Government sends tax notices to cryptocurrency investors as trading hits $3.5 billion

 

– The government has issued repeated warnings against digital currency investments
– Tech-savvy young investors, real estate players and jewellers are among those invested in bitcoin and other virtual currencies

The government has sent tax notices to tens of thousands of people dealing in cryptocurrency after a nationwide survey showed more than $3.5 billion worth of transactions have been conducted over a 17-month period, the income tax department said.

Tech-savvy young investors, real estate players and jewellers are among those invested in bitcoin and other virtual currencies, tax officials told Reuters after gathering data from nine exchanges in Mumbai, Delhi, Bengaluru and Pune.

Governments around the world are grappling with how to regulate cryptocurrency trading, and policymakers are expected to discuss the matter at a G20 summit in Argentina in March.

The government has issued repeated warnings against digital currency investments, saying these were like “Ponzi schemes” that offer unusually high returns to early investors.

But it has not so far imposed curbs on an industry estimated to be adding 200,000 users in India every month.

B.R. Balakrishnan, a director general of investigations at the income tax department in the southern state of Karnataka, said notices were sent following the survey to assess the penetration and patterns of virtual currency trade.

“We cannot turn a blind eye. It would have been disastrous to wait until the final verdict was out on its legality,” he told Reuters.

The tax department has asked people dealing in bitcoin and other virtual currencies such as ethereum and ripple to pay tax on capital gains. They have also asked for details about their total holdings and the source of funds in the tax notice seen by Reuters.

“We found that investors were not reflecting it on their tax returns and in many cases, the investment was not accounted for,” Balakrishnan said.

Bitcoin, the world’s biggest cryptocurrency, soared more than 1,700 percent last year, hitting a record high just shy of $20,000 as institutional and retail investors around the world snapped up the virtual currency.

Its huge gains have attracted the attention of global regulators tasked with protecting investors from fraud.

In recent weeks, Japan and China have made noises about a regulatory crackdown, while South Korean policymakers said they were considering shutting down domestic virtual currency exchanges.

REGULATION

An Indian finance ministry official said a federal committee was looking into the possibility of imposing restrictions on virtual currencies and that eventually parliament would have to legislate a regulatory regime.

Officials at Zebpay, India’s leading bitcoin exchange, said the industry was adding near 200,000 users every month with an estimated trade volume of about 20 billion Indian rupees ($315 million).

“Many of our customers are treating digital currency like gold,” said Zebpay co-founder Saurabh Agarwal.

Aman Kalra, marketing head of Coinsecure, a bitcoin exchange in New Delhi, said more than 150 bitcoins were changing hands every week through its platform. The company has 100,000 registered users and is now launching a platform to sell ethereum and other digital currencies.

“I don’t think anyone in the government should label our business as a ‘Ponzi scheme’, we are not doing anything illegal,” said Kalra.

Tax inspectors said they sought help from experts in blockchain, the technology that underpins bitcoin, to conduct the survey.

In some cases, tax officials themselves participated in the trade to identify loopholes after they found investors had poured in billions of dollars through unregulated exchanges.

Source: Times of India

Jurisdiction-free I-T assessment on the cards

The identities of the taxpayer and his assessing officer will be hidden in a bid to check corruption and harassment assessees face at the hands of over-zealous officers.

To check corruption and harassment, the tax department will soon launch a pilot of “jurisdiction-free assessment” where a tax officer will not get to know identity of the assessee as allotment of cases will be done randomly by computers rather than on the basis of area.

The success of the pilot, to be first carried out in New Delhi and Mumbai, will determine if the plan has to be expanded all over the country, a senior revenue department official said.

The country is divided into 18 tax zones. Taxpayers are assessed by the officers of the region they are based in.

Under the new system, the assessment zones will be demolished and a special computer software will allocate a taxpayer to any officer anywhere in the country, he said.

The identities of the taxpayer and his assessing officer will be hidden in a bid to check corruption and harassment assessees face at the hands of over-zealous officers.

