New T.D.S. Rates

PrintPDF New rates of Tax deducted at Source effective from 30th June, 2010. Click on the link to get the latest chart.

Mandatory requirement of Permanent Account Number (PAN)

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CIRCULAR

CIR/MRD/DP/ 22 /2010 July 29, 2010

To,

The Depositories

Dear Sir/Madam,

Sub: Mandatory requirement of Permanent Account Number (PAN)

1. Please refer to SEBI circular No.MRD/DoP/Cir-05/2007 dated April 27, 2007 making PAN mandatory for all transactions in the securities market.

2. As you are aware, the demat accounts for which PAN details have not been verified are “suspended for debit” until the same is verified with the Depository Participant (DP). However, it has come to our notice that despite follow up, investors are not furnishing the PAN details.

3. In order to ensure better compliance with the Know Your Client (KYC) norms it has been decided that with effect from August 16, 2010 such PAN non-compliant demat accounts shall also be "suspended for credit" other than the credits arising out of automatic corporate actions. It is clarified that other credits including credits from IPO/FPO/Rights issue, off-market transactions or any secondary market transactions shall not be allowed into such accounts.

4. The Depositories are advised to:-

a) make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately, as may be applicable/necessary ;

b) bring the provisions of this circular to the notice of their DPs and advising them to also communicate the same to all the Beneficial Owners (BOs); and

c) disseminate the same on the website.

5. This circular is being issued in exercise of the powers conferred by Section 11(1) of Securities and Exchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.

Understanding "Books of Account" under Companies Act, 1956

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Clause (a) to (c) of the sub-section (1) of section 209 requires every company to maintain books of accounts in respect of receipts, expenditure, sales, purchase, assets and liabilities. It is based on the fundamentals of accounting and the broad spectrum of preparation of mandatory final accounts by company. The clause (d) of the sub-section (1) refers to the books of accounts in view of the cost accounting requirements. Logically, even the company required to comply with the cost accounting requirements, has to maintain all the books referred to in clause (a) to (c) as there is no relaxation to any company in respect of filing of final accounts. But, what is interesting is that, the ‘proper books of account’ as referred to in the sub-section (1), has been further dealt with under sub-section (3). The sub-section (3) lays down two broad conditions for construing that the company maintains the proper books of accounts. Clause (a) and (b) of sub-section (3) are extracted below:

(a) if there are not kept such books as are necessary to give a true and fair view of the estate of the affairs of the company or branch office, as the case may be, and to explain its transactions; and

(b) if such books are not kept on accrual basis and according to the double entry system of accounting.

The wording ‘true and fair view’ as referred to under sub-section (1) is obviously refers to the need of recording the transactions as it took place. To conclude, there should not be any falsity or concealment. Though, the maintenance of books of accounts by the company can be seen as a clerical and mechanical, the preparation of final accounts is vital. The Accounting Standards prescribed by the Institute of Chartered Accountants of India, the provisions of the Act and other notes issued by the Institute, governs the issue of preparation of final accounts generally and broadly. The standards governing valuation of inventories, the depreciation, revaluation of fixed assets, ammortazisation principles, accounting for research and development etc. are few examples, where there was a great potential of giving an unfair view while presenting the company’s financial position if not checked. The provisions of the Act and in particular the Standards prescribed by the Board, are laudable. The Standards deal with the object of filing of accounts, basic assumptions, detailed principles and disclosure in a systematic and appreciable way. The Standards repeatedly stresses on the principle of conservatism and the principle that the substance should prevail over the rules. While preparing the final accounts, the Company is supposed to be fair in preparing estimates etc., represent before audit fairly and adhere to the interests of the external users broadly. Thus, though, the section refers to the ‘true and fairness’ in the context of maintaining accounts, in fact, it has very wide spectrum. While the reference to ‘true and fairness’ is very very wide in relation to the preparation of final accounts, the reference to the same under the section is really narrow as it implies that there should not be any falsity in conveying the events or transactions. Thus, clause (a) of sub-section (3) stresses that the events and transactions to be recorded as it occurred and without any falsity. The clause (b) of sub-section (3) lays down a requirement of the mode in which accounts are to be maintained rather referring to what all the books are to be maintained by the company. The clause (b) says that the books are to be maintained on accrual basis and according to the double entry system of account. In the accrual basis of accounting, the events and transactions are recorded as and when they occur without waiting for the actual receipt or payment of cash. Thus, there exist ‘cash basis system’ and the ‘accrual basis’, and in India, Act mandates to maintain the books of accounts for the purpose of preparation of final accounts in the ‘accrual basis’. Secondly, clause (b) of the sub-section (3) refers to the “double entry book keeping system”. Recording both the event and transaction separately in consonance with the principle that the expenses equals the receipts, will be basis for the double entry book keeping system. Usually, the prime entries, ledger accounts, trial balance, and preparation of final accounts etc. works on the basis of “double entry book keeping system”.

