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Monday, October 26, 2009

How to make best use of Tax benefit

How to make best use of Tax benefit. I am glad that you have appreciated my efforts and enjoyed reading the previous article.


Mr. Einstein once said that “The hardest thing in the world to understand is the income tax”, with this article we shall try and make various tax provisions, easier. After insurance it’s time now to shift our attention to some simple but very popular investment options like Fixed Deposit, National Saving Certificate, Provident Funds and Bonds.


Fixed Deposit


Fixed deposits are very common tool of investment option taken up by individuals/corporate assessee in India. It is one of the best savings options available and in fact government likes to promote this inorder to inculcate the habit of savings in the country. It is very easy method of investment, time saving and hassle free.

As per section 80C, it says that ‘amount invested as term deposit (for a fixed period not less than five years) with a schedule bank or notified by central govt will be allowed an exemption under section 80C. The maximum benefit that can be claimed is upto Rs 100,000 in the previous year. (includes five year time deposit in an account under Post Office time deposit rules, 1981)

The interest accrued on the above investment is reinvested in the F.D and this interest is taxable i.e whether it is received monthly or quarterly.

The interest taxability is governed by section 194A where it specifies any interest (interest other than by way of interest on securities) received (resident individual) from any bank over Rs 10,000 during the previous year will be taxable and the bank will credit the amount after TDS deduction @ 10% for non corporate entities.

(Remember interest on Savings bank account is taxable under head of income ‘Income from other sources’)

National Saving Certificate

This investment option is very popular within middle-class. It has different features compared to fixed deposit but the regulation is the same. It is covered by section 80C and rebate is admissible under section 80C upto Rs 100,000 along with the deposit amount.

(As per regulations NSC does not attract TDS)

Provident Fund

This is another popular tool of investment amongst salaried individual. There are three types of provident fund and it has different tax implication. I will elaborate on the 3 types of provident funds and its implication.

Statutory Provident Fund: This fund is created for government employees or semi government employees and the investment is made via salary deduction (contribution) every month. The contributions to these funds attract section 80C and the entire amount of interest is exempt under this section.
{The above section is covered under chapter salary section 10(11)}

Recognized Provident Fund: This fund is set up for all private sector individuals and the investment is made via salary deduction (contribution). The features:
a. In recognized provident fund the employers contribution is taxable in excess of 12% salary (i.e if the employer contributes more than 12% of salary then it will be taxable
b. Employee’s contribution is eligible for section 80C deduction i.e upto maximum limit of Rs 100,000
c. Interest is taxable in excess of 9.5 % as salary
d. When the amount is received on retirement this will be fully exempted u/s 10(12)
(Tip: If you withdraw from the accumulated RPF account within five years of service, the amount will be taxed)

Unrecognized Provident Fund: This provident fund is not recognized by government and the features are as follows:

In unrecognized provident fund the employers contribution is not taxable
Employees contribution is not eligible for section 80C deduction
Interest is taxable in under head of income ‘ Income from other sources’
When the amount is received on retirement this will be fully taxable as salary.

*Hence it is advisable to invest in Recognized Provident Fund (RPF)

Bonds

Section 80C says ‘subscription to bonds issued by National Bank for Agriculture and Rural Development (NABARD) is exempted upto maximum limit of Rs 100,000’. At present only NABARD rural bonds are eligible for section 80C and the interest on these bonds is subject to TDS. (although the subscription is closed). In case of corporate bonds, the benefit of exemption is not available to the assessee and the interest accrued or received is taxable.

I hope this will prove to be a useful guidance for your investment and you will consider the above benefit before making an Investment. In both the series (I and II) we have covered Insurance, Fixed Deposit, National Saving Certificate, Provident Fund and Bonds. In the next series we will elucidate on few more investment options like Mutual Funds, ELSS or ULIP. So stay tuned till the next edition, until then bye for now!!!

How to make best use of Tax benefit

How to make best use of Tax benefit. I am glad that you have appreciated my efforts and enjoyed reading the previous article.


Mr. Einstein once said that “The hardest thing in the world to understand is the income tax”, with this article we shall try and make various tax provisions, easier. After insurance it’s time now to shift our attention to some simple but very popular investment options like Fixed Deposit, National Saving Certificate, Provident Funds and Bonds.


Fixed Deposit


Fixed deposits are very common tool of investment option taken up by individuals/corporate assessee in India. It is one of the best savings options available and in fact government likes to promote this inorder to inculcate the habit of savings in the country. It is very easy method of investment, time saving and hassle free.

As per section 80C, it says that ‘amount invested as term deposit (for a fixed period not less than five years) with a schedule bank or notified by central govt will be allowed an exemption under section 80C. The maximum benefit that can be claimed is upto Rs 100,000 in the previous year. (includes five year time deposit in an account under Post Office time deposit rules, 1981)

The interest accrued on the above investment is reinvested in the F.D and this interest is taxable i.e whether it is received monthly or quarterly.

The interest taxability is governed by section 194A where it specifies any interest (interest other than by way of interest on securities) received (resident individual) from any bank over Rs 10,000 during the previous year will be taxable and the bank will credit the amount after TDS deduction @ 10% for non corporate entities.

(Remember interest on Savings bank account is taxable under head of income ‘Income from other sources’)

National Saving Certificate

This investment option is very popular within middle-class. It has different features compared to fixed deposit but the regulation is the same. It is covered by section 80C and rebate is admissible under section 80C upto Rs 100,000 along with the deposit amount.

(As per regulations NSC does not attract TDS)

Provident Fund

This is another popular tool of investment amongst salaried individual. There are three types of provident fund and it has different tax implication. I will elaborate on the 3 types of provident funds and its implication.

Statutory Provident Fund: This fund is created for government employees or semi government employees and the investment is made via salary deduction (contribution) every month. The contributions to these funds attract section 80C and the entire amount of interest is exempt under this section.
{The above section is covered under chapter salary section 10(11)}

Recognized Provident Fund: This fund is set up for all private sector individuals and the investment is made via salary deduction (contribution). The features:
a. In recognized provident fund the employers contribution is taxable in excess of 12% salary (i.e if the employer contributes more than 12% of salary then it will be taxable
b. Employee’s contribution is eligible for section 80C deduction i.e upto maximum limit of Rs 100,000
c. Interest is taxable in excess of 9.5 % as salary
d. When the amount is received on retirement this will be fully exempted u/s 10(12)
(Tip: If you withdraw from the accumulated RPF account within five years of service, the amount will be taxed)

Unrecognized Provident Fund: This provident fund is not recognized by government and the features are as follows:

In unrecognized provident fund the employers contribution is not taxable
Employees contribution is not eligible for section 80C deduction
Interest is taxable in under head of income ‘ Income from other sources’
When the amount is received on retirement this will be fully taxable as salary.

