could not be protected by mere competition control or price control. “You need to build and sustain health care capabilities through sufficient generic competition and national ownership of such capabilities,” the official said.
The fact that acquiring companies were paying huge valuations, which were many times the cost of setting up greenfield projects, did raise a question on their motivation, said the DIPP, adding the (Maira) Committee should have appreciated this position. Earlier, the health ministry had raised concerns on the impact of a series of takeovers happening since 2006 in the domestic drug industry. Subsequently, it urged the ministry of commerce and industry to tweak the FDI policy, following which the Maira Committee was formed to examine the current policy on pharma.

TAX EVASION NET MAY WIDEN

2011-10-07T22:53:00.000-07:00

OPENING OF 16-YEAR RECORDS POSSIBLE

To trace the secret bank accounts of Indians abroad, the finance ministry is considering reopening accounts of such individuals for the past 16 years, against the present norm of only six years.

“We may inspect past records. The number of years may be extended from six years to 16 years,” said a ministry official. This might, he said, help in seeking information from tax havens on such individuals, as the government would be in a condition to have more relevant details. Currently, the ministry can seek information from tax payers on unexplained investment under Section 69 of the Income Tax Act. Likewise, it can seek details on unexplained expenditure under Section 69C of the Act. The assessing officer has the power to reopen a case up to six years from the end of the relevant assessment year.
India has been revising its tax treaties with many tax havens to crack down on evaders. However, the revised agreements, including a recent one with Switzerland, allow India to access information from these countries only from prospective effect. India and Switzerland will start exchanging information on tax matters from the next financial year after the new treaty is ratified by the Swiss parliament tomorrow, paving way for obtaining data on unaccounted money stashed there.
Last month, a government panel had ruled out any Voluntary Disclosure of Income Scheme, creation of a new Act and capital punishment as measures to deal with the issue of black money abroad. The committee suggested only strengthening of the administrative machinery and better sharing of intelligence.
The government has adopted a five-pronged strategy on unaccounted money. It includes creating an appropriate legislative framework, joining the global crusade against black money, setting up institutions for dealing with illicit funds, developing a system for implementation, and imparting skills to its staffers for effective action. It has entered into pacts with three economic think tanks —National Institute of Public Finance and Policy, National Council of Applied Economic Research and National Institute of Financial Management — to arrive at an official figure on the extent of the problem.

Tata Motors launch Manza, Prima in South Africa

2011-10-07T04:44:00.000-07:00

New Delhi, Oct 7 (IANS) Automobile major Tata Motors Friday launched premium sedan Manza and its trucks range Prima at the Johannesburg international motor show in South Africa.

'The new Tata vehicles being introduced in South Africa will bolster our already significant portfolio in the country,' P.M. Telang, Tata Motors managing director - India operations, said in a statement here.

He said the company hopes to penetrate further in the African market with its new offerings. 'We look forward to a deeper presence in South Africa, which is already a focus market for us.'

Other top company officials said the African continent presented an enormous potential for the company in the automobile sector.

'We see Africa as a region of tremendous potential for the group and our participation in the motor show with the introduction of the latest products will serve to further strengthen the Tata brand in these markets,' said Tata International managing director Noel

The auto-giant's sedan will sport a new body, interiors and platform. The car will be powered by Fiat's 66 kw quadrajet diesel and safire petrol engines.

'The Tata Manza will be available across dealerships in South Africa next year,' the company said in the statement.

Meanwhile, the company also launched its international range of trucks - Prima - in South Africa. The trucks will be available in South Africa by early 2012.

The company has been exporting its commercial vehicles to South Africa since 1998, while the exports of passenger vehicles began in 2004.

It has so far sold over 32,000 passenger vehicles and over 35,000 commercial vehicles in South Africa.

STATE FM STO DISCUSS GST LESSONS FROM EUROPE

2011-10-05T21:59:00.000-07:00

The Empowered Committee of State Finance Ministers will meet on October 14, the first since it returned from aEurope trip last month to study the Goods and Services Tax (GST) model there and how it can be implemented in India.

The learning from the fourcountry tour tops the agenda of the meeting, while the GST structure, the compensation package on account of the Central Sales Tax phase-out, and the information technology platform will also be discussed.

The implementation of the indirect taxation system has been stuck following opposition from some states. The Centre was expecting states opposing GST might soften their stance after seeing how GST works in other countries. But now there are indications that the 10-day tour of France, Spain, Luxembourg and Belgium might have reaffirmed the states’ beliefs about their demands on GST.

Some finance ministers have come home convinced that if countries in Europe can have multiple rates for GST so can India. For some others, the European structure cannot be compared with India.

After seeing how GST works in Europe, Empowered Committee Chairman and Bihar Deputy Chief Minister Sushil Modi has arrived at a conclusion that a rate band instead of fixed and uniform rates of taxes should be adopted in India on the lines of Europe to provide flexibility to states.

European countries have kept the standard rate at 15 per cent and there is a band ranging between 15 and 25 per cent.

Also, there is a reduced rate of five per cent. They also have an exemption threshold.

For Madhya Pradesh Finance Minister Raghavji, who has strongly opposed all the GST models suggested by the Centre from the beginning, the trip was an eye-opener. He says he realised the federal structure in Europe is much different from ours and a cash economy like India cannot adopt GST in the form suggested by the Centre.