The tax department is working on a major reform initiative to make compliance taxpayer friendly and a 13- member committee of tax officers has been formed to look into implementation issues, the official said.

But before the country-wide launch, the pilot is being run to spot implementation issues.

“After you initiate jurisdiction-free assessment, a taxpayer might say he wants to meet the tax officer face to face and explain his case. What do we do in that case? Can we deny the taxpayer an option to meet his assessment officer (AO)? Say, we allow them to have video conferencing, then we will have to set up the facility in tax offices. These are issues we need to address,” he explained.

Among draft recommendations of a technical committee submitted to the CBDT, the apex policy-making body on income tax matters, the tax department wants to move to the jurisdiction-free I-T assessment where the taxpayer will not have to meet his assessing officer face to face.

The official also said the proposals were broadly reflected in the Prime Minister’s speech in Rajaswa Gyan Sangam earlier this month when he had said the relation between the tax department and an assessee should be that of an examiner and an examinee where either party does not know each other.

Modi, the official said, had also called for redrafting of the archaic income tax laws so that these become simpler. The humongous Income Tax Act has been in place since 1961 and the UPA government had proposed a Direct Tax Code to replace the Act.

However, since the government changed in 2014, the DTC could not be taken up.

India is now the hottest destination in the retail space

Retail in India overtakes China in H1; global brands, hypermarkets expand presence: CBRE

India has topped the Global Retail Development Index in 2017, overtaking China. During the first six months of the year, there were 70 new brands which marked their presence in Mumbai, Delhi-NCR and Bengaluru.

According to CBRE’s India Retail MarketView Report – H1, 2017, seven new global brands entered the country and investments into the segment by firms/wealth funds touched $200 million.

Additionally, several retail developments were completed across select cities, resulting in around 1.5 million sq.ft. of fresh supply entering the market. During the first half of the year, demand for quality retail space remained robust with a majority of this supply concentrated in Mumbai, Bengaluru and Delhi- NCR.

Anshuman Magazine, Chairman, India and South-East Asia, CBRE, said: “Our ranking on the 2017 Global Retail Index for developing countries as well as continued investment by private equity players is a demonstration of the sustained preference of international brands to set up, or expand their operations in India.

“With several laws and policies in implementation mode, we are already seeing an increase in consumer and investor confidence. This will have a cascading effect on the retail segment. Overall, retail real estate will continue to grow and witness healthy demand across tier-I and -II cities.”

Vivek Kaul, Head, Retail Services, said, “The fact that demand for quality space continues to outstrip supply is indicative that the retail real estate segment across key cities in India is growing exponentially. While global brands continue to evaluate and consider quality retail developments in the top cities, with growing globalisation, smaller cities are also gaining prominence and witnessing traction.

“While there still remains some ambiguity around the highway liquor ban, resulting in F&B operators being in wait-and-watch mode, the overall market sentiment continues to be positive.”

During the first half of the year, a number of international brands already present in the country expanded their presence. Several hypermarkets too were in expansionary mode, including Big Bazaar, which opened new stores in Mumbai, Bengaluru and Chennai.

Clothing retailers such as Max and Pantaloons were also active during the review period.

According to the report, rental trends continued to vary across key high streets in major cities during the review period. While high streets such as Connaught Place, Khan Market, and South Extension in Delhi and Park Street and Elgin Road in Kolkata witnessed a rental appreciation, rentals in most other high streets remained stable.

At the same time, some high streets such as Linking Road in Mumbai and MG Road in Pune saw a marginal dip in rentals.

Source: The Hindu Businessline

Direct tax collection rises fastest since 2013-14

The Income Tax Department’s time series data of direct taxes for 2016-17 estimates the government has collected ₹8,49,818 crore as income tax on individuals and businesses, recording a 14.5 per cent growth, the highest rise since 2013-14.

Personal income taxes rose 21.4 per cent, but taxes on corporate incomes grew more slowly at 7 per cent.

