Serving Since 1968Serving Since 1968Serving Since 1968Serving Since 1968 April 2016April 2016April 2016April 2016

Lunawat Bulletin

Market Watch Sensex Sensex Sensex Sensex

31.03.2016 : 31.03.2016 : 31.03.2016 : 31.03.2016 : 25341.8625341.8625341.8625341.86

29.02.2016 : 29.02.2016 : 29.02.2016 : 29.02.2016 : 23002.0023002.0023002.0023002.00

NiftyNiftyNiftyNifty

31.03.2016 : 31.03.2016 : 31.03.2016 : 31.03.2016 : 7738.407738.407738.407738.40

29.02.2016 : 29.02.2016 : 29.02.2016 : 29.02.2016 : 6987.056987.056987.056987.05

For Private Circulation Only

Lunawat & Co. Chartered Accountants www.lunawat.com

Inside …..

Compliance Due Dates

2

Income Tax 3

Income Tax, RBI & Service Tax

4

Corporate Laws 5

Lunawat Update 6

Keen to accelerate Swachh Bharat Abhiyan, the Centre is considering a proposal to ask private companies and PSUs to spend around 30% of CSR funds on the cleanliness programme. The proposal is under consideration of a panel of Union ministers which is deliberating on ways to fast-track Prime Minister Narendra Modi's top priority schemes - Make in India, Jan Dhan Yojana, Swachh Bharat, Digital India and Skill India. The proposal is in line with the recommen-dation of Niti Aayog's panel . The panel in its report has said, "A certain part of the CSR contributions by PSUs/Companies may be spent in the states where they are located." Niti Aayog's report had recommended several steps, saying "it is very comprehensive in its coverage and requires huge amounts of funds to cover all aspects of the mission."

Budget 2016: FM Arun Jaitley rolls back proposal to tax EPF

In the recent budget for FY17, the government had proposed that withdrawal in excess of 40% of the accumulated corpus will be taxed. Facing a strong backlash from salaried tax payers over its proposal to tax withdrawal from EPF, the government has decided to roll back the budget pro-posal that sought to create a pensioned society by discouraging full withdrawal. "In view of the representation received, the government would like to do a comprehensive review of this proposal and therefore I withdraw this proposal," finance minister Arun Jaitley said in a statement in the Lok Sabha. There is at present no tax on withdrawal from employee provident funds and other superannua-tion funds. In the recent budget, the government has proposed that withdrawal in excess of 40% of the accumulated corpus will be taxed.

Companies may have to spend 30% of CSR funds for Swachh Bharat Abhiyan

Page 2

Lunawat Bulletin

Due Date Related to Particulars

15.04.2016 (Friday)

EPF Deposit PF under Employees Provident Fund & Misc. Provision Act, 1952 deducted for the month of March 2016.

15.04.2016 (Friday)

DVAT/CST Deposit tax deducted at source under DVAT Act for the month of March 2016.

21.04.2016 (Thursday)

ESI Deposit ESI under Employees State Insurance Act, 1948 deducted for the month of March 2016.

21.04.2016 (Thursday)

DVAT/CST Deposit DVAT and CST for the month ended March 2016.

22.04.2016 (Friday)

DVAT Issue TDS certificate under DVAT Act for tax deducted and deposited for the month of March 2016 in Form DVAT-43.

25.04.2016 (Monday)

EPF File monthly return under Employees Provident Fund & Misc. Provision Act, 1952 for the month of March 2016.

25.04.2016 (Monday)

Service Tax Half Yearly - Return of Service Tax for the period October 2015-March 2016 in form ST-3.

28.04.2016 (Thursday)

DVAT/CST File DVAT & CST quarterly return in electronic form for the quarter ended March 2016 & File annexure 2A & 2B electronically. (Note:- The dealers whose Gross turnover during F.Y 2014-15 exceeds Fifty Lakhs, shall furnish their Return with DSC.)

30.04.2016 (Saturday)

TDS/TCS (Income Tax)

Deposit TDS for payments of Salary, Interest, Commission, Rent, Professional, etc. during month of March 2016.