*Hence it is advisable to invest in Recognized Provident Fund (RPF)

Bonds

Section 80C says ‘subscription to bonds issued by National Bank for Agriculture and Rural Development (NABARD) is exempted upto maximum limit of Rs 100,000’. At present only NABARD rural bonds are eligible for section 80C and the interest on these bonds is subject to TDS. (although the subscription is closed). In case of corporate bonds, the benefit of exemption is not available to the assessee and the interest accrued or received is taxable.

I hope this will prove to be a useful guidance for your investment and you will consider the above benefit before making an Investment. In both the series (I and II) we have covered Insurance, Fixed Deposit, National Saving Certificate, Provident Fund and Bonds. In the next series we will elucidate on few more investment options like Mutual Funds, ELSS or ULIP. So stay tuned till the next edition, until then bye for now!!!

Saturday, July 11, 2009

Union Budget 2009-10: FM makes life less taxing, more saral

For the millions of working people stung by the rising cost of living and salary freezes or cuts, the Budget comes as a palliative, but not the cure that they hoped for. Individuals in the low-to-middle-income groups will save at least Rs 1,030 in tax, benefitting from the Rs 10,000 increase in the income tax exemption limit. Senior citizens will pay at least Rs 1,545 less. The filing of tax returns is also set to become simpler, particularly for the salaried, as the government plans to re-introduce ‘Saral’ forms.

But it is those with taxable income of over Rs 10 lakh that have gained more from the Budget. They benefit from the removal of the 10% income tax surcharge as well as the higher exemption level. As a result, their tax incidence at the highest slab has declined to 30.09%, from 33.99%. This is the first time in many years that the high-income group, the group that drives consumption of the mid-market to premium consumer goods and services, has got any concession from the government. It is meant to be a small step in the direction of reforming the tax structure to make it simpler.

However, a part of what this group has gained can be taken away by the government’s proposal to scrap fringe benefit tax (FBT) on employee perks and shift the burden to employees. As a result, employees would be taxed for contributions made to the superannuation fund.

Likewise, stock options would become taxable on the date of vesting. In both, individuals would pay taxes on benefits they have not received: the superannuation fund is received by an individual only on retirement while the benefits of a stock option can be enjoyed only when the stocks are sold.


The new form of taxation of the superannuation fund creates a situation where contributions as well as withdrawals are subject to tax. This goes against the accepted principle of taxing such savings only once, observed Kaushik Mukherjee, executive director, tax and regulatory practices, PricewaterhouseCoopers.

For those getting stock options, the person who sells the stock at lower than the vesting price, at least in theory, would have suffered a higher than warranted tax. “Ideally, the tax should become payable when the stock is sold,” said Vikas Vasal, executive director, tax, KPMG. That was the norm before former finance minister P Chidambaram introduced FBT.

Conversely, the change in taxation of stock options will enable expatriate employees to claim credit in their home country for taxes paid in India. In any case, the government needs to provide more clarity on the taxation of perks now that FBT is being scrapped.

The government’s plan to expand the scope of presumptive tax to all small businesses a with turnover up to Rs 40 lakh will ease the burden of maintaining books of accounts and ease their funds flow. This section of business can, from the next fiscal, pay 8% tax on their turnover at the end of the year instead of an advance tax. The measure may increase compliance as well as the tax base.

In the past, such measures have yielded results and there is no reason to doubt that more businessmen will not come forward to file self assessment.

The re-introduction of Saral forms, replacing the ITR forms, will also remove confusion tax payers face at the time of filing returns. At present, individuals are required to pick one of the four ITR forms, depend-ing on his sources of income to file income tax returns.

Thursday, June 18, 2009

BUY-BACK PROCEDURE FOR UNLISTED AND PRIVATE LIMITED COMPANIES

Applicable Rules

  • Section 77A, 77AA and 77B of the Companies Act, 1956.
  • SEBI Private Limited Companies and Unlisted Public Limited Companies (Buy-back of Securities) Rules, 1999.

Buy-Back (Rule 3)

  • From existing shareholders on a proportionate basis through private offers
  • Purchasing securities issued to employees through a scheme of stock option or sweat equity
  • The process of buy-back commences with the BoD passing the necessary resolutions and approving the buy-back.
  • The buy-back must be subsequently approved by the shareholders at a general meeting of the company through a SPECIAL RESOLUTION.
  • The notice to the meeting should have an explanatory statement annexed thereto. It should contain the details required to be specified under these rules.

Filing Letter of offer with RoC (Rule 5)

  • The company should file draft LOO with Registrar before the buy-back in the specified form given under the rules.
  • The draft LOO should be accompanied by a declaration of solvency in the prescribed Form 4A with the RoC.

Offer Procedure (Rule 6)

  • The LOO should be dispatched immediately after filing with the RoC but not later than 21 days from such filing.
  • The offer should remain open for a period of not less than 15 days but not later than 30 days from date of dispatch of LOO.
  • The company should complete verification of offers within 15 days of the closure of offer.
  • The shares lodged will be deemed to have been accepted unless a communication of rejection is made within 21 days from the closure of the offer.
  • Where the number of shares offered by the shareholders is more than the total number of shares to be bought back by the company, the acceptance per shareholder should be on a proportionate basis.

Payments to Shareholders (Rule 7)

  • The company should open a separate bank a/c and deposit the entire sum payable as consideration immediately after the date of closure of the offer.

  • The company should make the payment to shareholders within 7 days of the specified period in cash or bank draft/pay order to the shareholders whose offer has been accepted or return the share certificates to the shareholders.

General obligations of the company (Rule 8)

  • The letter of offer should contain true, factual and material information and not any misleading information. It should also state that the directors accept the responsibility for the information contained in the offer documents.

  • No issue of bonus shares shall be made till the date of closure of offer.

  • The company should confirm that a separate bank a/c has been opened and the consideration has been transferred to the same and the same will be payable only in cash/bank draft/pay order

  • No withdrawal of buy-back offer after draft LOO is filed with the Roc.