The biggest rise was reported under the head of ‘other direct taxes’, which includes collections on account of Income Declaration Scheme 2016 and Pradhan Mantri Garib Kalyan Yojana 2016, schemes for declaring previously undisclosed income. Collections under this head is estimated to have risen 1,348 per cent to ₹15,624 crore.

The sharper rise in personal income taxes has also meant its share in the direct tax collection has increased to over 40 per cent for the first time since 2002-03 and the share of taxes on corporate incomes have fallen below 60 per cent. These estimates are based on provisional data, which the department has extracted from Online Tax Accounting System (OLTAS) and Principal Chief Controller of Accounts under the Central Board of Direct Taxes, and are bound to be revised after the returns for the last fiscal year is reconciled.

Saturday August 5 was the last day for filing of returns by those who are not required to get their accounts audited. Others can file their returns before March 31, 2018, for incomes earned in 2016-17.

Total tax collection

The growth in direct tax collections notwithstanding, its share in total tax collection has fallen below 50 per cent for the first time in 10 years. The share of direct taxes in the total taxes was estimated at 49.7 per cent for 2016-17, after staying well above 50 per cent between 2007-08 and 2015-16. This reversal in trend may be attributed to increase in collection under service tax.

The time series data also estimates that the gross tax receipts before reducing refunds made through the year rose 17 per cent to ₹10,12,506 crore, the highest jump seen since 2010-11. This included a 24 per cent jump in self-assessment tax (a bulk of which is taxes paid by unincorporated businesses), 14 per cent rise in tax deducted at source (TDS) and 15 per cent increase in advance tax payments.

Incidentally, TDS growth has slowed from 22 per cent reported for 2015-16, while advance tax payments growth has risen from 9 per cent reported then. TDS accounted for 36 per cent of the taxes collected in the last fiscal year and advances taxes accounted for 41 per cent. Income tax laws require a bulk of the taxes on incomes of individuals and businesses to be paid in advance on a quarterly basis.

The Income Tax Department has estimated the number of assesses for 2016-17 at 6.27 crore, of which about 95 per cent or 5.93 crore were individual assessees. The number of assessees grew just about 2 per cent from 2015-16.

On State-wise basis, Maharashtra continued to contribute a bulk of the direct taxes, accounting for about 37 per cent of the collection. Delhi accounted for 12.8 per cent of the taxes collected and Karnataka about 10.1 per cent.

Source: http://www.thehindubusinessline.com/economy/direct-tax-collection-rises-fastest-since-201314/article9805948.ece

Gujarat retains top slot of states with most investment potential

Gujarat is followed by Delhi, Andhra Pradesh, Haryana, Telangana, Tamil Nadu, Kerala, Maharashtra, Karnataka and Madhya Pradesh.

Gujarat has retained the top position in the list of 21 states and UTs with most investment potential, according to a report by economic think-tank NCAER.

Gujarat is followed by Delhi, Andhra Pradesh, Haryana, Telangana, Tamil Nadu, Kerala, Maharashtra, Karnataka and Madhya Pradesh.

The ranking of 20 states and one Union Territory of Delhi was based on six pillars — labour, infrastructure, economic climate, governance and political stability, perceptions and land —  and 51 sub-indicators.

While Gujarat topped in economic climate and perceptions, Delhi ranked one in infrastructure. While Tamil Nadu topped the chart in labour issues, Madhya Pradesh ranked one in land pillar.

The National Council of Applied Economic Research (NCAER) State Investment Potential Index (N-SIPI 2017) report ranks states on their competitiveness in business and their investment climate.

Compared to 2016, Gujarat and Delhi again top the list of states, while Haryana and Telangana have moved rapidly up the ranks to finish among the top five, it said.
NCAER Director-General Shekhar Shah said: “Investment opportunities are expanding in India in all sectors. The GST will weave India’s states together in ways that has not been possible before”.

Further the report said that although Bihar, Uttar Pradesh and West Bengal are ranked among the least favourable states for investment, they rank higher under individual pillars.

Indira Iyer, the team leader for the 2017 N-SIPI, stated that as per the report, “corruption” continues to be the number one constraint faced by businesses.

