Service Tax Payment Rate Chart

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The table below shows the rate of service tax applicable at the relevant period of time.

Sr.No.	Period	Rate of Service Tax	Rate of Education Cess	Rate of Secondary & Higher Education Cess
1.	Till 13.05.2003	5%	Nil	Nil
2.	14.05.2003 to 09.09.2004	8%	Nil	Nil
3.	10.09.2004 to 17.04.2006	10%	2% of the S.T.	Nil
4.	18.04.2006 to 31.05.2007	12%	2% of the S.T.	Nil
5.	01.06.2007 to 23.02.2009	12%	2% of S.T.	1% of S.T.
6.	From 24.02.2009	10%	2% of S.T.	1% of S.T.
7	From 01.04.2012	12%	2% of S.T.	1% of S.T.

NIL Service Tax Return late filling penalty

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Section 70 of Finance Act, 1994 reading with Rule 7 of Service Tax Rules, 1994 mandates every service tax payer to file half yearly return within 25 days. If the return is not filed within the time specified then following amount of penalty is levied:

Day wise default criteria	Penalty Amount (Rs.)
< 15 days	500 Rs. per day
> 15 days but < 30 days	1000 Rs. per day
> 30 days	1000 Rs. fix plus Rs. 100 per day or Rs. 20,000/- maximum

The same provisions apply for NIL returns i.e. where service has not been provided or received and no service tax has been collected or paid.

Taxability of Motor Acccident Compensation & Interest

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1) Deduction allowable from Income for payment of Life Insurance Premium (Sec. 80C).

(a) Life Insurance premia paid in order to effect or to keep in force an insurance on the life of the assessee or on the life of the spouse or any child of assessee & in the case of HUF, premium paid on the life of any member thereof, deduction allowed upto 20% of capital sum assured during any financial year.

(b) Contribution to deferred annuity Plans in order to effect or to keep in force a contract for deferred annuity, on his own life or the life of his spouse or any child of such individual, provided such contract does not contain a provision to exercise an option by the insured to receive a cash payment in lieu of the payment of annuity is eligible for deduction.

(c) Contribution to Pension/Annuity Plans – New Jeevan Dhara-I & Jeevan Akshaya – VI

2) Jeevan Nidhi Plan & New Jeevan Suraksha – I Plan (U/s. 80CCC)

A deduction to an individual for any amount paid or deposited by him from his taxable income in the above annuity plans for receiving pension (from the fund set up by the Corporation under the Pension Scheme) is allowed.

NOTE: The premium can be paid upto Rs.1,00,000/- to avail deduction u/s.80C, 80CCC & 80CCD (80CCD- Deduction in respect of contribution to pension scheme of Central Government.). However, there is no sectoral cap i.e. the limit of Rs.1,00,000/- can be exhausted by paying premium under any of the said sections.

3) Investment under long-term infrastructure bonds notified by the Central Government. (Sec. 80CCF)

A deduction up to Rs. 20000/- is available to individuals and HUF for amount paid or deposited as subscription to long-term infrastructure bonds notified by the Central Government. This is in addition to Rs. ! lakh deduction available under section 80C.

3) Deduction under section 80D

1. Deduction allowable upto Rs.15,000/- if an amount is paid to keep in force an insurance on health of assessee or his family (i.e. Spouse & children)

2. Additional deduction upto Rs.15,000/- if an amount is paid to keep in force an insurance on health of parents

3. In case of HUF, deduction allowable upto Rs.15,000/- if an amount is paid to keep in force an insurance on health of any member of that HUF

Note: If the sum specified in (a) or (b) or (c) is paid to effect or keep in force an insurance on the health of any person specified therein who is a senior citizen, then the deduction available will be upto Rs.20,000/-.

provided that such insurance is in accordance with the scheme framed by

a) the General Insurance Corporation of India as approved by the Central Government in this behalf or;

b) Any other insurer and approved by the Insurance Regulatory and Development Authority.

4) Jeevan Aadhar Plan (Sec.80DD) :

Deduction from total income upto Rs.50000/- allowable on amount deposited with LIC under Jeevan Aadhar Plan for maintenance of an handicapped dependent (Rs.1,00,000/- where handicapped dependent is suffering from severe disability)

5) Exemption in respect of commutation of pension under Jeevan Suraksha & Jeevan Nidhi Plans:

Under Section 10(10A) (iii) of the Income-tax Act, any payment received by way of commutations of pension out of the Jeevan Suraksha & Jeevan Nidhi Annuity plans is exempt from tax under clause (23AAB).