A finance ministry official, however, said states had conveniently learnt from Europe whatever suited them, but when it came to various other things, like a dispute resolution panel with binding decisions, they felt India was different and could not copy these things.

During the tour, the ministers had met Spain’s secretary general for finance, the French minister for foreign trade, Belgium’s deputy prime minister and minister of finance, the OECD deputy secretary general, and secretary of the Eu

The implementation of the indirect taxation system has been stuck following opposition from

MCA makes it mandatory for CAs, CSs, CWAs to digitally sign DIN applications

2011-10-04T21:27:00.000-07:00

Permanent Account Number (‘PAN’) has been made mandatory for DIN applications. Also, previous DIN holders are required to add their PAN details vide form DIN-4 on or before 30 September 2011.

THE Ministry of Corporate Affairs has vide General Circular No. 32/2011, New Delhi Dated 315t May, 2011 decided that with effect from 12th June, 2011, all DIN-1 & DIN-4 applications have to be digitally signed by the practicing Chartered Accountants, Company Secretaries or Cost Accountants who shall also verify the particulars of the applicant given in the applications. All these applications will be approved online.

At present, the PAN of the applicant is not a mandatory field in DIN eform-1. In order to examine DIN e-forms through the system and to avoid duplicate DIN, it has been decided that all existing DIN holders who have not furnished their PAN earlier at the time of obtaining DIN, are required to furnish their PAN by filing DIN-4 e-form by 30th September, 2011 failing which their DIN will be disabled and they shall also be liable for heavy penalty

It may be noted that the Ministry has already issued instructions on April 7 this year regarding the intention to allot all DIN applications online and to examine the DIN-1 and DIN-4 e-form through the system.

Accordingly, following fields in the DIN e-form will be mandatory :

(i) Name of Applicant
(ii) Father’s name of the Applicant
(iii) Date of Birth
(iv) Income Tax Permanent Account Number (PAN) in case of all Indian Nationals.
(v) Passport in case of all Foreign Nationals.

MADE A MISTAKE IN FILING I-T RETURNS?

2011-10-04T05:22:00.000-07:00

MANYincome-tax (I-T) payers, especially businessmen or people with many sources of income, may file returns that need to be revised. This could happen when income from some sources were not determinable or because of some mistake during the time of assessment. In such circumstances, the I-T department allows for revision of returns.

While doing so, some clauses need to be adhered to. For one, you can only revise the return if the original one was filed on time, that is by July 31. Belated returns cannot be revised. Revision becomes extremely important for people who are filing for losses. If the returns are not filed on time, losses cannot be carried forward.

Also, revision is allowed only if the omission was unintentional. The benefit of Section 139 (5) cannot be claimed by a person who has filed fraudulent returns. Section 139 (5) will apply only to cases of omission or wrong statements and not to cases of concealment or false statements. And, once you revise returns, the original stands withdrawn. If the omission(s) in the original return is intentional, the assessee will be penalised, warns Nagaraju PS, director of etaxmentor.com.

There is also a time line. You can revise I-T returns before the expiry of a year from the end of the assessment year or before the completion of assessment of returns, whichever is earlier. So, the returns of assessment year 2010-11 can be revised till March 31, 2012, or before the completion of the assessment.

A notice under Section 148 is issued for not paying the entire tax liability. "You need to file tax returns pursuant to this notice and this return can be revised," says Kaushik Mukherjee, ED (tax & regulatory practices), PricewaterhouseCoopers. Reason: Section 148 says for such returns, all the provisions of Section 139 would apply.

Here, you need to pay the additional tax due, with an interest of one per cent a month on the delayed tax amount, reminds Vishwanathan K, executive director, RSM Astute Consulting Group.

There is a penalty for non-payment as well. Section 271(1)(c) levies a penalty for concealing income and furnishing inaccurate details at the time of filing returns. The penalty can be 100 to 300 per cent of the tax due, says Mukherjee. Some say if the returns are revised before the notice under Section 148 is issued, then there is no penalty.

Experts say if income was hidden in the original return and is revised and disclosed after the assessing officer pursued it, then apenalty is levied. If the revised return shows a higher income than originally declared, a penalty may or may not be levied.

Airports authority says it won't finance DIAL bailout

2011-10-02T22:08:00.000-07:00

The Airports Authority of India (AAI) has rejected a move to bail Delhi International Airport Ltd (DIAL) out of a financial crisis by extending it a Rs 350 crore loan at nine per cent rate of interest.

The proposal was mooted at a Prime Minister’s Office (PMO) meeting, chaired by the principal secretary to the prime minister in August.

AAI has also not accepted another proposal to let DIAL pay its share of revenue on a ‘cash’ basis, saying it was not found to be in conformity with its accounting principles. Paying on a ‘cash’ basis would mean the payment would be made based on actual revenues, excluding dues from Air India.

DIAL has been facing a cash crunch because the state-owned Air India has not paid dues of over Rs 250 crore. However, the company has to pay its 45.99 per cent revenue share to joint venture partner AAI at the beginning of the month, based on normal revenue projections.

During the meeting at the PMO chaired by its principal secretary, it was decided that AAI, being one of the shareholders of DIAL, may explore various possibilities, including a short-term loan, to avoid the risk of the airport facing financial problems on account of non-payment of dues by Air India.

