Directors of shell companies which have not filed tax returns for three or more years will be barred from taking similar positions elsewhere or getting reappointed, the government said, as it intensified the crackdown on firms that exist only on paper.
The government has struck more than 2 lakh shell companies off the Register of Companies and put restrictions on their bank accounts as part of its clampdown on black money.
Directors of the companies that were struck off the RoC could face up to 10 years in jail if they were found siphoning off funds, the government said on Wednesday.
The government said it is compiling the profiles of the directors at such companies in collaboration with enforcement agencies and expects the move to cover 2-3 lakh people.
Professionals such as chartered accountants, company secretaries and cost accountants associated with shell companies and involved in illegal activities have also been identified, according to a statement.
The decisions were made at a review meeting chaired by the minister of state for corporate affairs, PP Chaudhary, to strengthen the rules and procedures of corporate governance, it said.
The move “would not only help in checking the menace of black money but also would promote an ecosystem of ‘ease of doing business’ and enhancing investors’ confidence”, Chaudhary said.
Enforcement agencies are compiling profiles of directors, including their background, antecedents and role in the operations and functioning of these companies.
“All efforts are also being made to identify the actual beneficiaries and persons behind such shell companies,” the government statement said.
The government is also monitoring action being taken by professional institutes such as the Institute of Chartered Accountants of India and Institute of Company Secretaries of India.
In a major clampdown against black money, the government on Tuesday directed freezing bank accounts of more than 2.09 lakh companies whose names have been struck off from the records and said action would be taken against more such firms.
Banks have also been asked to step up their vigil against those companies that are non-compliant with various regulations and not carrying out business activities for long, a senior finance ministry official said as authorities continue their crackdown against shell entities The official said banks have been directed to freeze the bank accounts of these deregistered companies.
While warning that action would be taken against erring firms, the official said the efforts would help in enhancing corporate governance standards as well as clean up the system that otherwise is prone to be misused.
The names of over 2.09 lakh firms have been struck off from register of companies for failing to comply with regulatory requirements
“The names of 2,09,032 companies have been struck off from the register of companies under Section 248 (5) of the Act. The existing directors and authorised signatories of such struck-off companies will now become ex-directors or ex- authorised signatories,” an official release said
Section 248 of the Companies Act – which is implemented by the corporate affairs ministry – provides powers to strike off names of companies from the register on various grounds including for being inactive for long.
According to the official, since these companies had ceased to be legal entities, there was no reason having active bank accounts which could be prone to misuse.
Once these companies become compliant, banks would activate their accounts, the official added. “Furthering our war against #BlackMoney, banks have been advised to immediately restrict bank accounts of struck-off companies,” Minister of State for Corporate Affairs P P Chaudhary said in a tweet.
The official said a detailed analysis has been initiated to check whether these deregistered companies were used as conduits for channelising unaccounted money into the system, especially during demonetisation.
Amid efforts against shell companies which are allegedly used as conduits for illicit fund flows and tax evasion, the government said the directors of deregistered firms would not be able to operate the bank accounts till these entities are legally restored
About the directors and signatories of the over 2.09 lakh firms, the government said they would not be able to operate bank accounts of such companies till these entities are legally restored. The restoration, as and when it happens, would be reflected in the official records by way of change in the status from ‘struck off’ to ‘active’. “Since such ‘struck off’ companies have ceased to exist, action has been initiated to restrict the operation of bank accounts of such companies,” the release said.
The Department of Financial Services, through the Indian Banks Association, has advised banks that they should take immediate steps to put restrictions on bank accounts of such struck-off companies. “In addition to such struck-off companies, banks have also been advised to go in for enhanced diligence while dealing with companies in general,” the release said.
A company even having an active status on the corporate affairs ministry website but defaulting in filing of its due financial statements or annual returns, among others, “should be seen with suspicion as, prima facie, the company is not complying with its mandatory statutory obligations”. In another tweet, Chaudhary said the ministry is committed “in attaining @narendramodi ji’s vision of eliminating black money”.