6) Income tax exemption on Maturity/Death Claims proceeds under Section 10(10D)

Under the provisions of section 10(10D) of the Income-tax Act, 1961, Maturity/Death claims proceeds of life insurance policy, including the sum allocated by way of bonus on such policy (other than amount to be refunded under Jeevan Aadhar Insurance Plan in case of handicapped dependent predeceases the individual or amount received under a Keyman Insurance Plan) is exempted from income-tax. However any sum (not including the premium paid by the assessee) received under an insurance policy issued on or after the 1st day of April, 2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20% of the actual capital sum assured will no longer be exempted under this section.

S. 40(b) Interest on deposits for availing bank guarantee is business income

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INCOME TAX APPELLATE TRIBUNAL, COCHIN

I.T.A. No. 109/Coch/2010 – Assessment Year:2002-03

Solvents and Chemicals Vs. The Assistant Commissioner of Income-tax

Date of Decision – Dated: 29th July, 2011

It is the purpose or the proximity to the purpose, which would determine the character of the asset and, thus, that of the income arising there-from and, consequently, its assessability under the Act, going on to hold that where the amount was deposited in the bank to obtain a letter of credit for purchase of a capital asset (machinery), the interest thereon would only be a capital receipt, which shall go to reduce the cost of the relevant capital asset. The said decisions, in our view, full govern the present case, and the Revenue has misapplied the decisions by the hon’ble jurisdictional high court. We, accordingly, hold the impugned interest income of Rs. 471612/- as liable to be assessed as business income under Chapter IV-D of the Act. Accordingly, it would be entitled to deduction qua remuneration allowed to working partner/s by considering the said income as part of the `book profit’ under Explanation 3 to s. 40(b)(v). We decide accordingly.

SEBI Timeline For Submission of Annual Audited Financial Result of FY 2011-12

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Timeline For Submission Of Annual Audited Financial Results For Financial Year 2011-12

CIRCULAR NO. CFD/DIL/LA/SK/AT/8278/201 2, DATED 11-4-2012

1. Please refer to SEBI’s Circular dated October 5, 2011 on amendments to the Listing Agreement.

2. Pursuant to representations received from the listed entities and the auditing fraternity regarding difficulties, faced in submission of annual financial results along with Q4 results, more specifically owing to the first time adoption of the revised Schedule VI format recently notified by the MCA for FY 2011-12 results, it has been decided to, as a one-time measure, for the purpose of submission of FY 2011-12 financial results, restore, the earlier provision for the time being and review the situation at a later stage.

3. Accordingly, the timeline for submission of financial results for FY 2011-12 shall be as under:-

• For the quarter ended FY 2011-12 and in respect of annual audited results for FY 2011-12, listed entities have an option to either: -

• Submit limited reviewed Q4 results within 45 days from end of the quarter and thereafter submit annual audited results as soon as they are approved by the Board.

(or)

• Submit annual audited results within 60 days from the end of fourth quarter along with Q4 results which would be a balancing figure.

4. You are advised to suitably disseminate the above to the listed entities.

Printing of MICR Code and IFSC Code on Passbook /Bank Statement mandatory

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RBI/2011-12/516
DPSS (CO) RTGS No. 1934/04.04.002/2011-12

April 20, 2012

The Chairman and Managing Director /
Chief Executive Officer of all banks participating in RTGS, NEFT and NECS

Dear Sir/Madam,

Printing of MICR Code and IFSC Code on Passbook/Statement of Account

As you are aware, the MICR code is necessary for all Electronic Clearing Service (ECS – Credit and Debit) transactions. Similarly, the IFSC code is a pre-requisite for NEFT and RTGS transactions.

2. Currently, the MICR code is available on the cheque leaf along with the IFSC code of the branch. On a review it has been decided that this information should also be made available in the passbook / statement of account of the account holders.

3. Banks are accordingly advised to take necessary steps to provide this information as indicated above in all passbook / statement of account to their account holders.

4. Please acknowledge receipt and furnish an action taken report within 15 days of receipt of the circular.

FM defends Retrospective Tax Amendments

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The Union Finance Minister, Shri Pranab Mukherjee said that the relations between India and the United States have evolved in recent years into a global strategic partnership, based on shared values and increasing convergence of interests on regional and global issues. He said that relations between two countries has deepened and grown across a broad range of areas. Shri Mukherjee was speaking during the bilateral meeting between India and US when he met the US Treasury Secretary Mr Timothy Giethner in the latter’s office in Washington D.C. yesterday. Shri Mukherjee further said that our political and strategic engagement is at an unprecedented level. The Finance Minister Shri Mukherjee said that our cooperation in all areas, including defence, counter-terrorism, trade, investment, science and technology, education, and energy are growing.