  • The company should not utilize money borrowed from Banks/FIs for the purpose of buy-back of shares.

Return of Buy-back (Rule 9)

The company should file a return of buy-back with Roc after completion of buy-back in the form prescribed under these rules.

Extinguishment of share certificates (Rule 10)

  • The company should extinguish the share certificates within 7 days from the date of acceptance of the shares in the presence of a CS in whole-time practice.

  • The company should furnish a certificate to the Roc, certifying the compliance of these rules within 7 days from the date of extinguishment and destruction of certificates duly signed by -

ü Two WTDs including the Managing Director, if any and

ü CS in whole-time practice.

  • The company should maintain a record of share certificates cancelled and destroyed within 7 days of the buy-back of shares.

Register of Shares bought back (Rule 11)

The company should maintain a register of shares bought back in the form prescribed under these rules.



Wednesday, May 06, 2009

INTEREST ON BORRED CAPITAL

Income Tax Deduction under Section 24

 
Following two deductions are available under section 24:
(i)                 Standard deduction
(ii)               Interest on borrowed cpital
 
Please note that no deduction can be claimed in respect of expenses on insurance, ground rent, land revenue, repairs, collection charges, electricity, water supply, salary, salary of liftman etc.
 
Standard deduction
 
30% of the net annual value of the property.
 
 
Interest on borrowed capital
 
Interest on borrowed capital is allowable as deduction on accrual basis if capital is borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the house property. Interest on borrowed capital is deductible up to Rs. 1,50,000.
 
Interest on pre-construction period: Interest payable by an assessee in respect of funds to the previous year in which such property has been acquired or constructed, to the extent it is not allowed as a deduction under any other provision of the Act, will be deducted in five equal instalments, commencing from the previous year in which the house is acquired or constructed.
 
What is pre-constructed period?
Interest of pre-constructed period is deductible in five equal instalments. The first instalment is deductible in the year in which construction of property is completed or in which property is acquired. For this purpose “pre-constructed period” means the period commencing on the date of borrowing and ending March immediately prior to the date of completion of construction / date of acquisition or repayment of loan, whichever is earlier.
 
Now I take a case.
 
 
Date of borrowing commencing on June 2008.
Date of completion of construction – 17 Feb 2009 (as per occupancy certificate issued by Village Panchayat).
Date of acquisition – 21 March 2009 (possession of the flat taken from the builder)
Date of repayment of loan will start from April 2009.
 
Accordingly, pre-constructed period means date of borrowing (9 June 2008) to 31 March 2008 (ending March immediately prior to the date of completion of construction / date of acquisition or repayment of loan, whichever is earlier).
 
In this case interest of pre-constructed period will be nil, since there is no interest applicable for the period between 9 June 2008 and 31 March 2008 (it is a date prior to the loan). Accordingly, as per my opinion, interest paid on borrowed capital during the financial year 2008-2009 should be deductible as full.
 
Am I correct? Please guide with your expert opinion.
 

Wednesday, March 18, 2009

FAQ on Taxable Income

1. What does the Income Tax Department consider as income?
The word ‘Income’ has a very broad and inclusive meaning. In case of a salaried person, all that is received from an employer in cash, kind or as a facility is considered as income. For a businessman, his net profits will constitute income. Income may also flow from investments in the form of Interest, Dividend, and Commission etc. Infect the Income Tax Act does not differentiate between legal and illegal income for purpose of taxation. Under the Act, all incomes earned by persons are classified into 5 different heads, such as:
1. Income from Salary
2. Income from House property
3. Income from Business or Profession
4. Income from capital gains
5. Income from other sources

2. Are all receipts considered as income?
No.

Receipts can be classified into two kinds. A) Revenue receipt B) Capital receipt.

The general rule under the Income tax Act is that, all revenue receipt are taxable unless a receipt is specifically exempted and all capital receipts are exempt from taxation unless there is a provision to tax it. Gifts and loans etc are in the nature of capital receipts not attracting tax.

3. What are revenue and capital receipts?
In a simple language, all that one derives from a source is called revenue receipt. For ex. Salary from employment, Rent from property, Interest or Divided from Investments, Profits from business. When an income is earned on account of transacting the source itself, it is called Capital receipt. For ex. Sale of land and building, business, investment etc

4. Is income tax levied on gifts received by a person?
Gift exceeding Rs 25,000 is taxable unless it is received from

any person who is a relative or

on occasion of marriage or

under will or by inheritance or

in contemplation of death of the payer

5. I own shares of various Indian companies and receive dividends. Is it taxable?

No. The dividend declared by Indian companies is not taxable in the hands of the share holders because tax on distributed profits have already been borne by the company

6. I am a religious preacher and earn money from preaching. Do I have to pay tax and file return?
Yes.
7. Can I claim deduction for my personal and household expenditure in calculating my income or profit?
No.

8. Most of my income is given away in charity and I am left with just enough to meet my personal requirement. What will be considered as my income?
What is done after the income is earned does not determine its taxation. However charitable contribution to approved institutions will give you the benefit of certain deductions from taxable income.

9. My daughter stays in USA. She owns a house in India and has let it out. She has asked tenants to pay rent to me so that I can a lead decent life. She has not received any rent. Is she still liable to tax? What if she transfers the house to me?
Your daughter is the owner of the house and therefore she is liable to pay tax even though you receive the rent. If the house is transferred, then you would become the owner and you will have to pay tax on the rental income.

10. My children living abroad send me Rs.20000/- per month for my maintenance. Would this be considered as my income?

No.
11. Is there any limit of income below which I need not pay taxes?
At the moment individual, HUF, AOP, and BOI having income below rupees one lakh need not pay any income tax. For other categories [persons] such as co-operatives societies, firms, companies and local authorities no such exempted limits exists, so they have to pay taxes on their entire income. In cases of senior citizens aged above 65 years and women the exempted limit for the financial year 2007-08 are rupees one lakh ninety thousand and one lakh forty thousand respectively.

12. I am an agriculturist. Is my income taxable?
Your agricultural income is not taxable per se. However, if you have any other source of income like income from investments, property etc, while calculating tax on them, your agricultural income will be taken into account, so that you pay tax at a higher rate on that other income.