The meeting was also attended by Nasim Zaidi, civil aviation secretary, AAI chairman V P Agarwal, Vini Mahajan and Davinder Sandhu from the PMO, as well as GM Rao and Kiran Grandhi, chairman and managing director of DIAL, respectively.

Rejecting the proposal, AAI said it had no provision for extending any such loans to any entities, including its joint ventures. The state-owned airport operator said it had already borrowed Rs 1,500 crore from the open market at an interest rate of 10 per cent per annum.

AAI has argued its dues with various airlines and concessionaries as on March 31, 2011 amounted to Rs 1,687 crore. The dues against Air India rose to Rs 845 crore till June 30, 2011.

It has also argued against the loan, saying it would need to finance ongoing airport projects, including the mega projects of Kolkata (Rs 1,000 crore) and Chennai (Rs 590 crore). The other reason for rejection it has given is it has to pay advance tax and service tax. The payment of these taxes in respect of the billing on Air India without realisation has adversely affected the company's cash flow.

DIAL says it needs money primarily because of two reasons: its Airport Development Fee (ADF) has been stopped and Air India has not been paying it for a year.

“Our short-term borrowings have increased to Rs 650 crore and we are in a tight liquidity situation.

The government needs to ensure Air India starts paying something to us and we are allowed to charge ADF,” said a GMR spokesperson.

AAI chairman V P Agarwal did not respond to an SMS query and phone calls.

DIAL's cash crunch was compounded by a court order to stop charging ADF, leading to a daily loss of Rs 2 crore. Before the order, every domestic passenger leaving the Delhi airport was charged Rs 200 and every international passenger Rs 1,300 as development fee.

Delhi airport has been upgraded and is being maintained by DIAL, a joint venture led by Bangalore-based GMR group (which holds 54 per cent stake). AAI holds 26 per cent. Malaysia Airports Holdings and Fraport hold 10 per cent each in the joint venture company.

According to the agreement between the government and DIAL, the latter is required to share 45.99 per cent of its gross revenue with the public sector airport operator.

Three steps to avoid a global depression

2011-09-30T23:03:00.000-07:00

Policymakers have lost control of the economic crisis and financial markets are forcing the world into a depression, George Soros said on Friday, urging Europe to create a common Treasury, recapitalise its banks and protect vulnerable states.

Soros, chairman of Soros Fund Management who made a fortune during the 1992 sterling crisis, said the most important task was to “erect safeguards against contagion from a possible Greek default.”

“Since a euro zone treaty establishing a common Treasury would take a long time to conclude, in the interim the member states have to appeal to the European Central Bank to fill the vacuum,” he wrote in an article for the Financial Times newspaper.

“Both the banks and bonds of countries such as Italy and Spain need to be protected ... To relieve the pressure on the government bonds of countries such as Italy, the ECB would lower its discount rate.”

Soros said the ECB could then encourage countries to finance themselves with Treasury bills bought by banks. Those banks could then at some stage rediscount the bills with the central bank, allowing countries to refinance for about one per cent a year during the “emergency period.”

“Neither the ECB nor the EFSF (European Financial Stability Facility) would buy any more bonds in the market,” he said.

He said the EFSF should be used to guarantee and recapitalise banks who would then have to maintain credit flows under guidance and monitoring from the ECB.

“These measures would allow Greece to default without causing a global meltdown,” Soros said. “That does mean that Greece would be forced in default ... How Greece fared would be up to the Greeks.”

However, he said only public demand for his plan would make it happen, given likely resistance from banks and national governments.

Auditors Spared of Matching XML A/Cs With Original Papers

2011-09-30T04:43:00.000-07:00

Auditors and company secretaries will not be required to certify that filing of accounts under a new electronic format match the original balance sheet, relieving finance professionals from a burdensome compliance in the first year of this new reporting mode. All listed companies and certain unlisted ones are required to file their financial statements for the year ended 31 March 2011 using the Extensible Business Reporting Language (XBRL) format. Moreover, finance professionals, including chartered accountants, have to certify that the audited balance sheet of a company and the XBRL-converted documents match. But for this year only authentication by a practicing CA/CS/CWA will be required and MCA will issue a circular by this week, Avinash K Shrivastava, joint secretary, ministry of corporate affairs, told ET. Thus, these experts just need to authenticate that the data is accounted for and they don't have to validate the converted XBRL document. A government official, however, said there was no significant difference between authentication and certification as both need digital signatures of registered accountants but as the term authentication was more acceptable to companies the ministry decided to go forward with it. XBRL is a global standard for exchanging business information. Under this format, companies report their financial statements using XBRL syntax as an .xml file instead of uploading their balance sheets in .doc or .pdf format. However, Indian companies have some apprehensions about this new mode as they fear that there would be differences in the standard reported balance sheet and the one accepted by the XBRL format. The certification process would have been cumbersome and confusing as several terms would have to be reclassified by the accountants. This would have increased our costs significantly as well as led to a lot of loss in data, an official of a service-based firm told ET. According to experts, this is primarily because in XBRL-enabled filing of financial statements, financial terms may be differently defined than in a standard balance sheet, resulting in a lot of aggregation and desegregation of figures.In the US, XBRL was introduced five years ago, but the process of certification started only this year. India, too, should adopt a gradual process of business reform, a reputed accountant told ET. Ministry officials rubbished the argument. There is no question of any sort of data being lost as at the end of the day it's just reclassification. The net profit after and before tax would still be the same. Such issues are just being highlighted by some with vested interests, the official added. The ministry is doing everything to pacify all stakeholders while ensuring that XBRL as a forward-looking reporting standard gets adopted as smoothly as possible, Shrivastava said. Most accountants ET spoke to said that for this year the ministry didn't allow companies to define their own accounting elements and definitions in their statements under XBRL, something they call 'extensions'. Senior MCA officials dispute this. The issue of extensions is being considered throughout the world as allowing companies to classify their own elements beats the very purpose of a standard reporting format and such a practice can lead to bypassing various important overheads in a balance sheet, one official said on condition of anonymity. Banks, insurers and NBFCs have been exempted from XBRL filing for 2010-11.

