E-filing of tax returns jumps 68.5% in April, 2016

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E-filing of tax returns witnessed a jump of 68.5% in the first month of the current fiscal year with over 8.32 lakh assessees filing ITRs electronically.

The number of e-filed returns recorded in April 2015-16 stood at 4.94 lakh. In all, 4.33 crore returns were electronically filed last fiscal.

As per the data of Central Board of Direct Taxes (CBDT), a total of 8,32,499 assessees have filed returns in April 2016.

Unlike previous year, the CBDT had operationalised all the nine types of Income Tax Returns (ITRs) filed by different types of assesses from this fiscal.

Over the years, the e-filing process has been simplified and assessees can file returns even from the comfort of their homes.

As per the CBDT, there were over 5.25 crore registered users (on April 30, 2016) and about 49.54% of the returns were received outside office hours. Also, 35.27% of assesses used the utility provided by the department.

An online ‘tax calculator’ for filers is meant to help taxpayers assess tax liability.

Divya Baweja, Partner, Deloitte Haskins and Sells LLP said during the initial years, e-filing was considered to be an onerous task, but now the process has become a “simple affair”.

“In recent years, tax department has made a conscious effort to ease the e-filing procedure by simplifying the tax return forms and introducing tax utilities which automatically picks data from previous year’s tax return/tax credit statement, thereby making it much easier for a common individual to file his or her tax return,” she said.

The CBDT had notified the new forms on March 30, and ITRs can be filed till the stipulated deadline of July 31.

The data further said during April, the maximum returns were filed from Maharashtra followed by Gujarat, Tamil Nadu and Uttar Pradesh.

People with an income of more than Rs 50 lakh per annum and who own luxury items like yacht, aircraft or valuable jewellery will have to disclose these expensive assets with the IT department in the new ITRs.

Last year, the e-filing commenced on July 1 following the controversy over a 14-page form requiring assessees to disclose bank account and foreign travel details.

Source: http://timesofindia.indiatimes.com/business/india-business/E-filing-of-tax-returns-jumps-68-5-in-April/articleshow/52277938.cms

IIT Madras incubated ‘water-tech’ InnoNano Research raises $18mn

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With an aim to making India an exporter of water technologies, the company plans to set up a manufacturing facility, a modern research laboratory and technology delivery offices across North America, Asia and Africa.

InnoNano Research (INR), a clean water technology company incubated at IIT Madras has entered into an agreement with NanoHoldings (NH), an energy and water investment specialist firm from US, to set-up a global water technology company with an investment plan of $18 million.

 

With an aim to making India an exporter of water technologies, the company plans to set up a manufacturing facility, a modern research laboratory and technology delivery offices across North America, Asia and Africa. Nano Holdings, has supported global patenting activity for the team and IIT Madras for the past four years.

 

“These technologies are destined to change the world in a significant way,” said Justin Hall-Tipping, CEO, NH.

 

This is perhaps first of its kind global expansion programme for academia-born Indian material technologies in India.  “IIT Madras is delighted that research at the cutting edge of materials science has led to applications at the very core of human well-being, namely, supply of safe drinking water,” said Prof Bhaskar Ramamurthi, director of IIT Madras.

 

Prof Pradeep, co-founder and advisor of INR said, “Making our science challenging to academia and simultaneously delivering solutions to the common man is an enormous challenge, but we find a purpose there. Water is an area where India needs self-reliance and every technology and every effort matters in this noble objective.

 

Water technologies have to be inclusive as water itself presents enormous diversity, both locally and globally. This would not have happened without the sustained support of Department of Science and Technology, government of India”.

 

Source: http://www.financialexpress.com/article/industry/companies/iit-madras-incubated-water-tech-firm-raises-18-million/251765/

India, Mauritius to amend tax treaty

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies, India & International - Corporate updates | 0

India will levy capital gains tax on investments routed through Mauritius from April 1 next year, bringing down the curtains on a contentious three decade-old rule that allowed companies to bring in billions of dollars by paying negligible taxes.