13. What is agricultural income?

To consider an activity as ‘agriculture’ the basic operation such as tilling, sowing, irrigating & harvesting should have been carried out. Thereafter what is sold in the market should be the primary product harvested. Receipt from such sale is considered as agricultural receipt. If however some further processing or modification were done to the harvested product to enhance its marketable value then such enhanced value would be considered as business income.
14. Is income from animal husbandry considered as agricultural income?

No.

15. Do I have to maintain any records or proof of earnings?
For every source of income you have to maintain proof of earning and the records specified under the IT Act. In case, no such records have been laid down, you should maintain reasonable level of records with which you can support the claim of income.

16. As an agriculturist, am I required to maintain any proof of earning and expenditure incurred?

Even if you have only agricultural income you are advised to maintain some proof of your agricultural earnings

17. I win a lottery or prize money in a competition. Am I required to pay taxes on it?

Yes.

Tuesday, February 03, 2009

HISTORY OF ICAI

HISTORY OF ICAI

1857
The first ever Companies Act in India legislated.

1866
Law relating to maintenance of accounts and audit thereof introduced.
Formal qualification as auditor now required.

1913
New Companies Act enacted.
Books of accounts to be maintained specified.
Formal qualification to act as auditor named. A Certificate from the local government to be held in order to act as auditor. An unrestricted Certificate entitled a person to act as auditor throughout British India. A Restricted Certificate entitled him to act as auditor only within the Province concerned and in the languages specified in the certificate.

1918
Government Diploma in Accounting (GDA) launched in Bombay. On completion of articleship of three years under an approved accountant and passing the Qualifying Examination the candidate would become eligible for the grant of an Unrestricted Certificate.

1920
The issue of Restricted Certificates discontinued.

1927
Society of Auditors founded in Madras.

1930
Register of Accountants (RA) to be maintained by the Government of India to exercise control over the members in practice. Those whose names found entry here were called Registered Accountants (RA).

1930
The Governor General in Council replaced the local government as the statutory authority to grant certificates to persons entitling them to act as auditors.
Auditors allowed to practice throughout India
1932
First Accountancy Board formed. The Board was to advise the Governor General in Council on matters relating to accountancy and to assist him in maintaining standards of qualification and conduct required of auditors.

1933
First examination held by the Indian Accountancy Board. GDAs exempted from taking the test.

1935
The first Final Examination was held. GDAs exempted from taking the test.

1943
GDA abolished.

1948
Expert Committee formed to examine the scheme of an autonomous association of accountants in India.

1949
The Chartered Accountants Act, 1949 was passed on 1st May. The term Chartered Accountant came to be used in place of Indian Registered Accountants.

Chartered Accountants Act was brought into effect on 1st July. The Institute of Chartered Accountants of India is born.

1999
ICAI completed 50 years on 1st July 1999.

Friday, January 23, 2009

AMENDMENTS FOR ASSESSMENT YEAR 2009-10

AMENDMENTS FOR ASSESSMENT YEAR 2009-10

APPLICABLE FOR MAY – 2009 & NOV – 2009
COMPUTATION OF TOTAL INCOME AND TAX LIABILITY
1. Individual, HUF, AOP, BOI, Artificial Juridical person
Total Income upto Rs.1,50,000 Nil
Next 1,50,000 10%
Next 2,00,000 20%
Balance 30%

2. Resident women below the age of 65 years at any time during the previous year
Total Income upto Rs.1,80,000 Nil
Next 1,20,000 10%
Next 2,00,000 20%
Balance 30%
3. Resident individual of the age of 65 years or more at any time during the year
Total Income upto Rs.2,25,000 Nil
Next 75,000 10%
Next 2,00,000 20%
Balance 30%
No change in surcharge and education cess.
No change in tax rate and education cess for partnership firm and company.
Short term capital gain under section 111A shall be taxable @ 15% in all assessees.
Example
Compute tax liability in the following cases:
Mr. X (resident) has total income of Rs.6,00,000
Mr. X (non-resident) has total income of Rs.6,00,000
Mrs. X (resident) has total income of Rs.6,00,000
Mrs. X (non-resident) has total income of Rs.6,00,000
Mr. X (resident), aged 65 years has total income of Rs.6,00,000
Mrs. X (resident), aged 65 years has total income of Rs.6,00,000
Mr. X (non-resident), aged 65 years has total income of Rs.6,00,000
Mrs. X (non-resident), aged 65 years has total income of Rs.6,00,000
Solution:
Rs.
(i) Computation of Tax Liability
Total Income 6,00,000
Tax on Rs.6,00,000 at slab rate 85,000
Add: Education cess @ 2% 1,700
Add: SHEC @ 1% 850
Tax Liability 87,550
(ii) Computation of Tax Liability
Total Income 6,00,000
Tax on Rs.6,00,000 at slab rate 85,000
Add: Education cess @ 2% 1,700
Add: SHEC @ 1% 850
Tax Liability 87,550
(iii) Computation of Tax Liability
Total Income 6,00,000
Tax on Rs.6,00,000 at slab rate 82,000
Add: Education cess @ 2% 1,640
Add: SHEC @ 1% 820
Tax Liability 84,460
(iv) Computation of Tax Liability
Total Income 6,00,000
Tax on Rs.6,00,000 at slab rate 85,000
Add: Education cess @ 2% 1,700
Add: SHEC @ 1% 850
Tax Liability 87,550
(v) Computation of Tax Liability
Total Income 6,00,000
Tax on Rs.6,00,000 at slab rate 77,500
Add: Education cess @ 2% 1,550
Add: SHEC @ 1% 775
Tax Liability 79,825
Rounded off u/s 288B 79,830
(vi) Computation of Tax Liability
Total Income 6,00,000
Tax on Rs.6,00,000 at slab rate 77,500
Add: Education cess @ 2% 1,550
Add: SHEC @ 1% 775
Tax Liability 79,825
Rounded off u/s 288B 79,830
(vii) Computation of Tax Liability
Total Income 6,00,000
Tax on Rs.6,00,000 at slab rate 85,000
Add: Education cess @ 2% 1,700
Add: SHEC @ 1% 850
Tax Liability 87,550
(viii) Computation of Tax Liability
Total Income 6,00,000
Tax on Rs.6,00,000 at slab rate 85,000
Add: Education cess @ 2% 1,700
Add: SHEC @ 1% 850
Tax Liability 87,550
DEFINITIONS
Agricultural Income Section 2(1A) Explanation 3

Any income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income.