07.04.2016 (Thursday)

TDS/TCS (Income Tax)

• Deposit TCS for collections made under section 206C during the month of March 2016

• Deliver copy of Form 15G/15H to CCIT/CIT for forms received in month of March 2016.

30.04.2016 (Saturday)

EPF File Annual Return for Employee Provident Fund for the year ended March 2016.

30.04.2016 (Saturday)

Service Tax Input Service Distributor to file half-yearly return of service tax credit received and dis-tributed for the period 01.10.2015 to 31.03.2016 in Form ST-3.

30.04.2016 (Saturday)

Central Sales Tax

Submit Reconciliation of Form C and Other Forms for the year 2014-15 in Form 9

LIST OF HOLIDAYS

DATE DAY HOLIDAY

15.04.2016 Friday Ram Navami

20.04.2016 Wednesday Mahavir Jayanti

Compliance Due Dates

Page 3

April 2016

CBDT Bars coercive recovery of TDS from Payee even if Payer has defaulted

by Non Deposit of TDS with Govt.

CBDT has clarified the issue clarification regarding the issue of taxability of surplus on sale of shares and securities. The CBDT has explained the circumstances in which such surplus can be assessed as capital gains or business income. The said clarifications have been issued in order to reduce litigation.

CBDT Clarifies law on whether surplus on sale of shares is taxable as capital

gains or business income

Latest CBDT Guidelines for Implemen-tation of Transfer Pricing Provisions

The CBDT has issued detailed guidelines for Implementation of transfer pricing provisions. The CBDT has pointed out that due to a number of legislative, procedural and structural chang-es carried over the last few years, Instruction No. 3 of 2003 was replaced with Instruction No. 15/2015, dated 16.10.2015. After issuance of Instruction No. 15/2015, the board has received some suggestions and queries, which have been examined in detail. Accordingly instruction No. 3/2016 dated 10.03.2016 is being issued to replace instruction No. 15 of 2015. This In-struction is applicable for both international transaction and specified domestic transactions between associated enterprises.

CBDT extends benefit of Low Tax Effect circular to Cross-Objections and Refer-

ences

CBDT has clarified that benefit of circular 21 of 2015 dated 10.12.2015 by which the monetary limits for filing appeals before the Income Tax Appellate Tribunal and High Courts were raised to Rs. 10 lakhs and Rs. 20 lakhs respectively ap-plies also to cross objections filed by the department before the ITAT under section 253(4) of the Income Tax Act, 1961 and to references to the High Court under section 256(1) and 256(2) of the Act.

CBDT has issued a letter by which it has drawn attention to its earlier letter dated 01.06.2015 in which it was stated that in case of assessee whose tax has been deducted at source but not deposited to the government’s account by the deductor, the deductee assessee shall not be called upon to pay the demand to the extent tax has been deducted from his income. It was fur-ther specified that section 205 of the Income Tax Act, 1961 puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch in such situ-ations cannot be enforced coercively.

Income Tax

CBDT circular provides important clar-

ification on when Consortium members

executing EPC Contracts can be taxed

as an AOP

CBDT has clarified that consortium of contractors is often formed to implement large infrastructure projects particularly in engineering, procurement and Construction (EPC) contracts and Turnkey projects. The tax authorities, in many cases have taken a position that such a consortium constitutes as AOP i.e., a sepa-rate entity for charging tax. The Claim of tax payers on the other hand is contrary to this view. This led to tax disputes. With a view to avoiding disputes, the CBDT has issued clear cut guide-lines on the attributes that a consortium arrangement for execut-ing EPC/ Turnkey contacts must posses for it not to be treated as an AOP.

Page 4

Lunawat Bulletin

CBDT circular on extension of benefits of the India- United Kingdom DTAA to

UK Partnership Firms

CBDT has clarified that the provisions of the India-UK DTAA would be applicable to a partnership that is resident of either India or UK, to the extent that the Income Derived by such part-nership, estate or trust is subject to tax in that state as income of a resident, either in its own hands or in hands of its partners or beneficiaries.