The taxes on capital gains will apply to investments made from April 1, 2017 and will be imposed at 50% or half of the domestic rate until March 31, 2019, and at the full rate thereafter.

How do people use tax havens to avoid paying taxes?

Through “round tripping” or “treaty shopping”.

How does round tripping work?

Round tripping refers to routing of investments by a resident of one country through another country back to his own country.

You get money out of India and transmit it to a tax haven with whom India has a bilateral tax avoidance treaty such as the double-taxation avoidance agreement (DTAA). In the tax haven, this money is treated as capital of a registered corporate entity. You now invest this money back in an Indian company as foreign direct investment (FDI) by buying stakes or invest it in Indian equity markets.

How does this help in avoiding taxes?

The entire purpose of this exercise is to window-dress as foreign capital your original money that you had taken out from India.

In the entire process, you end up paying zero or negligible taxes. In India, you can claim tax exemption citing the DTAA arguing that you have paid taxes in the source country. In the source country, taxes are negligible since it is a tax haven.

What is DTAA?

These are bilateral treaties signed between governments to prevent companies from being taxed twice over.

So, what was the problem with Mauritius?

Mauritius, and other tax havens, has almost negligible taxes. This was encouraging companies to route their investments in India through “shell” companies (those that exist only on paper) in Mauritius and avoid paying taxes.

How big was the problem?

At $94 billion, Mauritius has been the largest FDI source for India, accounting for 34% of total FDI in India between 2000 and 2015.

What are the changes that will plug this gap?

The changed DTAA will make it mandatory to pay capital gains tax on sale of shares in India by companies registered in Mauritius

When will the new rules kick-in?

Share sales in Indian companies by Mauritius-registered firms will be taxed at half of the applicable rate between April 1, 2017 and March 31, 2019.

If the capital gains tax in India is 10% currently, Mauritius-registered companies will be taxed at 5% during the first two years beginning April 2017. Full capital gains tax will apply from April 1, 2019.

What about previous investments?

The new rules will not apply only to investments made before April 1, 2017, meaning share sale of investments made before this date will be exempt from capital gains tax.

Which companies will benefit from the reduced tax rates during the first two years?

The benefit of 50% reduction in tax rate during the transition period from April 1, 2017 to March 31, 2019 shall be subject to a limitation of benefit (LOB) Article.

A Mauritius-registered company (including a shell or conduit company) will not be entitled to lower tax rate, if it doesn’t spend at least Rs 27 lakh in Mauritius in the previous 12 months. This is called ‘purpose and bonafide business test’.

How will impact investors?

Many foreign investors will have to redraw their strategies. The incentive to route investments through Mauritius will cease to exist once the new rule kicks-in. This could raise their tax outgo.

What about markets?

It could hurt short-term foreign investor inflows into India, particularly from companies whose investment strategies are guided by minimising taxes. This could pull down markets initially.

Are these rules related to the general anti-avoidance rules (GAAR)?

GAAR are aimed at curbing tax avoidance and aim to give tax authorities the right to scrutinise transactions that they feel have been done to avoid taxes.

Under GAAR corporations may be forced to restructure salaries of employees if taxmen conclude that these were structured only to avoid taxes. Similarly, if a foreign investment transaction from Mauritius has taken place with an intent to exploit DTAA, it will come under GAAR.

Implementation of GAAR will take place from April, 2017.

Source: http://www.hindustantimes.com/business/india-mauritius-tax-treaty-all-you-need-to-know/story-QSOlvKyt6rrN7E00S7wp9K.html

IRDAI gives approval to 23 cross-border reinsurers

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The Insurance Regulatory and Development Authority of India (IRDAI) has granted special approval to 23 Cross Border Reinsurers (CBR) for the year 2016-17.

This will allow Indian insurers to make reinsurance placements with a large number of reinsurers. Cross-border reinsurers are those who do not have a physical presence in India but carry on reinsurance business with Indian insurance companies.