However, she said, the 2017 N-SIPI reports a decline in the percentage of respondents citing corruption as a constraint to conducting business from 79 per cent in 2016 to 57 per cent in 2017.

Getting approvals for starting a business is still the second-most pressing constraint faced by businesses in 2017 as was the case in 2016, she added.

Talking about this index, Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said these reports are aiding states in improving the business climate and attracting investors.

Source : http://economictimes.indiatimes.com/articleshow/59661570.cms

EPFO’s new enrolment scheme works, 10 million members added in three months

The government’s idea of including the number of Employees Provident Fund Organisation (EPFO) subscribers to calculate formal jobs is likely to swell the latter’s formal number.

 

For, the PF body has added a little more than 10 million members in the past three months, taking its membership to around 48 mn, from 37 mn on March 31.

 

This has been due to EPFO’s new enrolment scheme. Under it, employers got the opportunity to file declarations for unregistered employees with a nominal fine of Rs 1 per annum. According to data reviewed by Business Standard, the body has added 10,131,453 subscribers under the new scheme, higher than its expectation of 10 mn new ones. Most of the rise has come from urban areas such as Mumbai, Delhi and Bengaluru — Mumbai has added the highest number of subscribers, at 1,287,500.

 

NITI Aayog vice-chairman Arvind Panagariya had earlier said a task force for calculation of employment would use other data sources such as EPFO, National Pension System and other private pension schemes for formalisation of the workforce, beside existing sources like the National Sample Survey Office and labour bureau.

 

The panel is headed by Panagariya himself. It was set up to suggest a revamp of employment data surveys, to ensure timely and reliable data for policy making. There was a view within the government that the current surveys did not provide a real picture on job creation.

 

However, the EPFO subscriber base might only be showing a formalisation of the workforce, not an addition to the job numbers. “As a result of this (our move), workers who earlier were out of the social protection coverage will now get these benefits,” V P Joy, the central PF commissioner, told Business Standard.

 

Source: http://www.business-standard.com/article/economy-policy/epfo-s-new-enrolment-scheme-works-10-million-members-added-in-three-months-117071000045_1.html

UrbanClap receives Rs 20 Crore as NCD from Trifecta Capital

Home service startup UrbanClap has raised Rs.20 Crore of debt funding from California-Based Trifecta Capital through Non-Convertible Debentures.

A Non – Convertible debenture or NCD do not have the option of conversion into shares and on maturity, the principal amount along with accumulated interest is paid to the holder of the instrument. There are two types of NCDs-secured and unsecured.

Previously, UrbanClap raised an undisclosed amount funding from Ratan TATA in December 2015. The total equity funding from UrbanClap is about $36.6 Millions. The startup investors base include SAIF Capitals, Rohit Bhansal, Accel Partners, Bessemer Venture Capital and others.

The startup has also acquired similar startups like GoodServices and Mumbai-Based HandyHome.

The Delhi-Based startup was founded in October 2014 by Varun Khaitan, Raghav Chandra and Abhiraj Bhal. UrbanClap is the simplest way to hire trusted services. The startup helps their customers to find the right service professionals for activities important house works. Their vision is to use technology and smart processes to structure the highly unorganised services market in India and emerging markets.

Trifecta Capital is an early stage technology fund that invests in the best start-ups. Current portfolio companies include Equipment Share, Second Spectrum, Moltin and others. Trifecta Capital is a top quartile Silicon Valley-based seed fund. The venture capitalist is industry agnostic and look to support companies starting at seed stage but continue our support until IPO.

Commenting on the funding Rahul Khanna, managing partner at Trifecta Capital, said: “We are very focused on identifying category leaders. The venture debt firm has so far committed Rs 300 crore to 21 startups in the last 18 months through its Trifecta Venture Debt Fund I, the target corpus for which is Rs 500 crore.”

The venture debt firm has invested in several startups such as BigBasket, Rivigo and Urban Ladder.

Source: https://indianceo.in/news/urbanclap-receives-rs-20-crore-ncd-trifecta-capital/