CBDT sets up dedicated structure for speedy redressal of taxpayers grievances

CBDT has issued a press release dated 07.03.2016 stating that it has issued an order setting up a dedicated structure for deliver-ing and monitoring of tax payer services in the Income Tax De-partment. Member (Revenue and Tax Payer Services) will over-see the delivery and monitoring of tax payer services in CBDT. Two separate Directorates called directorate of Tax payer ser-vices I and II have been set up. They will oversee and coordi-nate all matters relating to grievances of tax payers and ensures their timely redressal.

Other Notifications by CBDT

• CBDT directive regarding verification of genuineness of Agricultural Income Shown in Return of Income for the Assessment Year 2011-12 to 2013-14.

• CBDT revises Timelines for verification of arrear demand under section 245 of the Income Tax Act, 1961.

• CBDT notifies Income Tax Returns for AY 2016-17 well in time as per High Court’s Order.

Service Tax

Notifications

• CBEC introduces changes in ST-3 Return Form related to Swachh Bharat Cess.

• Where there is change in the liability or extent of liability of a person required to pay tax as recipient of service, in case service has been provided and the invoice issued before the date of such change, but payment has not been made as on such date, the point of taxation shall be the date of issuance of invoice.

RBI

• Investment by FPIs in Central Government Securities for the next half year increased by Rs. 105 billion from April 4, 2016 and by Rs.100 billion from July 5, 2016 respective-ly.

• As in the previous half-year, the limits for State Develop-ment Loans (SDL) are proposed to be increased in two tranches, each of Rs.35 billion, from April 4, 2016 and July 5, 2016 respectively.

• Any limit remaining un-utilised by the long term investors at the end of a half-year would be made available as addi-tional limit to the investors in the open category for the fol-lowing half-year.

• All other existing conditions, including the security-wise limits, investment of coupons being permitted outside the limits and investments being restricted to securities with a minimum residual maturity of three years, will continue to apply.

Limits for investment by foreign port-folio investors (FPI) in Government

securities

Page 5

April 2016

MCA notifies Companies (Share Capital

and Debentures) Amendment Rules,

2016

MCA adds a provision which states that where the audited ac-counts are more than six months old, the calculations with refer-ence to buy back shall be on the basis of un-audited accounts not older than six months from the date of offer document which are subjected to limited review by the auditors of the company.

MCA notifies that the Debt to capital and Free Reserves ratio shall be 6:1 for government companies which carry on Non –Banking Finance Institution activities and Housing Finance ac-tivities

MCA relaxes compliance with debt eq-uity ratio for Government Companies

for buy back of shares

MCA amends Incorporation Certificate in Form INC-11

MCA amends Incorporation Certificate in Form INC-11 (Certificate of Incorporation) consequent to start of CRC

• MCA notifies that the Central Registration Centre (CRC) shall process forms pertaining to registration of companies filed along with the prescribed fee as provided in the Compa-nies (Registration of offices and Fees)Rules,2014.

• MCA also notifies that the jurisdiction, processing and ap-

proval of names proposed in E-Form number INC-29 shall

forthwith be exercised by Registrar, CRC and the Jurisdic-tional Registrar of Companies, other than Registrar CRC,

within whose jurisdiction over the companies incorporated by the Registrar, CRC under the Companies Act ,2013 for all the provisions of the Act.

MCA notifies CRC would process all forms related to Incorporation of a

Company

Exemption to any service by Govt or Local Authority to small Business Entity

If Government or a Local Authority provides services to a busi-ness entity whose turnover is upto 10 Lacs in the preceding fi-nancial year will be covered under Mega Exemptions. The amendment shall come into effect from 01st April 2016.

Corporate Laws

Easing the process of private placement

The CLC Report has made sweeping recommendations with an intent to liberalise the business model that India propagates. The ease in raising funds for companies and reducing the time taken in the process shall inevitably increase the allure of investing in India. Without prejudice to any other government policy, it can indubitably be stated that Modi government’s ease of doing business campaign is on the right track.

