Finance ministry sends home non-performing tax officials

Government officials are often accused by the public for their lack of swiftness in work corruption and reckless attitude towards citizens approaching them. The main source for this attitude arises from the lack of accountability. Government jobs come with the security now matter what you don’t lose your employment even if you are incompetent. These are the cornerstones for corruption and slow action among officers. To change this public perception the finance ministry has removed 33 officials including 7 group ‘A’ officers. They are revenue officers and have been given pre-mature retirement for non-performance. Tax officials are often accused for harassing tax assesses and non-performance. The decision comes under the rule 56(j) of CCS (pension).

This to some extent fulfills the ruling government NDA’s election campaign of good governance. It is high time that government reformed Indian Bureaucracy. The removal of employees is not limited to tax department alone but to various other government departments.

In the past two years there have been 70 such officers who were removed including six group ‘A’ officers. To keep a check on late comers the department of Personnel & training has issued warning circular for late comers. According to the circular all central government officials should report in time for their work. Strict disciplinary action will be initiated against those failing to do so. Some of the government offices are currently equipped with biometrics and other offices will be soon fitted with the required equipments. The government employees are allowed to be late only twice a month and more than that will be accounted as half day holiday.

Quarterly financial report excites the investors

The March quarter financial reports show an increase in the turnover, which is greater than the estimated value.
About seventy six companies went through the quarterly analysis in which it shows that around forty nine companies gained profit more than the estimate. Head of research at Emkay Global Financial Service Dhananjay Sinha said that the commodity price is recovering and also the expenditure from the government shows a gradual increase. Only some companies went through the analysis process, there yet many more entities that have to report their financial status.
Vijit Jain and Surendra Goyal, analyst at the Citigroup said that around fifty three percent of the entities that went through the financial analysis for the quarter year crossed the target, and thirty percent of the company missed the review. He said that the estimation of expectation vs earning performance shows that major results were from the telcos, material and energy sector.

India equity strategist of Bank of America Merrill Lynch (BofA-ML), Sanjay Mookim said that the March quarter results are high, but said that any dispiriting or unexciting news comes in the later part of the year. On another analysis of eighty four companies, with the reference of the earlier fourteen quarter report shows an increase of 6.8% from the previous year. Because of the impairment charges, Vedanta Ltd and Cairn India Ltd are not included in the list.
The decrease in the commodity price increase the operation, but it does not reflect in the net profits because of higher interest rates. Reliance Industries Ltd has the highest net profit because of the decrease in the price of crude oil, HDFC bank increase a net profit of twenty percent and the Tata Consultancy services increased 11.9% of revenue growth.

Tax benefits for first-time home buyers

The financial budget for the year 2016-17 has some relief for home buyers. There is an additional INR 50,000 tax benefit for home loans up to 35 lakhs provided that the total value of the house does not exceed 50 lakhs. The deduction is a huge relief given the high property values in India. This increase will lead to 2.5 lakh tax deduction over home loan compared to the 2 lakh in the previous year, comes under section 24(for interest paid). All tax deductions for home loan interest are applicable for the ones obtained after April 1999. This is the first clause of section 24.

Other benefit provided in budget is increase in the number of years for the construction activity to be completed.
The tax deduction over home loan interest is available only if the construction is completed within three years starting from the year when the loan was taken. The time period of 3 years is increased to 5 years. This deduction will be reversed if the property is sold before 5 years of purchase. This is beneficial for the home buyers as many real estate projects tend to get delayed and are dragged for more than 3 years. However the new regulation will be applicable from April 2017. This move is also expected to boost the real estate sector which has been quite dull for the past few years. Major cities in India have empty inventories built and waiting to be purchased.

Tax incentives for first-time home buyers

The Union Finance Minister Arun Jailtley has presented the Financial Budget for the year 2016-17. For common taxpaying citizens there has been no rise in the tax percentage or the tax slabs. However the government has given incentives to first-time home buyers. First time home buyer will get tax benefit for purchase of homes of value not more than 50 lakh. The first time buyers will get interest deduction of INR 50,000 for loans up to 35 lakh given that the value of house is not more than 50 lakh. The government has created this incentive with the idea of “housing for all” scheme. This move would encourage first-time home buyers and also boost the real estate sector which remains dull for the past few years.

