March 1st - 15th, 2017
Clarification on the Taxation and Investment regime for Pradhan Mantri Garib Kalyan Yojana, 2016
The Taxation and Investment regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (hereinafter referred as “Scheme”) has commenced on 17th December 2016 and is open for declarations upto 31st March 2017. CBDT has issued certain clarification on the scheme on 18th January 2017. Subsequent to the issue of clarifications, representations have been received from the stakeholders seeking clarifications as to whether the deposits made in a bank account or cash in hand which are eligible for being declared under the scheme should exist on the date of filing of declaration under the scheme.
The CBDT has now clarified that where the undisclosed income is represented in the form of deposits in an account maintained with a specified entity, it is not necessary that the said deposit should exist on the date of making payments under the scheme or furnishing a declaration under the scheme. However, where the undisclosed income is represented in the form of cash, it is clarified that such cash should exist on the date of making payment of tax, surcharge and penalty under the scheme or on the date of making deposit under the Pradhan Mantri Garib Kalyan Yojana, 2016, whichever is earlier.
Procedure of Permanent Account Number (PAN) application through Simplified Proforma for Incorporating Company electronically using SPICe Form INC 32 of Ministry of Corporate Affairs
The Central government had enabled the applicants to apply for allotment of PAN through a common application form SPICe Form INC 32. Further the Principal Director General of Income Tax (Systems) or Director General of Income tax (Systems) was to specify the classes of persons, forms and format along with the procedure for safe and secure transmission of such forms and formats in relation to furnishing of PAN. Now the Principal Director General of Income Tax (Systems) has laid down the classes of persons, forms and format and procedure for PAN as under
|1||Classes of persons to which SPICe will apply||Newly incorporated company|
|2||Applicable Form||Simplified Proforma for Incorporating Company Electronically (SPICe) (Form No. INC• 32) of Ministry of Corporate Affairs (MCA) notified vide notification G.S.R. No. 70(E) dated 25th January 2017|
|3||Procedure||Application for allotment of Permanent Account Number (PAN) will be filed in SPICe (INC-32) form using Digital Signature of the applicant as specified by the Ministry of Corporate Affairs. After generation of Corporate Identity Number (CIN), MCA will forward data in form 49A to prescribed Income Tax Authority through digital signature Class 2/ Class 3 of MCA|
RBI and FEMA
Amendments to Transfer or Issue of Security by a Person Resident outside India Regulations
a. In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations 2000, a new sub-regulation (ii e) is inserted to define E-Commerce business and its various aspects with respect to FDI investment in E-commerce companies. These regulations covers aspect of activities covered under E-commerce, inventory & market place model of E-commerce and E-commerce entity. The amendment also covers FDI cap and entry route for investment in E-Commerce companies as detailed below.
|SI No||E-Commerce||% of equity/FDI Cap||Entry route|
|1||B2B E-commerce activities||100%||Automatic|
|Such companies would engage only in Business to Business (B2B) E-commerce and not in retail trading, inter alia implying that existing restrictions on FDI in domestic trading would be applicable to E-commerce as well.|
|2||Market place model of E-commerce||100%||Automatic|
FDI is not permitted in inventory based model of E-commerce.
b. In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations 2000) in place of existing sub-regulation (9) of Regulations 5, an amendment is made to allow person or entity incorporated outside India or a person resident outside India (not being citizen/entity of Pakistan or Bangladesh) to contribute foreign capital either by way of capital contribution or by way of acquisition/transfer of profit shares in the capital structure of an LLP under FDI, subject to terms and conditions specified in Schedule 9. Schedule 9 is also amended to be at par with the liberalized Foreign Direct Investment (FDI) policy in LLP released by Foreign Investment Promotion Board (FIPB) on 24th November 2015. The amended Schedule 9 introduces a scheme called Foreign Direct Investment (FDI-LLP) in Limited Liability Partnerships (LLP) formed and registered under the Limited Liability Partnership Act, 2008. Schedule 9 cover matters such as eligible investors, eligible investment, sectors and activities permitted for FDI-LLP, downstream investments it can make and also conversion of company into FDI-LLP.
Publishing of rate of exchange for conversion of the foreign currenc
The Central Board of Excise and Customs (CBEC) vide Notification No. 14 /2017 - 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 3rd of March 2017.
Introduction of Composite Claim forms for withdrawal of Provident Fund amounts
The Employees Provident Fund Organization (EPFO) has been taking many steps to ease the process of Provident Fund (PF) Withdrawals. The PF money can be withdrawn after two months of cessation of employment. As per the current process, if the Aadhaar number and bank account details are seeded, then, the PF subscribers can submit the claim forms (Form No. 19 – PF Final settlement, Form 10C – Pension withdrawal benefits and Form 31 – PF part withdrawal) directly to PF office for withdrawal without employer’s attestation.
In continuation of the e-governance reforms and to provide better services, the EPFO has come out with a new one page composite withdrawal form detailed below wherein the PF subscribers can directly apply to the PF office for withdrawals.
- Composite Claim Form (Aadhaar) – Applicable for PF subscribers wherein their PF account is seeded with Aadhaar and bank account details and the UAN has been activated. No employer’s attestation required.
- Composite Claim Form (Non-Aadhaar) - Applicable for PF subscribers wherein their PF account is not seeded with Aadhaar and bank account details. Employer’s attestation mandatory.
- No documents needs to be enclosed along with the above composite forms except for the benefits to be availed under para 68J( Illness of member/family) wherein certificate of doctor and certificate by employer that ESIC facility is not available to the member has to be submitted along with withdrawal forms.
Further, EPFO has also prescribed new Composite withdrawal form in death cases by replacing the existing Forms No. 20 – (PF Payment), Form 5-IF – (EDLI) and Form 10D – (Pension). In case of death of a member, the claimant may apply for claim of PF, insurance fund and monthly pension in this single form
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