Though, presenting the fair view and the accrual basis of system, may not be ambiguous to understand, the maintenance of books of accounts according to double entry book keeping system is somewhat interesting to consider. Take an example, if accounting staff of the company who maintains the accounts forgot making an entry in their books of account though they recorded in one ledger, then, will the same be construed to say that the company has not maintained the books of account. The answer will be an obvious ‘No’. That’s why, the rectification entries and adjustments became a routine business of the accountants or the auditor while preparing the final accounts. But, if there is no mandate that the books need not be maintained in accordance with the double entry system, then, no one bothers to be systematic and which ultimately results in presenting an unfair view before the users of accounts and especially shareholders. Though, it can not be ruled out that the non-maintenance of books of accounts in accordance with the “double entry book keeping system” can be construed as a default under the proviso in some cases, the transaction omitted, the staff entrusted with the job, the track record of the company, the recording of other transactions etc. will be considered broadly while dealing with the issue of ‘default’ under the proviso. As such, broadly, the company is supposed to maintain the following books of account.

(a) Record of all events of transactions which fell in any one of the heads viz., receipts, expenses, sales, purchases, assets and liabilities in accordance with the accrual basis of accounting and in accordance with the double entry book keeping system.

(b) All books of accounts in compliance of the provisions of the Act and the cost accounting requirements in respect of the scheduled or specified industry under clause (d) of sub-section (1).

Income-tax Treatment of Expenditure Incurred in Connection with Issue of Shares

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Treatment of share issue expenses can be explained under two categories-

1. Issue expenses expended at the time of inception of company,
2. Subsequent Issue Expenses.

1. Issue expenses expended at the time of inception of company:

As per Section 35D(2)(c)(iii) or (iv) of the Income Tax Act, before the commencement of his business, Any expenditure incurred by the company by way of fees for registering the company or in connection with the issue of shares in or debentures of the company, being underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus, the assessee shall be allowed a deduction of an amount equal to one-fifth of such expenditure for each of the five successive previous years.

2. Subsequent Issue Expenses:

After the commencement of business, Section 35D covers the expenditure incurred in connection with the extension of industrial undertaking or in connection with setting up a new industrial unit.

Under broad view, the share issue expenses can be grouped under the expenditure incurred in connection with the extension of industrial undertaking or in connection with setting up a new industrial unit.

However Supreme Court has different view on the same. The Supreme Court in the case ofPunjab State Industrial Development Corporation Limited v. CIT [1997] 225 ITR 792 andBrooke Bond India Limited v. CIT [1997], has held that the expenditure incurred by a company in connection with issue of shares, with a view to increase its share capital, is directly related to the expansion of the capital base of the company and its capital expenditure, even though it may incidentally help in the business of the company and in the profit-making. Therefore, it was held that the expenditure incurred with reference to issue of shares is not allowable deduction. In view of the aforesaid judgment of the Supreme Court, the order of the Tribunal holding it otherwise is unsustainable in law and, therefore, the question referred for our opinion is answered in the negative and against the assessee and in favour of the revenue.