The amendments to the income tax act will be in effect from April 1 2016. The chamber for real estate has welcomed this decision as it will recover the real estate sector to an extent. The major reason for low performance in real estate sector being the exponential rise in the prices of properties. The raw materials ( cement and bricks) price too has been on rise. In the current scenario housing seems a huge investment for a normal middle class family in metros, even in 2nd and 3rd tier cities of India. The incentive given by the government sounds sweet for first time buyers but this alone will not prompt anybody to buy a house. Housing has become a life-time investment for families with high loan rates and long duration of EMIs.

Tax incentives for cleanliness in Mumbai

In a bid to promote cleanliness among the residents of Mumbai the Thane municipal corporation has begun completion among housing societies. As a part of the swachh bharat abhiyan the municipal corporation is planning to make thane defecation free. The cleanliness competition is for all housing societies, complexes and slums. To participate in the contest forms have to be filled starting from April 14th and till April 30th. The contest will begin from May 1 and will end on july 31st. The civic authorities will review from august 1 to august 14. The total points are split for various parameters; they are solid waste management (15 points), tree plantation (10 points), solar power (10 points) rain water harvesting (10 points) fire equipment (10 points) voter registration (10 points) and payment of property tax (10 points).

These parameters are common for slums and also include segregation of garbage personal toilets and electricity in the area. The authorities have announced that a 5 percent reduction of property tax for the winner of the completion. The civic authority has already given a 5 percent reduction to those housing complexes with rainwater harvest. The winning slums will get 10 to 15 lakhs allotted for development work. One hopes these initiatives by the government will bring cleanliness in the heavily congested areas of Mumbai. The residents too are happy about the contest and expect it to be conducted year after year.

India in agreement to share information on tax evasion

The G20 summit will be held in the month of September. During the summit the nations will sign a deal for information exchange to reduce tax evasion. The information for exchange will consist of off-shore accounts of citizens their interest payments and ownership. The G20 nations are working continuously to bring transparency in the tax payment. In 2014 the countries signed an agreement to begin automatic exchange of information to create a global transparency standard. India will be a part of the information exchange framework and is an early adaptor who signed the deal during Organization for economic cooperation and development (OECD) in 2014. There are several countries apart from the G20 members who have come up to sign the automatic information exchange program, at present 96 countries have signed the deal. India also signed the deal for assistance on administrative taxes in 2015.

Countries across the globe have come forward to resolve issues of tax evasion, off-shore secret accounts. The consciousness to fasten this process came after the “Panama Papers”. The papers of panama law firm Mossack Fonsecka took the world by storm, it consists names of powerful people from countries covering half the globe. In that list 500 Indians have been listed, containing names of people in entertainment to banking sector. Though using off-shore entities is not illegal the amount stashed in these accounts are believed to fund drug trafficking fraud and tax evasion. A Global level solution is being framed to solve tax evasion issues.

Conducting business in India-tax and regulations

Conducting business in any country requires a keen insight into the countries rules and regulations. There are several regulatory compliances and legislation governing the setting-up and functioning of a company.
The company should obtain a digital signature certificate from the Ministry of Corporate affairs. Best Accounting services in India by Uptra consultancy services. The name of the company should be registered. The new companies act is an important legislation that any company should be aware of in regards with the functioning. It lays down the provisions regarding qualification remuneration transactions, board and shareholders meetings

The registrar of companies is the official agency which takes care of the functioning of the companies act is
The country has various tax levied by the state and central government broadly classified as direct and indirect taxes. Wealth tax, income tax minimum alternate tax and share buyback tax come under the direct taxes. Value added tax (VAT), service tax, excise duty and R&d cess come under indirect tax. The tax structure is expected to change with the introduction of Goods and services (GST) bill. Under GST all the various tax categories will clubbed to a single entity. The companies will pay only two tax one for the central and the other for state