Now, carbon credit through green grass

2011-09-29T04:22:00.000-07:00

The Food and Agriculture Organization (FAO) of the United Nations has changed the definition of carbon credit, with its new finding of green grass as the potential area.

Until now, carbon credit was allowed to be claimed from industrial units reducing emission of major polluting gases — SO2, CO2, CO and Nox — into the environment. Now, the reduction of obnoxious gases through green grass will also be entitled to claim carbon credit.

Each tonne of reduction in the release of obnoxious gases is entitled for one carbon credit. Green grass, which not only spread greenery all around, also absorbs obnoxious gases from the environment and reduce the quantum of such gases directly into the environment.

The vast potential of grasslands to support sustainable livelihoods while trapping atmospheric carbon and helping slow global warming is one step closer to being realised, thanks to a new methodology developed by FAO in collaboration with the Chinese Academy of Agricultural Science, the Chinese Academy of Sciences and the World Agroforestry Centre.

Large swathes of the world’s grasslands are moderately to severely degraded. Restoring these to a healthy state could remove gigatonnes of carbon from the atmosphere and improve resilience to climate change. So far, however, carbon crediting schemes that pay projects for reducing greenhouse gas (GHG) emissions and sequestering carbon have largely ignored agriculture, including grazing-based livelihood systems.

One key challenge has been finding reliable and affordable ways to measure how much carbon is being trapped in agricultural mitigation projects.

“We think we have cracked the problem and come up with a reliable way for herders who are investing in restoring grasslands to prove they are sequestering measurable amounts of carbon, and fund their activities by accessing mitigation finance,” said Pierre Gerber, an FAO livestock policy specialist who is working on the project.

The breakthrough of FAO’s new methodology is that it provides an affordable way to reliably estimate the amount of GHG emissions removed from the atmosphere through improved management of grasslands.

“Our approach allows not only for direct measurement of carbon sequestration through soil sampling but also computer modelling of sequestration based on soil types and activities undertaken,” said Leslie Lipper, an FAO economist involved in the project. “Being able to demonstrate reliable monitoring is a must for projects wishing to participate in carbon markets, and modelling reduces monitoring costs, making it possible for small-scale herders and livestock raisers to participate.”

The methodology is being applied to a pilot project in Qinghai Province, China, which will eventually be able to deliver significant carbon offsets for a period of 10 years. FAO has sent its methodology for approval to the non-profit Verified Carbon Standard (VSC), a greenhouse gas accounting programme used by projects around the world to verify and issue carbon credits in emissions markets.

MCA may extend demat deadline for shares, bonds

2011-09-27T21:37:00.000-07:00

The Union ministry of corporate affairs (MCA) may give more time to unlisted companies to convert their share certificates and bonds into the electronic (dematerialised) format.

The September 30 deadline for this purpose, proposed by MCA in June for companies that had raised money by issue of shares, debentures or any other financial instruments from the public or by accepting deposits from the public, may get extended due to concerns expressed by several small firms, a ministry official said.

According to him, most big companies had opted for the electronic format. It is only the small players that are seeking more time.

The official added the proposal to convert paper certificates to demat form is already part of the Companies Bill, 2011, that is before the Cabinet. Hence, a hasty decision to notify The Companies (Dematerialisation of Certificates) Rules, 2011, may not be needed.

The move was expected to bring in transparency and an easy transaction platform for both companies and investors, in addition to making regulatory scrutiny more effective.

The MCA plan will have no impact on publicly-listed companies, as their promoters will have to move to this new format by September 30, following a Securities and Exchange Board of India (Sebi) directive.

Sebi had earlier said the promoters of all listed companies should dematerialise their holdings fully by by September 30.

Failing this, these companies could be dropped from the derivatives segment. That would mean restrictions on intra-day trading. The regulator had said it could also cut trading bands from five per cent to two per cent.

Sebi questions USE on trade concentration

2011-09-26T22:11:00.000-07:00

Allegations on Jaypee Capital alone accounting for bulk of turnover, something not permitted under the rules.

The United Stock Exchange (USE) has come under the regulatory scanner for alleged concentration of trades by a single member. The regulator has questioned the effectiveness of the exchange’s surveillance and risk mechanism measures that allowed such an occurrence.

