I-T dept launches tax calculator; e-filing of few ITRs begins

by | posted in: Corporate Updates, Income Tax,e-Filing- Individuals, Firms, Companies | 0
The calculator works once a filer correctly feeds his basic details and information, as notified for the current assessment year by the government.

E-filing of income tax returns for the assessment year 2016-17 was launched today for a select category of entities and individuals even as the IT department provided an online calculator for filers to do an easy check and obtain their annual tax liability.

“Two Income Tax Returns have been activated over the official e-filing portal of the department today.

The two are ITR 1 (SAHAJ) meant for individuals having income from salary and interest and ITR 4S (Sugam) meant for individuals, HUF, partnership firms having income from presumptive business,” a senior tax department officer said.

The other ITRs will be hosted on the same portal soon, the officer said.

The ‘tax calculator’ is an online computer-based programme hosted on the website of the tax department and is meant to help taxpayers or filers assess their tax liability.

The calculator works once a filer correctly feeds his basic details and information, as notified for the current assessment year by the government.

Last year, the e-filing commenced on July 1 as there was delay in finalisation of the ITR forms because of the controversy generated over a 14-page document requiring assesses to disclose bank account and foreign travel details.

Later the form was simplified and the number of pages was reduced to three.

This year, the Central Board of Direct Taxes notified the new forms on March 30 and ITRs can be filed till the stipulated deadline of July 31.

At the time of filing the form, the taxpayer has to fill in his PAN, personal information and information on taxes paid and TDS will be auto-filled in the form.

Officials said the calculator has been updated and calibrated by the department as per the new announcements made in respect of tax rates in the latest Budget.

The facility can be used by any taxpayer whether individual, corporate or any other entity, to compute their tax liability.

However, there is a word of caution from the tax department that filers should not solely rely on it as complicated cases of ITR have different requirements which may not be addressed by the ‘calculator’.

“The calculator is only to enable public to have a quick and an easy access to basic tax calculation and does not purport to give correct tax calculation in all circumstances.

“It is advised that for filing of returns the exact calculation may be made as per the provisions contained in the relevant Acts, Rules etc,” the tax department said in a disclaimer.

The official said the calculator has been hosted on the website of the department, for the ease of all who either do e-filing or manual filing of ITR.

The calculator has been enabled to compute the total tax liability of an individual or any other category of taxpayer under various heads like income from house property, capital gains, profits and gains of business or profession and agricultural income, among others.

A total of nine such ITRs have been notified which include the Sahaj (ITR-1), ITR-2, ITR-2A, ITR-3, Sugam (ITR-4S), ITR-4, ITR-5, ITR-6, ITR-7 and an acknowledgement form called the ITR-V.

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

ITR 1-SAHAJ, 2 and 2A can be used by individual or Hindu Undivided Families whose income does not include income from business.

ITR 4S – SUGAM can be used by an individual or HUF whose income includes business income assessable on presumptive basis.

It can also be filed by a firm, other than a limited liability partnership firm.

CBDT processes 6.53L online rectification requests in ITR

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CBDTThe tax department has processed over 6.53 lakh online rectification applications in 2015-16 fiscal and asked the assesses to make use of the e-filing portal for correcting mistakes in Income tax returns.

The Central Board of Direct Taxes (CBDT) in a statement said the e-filing portal of the I-T department provides the utility for online filing and tracking of rectification requests.
CPC has already processed 6,53,763 online rectification requests in 2015-16 till February 29, 2016.
Section 154 of the Income-tax Act provides the taxpayer with an option to seek rectification of mistakes in record.
CBDT said a detailed user manual for filing online rectification is available on the e-filing portal, on which the taxpayer can also monitor the status of disposal of rectification request.
It said in case of any mistake in data entry of tax payment or TDS details, taxpayer can select the “Rectification Request Type->Taxpayer is correcting data for Tax Credit mismatch only” and use the option of pre-filling the correct details.
In case of data entry mistake in any other Schedule or omission of any details, the taxpayer can select the option “Taxpayer is correcting Data in Rectification” and the reason for seeking rectification.
In any other case taxpayer can select the option “No further Data Correction Required, Reprocess the case” where the mistake in processing may have occurred due to non-reporting of TDS by deductor etc, CBDT said.
“CBDT is committed to ensuring accuracy in processing of returns and determination of refunds and seeks the active cooperation of taxpayers in ensuring correctness of data while submitting the return or rectification request,” the statement added.

Source: http://policypulse.com/news/india/story/1116.html

Private sector lender Federal Bank to support startups

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Jumping on to the startup bandwagon, Kerala based private sector lender Federal BankBSE -1.38 % is opening incubation centres in Bangalore and Ernakulam exclusively for startups. These would be specialised lounges within Federal Bank branches meant for funding advisory, regulatory support and if required even for direct investment.