Understanding your Team and making them perform better

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The first thing is to understand critically is the difference between things and people. People are not just resources they are” Human Beings”. It’s these people who form a team and make anything and everything a success.

Being a CA, a derived equation for the same would be Things < people=" Tangible">

A lot of managers pride themselves on their open door role with their team and all the other ways they signal to employees that their inputs are welcome. Managers probably believe that they’re actually hearing what’s on most people’s minds — after all, people speak up in meetings, chat with you in the hall, and copy you on e-mails. Well, you’re not hearing as much as you think or as much as you need to.

Personally I am not a stickler for jargons and guideline; thankfully there surely is no one way to cogently work toward a goal.

As per a survey by James R. Detert, Ethan R. Burris, and David A. Harrison at Harvard Business Review there are few myths that common managers believe and follow about understanding employees:

Women and nonprofessional employees withhold more information than men and professional staffers because they are more concerned about consequences or more likely to see speaking up as futile.

If my employees are talking openly to me, they’re not holding back.

If employees aren’t speaking up, it’s because they don’t feel safe doing so, despite all my efforts.

The only issues employees are scared to raise involve serious allegations about illegal or unethical activities.

As a fact most people withhold feedback on routine problems and opportunities for improvement to avoid wasting their time, not because they fear consequences.

Honest feedback is not the solution to employee satisfaction. Make people involved. Don’t ask for suggestion for making the change. Tell people to be a part of the change.

Finally as entrepreneurs the key to the change is simple “BE REALISTIC”. Don’t agree to impossible deadline and scrunch up people. Remember the job and deliverables are the Client’s only interest but the quality and credibility is yours. Make people work with you and not make them feel they work for you. Delegation is not the only solution that a Manager has. Its takes efforts to roll up those sleeves and getting things done. Always the end is not the only destination. At times the process is more important. People matter. Understanding this fact is worth a lifetime’s yield. Invest in them, coach them; it’s a small price for a lifelong solution.

Director's Responsibility for Dishonour of Cheques?

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We need not go into the background concerning the usage of cheque and it is a reality now that the payments through cheque have become an indispensable part of the mercantile community and even the public in general. In fact, payments through cheque is encouraged and made mandatory in view of certain regulations and as a best accounting practice. Considering the usage of cheque and its significance and in order to give the needed credibility to the cheque, the legislature has thought it fit to bring a stringent law dealing with dishonor of cheques. As a result, the Negotiable Instruments Act, 1881 was amended and 138 to 142 have been introduced in the Act specifically dealing with dishonor of cheques. Before the introduction of section 138 to 142, an act of dishonour of cheque is considered as a civil issue and the aggrieved is only provided with Civil Remedy which consumes lot of time and also costly. The legislature had further felt that the provisions introduced in the N.I.Act in the year 1989 dealing with the dishonour of cheques could not be effective and speedy, and further provisions 143 to 147 were introduced through 2002 amendment to the N.I.Act. The provisions introduced in the year 2002 were basically of procedural in nature and aimed at reducing delay in disposal of "138 cases"/Dishonour of Cheque cases. Unless otherwise specifically provided, the procedure to be followed in criminal cases is provided in the Code of Criminal Procedure. Despite making efforts to make certain enactments like the provisions dealing with the dishonour of cheques self-contained, the Courts had to depend on certain provisions of Code of Criminal Procedure very often. Making a balance between the object of special provisions like dishonor of cheques and the rights of the accused has become a complicated exercise for the courts.

The gist of the provisions dealing with 'dishonour of cheques" is as follows:

1. The holder of cheque in due course can present the cheque to the Bank within 6 months from the date of the cheque.
   
2. When the cheque is dishonoured, then, the drawee, if chooses to take action against the drawer, should give a notice or intimation in demand to the drawer about dishonour of cheque and there should be a demand for payment of the Amount.
   
3. The drawee who receives a notice from the drawee for dishonour of cheque is supposed to reply the notice within 15 days or makes the payment.
   