During the meeting, both the leaders discussed bilateral economic and financial cooperation as well as the recent developments in the global economy.

The officials at the Indian Mission in Washington DC informed that US Secretary Mr. Geithner and the Finance Minister Shri Mukherjee discussed the broad range of global and bilateral macro-economic and financial issues relating to foreign investment and tax matters. While discussing tax issues, Mr. Geithner mentioned about certain amendments proposed in tax provisions of India’s Income Tax Act with retrospective effect. In this regard, the Finance Minister Shri Mukherjee informed that the tax changes proposed are not substantive but clarificatory in nature as the changes reiterated only the intent of the legislation. During the meeting, it was also pointed out that as per Section 149 of the Income Tax Act, no tax cases can be opened beyond 6 years. It was also informed that tax cases which have already been assessed and finalized up to April 1, 2012 cannot be reopened. Further the Indian tax laws are very clear that the companies making capital gains from the assets located in India will have to pay taxes either in the country of their origin or in India. It is not a case of double taxation but ensuring that companies that are liable to pay tax must pay some tax. On the issue of categorization of software sales as royalties, it was informed that discussions have been held in the past between the tax authorities in both the countries and they had agreed to disagree on such characterization

Alterations in the Schedule XIV in respect of Intangible Assets

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Alterations in the Schedule XIV of the Companies Act, 1956 in respect of Intangible Assets

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS

Notification

Dated-17.04.2012

G.S.R. (E) :- In exercise of the powers conferred by sub-section (1) of section 641 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following further alterations in the Schedule XIV of the said Act, namely:-

In Schedule XIV to the Companies Act, 1956, after serial number IV relating to Ships and the entries relating thereto, the following serial number and entries shall be inserted, namely:-

“V- Intangible Assets

1. Intangible Assets (Toll Road) created under Build, Operate and Transfer, Build, Own, Operate and Transfer or any other form of Public Private Partnership Route.

Amortization Rate	=	Amortization Amount x 100
		Cost of Intangible Asset (A)

Amortization Amount =

Cost of Intangible Asset (A) X	Actual Revenue for the year (B)
	Projected Revenue from Intangible Asset (till the end of the concession period) (C)

2. Meaning of particulars are as follows:-

Cost of Intangible Asset (A)	=	Cost incurred by the Company in accordance with the Accounting Standards.
Actual Revenue for the year (B)	=	Actual Revenue (Toll Charges) received during the accounting year.
Projected Revenue from Intangible Asset (C)	=	Total Projected Revenue from the Intangible Asset as provided to the Project Lender at the time of financial closure/agreement.

The amortization amount or rate should ensure that the whole of the cost of the intangible asset is amortized over the concession period.

Total Revenue shall be reviewed at the end of each financial year and the projected revenue shall be adjusted to reflect any changes in the estimate which will lead to the actual collection at the end of the concession period.

3. For Example:‑

Cost of creation of Intangible Assets	Rs. 500/- Crores
Total period of Agreement	20 Years
Time use for creation of Intangible Assets	02 Years
Intangible Assets to be amortized in	18 Years

Let us assume that the Total revenue to be generated out of Intangible Assets over the Period would be Rs. 600 Crores, in the following manner:-

Year No.	Revenue (In Rs. Crores)	Remarks
Year 1	5	Actual
Year 2	7.5	Estimate*
Year 3	10	Estimate*
Year 4	12.5	Estimate*
Year 5	17.5	Estimate*
Year 6	20	Estimate*
Year 7	23	Estimate*
Year 8	27	Estimate*
Year 9	31	Estimate*
Year 10	34	Estimate*
Year 11	38	Estimate*
Year 12	41	Estimate*
Year 13	46	Estimate*
Year 14	50	Estimate*
Year 15	53	Estimate*
Year 16	57	Estimate*
Year 17	60	Estimate*
Year 18	67.5	Estimate*
Total	600

‘*’ will be actual at the end of financial year.

Based on this the charge for first year would be Rs. 4.16 Crore (approximately) (i.e. Rs. 5/Rs. 600 X Rs. 500 Crores) which would be charged to profit and loss and 0.83% (i.e. Rs. 4.16 Crore/Rs. 500 Crore X 100) is the amortization rate for the first year.”