According to reports, only a few brokers account for a majority of the volume registered on USE. More important, Gurgaon-based Jaypee Capital, also a shareholder in USE, accounts for nearly 80 per cent of the turnover. USE currently operates in the currency derivatives space and offers currency futures in all the four currency pairs permitted by the Securities and Exchange Board of India (Sebi). It is also one of the only two stock exchanges in the country to offer currency options in the dollar-rupee pair.

“This puts a big question mark on the surveillance mechanism, as there should have been alerts thrown up by the system and the exchange should have taken note of it," said an official familiar with the development. "Questions have been raised as this is something the regulator is not comfortable with. It is against the spirit of the law."

Sebi has clearly said on numerous occasions that concentration of positions with a single member will not be entertained and exchanges should have robust surveillance and risk mechanism measures to monitor such developments.

The regulator has also directed exchanges to put in place systems to monitor "position concentration, open interest across trading members... alerts on large traded quantity." Further, "exchanges were also advised to suitably warn their members against self trades," in a surveillance meet held in December 2008.

Jaypee Capital is a direct shareholder in USE. Gaurav Arora, managing director and founder of the brokerage entity, and his son, Saurav Arora, hold another one per cent each. USE chief executive officer and managing director, T S Nayaranaswami, could not be reached for comments, despite repeated attempts.

"Concentration of positions with one single entity is a clear breach of FUTP (Fraudulent and Unfair Trade Practices)," says Ameet Naik of Naik, Naik & Co. "One cannot have brokers with trading rights, as that was the whole idea behind pushing for demutualisation. Then, there are also codes and ethics followed by brokers, violation of which could have serious impact," says Naik, who specialises in securities regulations.

Data shows that while Jaypee Capital accounted for nearly 80 per cent of the turnover, some of the banks (Andhra Bank, Union Bank of India, Indian Bank, Bank of India and Bank of Baroda) were responsible for a marginal share in the volume. USE’s stakeholders include the Bombay Stock Exchange, which owns 15 per cent, along with 28 banks and three corporate houses.

Last Friday, the volume on USE dropped significantly to Rs 6,514 crore after clocking a little over Rs 12,000 crore the previous day. Interestingly, MCX Stock Exchange (MCX-SX) and the National Stock Exchange registered volumes of Rs 29,992 crore and Rs 35,393 crore, respectively. On Monday, USE registered a turnover of Rs 8,038 crore, while MCX-SX and NSE clocked volumes of Rs 26,616 crore and Rs 19,067 crore. USE’s first-day turnover had surpassed the combined currency segment of NSE and MCX-SX. The exchange had made a big-bang debut last year, cornering a near 52 per cent market share in the currency derivatives segment. Jaypee and Union Bank, incidentally, conducted the first trade on the exchange.

RTI misuse makes I-T dept, CBI see red

2011-09-26T04:53:00.000-07:00

Investigating and law enforcement agencies are concerned over the growing number of attempts to misuse Right to Information (RTI) to settle personal scores and animosities, and make personal gains.

A senior official from one of the investigating agencies told

Business Standard that serious concerns were raised in several meetings convened by the government with the Income Tax Department, the Central Bureau of Investigation (CBI) and others in the recent past. “It has been pointed out that steps are needed to balance the RTI provisions, privacy concerns and protection of individuals and institutions from misuse of any information acquired through RTI,” the official said. He added, the discussion on the proposed Right to Privacy Bill had been broadened to cover this aspect.

“It has also been felt that the RTI Act should have provisions so that frivolous complaints and RTI applications are dealt with a firm hand,” he said. The issue was also part of the meeting of the officials from these agencies and also from the concerned ministries, including the ministry of home affairs, called by the Department of Personnel and Training (DoPT) this week.

CBI, the Enforcement Directorate (ED), the investigation wing of the Income Tax department, the Narcotics Control Bureau, the Directorate of Revenue Intelligence (DRI) and Delhi Police are all concerned. “It has been seen that the RTI Act is often misused for settling personal scores and grudges,” the official said.

The applications aimed at misusing RTI have emerged as a major problem in the dowry and income tax related cases. Outlining the problem, a senior Income Tax official said: “Earlier people would send complaint against an individual first and then file RTI to get the details about tax payments and income. The situation has changed.

The complaint and the RTI are coming together and they demand information within a month.” The investigating agencies have stressed that the endeavour to derail critical investigations by seeking information through RTI is emerging as a big issue, the official said. “If the official handling the RTI application is amenable to manipulation, the results could be dangerous,” he added.
Explaining the extent of the problem, he said in one of the RTI applications it had been demanded that information should be provided on the postings of a particular army official in different armed forces bases.

RBI has managed exchange rate well

2011-09-23T22:03:00.000-07:00

The Indian rupee has depreciated by more than eight per cent so far this month, after remaining stable for a fairly long period. Naturally, there has been a growing pressure on the Reserve Bank of India (RBI) to aggressively intervene in the forex market to stem the rupee's decline, since imported inflation rises and risks associated with exchange rate volatility are growing.

Despite the rupee falling to its lowest level against the dollar in more than two years on Thursday, RBI has stayed on the sidelines, stating it would intervene aggressively only when it saw excessive volatility. Many experts feel this stance of RBI's would aggravate the uncertainty in equity markets and scare foreign investors away.

However, as a central monetary authority, RBI has to focus on the effectiveness of forex interventions. We cannot forget such interventions do involve important costs. Among others, these costs are the risks of financial losses on the operations, the cost in terms of resources devoted to the conduct of these operations, and the cost in terms of credibility, if the intervention fails to deliver the desired effect.