Charitable Purpose Section 2(15)
“Charitable purpose”
includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility:

Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity.

Reverse mortgage Scheme Section 10(43)

Any amount received by an individual as a loan, either in lump sum or in instalment, in a transaction of reverse mortgage referred to in clause (xvi) of section 47 shall be exempt from Income Tax.

Reverse mortgager
means the eligible person who has mortgaged the capital asset for the purpose of obtaining loan.

Reverse mortgage transaction
means a transaction in which the loan may be disbursed to the reverse mortgagor but does not include transaction of sale, or disposal, of the property for settlement of the loan.

Any transfer of a capital asset in a transaction of reverse mortgage under a scheme made and notified by the Central Government is not regarded as transfer.

BUSINESS/PROFESSION
1. Payments in excess of Rs.20,000 section 40A(3) Rule 6DD

If any person has made the payment to a particular person during a particular day in excess of Rs.20,000 and such payment was not made through account payee cheque or account payee bank draft, in that case entire payment is disallowed.
If any person has claimed expenditure on due basis but in the subsequent year the payment was not made by account payee cheque or draft, in that case it will be considered to be income of the year in which the payment has been made.
Example
During the previous year 2008-09 ABC Ltd. has incurred Rs.1,00,000 on advertisement and the company has not made the payment till 30.09.2009 and the expenditure was claimed on due basis and the company has filed the return of income. The company made the payment on 01.01.2010 in cash, in this case Rs.1,00,000 shall be considered to be income of the company in the previous year 2009-10.

2.
Rebate under section 88E has been omitted. The assessee is allowed to debit the amount of securities transaction tax to profit and loss account.

3.
Bank cash Transaction tax shall not be applicable from 01.04.2009 i.e. previous year 2009-2010 i.e. assessment year 2010-2011.

4.
The last date for filing the return of income for the company etc. shall be 30-09 of assessment year. The amendment is applicable from retrospective effect of assessment year 2008-09.


5.
Donation/contribution given to an Indian company for scientific research and development is also allowed 1.25 times.

6. Amortisation of certain preliminary expenses section 35D
The provisions shall be applicable to all the undertakings instead of only industrial undertaking.


Amendment of section 36.
In section 36 of the Income-tax Act, in sub-section (1), after clause (xiv), the following clauses shall be inserted with effect from the 1st day of April, 2009, namely:—
36 (1)(xv) , An amount equal to the securities transaction tax paid by the assessee in respect of the taxable securities transactions entered into in the course of his business during the previous year, if the income arising from such taxable securities transactions is included in the income computed under the head “Profits and gains of business or profession.’.
Explanation.—For the purposes of this clause, the expressions “securities transaction tax” and “taxable securities transaction” shall have the meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004 (23 of 2004);
36(1) (xvi) an amount equal to the commodities transaction tax paid by the assessee in respect of the taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such taxable commodities transactions is included in the income computed under the head “Profits and gains of business or profession”.

Explanation.
—For the purposes of this clause, the expressions “commodities transaction tax” and “taxable commodities transaction” shall have the meanings respectively assigned to them under Chapter VII of the Finance Act, 2008.’.

Tax deduction at source for Payment of interest, commission, brokerage etc. in India Section 40(a)(ia)

In case of payment of interest, commission, brokerage, rent, royalty, professional fees, technical fees, payment to a contractor, payment to a sub-contractor and the payment is been made to a resident and tax has to be deducted at source as per provisions of Income Tax Act and the person making payment has deducted tax at source, the expenditure shall be allowed if tax has been paid to the government upto the end of the relevant previous year, in such cases amount shall be allowed to be debited in the relevant previous year. In section 115-O of the Income-tax Act, after sub-section (1), the following sub-section shall be inserted, namely:—
If the payment was made in the month of March, tax should be paid to the government till the last date of filling of return of income and in such cases amount shall be allowed to be debited in the relevant previous year.
If the above provisions have not been complied with, in such cases deduction shall be allowed in the year in which tax has been paid to the government.

Amendment of section 115-O.
24.
“(1A) The amount referred to in sub-section (1) shall be reduced by the amount of dividend, if any, received by the domestic company during the financial year, if—
(a) such dividend is received from its subsidiary;
(b) the subsidiary has paid tax under this section on such dividend; and
(c) the domestic company is not a subsidiary of any other company:
Provided
Explanation.

—For the purposes of this sub-section, a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company.”. that the same amount of dividend shall not be taken into account for reduction more than once.
DEDUCTION FROM GROSS TOTAL INCOME
1.
2.
Deduction shall be allowed if the assessee has paid premium towards medical insurance out of his income chargeable to tax.
3.
4.
Policy can be taken in case of an individual, in the name of wife or husband or dependent children and deduction shall be allowed equal to the amount of premium paid but subject to a maximum of Rs.15,000 but in case of senior citizen deduction shall be allowed upto Rs.20,000
If the individual has taken policy in the name of parents (dependent or independent), additional deduction shall be allowed to the extent of the premium paid but maximum Rs.15,000, however, if the policy has been taken in the name of senior citizen, deduction shall be allowed to the extent of Rs.20,000.
Hindu Undivided Family can take the policy in the name of any of its members and deduction shall be allowed in the similar manner.
5.
6.

Medical insurance shall be in accordance with a scheme framed in this behalf by the General Insurance Corporation of India or by any other insurer as approved by the Insurance Regulatory and Development Authority (IRDA). “Senior citizen” means an individual resident in India who is of the age of 65 years or more at any time during the relevant previous year.
Assessee engaged in operating and maintaining a hospital in India other than the excluded area Section 80-IB(11C)
2.
The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital located anywhere in India, other than the excluded area, shall be 100% of the profits and gains derived from such business for a period of 5 consecutive assessment years, beginning with the initial assessment year, if–
(i) the hospital is constructed and has started or starts functioning at any time during the period beginning on the 01.04.2008 and ending on the 31.03.2013;
(ii) the hospital has at least 100 beds for patients;
(iii) the construction of the hospital is in accordance with the regulations or bye-laws of the local authority; and
(iv) the assessee furnishes along with the return of income, a report of audit in such form and containing such particulars, as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation to sub-section (2) of section 288, certifying that the deduction has been correctly claimed.