Tax payers who were supposed to file their income tax returns by September 30 now have some more time on their hands. The government has extended the deadline to file income tax returns for such tax payers until October 31.
“The ‘due-date’ for filing Income Tax Returns and various reports of audit prescribed under the Income-tax Act,1961 has been extended from 30th September, 2017 to 31st October, 2017 for all taxpayers who were liable to file their Income Tax Returns by 30th September, 2017,” Ministry of Finance said.
This time tax payers will have to quote their 12-digit Aadhaar number or the 28-digit Aadhaar enrolment number while filing the income tax return.
You will have to keep the Form 16, which you got from their employer handy. If you don’t have it, get it asap. Download the Form 26AS from the Income Tax e-filing website. Form 26AS is a consolidated tax statement which states tax credit statement of all taxes received by the Income Tax Department against your PAN number. You will need it to tally with your Form 16.
Availability of the detail of bank accounts in which the refund is to be credited is a precondition for direct credit of refund in bank accounts. Refund generated on processing of return of income is currently credited directly to the bank accounts of the tax-payers. Non-residents, who are claiming refund but do not have bank accounts in India may furnish details of one foreign accounts in ITR for issuance of refund.
Bank accounts details
A tax payer is also required to disclose his/her bank account number along with the IFSC code. However, dormant accounts which have been in use for the past three years or more need not to be mentioned.
Due-date for filing Income Tax Returns & various reports of audit prescribed under the IT Act,1961 has been extended to October 31, 2017.
According to the Income Tax Department now, tax payers have to disclose information of cash deposited in their bank account aggregating to Rs 2 lakh from November 11 to 30 December, 2016.
Ensure that ITR is compliant with amount deposited in bank accounts during the period of demonetisation
Besides that, if any assessee has any unexplained income or investments, he has to report such unexplained income in the new ITR forms and such amount will be taxable at the tax rate of 60 percent plus surcharge and cess.
Tax deductions
If you are claiming tax deductions under 80C, you should keep the following details handy:
Investment details (eg: LIC, PPF, NSC)
Home loan
LTA
Medical
Consequences of Late filing of Return
According to ClearTax, if there are any taxes which are unpaid, penal interest at 1 per cent per month or part thereof will be charged till the date of payment of taxes .Also Penalty of Rs 5,000 may be charged. The penalty is not levied in all cases and depends upon the circumstances of the case.
For returns of FY 2017-18 and onwards, penalty of Rs 5,000 will be charged for returns filed after due date but before 31st December. If returns are filed after 31st December, a penalty of Rs 10,000 shall apply. However, penalty will be Rs 1,000 for those with income upto Rs 5 lakh.
Who has to file?
Every person whose gross total income exceeds the taxable limit must file an Income Tax Return (ITR)
Who has to file?
Every person whose gross total income exceeds the taxable limit must file an Income Tax Return (ITR)
Who has to e-file?
Individuals & HUF having total income exceeding Rs 5 lakh or claiming any refund in the return (excluding individuals of the age of 80 years or more who are furnishing return in Form no. ITR-1 or ITR-2).
Individual or HUF, being a resident other than not ordinarily resident, having any foreign asset/income or claiming any foreign tax relief.
The Income Tax Department will focus on widening of tax base and maximise e-assessment to cut down on human interface, according to an official statement.
The Income Tax Department will focus on widening of tax base and maximise e-assessment to cut down on human interface, according to an official statement. Also, efforts will be made by the Central Board of Direct Taxes (CBDT) to exceed the income tax collection target set for current fiscal by use of big-data analytics, said the statement after the end of the two-day annual retreat of central and state government tax officers. The conference also discussed strategies for widening of tax base, with special focus on verification of data collected during demonetisation and SFT (statement of financial transactions).
“The CBDT aims to add a sizeable number of new taxpayers in the current fiscal,” an official statement said. Prime Minister Narendra Modi, while inaugurating the Rajaswa Gyan Sangam yesterday, had nudged tax officials to use data analytics to track undeclared wealth and fix clear targets for improving tax administration by 2022. He asked taxmen to clear pendency of cases and create an environment that instills confidence among honest taxpayers and uproots corruption.