The Indian companies are subject to pay tax and stamp duty for business transactions.There are several laws environmental laws to be followed- water act, air act, hazardous waste rules, Indian forest act, National environmental tribunal act and several other acts which have to be followed. Laws are established in regard with employee rights maternity benefits act trade union act workmen compensation act provident fund act

Israel government to levy tax on online companies

Israel government has issued new tax guidelines for foreign online companies. According to the new rule online companies earning through services such as advertising and brokerage will pay 17 percent Value Added Tax(VAT) and income tax over other activities. Earlier tax was levied on companies if their activity made the organization a “permanent establishment”. The services offered by a company were subject to tax if it was generated in Israel. The tax authorities have broadened the definition of “permanent” and have included online business. The companies which will pay taxes on the basis of this decision will be Google, facebook, Amazon and eBay.

The issue was brought in the parliament of Israel as many representatives felt that foreign companies have an unfair advantage over Israel companies These companies which have substantial amount of business have to register themselves as approved enterprise and so the transactions are liable to VAT. The tax authorities are drafting framework for bringing digital services like books or music under tax net and VAT will be levied on them too. Facebook said that it was ready to comply with the rules and regulations of the countries it was established in. There were air balloons near Google offices which read “Google has to pay tax”. Google authorities are yet to issue a statement.

“Presumptive taxation” to benefit independent professionals

“Presumptive taxation” is a scheme available for consultants and independent professionals. Presumptive taxation is when a fixed amount of tax is charged on the gross receipts. Gross receipts are the total income earned without considering any expenditure. This is applicable to independent professionals like doctors, engineers tutors, interior decorator etc. The gross receipt of such professionals should not exceed INR 50 lakh. In such case the professional can get tax filed for 50 percent of his/her gross receipt. This feature was introduced in the 2015-16 budget under the recommendation of Easwar committee. The committee recommended a gross receipt limit of 1 crore but the government has given up to 50 lakh.

In the previous tax regime presumptive tax of 8 percent was allowed but was applicable to only a few styled professionals. This budged has increased the tax rate and also increased the number of professionals eligible.
The scheme will reduce the burden of maintaining audits and accounts by small and mid-size professionals. If the individual paying taxes under the scheme has net income higher than 50 percent of gross receipt the claim is not considered illegal or the person is not accounted to disclose income. However if the net income of the professional is less than 50 percent of gross receipt, he/she can fill tax procedure in the ITR-4 form. By filling under ITR-4, the individual can claim I-T on the lower income by maintaining records for the expenditure and income. This is applicable for partnership firms but the remuneration paid to the partner also comes under the 50 percent and the amount in the hands of the partner is also taxable. This scheme is best suitable for mid-size professionals.

European Union on tax havens and evasion

European Union in the wake of “panama papers” leaks has proposed new tax rules for big companies. According to which big companies operating in the 28 nation’s part of European Union will have to make their earnings public. Panama law firm Mossack Fonseca paper leak has exposed the extent of tax evasion and tax havens. These papers contain powerful corporations and peoples from half of the globe. The European Union looses up to 50 to 70 billion pounds due to firms avoiding taxes. This rule is applicable to firms with more than 750 annual global sales. The total number of such companies in Europe is 6,500. The companies will have to report the tax paid out of European Union too. All this information should be made available on the company’s website.

Business lobbyist state fear the rule to reveal sensitive data would reduce investments in Europe. While certain tax transparency experts state that all firms should be brought under this scanner. The union is also planning to draft a list of tax haven nation in the union. An earlier attempt to do so resulted in backfire from various members. This time the union is planning to release an accurate list of the countries. The problem arises as the unions of countries do not have a common definition for tax haven. Experts on tax transparency feel that the effort by EU will only create havens out of the union but does not resolve the issues of tax evasion and tax havens. To achieve this the rules should be imposed globally