4. If the payment is not made within 15 days, then the drawee can file a Complaint in writing to the Court within 1 month.
   
5. If the offence is proved, then, the Court can impose fine and also the accused may be sentenced to imprisonment upto 2 years.
   
6. There is a presumption in favour of the drawee that the there exists a legally enforceable debt.
   
7. If the Cheque issued by or on-behalf of the Company is dishonored, then, the persons in-charge of and responsible to the affairs of the Company can also be booked for an offence under section 138 of N.I.Act.
   

Though the law dealing with the dishonour of cheques appears to be simple, there are so many complications and many feel that the provisions are being misused very often. I do strongly feel that the provisions dealing with dishonour of cheques are being misused very often and some are proceeding with the illegality indirectly using the penal provisions to their advantage. Normally, the cheque is issued for a legally enforceable debt or liability, but, there is a presumption in section 139 of the Act in favour of the drawee that the cheque is issued by the Drawer for a legally enforceable debt. What happens is that, when there is a presumption in favour of drawee, then, it is the duty of the Accused to rebut that presumption. This is one of the controversial areas among many. There are conflicting judgments and views on this and there are allegations that the provisions are being misused and in some cases, the exercise of power by the concerned magistrate in a judicious way is also under suspicion.

Even if one issues a cheque for 2,000/- and if that is dishonored on the instructions of the Drawer for good and justifiable reasons, the drawer can be imprisoned upto 2 years depending upon the discretion of concerned Magistrate. These penal provisions and presumptions are very often misused. The Magistrate can award compensation and fine, and even then, if Magistrate chooses to impose a sentence of imprisonment strictly applying the provisions, then, it may appear legal and even the Appellate Court and Constitutional Courts are at times, support the strict applicability of the penal provisions dealing with dishonour of cheques.

Thus, though, there are only 9 sections in the Act dealing with the criminal liability of dishonour of cheques apart from other few provisions, the subject is so complicated.

Director's liability for the dishounour of cheque when the cheque is issued on-behalf of the Company:

Company is a juristic person and can not be imprisoned. Dealing with the issue of dishonour of cheques issued by Companies, the provisions dealing with the dishonour of cheques make it clear that that the persons in-charge of and responsible to the affairs of the Company can be taken to task when the cheque issued on-behalf of the Company is dishonoured for want of funds and even for other reasons. The issue as to on what ground the cheque dishonoured is another complicated issue. There is plethora of judgments on the issue of dishonor of cheques issued by the Companies and few issues are as follows:

1. There were judgments saying that there is no need to give a notice to the persons responsible or in-charge for the affairs of the Company and it is sufficient if notice is given to the Company when the cheque is dishonored.
   
2. There are judgments saying that the Managing Director can never say that he is not in-charge of or responsible to the affairs of the Company.
   
3. There are judgments saying that the accountants and secretaries of the Company are unnecessarily implicated in 'dishonour of cheque cases'.
   
4. There are issues where the Magistrate insists for the personal appearance of the Accused or even the Director, for many reasons and despite the directives of the Constitutional Courts that the presence of the complainant/accused can be exempted unless really required.
   

I have only mentioned few issues in the provisions dealing with the dishonour of cheque issued by Companies. There are contradictory judgments and views on the issues. In practice, no Company issues a cheque without any documentary proof or basis for the issuance of Cheque, but, this can be ignored easily if the provisions sought to be misused. If really there is involvement and dishonest intention on the part of the Director as proved based on documentary evidence and probabilities, then, he can be taken to task. But, merely, using the provisions dealing with the 'dishonour of cheques', the directors or the top of management of Company can not be troubled and the misuse of provisions can not be allowed. There are many judgments on the issue of director's responsibility and from the background of each case, it can be found that the provisions were misused and the Constitutional Court had to say very often that the directors could not have been taken to task as there can not be any involvement of directors. There are views as to what is wrong if a proceeding under section 138 of N.I.Act is filed and pending against a Director as he can prove his innocence during trial. But, the time and mental torture for the Directors who at times are burdened with so many responsibilities can not be easily ignored. Many issues are to be considered while dealing with the responsibility of the Directors when the cheque is issued on-behalf of the Company and the few issues are as follows:

1. The Cheque Amount.
2. The size of the Company.
3. The status and the relation of the Complainant with the Company.
4. The transaction in particular.