Revenue Secretary Hasmukh Adhia said that revenue was a cross sectoral subject and required coordination between both the CBDT and CBEC. He encouraged that officers of both CBDT and CBEC to share best practices with each other regularly. The CBDT said that in the conference “it was decided that assessing officers be encouraged to maximise e-assessment in a phased manner and to ensure that work be completed online so that there is complete transparency”. As a step towards effective litigation management, CBDT aims to achieve the twin objectives of substantially reducing the number of appeals and the disputed demand before CIT (appeals), it said.
“The focus is to dispose off 70 per cent of smaller appeals and 30 per cent of high demand appeals including 100 per cent of appeals involving disputed demand of Rs 50 crore and above,” the CBDT said. Strategies for revenue maximisation were discussed at length especially since the CBDT has been tasked to collect revenue of Rs 9.80 lakh crore in the present fiscal. “The officers were urged to utilise data effectively such that the target for collection of Personal Income Tax should not only be met but also be exceeded,” it added. With regard to redressal of grievances, the CBDT said 85 per cent of grievances have been disposed off online through the e-nivaran portal. “There was emphasis on redressal of grievances for both CBDT and CBEC,” the statement said.
It said that special focus should be given to popularise the Operation Clean Money portal such that an environment of voluntary compliance can be created. The indirect tax wing – Central Board of Excise and Customs – discussed issues relating to ease of doing business, litigation management among others. “There was also a Sunshine session to highlight a formation’s initiative in improving taxpayer services or individual initiative outside of the regular area of responsibility,” the statement said.
Besides, Adhia underlined the importance of increasing efforts to garner revenue in light of the data that is available post demonetisation. He also stressed that genuine grievances of taxpayers should be disposed off on priority and taxpayers should be treated with courtesy.
Stressed loans near $10-billion mark; total bad loans seen at over $130 billion; 250 NCLT cases across 10 benches
While many of the loan exposures had turned toxic in 2015 and 2016, bankers were looking to recover their dues via other schemes such as the strategic debt restructuring or the S4A (scheme for sustainable structuring of stressed assets ) and 5/25.
While many of the loan exposures had turned toxic in 2015 and 2016, bankers were looking to recover their dues via other schemes such as the strategic debt restructuring or the S4A (scheme for sustainable structuring of stressed assets ) and 5/25.
With defaults on loans and corporate bonds nudging $10 billion in 2017 so far and the total quantum of bad loans estimated to have crossed $130 billion, the number of cases at the National Company Law Tribunal (NCLT) has jumped to around 250 across 10 benches. At the end of March, fewer than 40 cases had been referred to the tribunal. Banks are hoping to recover their loans via the Insolvency and Bankruptcy Code(IBC) and have already referred a dozen large accounts to the tribunal following a recommendation from the Reserve Bank of India (RBI). They are expected to approach the tribunal for another two dozen accounts.
Apart from banks, also knocking on the doors of the NCLT are other creditors such as non-banking financial companies and asset reconstruction companies. A few corporate debtors too have approached the tribunal.
While many of the loan exposures had turned toxic in 2015 and 2016, bankers were looking to recover their dues via other schemes such as the strategic debt restructuring or the S4A (scheme for sustainable structuring of stressed assets ) and 5/25.
Consequently, several of the exposures had not been classified as non-performing assets. With the RBI asking banks to refer the cases to the NCLT, the tribunal has been inundated with cases.
Industry watchers believe that given the quality of the fixed assets — plant and machinery — at many of the companies is of good quality, the firms are unlikely to be liquidated. However, buyers will come in only if banks take big haircuts since just about 45-50% of the debt is believed to be sustainable.
Of the 12 cases referred to the NCLT, 11 have been admitted. While some of the companies — Essar Steel, Bhushan Steel and Monnet Ispat — raised objections, the tribunal overruled these.
Bhushan Steel, which owes banks a whopping Rs 44,447 crore, had earlier objected to the insolvency proceedings alleging that State Bank of India (SBI) had inflated the dues by around Rs 100 crore.