SERVICE TAX

Service tax exemption limit has been raised from Rs.8,00,000 to Rs.10,00,000 w.e.f. 01.04.2008.
Revision of Return Rule 7 Sub-Rule (7B)
An assessee may submit a revised return, in Form ST-3, in triplicate, to correct a mistake or omission, within a period of 90 days from the date of submission of the return under rule 7.
The payment must be made by any mode of payment other than cash.Deduction shall be allowed only to an individual or Hindu Undivided Family.
Deduction in respect of medical insurance premia Section 80D

sources:-http://www.caclubindia.com/forum/messages/2009/1/22412_amendments_for_may_2009.asp

Tuesday, January 13, 2009

How to read your Income Tax PAN?

How to read your Income Tax PAN?

The Income Tax Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Indian Income Tax Department.

A typical PAN for an individual would be AABPS1205E.

However, this appears to be a mysterious coded number to most of the people, there are some elements which would help you to validate a PAN.

The fourth letter of your PAN reflects your status. As such for an individual the letter will be 'P' for an HUF it will be an 'H', for firms - 'F' and for companies - 'C'.

The fifth letter of your PAN is the first letter of your surname in case of individuals and the first letter of the name in other cases. For example, in Nikhil Kumar's PAN the fourth letter will be 'P' and the fifth letter will be 'K'.

The other alphabets and numbers are allotted based on the Income Tax Department's series database.

Monday, January 12, 2009

Exemptions Of Capital Gain

EXEMPTION FROM CAPITAL GAIN:

A.

Section 54: Long Term Capital Gain arising from transfer of Residential House.

1.Who can claim benefit of this section?
Individual or H.U.F.

2.Which asset the tax payer should acquire to get the benefit this section?
Residential House Property in India or Outside India.

3.What is the time limit for acquiring the new asset?
Purchase: 1 Year before transfer or within year from the date of transfer.
Construction: Within 3 years from the date of transfer construction should be completed.
(Either of the two conditions should be satisfied But if both the conditions are satisfied then also there is no problem.)

4.From which date the time limit shall be computed?
From the date of Transfer but in case of compulsory acquisition from the date of receipt of compensation whether initial or full.*

5.Amount of Exemption?
Investments in the new asset (Including the amount deposited in the deposit scheme) or capital gain whichever is lower.

6.Possibility of revocation of exemption in the subsequent year?
If such new asset is transferred within 3 years from the date of acquisition.

7.In case of transfer of such new asset within 3 years how computation of capital gain is to be made for such new asset & such gain is Long term or short term capital gain?
(It is taxable in the Previous Year in which such transfer takes place).
Sales Consideration of New Asset: XXXX
Less: (Cost of Acquisition of new asset
Capital Gain claim exempted earlier
undersection 54 ) XXXX
--------
Short term Capital Gain XXXX
8.Whether Benefit of scheme is available?
Yes

9. Notes:

a) Such exemption is not limited to purchase or construction of one residential house property only. Assessee
may purchase two houses by selling one or can purchase one house by selling two houses.

b) Cost of new house includes cost of land.

B.

Section 54B: Long Term/Short Term Capital Gain arising from transfer of Urban Land used for
Agricultural Purpose.

1. Who can claim benefit of this section?
Individual. Provided such land should be used for agricultural purpose by the assessee or by his parents at least for a period of two years immediately before the date of transfer.

2. Which asset the tax payer should acquire to get the benefit this section?
Agricultural Land may be situated at urban area or rural area.

3. What is the time limit for acquiring the new asset?
Such Asset should be acquired within 2 years from the date of transfer and in case of compulsory acquisition from the date of receipt of compensation initial or full.

4. From which date the time limit shall be computed?
From the date of Transfer but in case of compulsory acquisition from the date of receipt of compensation whether initial or full. *

5. Amount of Exemption?
Investments in the new asset (Including the amount deposited in the deposit scheme) or capital gain whichever is lower.

6. Possibility of revocation of exemption in the subsequent year?
If such new asset is transferred within 3 years from the date of acquisition.

7. In case of transfer of such new asset within 3 years how computation of
capital gain is to be made for such new asset & such gain is Long term or
short term capital gain?
(It is taxable in the Previous Year in which such transfer takes place).
Sales Consideration of New Asset: XXXX
Less: (Cost of Acquisition of new asset
Capital Gain claim exempted earlier
undersection 54 B) XXXX
--------
Short term Capital Gain XXXX

8. Whether Benefit of scheme is available?
Yes

C.

Section 54D: Long Term/Short Term Capital Gain on compulsory acquisition of land or buildings forming part of Industrial Undertaking.

1. Who can claim benefit of this section?
(Meaning of Industrial Undertaking: It not only includes undertaking situated in industrial area but also include any project or business, a person
may undertake)
Any person. Provided such land or building forming part of industrial undertaking is used (not owned) by the assessee at least for a period of two years immediately before the date of compulsory acquisition.

2. Which asset the tax payer should acquire to get the benefit this section?
Land or Building for industrial purpose.

3. What is the time limit for acquiring the new asset?
Such Asset should be acquired or building should be constructed within 3 years from the date of receipt of compensation.

4. From which date the time limit shall be computed?
From the date of receipt of compensation whether initial or full. *

5. Amount of Exemption?
Investments in the new asset (Including the amount deposited in the deposit scheme) or capital gain whichever is lower.

6. Possibility of revocation of exemption in the subsequent year?
If such new asset is transferred within 3 years from the date of acquisition.

7. In case of transfer of such new asset within 3 years how computation of
capital gain is to be made for such new asset & such gain is Long term or
short term capital gain?
(It is taxable in the Previous Year in which such transfer takes place).
Sales Consideration of New Asset: XXXX
Less: (Cost of Acquisition of new asset
Capital Gain claim exempted earlier
under section 54 D) XXXX
--------
Short term Capital Gain XXXX

8. Whether Benefit of scheme is available?
Yes

D.
Section 54EC: Long Term Capital Gain not to be charged if investment in Long Term Specified Assets i.e. Bonds of N.H.A.I. or R.E.C.

1. Who can claim benefit of this section?
Any person.

2. Which asset the tax payer should acquire to get the benefit under this section?
Bonds issued by the NHAI or REC redeemable after 3 Years and issued after April1, 2006.