“We have a dedicated startup fund worth Rs 25 crore which we would like to use to fund or lend to promising startups. These lounges, named Launchpad, with fast internet connections, support staff from the financial world and advisory mechanisms would be the perfect breeding ground for future entrepreneurs,” said Shyam Srinivasan, managing director, Federal bank.

The lounge would be manned by bank officers who would be capable of dealing with the financial requirements of the startups as well as local specialists who would be able to advise on regulatory issues that entrepreneurs need to handle.

“We are talking to 3 or 4 startups daily. The challenge for a bank is to move away from a conservative credit mind set to a more entrepreneurial mind set and to accept the fact that out of 40 or 50 investments only one might take off. So even we are in the process of understanding how to engage with startups better,” he said.

The bank follows the footsteps of HDFC Bank and Bank of Baroda to integrate their platform with mobile payments application Chillr. The addition that Federal Bank brings to the Chillr app is that they would allow even non Federal Bank users to instantly open a Federal Bank account through a selfie and Aadhar identification number and allow them to receive payments through Chillr.

“This is just another offer in the suite of offerings for the customer. We are in the major discovery process slowly there would be convergence in this field,” said Srinivasan.

How FIIs outsmart domestic investors

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Domestic investors have a lot to learn from their foreign institutional counterparts, who seem to have mastered the art of timing, raking in the moolah in the midst of market volatility.

On the other hand, domestic investors mostly buy when foreign institutional investors (FIIs) are booking profits at higher valuations, limiting their own upside.

For example, in the current rally, most of the FII purchases were in 2012 and the first half of 2013, when the price-to-earnings (PE) multiple of BSE 500 companies had hit a multi-year low.

In contrast, most of the accumulation by domestic investors, through mutual funds and insurance companies, occurred in 2015 when BSE 500 companies were trading at a multi-year PE high. FIIs accumulated India’s top-listed companies at an average valuation of around 16 times and offloaded it to domestic investors at around 24 times their value (see chart).


In all, FIIs’ stake in BSE 500 companies was up 550 basis points between March 2012 and March 2015, at an average PE of around 16 times the companies’ combined trailing 12-month net profits. FIIs stake peaked in the March 2015 quarter, coinciding with the peak in valuations of BSE 500 companies. One basis point is one-hundredth of a per cent.

The analysis is based on the end-of-quarter shareholding pattern, market capitalisation and quarterly net profit of BSE 500 companies, beginning the March 2006 quarter. The sample is based on the data for 358 companies where the data is comparable across the period.

Analysts attribute this to the steady nature of fund flows FIIs receive, while domestic institutional investors are at the mercy of inflows from retail investors, which tend to take place late in the cycle.

“When FIIs were buying in 2012-13, insurance companies and mutual funds were still facing redemption, forcing fund managers to sell their holdings even when the valuations were low. Inflows turned positive only in late 2014 and 2015, when domestic retail investors were convinced about the rally,” said Dhananjay Sinha, head, institutional equities, Emkay Global Financial Services.

In comparison, FIIs receive a significant portion of their funds from large institutional investors in Europe and the US, whose investment sentiment remains steady over a long period.

Others also point to differences in the investing styles of FIIs and their domestic counterparts.

“FII investments are largely fundamental and research-driven compared to domestic investors, most of whom tend to get swayed by market sentiment and herd mentality,” said G Chokkalingam, the founder and chief executive officer of Equinomics Research & Advisory.

This explains why a majority of domestic investors fail to make money in the market, he added.

A similar trend was visible in the rally before the global financial crisis, when FIIs were net sellers for nearly two years in the run-up to the September 2008 crash while domestic investors were buyers.

Despite the trends, some analysts differ.

Nitin Jain, the president and chief executive officer of global asset and wealth management firm Edelweiss Capital, said there is no evidence of domestic investors being less smart than their foreign counterparts.

“We should not paint all FIIs with the same brush. Investment flows from exchange-traded funds, which is retail money – as volatile and sentiment-driven as domestic retail and mutual funds flows. FIIs, on the other end of the spectrum, also get pension money and sovereign wealth funds, which are long-term and their investment style is similar to that of domestic insurance companies,” said Jain.

Source: http://www.business-standard.com/article/markets/how-fiis-outsmart-domestic-investors-116032800052_1.html

E-commerce sees major money inflow

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It is not only Uber, the American taxi-hailing app, that is going all guns blazing in India with massive investment plans. Its biggest competitor, Bengaluru-based Ola, as well as e-commerce entities Flipkart and Amazon, are all planning to pump in big money to stay ahead, even in a scenario when investors are not as ready as earlier in opening their purse-strings.

Uber India has readied itself for another $500 million (Rs 3,300 crore) investment in the next three months, reports suggest. The app service had only nine months earlier committed $1 billion (Rs 6,600 crore) in India. Uber could not be reached for a comment.