According to PJ Joseph, Member (Non-Life), IRDAI, approvals were given on the basis of submissions made by CBRs and the recommendations made by the insurers and GIC Re in line with the guidelines issued by the authority last month. The approved CBRs include Ingosstrakh Joint Stock Insurance Company (Russia), Asian Reinsurance Corporation (Thailand), Trust Re (Bahrain), United Overseas Insurance Company (Singapore), Equator Reinsurances Ltd (Bermuda), East Africa Reinsurance Company Ltd (Nairobi), Vietnam National Reinsurance Corporation (Vietnam), CICA Re (Kenya), Arab Insurance Group (Labuan) and Union Insurance Company (UAE), among others.

Reinsurance assumes significance as it is important to maintain solvency of the insurer and to ensure that the claims/other clauses are honoured as and when they arise.

Past approvals

In the year 2015-16, the regulator had recognised 244 reinsurers and 90 Lloyds Syndicates. In 2014-15, 238 reinsurers and 87 Lloyds Syndicates were recognised. It is likely that the authority may give more approvals in future.

The onus of placing reinsurance business with registered CBRs is on the Indian insurers or reinsurers and they will have to ensure that the cross-border reinsurer meets the requirements as specified by the regulator. Within the country, the General Insurance Corporation of India is designated as the ‘Indian Reinsurer’ which entitles it to receive obligatory cessions of 5 per cent from all the direct non-life insurers.

Source: http://www.thehindubusinessline.com/money-and-banking/irdai-gives-approval-to-23-crossborder-reinsurers/article8581417.ece

Projects worth Rs. 80,000 cr coming Tamil Nadu’s way

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Tamil Nadu State’s ports will also benefit hugely fromRs. 4-lakh-cr Sagarmala programme: Gadkari

“We need cooperation from State governments for infrastructure development. In Tamil Nadu, unfortunately, we had to terminate two projects,” said Nitin Gadkari, Road Transport, Shipping & Highways Minister. “We never mix politics with development and development with politics,” claimed Gadkari, speaking at ‘Breakfast with BusinessLine ’, an interactive session with senior executives from the corporate sector. But in Tamil Nadu, he said, his Ministry had to give up on the Maduravoyal-Chennai Port elevated road project as there was no progress. Gadkari said he had “written many letters to the State government” to no avail.

Another road project, by L&T, also had to be shelved, said Gadkari, who is touring the State to campaign for the BJP in the Assembly elections, which will be held on May 16.

“We need an atmosphere in the country for development of infrastructure. Our government and my ministry look for ways to help develop infrastructure in different States with different political parties but sometimes we are helpless,” he shrugged.

“I am not speaking politically, but I am talking of practical issues such as forest and environment clearances,” claimed Gadkari.

There is strong political will at the Centre and speedy decision making. Positive cooperation from stake holders will help achieve goals, he said.

Sagarmala programme

Tamil Nadu will be a huge beneficiary under Sagarmala, a Rs. 4-lakh-crore flagship programme of the Centre envisaging port-led development. Conceived as a 10-year project, he hopes to complete it in five years.

Gadkari listed out projects totalling more than Rs. 80,000 crore relating to port and industrial investments in Tamil Nadu. Under Sagarmala, the State will get an LNG terminal at Ennore at a cost of about Rs. 3,000 crore; at Tuticorin Port, a North Cargo Berth, a foodgrain berth, an additional container berth and a coal jetty are planned.

Also in the pipeline is the development of ports at Sirkali and Colachel. Work on all of these will start within two years, he said.

Huge investments are also planned in developing inland waterways using the major rivers in the State, including the Tamiraparani, Manimuttar, Cauvery, Palar, Vaigai and the Bhavani. These present a huge opportunity for private sector investments, he said.

 

Source: http://www.thehindubusinessline.com/todays-paper/projects-worth-rs-80000-cr-coming-tns-way/article8597545.ece