Nonetheless, SBI’s petition was admitted by the NCLT, which ordered the interim resolution professional (IRP) to take charge of the company. The IRP, along with a committee of creditors, is currently working on a resolution plan.
The central bank has recently sent a second list of defaulters like Videocon Industries, IVRCL and Visa Steel that banks must take to the bankruptcy court if stress is not resolved by December 13.
These defaults, in turn, have put pressure on banks’ balance sheets which have reported a remarkable rise in bad loans in the June quarter of FY18. India’s largest bank SBI saw its gross bad loan ratio — total non-performing loans as a percentage of its total loans — rise 86 basis points sequentially to 9.97%.
SBI has an exposure of Rs 50,247 crore to the 12 accounts referred to the NCLT and the total provision on those accounts stood at Rs 19,943 crore. SBI chairman Arundhati Bhattacharya told reporters during the results press conference that the bank requires incremental provision of Rs 8,571 crore with respect to the 12 accounts in FY18.
Of the 59.57 lakh businesses, who should file return for July, 38.38 lakh had filed their GST returns.
Businesses will have more time to file the final GST returns as the government on Monday extended the last date for filing of sales and purchase data as well as payment of taxes for the months of July and August.
Now sales return or GSTR-1 for July will have to be filed by September 10 instead of September 5 earlier and purchase returns or GSTR-2 would be filed by September 25 instead of September 10 earlier.
GSTR-3, which is the match of GSTR-1 and GSTR-2, will have to be filed by September 30, in place of September 15.
“GIC (GST Implementation Committee) decides to extend date of GSTR 1, GSTR 2 and GSTR 3 for the month of July to 10th, 25th and 30th September 2017, respectively,” the government said in a tweet.
With regard to August, the date for filing GSTR-1, GSTR-2 and GSTR-3 has been extended to October 5, October 10 and October 15 from earlier September 20, September 25 and September 30, respectively.
The industry has been demanding an extension of the date of filing final GST returns in view of scores of invoices to be uploaded.
The government will shortly issue notification to extend the date of filing returns.
In the initial returns filed in form GSTR-3B, taxes worth Rs 92,283 crore were collected for July from just 64.42 per cent of the total taxpayer base.
Of the 59.57 lakh businesses, who should file return for July, as many as 38.38 lakh taxpayers accounting for 64.42 per cent of the total businesses who had registered in July had filed their GST returns.
Through a notification last week, the Central Board of Excise and Customs (CBEC) had waived fee for delayed filing of GSTR-3B and had allowed businesses to correct errors in the initial return form while filing the final returns.
It also said entities who had not filed GSTR-3B can file the final returns in GSTR-1, GSTR-2 and GSTR-3 and pay taxes.
The Central Board of Direct Taxes (CBDT) signed four more advance pricing agreements (APAs) in August with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.
The four APAs entered into during August, 2017 pertain to various sectors of the economy like telecom, banking, manufacturing and education, an official statement said today.
“Out of these four agreements, three are unilateral and one is a bilateral,” it said.
According to the statement, the bilateral APA is for international transactions between an Indian company and a UK-based company and this is the eighth bilateral APA with the United Kingdom and 13th overall (the other five being with Japan).
With the signing of these four agreements, the total number of APAs entered into by CBDT has reached 175, the statement said, adding, “this includes 162 unilateral APAs and 13 bilateral APAs.”
Besides, in the current financial year, a total of 23 APAs (2 bilateral and 21 unilateral) have been signed till date, the statement noted.
The APA provisions were introduced in the Income-tax Act in 2012 and the “rollback” provisions were introduced in 2014.
The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.
The statement pointed out that since its inception, the APA scheme has been well-accepted by taxpayers and that has resulted in more than 800 applications (both unilateral and bilateral) being filed so far in five years.
Noting that the progress of the APA scheme strengthens the government’s resolve of fostering a non-adversarial tax regime, the statement said the Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.
Directors of shell companies which have not filed tax returns for three or more years will be barred from taking similar positions elsewhere or getting reappointed, the government said, as it intensified the crackdown on firms that exist only on paper.