The considerations of the costs versus gains of intervention might have prevented RBI from intervening aggressively, though there has been some intervention in the market, as reported by some of the newswires.

While the current attack on the rupee is primarily sentiment-driven, on account of the growing turbulence in Europe, the rupee has developed a strong depreciation bias, due to India's widening current account deficit and growing dependence on short-term flows. These factors may not allow our currency to recover substantially (and sustainably), even after RBI intervenes aggressively. Also, according to RBI's report on forex reserves in August, India's external liabilities are more than its external assets. So, RBI would like to use forex reserves more prudently. Besides, a depreciation bias would help exports and employment generation, which is the need of the hour.

We also need to understand central banks the world over prefer selective, rather than complete, public disclosure of their interventions to make such moves more effective.

Rupa Rege Nitsure
Chief Economist, Bank of Baroda

Markets open weak on global cues

2011-09-21T22:07:00.000-07:00

The markets witnessed a negative opening following weak trades across the global markets. The BSE Sensex opened at 16,812, down 253 points and the Nifty at 5,053, down 81 points.

The Federal Reserve made it official, yesterday, that there were significant downside risks to the economy even as it launched a new plan, 'Operation Twist', to reduce long-term borrowing costs.

The Fed has revealed plans to shift $400 billion from short-term Treasuries into long-term Treasuries in an effort to boost lending and spur the economy. The Fed's new plan includes lowering long-term borrowing costs in order to bolster the battered housing market.

Overnight, the US markets plunged post the Federal Reserve's announcement. The Dow Jones industrial average dropped 2.5% at 11,125, with all but one of the blue-chip index's 30 components closing in the red. The S&P 500 fell nearly 3% at 1,167 and the Nasdaq shed 2% at 2,538.

In the morning trades, Asian markets have been projecting the evident weakness in the global markets with the Hang Seng, Nikkei and Shanghai Composite indices having shed nearly 1-4% each.

Back home, the Nifty had taken a breather in trade yesterday after Tuesday's strong up move. Analysts suggest that it is likely to get support at around 5,010 - its short-term moving average.

Among the sectoral indices, BSE Metal, Realty and Bankex indices are leading the losses, down nearly 2% each. Sterlite Industries, SAIL, JSW Steel and Hindalco Industries, down 3% each, are the major losers from the Metal' space.

IndusInd Bank, Yes Bank, ICICI Bank and Federal Bank, down 2-3% each, are the top losers among the financials.

On the Sensex, Tata Motors, Sterlite Industries, Hindalco Industries, Tata Steel and DLF, down 3-4% each, are the prominent losers. ONGC, marginally up at Rs 262, is the only gainers from the pack.

The overall market breadth is negative as 1,136 stocks have declined against 383 advancing ones, on the BSE.

SI Reporter / Mumbai September 22, 2011, 9:40 IST

SECTION 65(105)(zzzzm) OF THE FINANCE ACT, 1994

2011-09-21T00:20:00.000-07:00

SECTION 65(105)(zzzzm) OF THE FINANCE ACT, 1994 - LEGAL CONSULTANCY SERVICES - EXEMPTION TO SERVICE PROVIDED BY AN ARBITRAL TRIBUNAL IN RESPECT OF ARBITRATION TO ANY BUSINESS ENTITY

NOTIFICATION NO. 45/2011 - SERVICE TAX　, DATED 12-9-2011

2.　This notification shall come into force on the date of its publication in the Official Gazette.
In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services referred to under item (iii) of sub-clause (zzzzm) of clause (105) of section 65 of Finance Act, 1994.To clarify　sub-clause (zzzzm) of clause (105) of section 65 of Finance Act, 1994 reads as follows:-
　(zzzzm) to a business entity, by any other business entity, in relation to advice, consultancy or　assistance　in any branch of law, in any manner:　
Provided that any service provided by way of appearance before any court, tribunal or authority shall not amount to taxable service.

New Competition Policy in winter session: Moily

2011-09-13T23:14:00.000-07:00

The announcement of the National Competition Policy will be the second biggest reform initiative after the 1991 economic reforms, according to Union Corporate Affairs Minister Veerappa Moily.

Chairing the first consultation meeting, organised by the Indian Merchants' Chamber and the Indian Institute of Corporate Affairs, he said the Cabinet nod would be expected by December and the New Competition Policy would be in place by 2012.

“Ideally, the policy should precede the law, but it is a good idea to have a policy, even if the Competition Act is already in force,'” said Mr. Moily. He said, while the Competition Law was for enforcement, the policy was for infusion of principles and promoting competition culture in the country.

The Ministry of Corporate Affairs (MCA) wants to strengthen and refine India's competition laws and the strategy involves the drafting of the competition policy, making changes to laws and norms that government departments need to follow.

Once in place, the policy will be a guide for various ministries and State governments to follow on competition.

The Minister said the Centre alone could not implement the Competition policy but the States as well as local bodies should be encouraged to promote competition. “It is their actions which affect the common man most” he added.

He said the Competition Policy was one of the most important instruments to ensure transparency in transactions.