For foreign giants such as Amazon, Uber and Alibaba, this country is a big market they all want to capture. Experts believe this is a trend which will continue, as a global economic slowdown will push a chunk of new investments towards India.

“We can clearly see a slowdown in overseas markets, while India is still managing annual growth of seven to eight per cent. So, companies such as Uber, Amazon and Alibaba want to bet big on India. While Amazon was not able to make a dent in China and Alibaba in Europe, they do not want to lose out on India. We will see this trend through the year,” says Amarjeet Singh, partner – tax, KPMG in India.

Ola, rival of Uber in the same segment, is on track to invest a chunk of its $1.3 billion (Rs 8,650 crore) capital raised so far. The firm recently announced it would invest Rs 200 crore in the Delhi-National Capital Region area over the next six months, “towards innovative green fuel technology, leasing of CNG cars and strengthening the system to catalyse greater CNG adoption in the region”, Rahul Maroli, its vice-president for strategic supply initiatives had said.

According to sources, Ola will further make strategic investments in all metro cities, as well as in Tier-II and Tier-III towns. “The company plans to add at least another 550,000 vehicles by the end of this year,” said one. Ola has at least 350,000 cabs and 80,000 auto rickshaws on its platform across 102 cities in the country.

American e-commerce major Amazon had said in October 2014 it was investing $2 billion (Rs 13,200 crore) in India. Later, its executives said the group had an open chequebook for the market. In February, it bought Noida-based payments services provider Emvantage, its first acquisition. This is aimed to help Amazon accelerate the development of payment solutions for customers.

As for Alibaba, the Chinese e-commerce giant, it already has a foothold in Indian e-commerce through its investments. The group is majority stakeholder in One97Communications, owner of mobile payments giant Paytm. Also, online marketplace major Snapdeal raised $500 million (Rs 3,300 crore) from a group of entities last year which included Alibaba.

The Chinese company now plans to directly enter India.

“We plan to enter the e-commerce business in India in 2016,” recently said J Michael Evans, group president. “We have been exploring very carefully the opportunity in this country, which we think is very exciting against the backdrop of (the) Digital India (programme of the government).”

Indian e-commerce giant Flipkart had, in March, infused Rs 338 crore into its online fashion store, Myntra, documents filed with the registrar of companies stated. Flipkart has so far raised $3 billion (nearly Rs 20,000 crore).

Source: http://www.business-standard.com/article/companies/e-commerce-sees-major-money-inflow-116032800986_1.html

New bankruptcy bill to speed up shutdown of failed businesses

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Panel has sought the overhaul of the bankruptcy framework to allow the speedy winding up of failed businesses to protect shareholders and lenders, aiming to modernise an outdated system.

A government panel has sought the overhaul of the bankruptcy framework to allow the speedy winding up of failed businesses to protect shareholders and lenders, aiming to modernise an outdated system that drags out closure proceedings.

It has recommended new institutions and structures for a fresh regime that will encourage entrepreneurship and foster a startup culture, among the stated objectives of the Narendra Modi administration. The government has indicated it will move a Bill in the winter session of Parliament to give effect to the recommendations, addressing one of the key issues that has kept India low on the ease of doing business rankings.

The Bankruptcy Law Reform Commission headed by former law secretary TK Viswanathan has proposed insolvency resolution within 180 days and a new regulator to oversee the process. It’s also laid down a clear and speedy system for early identification of financial distress and revival of companies.

The timelines are on par with international norms for insolvency resolution. “The endeavour would be to introduce the Bill in the next session of Parliament,” Finance Minister Arun Jaitley said at the World Economic Forum in the Capital on Wednesday. Viswanathan submitted the report to the minister later in the day. The report, along with the draft legislation, has been made public for feedback. “The Bill seeks to improve the handling of conflicts between creditors and debtors, avoid destruction of value, distinguish malfeasance vis-a-vis business failure and clearly allocate losses in macroeconomic downturns,” the report said.

The World Bank has ranked India at 136 out of 189 countries in ‘resolving insolvency,’ estimating that it takes 4.3 years on average in Mumbai to settle a case.

Jaitley had identified bankruptcy law reform as a key priority for improving ease of doing business in his February budget speech. He said that a comprehensive bankruptcy code, meeting global standards and providing the necessary judicial capacity, would be unveiled in the fiscal year. Under the current system, proceedings take several years, hurting investors and lenders besides costing taxpayers crores of rupees.

Banks are groaning under bad debt stemming from projects that have got stuck, drawing the Reserve Bank of India’s concern. “We need a bankruptcy code. We need equity to be seen as equity and debt to be seen as debt. Today there’s a lot of confusion… We need that confusion to be changed,” RBI Governor Raghuram Rajan has said previously.

90 Days for Key Categories. The prescribed resolution timeline of 180 days can be cut further to 90 days from the trigger date for key categories. The proposed insolvency regulator will cover professionals and agencies specialising in the field.