Other Notifications

• MCA notifies that if all members of a company agree, the offer for buy-back may remain open for a period less than fifteen days.

• Accounting Standards (2, 4, 10, 13, 14, 21 and 29) has been amended & substituted by MCA and Accounting Standard 6 regarding Depreciation has been omitted and merged with AS 10.

• MCA notifies Ind AS 11 (Construction Contracts ) & Ind AS 18 (Revenues) and omitted Ind AS 115 ( Revenue from contracts with customer. Also it has provided road map for applicability of Ind AS to NBFCs.

• MCA has also notified the Companies (Auditor’s Report) Order [CARO] 2016.

© 2016 Lunawat & Co. All Rights Reserved Information in this document is intended to provide only a general outline of the subjects covered. We recommend that you seek professional advice prior to initiating action on specific issues. Lunawat & Co. does not take any responsibility for any loss arising from any action taken or not taken by anyone

Page 6

April 2016

Our Services

• Audit and Assurance

• International Taxation

• Indian Direct Tax Laws

• VAT/Sales Tax

• Service Tax

• Corporate Laws

• Limited Liability Partnership (LLP)

• NGOs/Societies and Trusts

• Compliance Audits

• Investigations

• Outsourcing Services

• Setting up Business in India

• Consulting Services

• Trainings

• Valuations

• XBRL

• Trade Marks

Daryaganj, New Delhi 54, Daryaganj, New Delhi – 110 002 Tel: +91 11 23270624 + 91 11 23279414 Email: dgoffice@lunawat.com

Paschim Vihar, New Delhi A-2/132, Prateek Apartments, Paschim Vihar, New Delhi – 110 063 Tel: + 91 11 25278405 + 91 11 25278406 + 91 11 45581264 + 91 11 45733511 + 91 11 45733512 Email:pvoffice@lunawat.com Karampura, New Delhi 109, Magnum House-1, Karampura Complex, New Delhi-110 015 Tel: + 91 11 41427356 + 91 11 42068101 Email: karampura@lunawat.com

Mumbai Office No. 9, First Floor. Star Trade Centre, Chamunda Circle, Near Station, Borivali (W), Mumbai - 400 092 Tel: + 91 22 28954451 Email: mumbai@lunawat.com Keshopur, New Delhi WZ-339, 2nd Floor, Street No. 19, Santgarh, Keshopur, Outer Ring Road, New Delhi - 110 018 Tel: +91 11 28333914 Fax:+ 91 11 28331602 Email: keshopur@lunawat.com

Presentations

During March 2016, our partner CA. Pramod Jain made follow-

ing presentations:

• “Certain Tax Aspects under Union Budget 2016” at West

Delhi Study Circle .

• “Certain Tax Aspects under Union Budget 2016” at Karol

Bagh Westend CPE Study Circle

• “Income Tax Proposals in Union Budget 2016 ” at Rewari

Branch of NIRC of ICAI.

• “Overview of Companies Act 2013 ” at Vivekanand Institute

of Professional Studies, Pitampura, Delhi.

Editorial Team: CA. Vikas Yadav, Reetika Jindal ,Nitin Sachdeva, Dishanka Khanna & Shyam Karwa

• “Critical issues in Income Tax Proposals in Union Budget

2016” at Nehru Place CPE Study Circle of NIRC of ICAI

During March 2016, our partner CA. Rajesh Saluja made follow-

ing presentations:

• “Finance for Non– Finance” for Volvo Eicher Comm. Vehi-cle Ltd. at Indore.

Lunawat Update

We may be contacted at:

We also have Associates at :

Chennai, Kolkata, Ludhiana, Pune,

Chandigarh, Udaipur, Vadodara,

Bangalore, Cochin, Indore, Jodhpur,

Jaipur, Bharatpur, Hyderabad,

Jharsuguda, Panipat, Ranchi & Gha-

ziabad.

Disclaimer

Lunawat’s

Budget Publication