Speaking on the forthcoming Procurement Policy, he said that once in place, it would remove lot of arbitrariness and discretionary powers in government purchases. “Over Rs.11 lakh crore of purchases are effected by government departments in India, and sadly we don't have a procurement policy yet, while smaller economies like Nepal and Afghanistan have well laid out norms.”

The Ministry wants to evolve a policy based on a vast consultative process. It had posted a draft competition policy on its website, seeking comments from the public during August 2011. It also held meetings with economists and consumer associations as well as business and industry.

Besides, a dozen experts are being approached to suggest sector-specific policy changes that are required to adopt principles of competition.

Another national consultation on the Competition Policy will be held in New Delhi on September 22, 2011 following which the final draft will be prepared.

Companies Act

Mr. Moily said India would a new Companies Act in 2012, replacing the existing Act of 1956. The Minister expected to obtain the approval of the Union Cabinet by next week or within a fortnight, following which it could be introduced during the Winter Session of Parliament.

The new Companies Bill seeks to promote shareholder democracy and improve corporate governance. The Ministry reworked and ‘fine-tuned' the Companies Bill, 2009, as the Standing Committee suggested as many as 300 amendments.

MODIFICATION IN PPF SCHEME

2011-09-11T22:36:00.000-07:00

MODIFICATION IN PPF SCHEME : DEPOSIT LIMIT RAISED FROM RS. 70,000 TO RS. ONE LAC WHILE RATE OF INTEREST ON ADVANCES AGAINST DEPOSITS IN PPF SCHEME RAISED FROM 1 PER CENT TO 2 PERCENTAGE POINTS

PRESS RELEASE, DATED 6-9-2011

The Committee on Comprehensive Review of National Small Savings Fund (NSSF) headed by Deputy Governor, RBI has recommended revision of certain provisions of PPF Scheme, 1968 and benchmarking of interest rates on various small savings schemes with the secondary market yields on Central Government securities of comparable maturities with suitable spread.

The Committee has recommended increasing the deposit limit under PPF Scheme from existing Rs. 70,000 to Rs. 1 lakh per annum and fixing of rate of interest on advances against deposits in PPF scheme at 2 percentage points as against the prevailing interest rate on such advances at 1 per cent.

The Committee has further recommended benchmarking interest rate on small saving schemes to interest rate on Government securities of similar maturities with a positive spread of 25 basis points on all schemes except for 50 basis points for 10 year NSC and 100 basis point for Senior citizens Savings Scheme. Recommendations of the Committee have been referred to State Governments and concerned Ministries/Departments of Central Government for their comments.

This information was given by the Minister of State for Finance Shri Namo Narain Meena in a written reply to a question raised in Rajya Sabha today.

Centre to Move Ahead with Companies Bill

2011-09-09T22:45:00.000-07:00

As part of its effort to showcase its commitment to transparency and accountability, the government has decided to move forward with the Companies Bill, 2011. The Prime Minister’s Office has stepped in asking the corporate affairs ministryto move ahead with the proposed legislation.
The government would like to introduce the bill in the winter session of Parliament.
More significantly, the PMO has suggested that there needs to be an emphasis on ensuring that there are independent directors on the board of companies. This was decided at a review of ministries dealing with industry and commerce by the Principal Secretary to the Prime Minister TKA Nair. The Companies Bill, 2009 requires public listed companies above a prescribed size to reserve a third of all seats on the board for independent directors. It requires that independent directors (or their relatives) not do business with the company which amounts to more than 10% of the turnover of the company in the past two years. Permitting financial transactions with the company up to this point creates a potential conflict of interest.
The listing agreement under the SEBI Act prohibits independent directors from a material financial relationship with company but does not define the term ‘material’.
In its review of the Bill, parliamentary standing committee on finance had recommended that the liabilities of independent directors should be limited to enable them to act freely and objectively. It suggested that the appointment process of independent directors be made independent of its management.

Govt committee suggests Increase in PPF limit, Saving Interest rate, Withdrawal of KVP

2011-09-09T05:54:00.000-07:00

A government committee has suggested raising interest rates on Post Office savings bank deposits to four per cent, a suggestion that could benefit lakhs of small depositors. The Committee on Small Savings also recommended linking returns on other small savings schemes with interest rates on government securities. It has also suggested that Kisan Vikas Patra (KVP) be withdrawn and annual investment limit for the popular Public Fund (PPF) be raised to Rs 1 lakh from Rs 70,000 at present. Provident

The committee recommended that interest rates for Post Office savings deposits be raised to four per cent from 3.5 per cent at present, in line with the Reserve Bank’s decision to hike rates on savings bank deposits.

Under the new formula, suggested by the committee headed by RBI Deputy Governor Shyamala Gopinath, small savings schemes would provide better returns to investors.

Interest rate for one-year deposit scheme would go up to 6.8 per cent from 6.25 per cent, while returns for the PPF would improve to 8.2 per cent from 8 per cent.

With regard to taxing returns on the small savings schemes, the committee said the issue should be considered by the government while firming up the Direct Taxes Code ( DTC )), which seeks to replace the Income Tax Act, 1961.

Noting that the small savings schemes are agent-driven, the committee suggested that the commission on them should be gradually reduced from four per cent to one per cent.

Can liaison office generate taxable income?