The proposals include information utilities that will collect, authenticate and disseminate financial information from listed companies. An Insolvency Adjudicating Authority will hear cases by or against debtors. The Debt Recovery Tribunal should be the adjudicating authority with jurisdiction over individuals and unlimited liability partnership firms, it said. The National Company Law Tribunal (NCLT) should be the adjudicating authority with jurisdiction over companies and limited liability entities, it added.

The draft bill has consolidated existing rules relating to insolvency of companies, limited liability entities, unlimited liability partnerships and individuals, all of which are currently scattered across a number of laws, into a single legislation.

According to the draft bill, during the transition phase, the Centre will exercise all regulatory powers until the agency is established. The panel’s report suggests that an insolvency resolution plan prepared by a resolution professional has to be approved by a majority of 75% of the voting share of financial creditors. As part of the insolvency resolution process, creditors and debtors will engage in negotiations to arrive at agreeable repayment plans.

The draft proposes that any proceeding pending before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) or the Board for Industrial and Financial Reconstruction (BIFR) before the new law goes into force should stand abated or stopped.

“However, a company in respect of which such proceeding stands abated may make a reference to Adjudicating Authority within 180 days from the commencement of this law,” the recommendation said, keeping in view continuity of the process. Minister of State for Finance Jayant Sinha said the required infrastructure needed to be put in place.

“We also have to ensure that necessary judicial capacity is available,” he said. “We also need to resolve many of the situations immediately because they are short of cash in most of these bankruptcy types of cases.” The minister said the government was trying to put together a comprehensive solution where “we can resolve default and bankruptcy cases as quickly and efficiently possible.”

Industry feels the new system will create a robust and globally competitive insolvency regime. This will significantly reduce the time taken for insolvency proceedings in India, which at present, on an average basis is estimated at about 4.3 years as against only 1.7 years in high-income OECD countries,” said Chandrajit Banerjee, director general of the Confederation of Indian Industry.

“The architecture proposed by the Viswanathan committee of establishing an insolvency regulator to have oversight of the new class of insolvency professionals, agencies and information utilities will enhance the systemic efficiency of dealing with insolvency cases in a timebound manner,” he said.

Source: http://articles.economictimes.indiatimes.com/2015-11-05/news/68043912_1_bankruptcy-framework-new-bankruptcy-bill-180-days

Indian medical tourism industry to touch $8 billion by 2020: Grant Thornton

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According to a CII – Grant Thornton white paper, cost is a major driver for nearly 80 per cent of medical tourists across the globe.

As healthcare turns costlier in developed countries, India’s medical tourism market is expected to more than double in size from USD 3 billion at present to around USD 8 billion by 2020, a report says.

According to a CII – Grant Thornton white paper, cost is a major driver for nearly 80 per cent of medical tourists across the globe. The cost-consciousness factor and availability of accredited facilities have led to emergence of several global medical tourism corridors – Singapore, Thailand, India, Malaysia, Taiwan, Mexico and Costa Rica.

“Amongst these corridors of health, India has the second largest number of accredited facilities (after Thailand). The Indian Medical Tourism market is expected to grow from its current size of USD 3 billion to USD 7-8 billion by 2020,” Grant Thornton India’s National Managing Partner Vishesh C Chandiok said.

Bangladesh and Afghanistan dominate the Indian Medical Value Travel (MVT) with 34 per cent share.

Africa, GCC and CIS regions (whose current share is just 30 per cent) present the maximum possible opportunity for the Indian healthcare sector. Medical tourists from these sectors currently favour the South East Asian medical corridors.

Chennai, Mumbai, AP and NCR are the most favoured medical tourism destinations for the floating medical population who avail treatments in India.

“While the number of MVTs itself is poised to grow at over 20 per cent CAGR, Kerala needs to focus on its visibility as a healthcare destination amongst other states,” said the report.

Kerala attracts only 5 per cent of such medical tourists currently and has the potential to increase its share to a 10-12 per cent with a focused marketing strategy.

As per the study, the key factor to drive medical value tourism in Kerala will be availability of national as well as globally accredited facilities across the entire state, an area where Kerala lags behind in comparison to Tamil Nadu, Maharashtra, NCR and Andhra Pradesh.

“… Kerala is already one of the most preferred tourist destinations in the country. For medical value tourism, however, there is a clear need to build and upgrade infrastructure,” Grant Thornton India Partner Vrinda Mathur said.

The white paper suggests tapping a larger share of the health wallet of the African, Asian, Middle East patients as well as welcoming tourists from other regions and countries, as also a marketing campaign with active support of the government and private sector.

Source: http://health.economictimes.indiatimes.com/news/industry/indian-medical-tourism-industry-to-touch-8-billion-by-2020-grant-thornton/49618595