Wednesday, 30 November, 2016

Vistra India Update 316

November 16th -30th, 2016

Income Tax

Expenditure incurred by a firm on Keyman Insurance Policy in the case of a partner is an admissible expenses

Accepting the judgement of the honorable High Court of Punjab and Haryana in the case of M/s Ramesh Steels, ITA No. 437 of 2015 , the Central Government has notified that the premium on the Keyman Insurance policy of partner of a firm is wholly and exclusively for the purpose of business and is allowable as business expenditure.  Click to view the relevant circular

Click to view the relevant circular

 

Income-tax (32nd Amendment) Rules, 2016

Section 9 A of the Income Tax Act 1961 provides that in the case of an eligible investment fund, the fund management activity carried out through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India of the said fund.  Further , sub clause 4 of section 9A provides that the eligible fund manager, in respect of an eligible investment fund, means any person who is engaged in the activity of fund management and fulfils the following conditions, namely:— 

(a) the person is not an employee of the eligible investment fund or a connected person of the fund; 

(b) the person is registered as a fund manager or an investment advisor in accordance with the specified regulations; 

(c) the person is acting in the ordinary course of his business as a fund manager; 

(d) the person along with his connected persons shall not be entitled, directly or indirectly, to more than twenty per cent of the profits accruing or arising to the eligible investment fund from the transactions carried out by the fund through the fund manager.

The Central government has now inserted two new rules relating to the above referred clauses (a) and (d) as detailed below with effect from 15th March 2016.

  • For the purposes of clause (a) of sub-section (4) of section 9A, a fund manager shall not be considered to be a connected person of the fund merely for the reason that the fund manager is undertaking fund management activity of the said fund.
  • For the purposes of clause (d) of sub-section (4) of section 9A, any remuneration paid to the fund manager, by the fund, which is in the nature of fixed charge and not dependent on the income or profits derived by the fund from the fund management activity undertaken by the fund manager shall not be included in the profits referred to in the said clause, if the conditions specified in clause (m) of sub-section (3) of section 9A are satisfied and such fixed charge has been agreed by the fund manager in writing at the beginning of the relevant fund management activity

Click to view the relevant circular

 

Service Tax

Amendment to Place of Provision of Services Rules

With the change in taxation of online information and database access or retrieval services [OIDAR], the Central Government vide Notification No. 51/2016ST dated 30th November, 2016 has amended the “Place of Provision of Services Rules”. The amended rules is called the “Place of Provision of Services (Second Amendment) Rules 2016”. In the “Place of Provision of Services Rules, 2012”, in rule 2, in clause (q), after the words “include broadcasting”, the words “and online information and database access or retrieval” is  inserted.  The Notification is appended below for reference:

Click to view the relevant circular

 

Customs

Publishing of rate of exchange for conversion of the foreign currency

The Central Board of Excise and Customs (CBEC) vide Notification Nos. 138 & 143/2016 - Customs (N.T.) notified the rate of exchange for conversion of the foreign currency into Indian currency or vice versa for Export and Import of goods, with effect from 18th and 30th of November 2016 respectively.  The Notifications are appended below for reference:

Click to view the relevant circular

Click to view the relevant circular

 

Commerical Tax

Due date for payment of Karnataka Value Added Tax (KVAT) extended for the month of October 2016

Due to withdrawal of INR 500 and INR 1,000 denomination currency notes, the registered dealers are required to deposit the old currency notes held by them to the bank account.  This has led to rush in the banks for cash deposit and withdrawal resulting in difficulty faced by dealers in depositing the old currency notes available with them.  In view of the difficulty faced by the dealers, the trade bodies have approached the Government of Karnataka to extend the due date to pay the taxes payable for the month of October 2016.  Considering the difficulty faced by the traders, Government of Karnataka has extended the due date for payment of taxes and filing of return for the month of October 2016 from 20th November 2016 to 24th November 2016 for the registered dealers whose tax liability is less then INR 50,000.  The Notification is appended below for reference:

Click to view the relevant circular

Events

26 Sep
Monaco | 26 Sep - 29 Sep
Singapore | 27 Sep
Mauritius | 30 Sep
Mexico City | 4 Oct - 5 Oct
Luxembourg | 4 Oct - 5 Oct
Munich | 8 Oct - 10 Oct
Munich | 9 Oct
9 Oct - 10 Oct
Warsaw | 18 Oct
Dublin | 18 Oct
Chicago | 24 Oct - 25 Oct
London | 25 Oct - 26 Oct

Archive