2011-09-07T22:34:00.000-07:00

It is quite common that foreign companies planning to do business in India set up a liaison office for undertaking promotional work as a prelude to actual commercial activities. A liaison office needs prior approval from Reserve Bank of India. Since the liaison office is not permitted to do any commercial activities, it is generally believed that the existence of a liaison office will not generate any taxable income in India.

It may be clarified that where the liaison office creates a permanent establishment or establishes a business connection, the foreign company would become liable to pay tax on the profits, which can be attributed to the liaison office. But if liaison office doesnâ€™t create any of the aforesaid relationship, liaison office will not attract any income tax in India.

Richest & Poorest In Parliament

2011-09-07T05:00:00.000-07:00

Prime Minister Manmohan Singh and his ministerial team declared their assets that places his own wealth at 5.1 crore ($1.3 million), while Urban Development Minister Kamal Nath is richest with over 250 crore ($55 million). Defence Minister A.K. Antony seems the poorest with 35 lakh ($77,000).

Among the so-called big-four in the council, Finance Minister Pranab Mukherjee is worth around 3 crore, Home Minister P. Chidambaram around 25 crore, Antony around 35 lakh, while External Affairs Minister S.M. Krishna commands a little over 3 crore.

Among the other heavyweights, Agriculture Minister Sharad Pawar is worth 12 crore.

ICAI’s moderation criteria

2011-09-07T00:20:00.000-07:00

In a dispute under the Right to Information Act, the Supreme Court last week ruled that the Institute of Chartered Accountants of India must disclose, if asked by acandidate in its examination, the standard criteria relating to moderation employed by it for the purpose of making revision. The court also rejected the argument of the institute that it had copyright over question papers and therefore they could not be disclosed even after the tests. It also rejected the argument of the institute on the burden cast on it by supplying information to failed candidates. Out of nearly 4 lakh candidates, only 16 per cent pass. If all of the failed candidates seek information on their answer sheets, the work of the institute will be stalled, it had argued. The court said that “Additional workload is not a defence. If there are practical insurmountable difficulties, it is open to the examining bodies to bring them to the notice of the government for consideration so that any changes to the Act can be deliberated upon. Examining bodies like ICAI should change their old mindsets and tune them to the new regime of disclosure of maximum information. Public authorities should realize that in an era of transparency, previous practices of unwarranted secrecy have no longer a place.

“We provide a comprehensive range of Accounting Auditing

2011-07-27T03:58:00.001-07:00

G K Sureka & Co. is a Chartered Accountancy firm registered with the institute of Chartered Accountants of India in the year 1994. The full-fledged operation of the firm started the same year with the mission to provide a comprehensive range of financial services to its clients. We offer our expertise in the areas of Auditing, Taxation, BPO and Company Law related matters.

Over the years, the firm has gained in-depth experience in providing a multitude of services to a number of multinational corporate as well as to several reputed Indian companies. The executive team of the firm provides real world solutions to complex business issues by laying stress on meeting time-bound schedules and continuously upgrading technical skills. The working of the entire firm is webbed through efficient communication and documentation, written systems and procedures and yearly calendar of meetings and training schedules.

We have a stated policy of ensuring high quality services to each client irrespective of its location and size. This is achieved by bringing professional and analytical skills to an assignment, which we have developed, through the academic background, internal training, continuing professional education and engagement experience of our personnel.

Official Blog

Clarification on regulation of interest rates for small savings scheme

Challan Correction Mechanism

Centralised Processing of Returns Scheme,2011

Reserve Bank of India (RBI) has been announcing very customer friendly Guidelines to Banks.

ETDS Return Due Date Extended

Extension of date of submission of service tax half yearly returns

Corporate Accounts: Accounting substandard

Google launches 'self-driving' car technology

Euro zone must assess solvency issues first - Mukherjee

Smartphones increasing global cyber crime

Bring public expenditure under purview of audit: CAG

India sees 8.5-9% growth in medium-to-long term

Learn from India, put economics in foreign policy: Hillary Clinton

Govt unveils export sops in trade policy

Repaying a personal loan!

New telecom policy puts roaming to rest

BSE Sensex ends down 21 points

PM to mediate in DIPP, PlanCom slugfest on pharma FDI

TAX EVASION NET MAY WIDEN

Tata Motors launch Manza, Prima in South Africa

STATE FM STO DISCUSS GST LESSONS FROM EUROPE

MCA makes it mandatory for CAs, CSs, CWAs to digitally sign DIN applications

MADE A MISTAKE IN FILING I-T RETURNS?

Airports authority says it won't finance DIAL bailout

Three steps to avoid a global depression

Auditors Spared of Matching XML A/Cs With Original Papers

Now, carbon credit through green grass

MCA may extend demat deadline for shares, bonds

Sebi questions USE on trade concentration

RTI misuse makes I-T dept, CBI see red

RBI has managed exchange rate well

Top 100 companies post unflattering tax numbers

Markets open weak on global cues

SECTION 65(105)(zzzzm) OF THE FINANCE ACT, 1994

New Competition Policy in winter session: Moily

MODIFICATION IN PPF SCHEME

Centre to Move Ahead with Companies Bill

Govt committee suggests Increase in PPF limit, Saving Interest rate, Withdrawal of KVP

Can liaison office generate taxable income?

Richest & Poorest In Parliament

ICAI’s moderation criteria

“We provide a comprehensive range of Accounting Auditing