3. What is the time limit for acquiring the new asset?
Such Asset should be acquired within 6 months from the date of transfer of original asset. However following should be considered:
(1) Upto 30th September, 2006: If Long Term Capital Asset is transferred between 29th September, 2005 and 31st December, 2005.
(2) Upto 31st December, 2006: If Long Term Capital Asset is transferred between 1st January, 2006 and 30th June, 2006.( Order F. No.142/09/2006 dated 30th June, 2006).

4. From which date the time limit shall be computed?
From the date of transfer of Long Term Capital Asset or from the date of receipt of compensation initial or full. *

5. Amount of Exemption?
Investments in the new asset (Including the amount deposited in the deposit scheme) or capital gain whichever is lower. (But from April 1, 2007 maximum investment allowed in such bonds is restricted to Rs.50 Lacs.

6. Possibility of revocation of exemption in the subsequent year?
If such new asset is transferred or it is converted into money or a loan is taken on the security of the new asset within 3 years from the date of acquisition.

7. In case of transfer of such new asset within 3 years how computation of
capital gain is to be made for such new asset & such gain is Long term or
Short term capital gain?
(It is taxable in the Previous Year in which such transfer takes place).
The amount of Long term Capital Gain on transfer of Original Asset not charged to tax due to such investment is chargeable as Long Term Capital Gain in the year of transfer of such bonds.

8. Whether Benefit of scheme is available?
No.

9. Notes: The Benefit of Section 54 EC is available to capital gain arising on transfer of depreciable assets. [CIT v/s
Assam Petroleum Industries Private Limited].

E.
Section 54F: Capital Gain arises on transfer of Long Term Capital Asset other than Residential House Property.

1. Who can claim benefit of this section?
Individual or H.U.F.

2. Which asset the tax payer should acquire to get the benefit this section?
Residential House Property provided that on the date of transfer of Original Long Term Capital Asset the assessee does not own more than one residential house property. Moreover He should not purchase a residential house within 2 years or construct within 3 years from the date of transfer of original capital asset except the new one.

3. What is the time limit for acquiring the new asset?
Purchase: 1 Year before transfer or within year from the date of transfer.
Construction: Within 3 years from the date of transfer construction should be completed.
(Either of the two conditions should be satisfied But if both the conditions are satisfied then also there is no problem.)

4. From which date the time limit shall be computed?
From the date of transfer of original Capital asset but in case of compulsory acquisition from the date of receipt of compensation whether initial or full. *

5. Amount of Exemption?
Amount invested to acquire the new asset
Amount of Capital Gain X -----------------------
Net Sale Consideration
Net Sale Consideration = Full Value of
Sale ConsiderationExpenses on Transfer

6. Possibility of revocation of exemption in the subsequent year?
Consequences

(a) If such new asset is transferred within 3 years from the date of purchase / construction; or

(b) Ifassessee purchases, within a period of two years or constructs within a period of 3 years a residential house from the date of transfer of Original Capital asset except the new one.
Capital Gain on transfer of such new asset will be termed as short term capital asset and the capital gain which was claimed as exempt u/s 54 F earlier is taxable as Long term Capital gain in the year in which such new asset is transferred.
Capital Gain which was claimed as exempt earlier u/s 54F is taxable as Long Term Capital Gain in the year in which another residential house is purchased or constructed.


7. Whether Benefit of scheme is available?
Yes

8. Notes:
(a) Cost of the new house includes cost of Land.
(b) If the Transferor allows the transferee to retain and apply a part of total consideration to discharge the mortgage to which such property has been subject to, the amount so applied for discharge for mortgage would have to be excluded from the full value of consideration.
(c) The expenditure incurred on making the house habitable i.e. flooring, wooden work, sanitary work etc. should be considered as investment in purchase of house, subject to condition that payment is made during the period specified in sec. 54 F.
(d) If by applying section 54 F, there is no income in hands of minor child to be added under section 64(1A), the benefit under section 54F cannot be denied to minor child on the ground that father of minor had two residential houses at the time of transfer of the capital asset.

F.
Section 54G: Long Term/Short Term Capital Gain arises from the transfer of capital assets in cases of shifting of industrial undertaking from urban area.

1. Who can claim benefit of this section?
Any person. The term Capital asset includes Plant, Machinery, Land or Building or Right in Land or Building but does not include Furniture.

2. Which asset the tax payer should acquire to get the benefit this section?
Land, Purchase/Construction of Building, New Plant or Machinery in order to shift an undertaking to Rural Area.

3. What is the time limit for acquiring the new asset?
Assessee has to acquire within a period of 1 Year before or 3 Years after the date on which such transfer took place.

4. From which date the time limit shall be computed?
From the date of transfer.

5. Amount of Exemption?
Investments in the new asset (Including the amount deposited in the deposit scheme) or capital gain whichever is lower.

6. Possibility of revocation of exemption in the subsequent year?
If such new asset is transferred within 3 years from the date of acquisition.

7. In case of transfer of such new asset within 3 years how computation of
capital gain is to be made for such new asset & such gain is Long term or
Short term capital gain?
(It is taxable in the Previous Year in which such transfer takes place).
Sales Consideration of New Asset: XXXX
Less: (Cost of Acquisition of new asset
Capital Gain claim exempted earlier
under section 54 G) XXXX
--------
Short term Capital Gain XXXX

8. Whether Benefit of scheme is available?
Yes

9.Notes: (a) The Cost of New Asset includes expenses incurred in relation to acquiring Land, Building, or Plant and
Machinery.

G.
Section 54GA: Long Term/Short Term Capital Gain arises from the transfer of capital assets in cases of shifting of industrial undertaking from urban area to SE

Z.

1. Who can claim benefit of this section?
Any person. The term Capital asset includes Plant, Machinery, Land or Building or Right in Land or Building but does not include Furniture.

2. Which asset the tax payer should acquire to get the benefit this section?
Land, Purchase/Construction of Building, New Plant or Machinery in order shifts an undertaking to Rural Area.

3. What is the time limit for acquiring the new asset?
Assessee has to acquire within a period of 1 Year before or 3 Years after the date on which such transfer took place.

4. From which date the time limit shall be computed?
From the date of transfer.

5. Amount of Exemption?
Investments in the new asset (Including the amount deposited in the deposit scheme) or capital gain whichever is lower.

6. Possibility of revocation of exemption in the subsequent year?
If such new asset is transferred within 3 years from the date of acquisition.

7. In case of transfer of such new asset within 3 years how computation of
capital gain is to be made for such new asset & such gain is Long term or
Short term capital gain?
(It is taxable in the Previous Year in which such transfer takes place).
Sales Consideration of New Asset: XXXX
Less: (Cost of Acquisition of new asset
Capital Gain claim exempted earlier
under section 54 GA) XXXX
--------
Short term Capital Gain XXXX

8. Whether Benefit of scheme is available?
Yes

9.Notes: (a) The Cost of New Asset includes expenses incurred in relation to acquiring Land, Building, or Plant and
Machinery.

* Section 54 H: Extension of Time limit for Acquiring new Asset.

1. Initial Compensation
As we know in case of Compulsory Acquisition, Capital Gain will be taxable in the Previous year in which compensation is received whether Part or Full.
For availing the benefit of exemption U/S 54, 54B, 54D, 54EC, 54F the new asset should be acquired within prescribed time limit. But such time period shall be computed from the date receipt of such compensation. Even if the initial compensation is received in parts then such period shall be determined on the basis such different dates of receipts.

2. Enhanced Compensation
For availing the benefit of exemption U/S 54, 54B, 54D, 54EC, 54F, such specified period shall be computed from the date on which such enhanced compensation is received.
DEPOSIT SCHEME: If the new asset is not acquired upto the due date of submission of Return of Income of the previous year in which Original Asset is transferred, the taxpayer has to deposit the unutilized amount in Capital Gain Deposit Scheme with a nationalized bank and proof of such deposit should be attached with Return of Income in order to avail the benefit of exemption.
Now the taxpayer has to withdraw from this account for acquiring the new asset. If the deposit amount is not utilized within stipulated time period as stated in Point 3 of each exemption then unutilized amount on the expiry of such time period will be taxable in the previous year in which such period expires as Long Term or Short Term Capital Gain depending upon the Original Capital Gain. It is to be noted that for section 54 & 54 F such period is 3 years.
# Transfer includes compulsory acquisition.
# In order to take benefit of Section 54 B and 54 D it should be ensured that the investment in the new asset is made only after effecting transfer of capital asset.
# It will be advisable that instead of selling or converting assets acquired under section 54, 54B, 54D, 54 F, 54 G and 54GA into money, the tax payer should obtain loan against the security of such asset to meet exigency.

sources :www.caclubindia.com

Saturday, January 10, 2009

ICAI sets ball rolling against auditors

The Institute of Chartered Accountants of India (ICAI) has written letters to government agencies and Satyam Computer Services, seeking relevant information to initiate investigation into the role of the statutory auditor in fudging the accounts of the Hyderabad-based software services firm.
However, the institute, which regulates the chartered accounting profession in India, is yet to communicate with the statutory auditor — Price Waterhouse — regarding the overstatement of profit by Satyam over the years.
“Based on the collected information, the disciplinary board of ICAI may summon the statutory auditor and also the internal auditors,” Ved Jain, president of ICAI, told Business Standard, adding they hope to get the inputs from the ministry of corporate affairs (MCA) and the Securities and Exchange Board of India (Sebi) in the next two to three days.
Jain also met Corporate Affairs Minister Prem Chand Gupta on Friday and appraised of the steps taken by ICAI and the future course of action. “We plan to coordinate between various government agencies and ICAI,” Jain added.
ICAI has disciplinary powers against its members who are acting as statutory and internal auditors of any company. It has maximum powers to revoke the license for lifetime and also levy a maximum penalty of Rs 5 lakh. While statutory auditors are appointed by the company’s shareholders, the internal auditors are hired by the management.
ICAI is seeking the list of auditors (both statutory and internal) employed by Satyam, and also the balance sheet and other documents filed with the Registrar of Companies (RoC), with whom firms are mandated to submit a list of documents on a regular basis.
If summoned, ICAI’s disciplinary committee could seek the “working paper file” maintained by statutory auditors. Working papers contains all audit evidences collected while auditing the financial statements of any company.
This is expected to help the investigators to piece together how the financial fraud of this magnitude had taken place at the country's fourth-largest software firm.
Satyam's promoter, in a letter to the stock exchanges, said they had inflated profits and revenue of the company for many years, involving a total amount of around Rs 7,000 crore. Cash position alone was inflated by Rs 5,000 crore.
Srinivas Talluri, a partner in Price Waterhouse, was the statutory auditor for the IT major in FY08, as per the corporate information provided by third party websites. Satyam’s website was inaccessible to retrieve information.
Price Waterhouse is the only from among the big four audit firms to have registered with ICAI, as all its partners are Indians, said Uttam Prakash Agarwal, vice-president of ICAI.

sources:-www.calubindia.com

ICAI to issue a show cause notice to Satyam auditors, PwC

The Institute of Chartered Accountants of India (ICAI) has decided to issue a show cause notice to the auditors of Satyam Computer Services in the backdrop of Satyam Computers chairman B Ramalinga Raju's sensational revelations on Wednesday. Talking to ET, ICAI president Ved Jain said: "We have set the ball rolling. On the basis of statements made by Mr Ramalinga Raju, ICAI has already initiated proceedings against the concerned auditor. Under legal provisions our disciplinary committee can take cognizance of information from external sources and initiate action against our members. On the basis of the statement, a show cause notice will be sent to the auditor of the Satyam Computer Services." Asked specifically, who the notice was being sent to, Mr Jain said: "I am told the audit firm was PricewaterhouseCoopers. A show cause notice will soon be sent to the auditor. This is indeed a situation where fingers are being pointed towards some chartered accountants." On the issue, an ICAI council member who declined to be named said: "As auditors, we definitely have a role to play. This incident gives the entire chartered accountants fraternity a bad name. If we unravel any wrong doings on the part of the auditors, the institute (ICAI) will initiate action against the concerned auditor. Auditors base their observations on documentary evidence provided to auditors and Mr Raju did not mention that the figures provided to auditors were wrong. However, if the auditors have failed, the institute will file an 'Information Case' against the concerned individual (at PwC, in this case) as a first step." The ICAI's Council is a core team that deals with critical aspects of running the Institute and policy matters involved as well as various accounting norms. Experience, however, shows the process of ruling on such cases takes time. For instance, ICAI had initiated proceddings against the auditors of the erstwhile Global Trust Bank (GTB) a couple of years ago. The case is yet to be diposed off, the council member said.

source:-www.caclubindia.com

happaniess mantra

happaniess mantra