If the required issues are considered by the Magistrates when the Directors contend that they are not responsible and seek for discharge in right perspective and the object of the legislation, then, many cases now pending on directors for the dishonour of cheques issued by the Company are bound to fail. When Directors feel that they are unnecessary implicated in the issue, then, they will either seek for discharge from the case in the concerned Magistrate Court or approach the High Court seeking to quash the proceedings as such. The issue of Director’s responsibility and even the penal provisions dealing with dishnour of cheques are complicated and there so many complicated issues. I would like to quote a very good observation of High Court of Andhra Pradesh in the matter of Rohinton Noria Vs. M/s. NCC Finance Ltd reported in 2000 (106) CRLJ 4117 AP: 2000 (2) ALT (Cri) 27: 2000 (1) ALD (Cri) 664 and the same is extracted below:

“It is being observed that in complaints filed for offence under Section 138 of the Negotiable Instruments Act, all the Directors of the Company are routinely being proceeded against 'by invoking the provision under Section 141 of the Negotiable Instruments Act by glibly repeating the words in the section that certain director "was incharge of and responsible to the company for the conduct of business of the company'. It is necessary to emphasize that Section 141 of the Negotiable Instruments Act where an offence under Section 138 of the Negotiable Instruments Act has been committed by a company, the complainant is required to give a serious thought and make enquiries and ascertain the fact as to whether a particular director was incharge of and responsible to the affairs and conduct of the business of the company. Routinely roping in all the Directors by merely repeating the words used in Section 141 of Negotiable Instruments Act without ascertaining the facts is a serious matter which has to be deprecated. However, it is a question of fact which necessarily has to be decided during the trial.”

The detailed directives given by the Constitutional Courts at times on the issue of dishnour of cheques is a testimony to the complications involved in the subject.

Convergence of Indian Accounting Standards with International Financial reporting Standards (IFRS) [Press Note 04/05/2010]

PrintPDF http://www.mca.gov.in/Ministry/press/press/press_release_04May2010_06may2010.pdf

Company Law Settlement Scheme, 2010 [Circular No.1]

PrintPDF General Circular No. 1 /2010
F. No. 2/7/2010-CL V
Government of India
Ministry of Corporate Affairs
5th Floor, A Wing, Shastri Bhavan,
Dr. R.P. Road, New Delhi,
Dated the 26th May, 2010
To
All Regional Director,
All Registrars of Companies.
Subject: Company Law Settlement Scheme, 2010
Sir,
It has been observed that a large number of companies are not filing
their due documents timely with the Registrar of Companies. Due to this,
the records available in the electronic registry are not updated and thereby
are not available to the stakeholders for inspection. Further, due to not filing
the documents on time, companies are burdened with additional fee and
facing the prosecutions also.
2. There are many companies, who have also not increased their paid up
capital up to the threshold limit provided in sub-section (3) and sub-section
(4) of Section 3 of the Companies Act, 1956.
3. In order to give an opportunity to the defaulting companies to enable
them to make their default good by filing belated documents and to become
a regular compliant in future, the Ministry, in exercise of the powers under
Section 611(2) and 637B (b) of the Companies Act, 1956 has decided to
introduce a Scheme namely, “Company Law Settlement Scheme, 2010,”
condoning the delay in filing documents with the Registrar, granting
immunity from prosecution and charging additional fee of 25 percent of
actual additional fee payable for filing belated documents under the
Companies Act, 1956 and the rules made there under. The details of the
Scheme are as under:-
(i) The scheme shall come into force on the 30th May, 2010 and
shall remain in force up to 31st August, 2010.
(ii) Definitions - In this Scheme, unless the context otherwise
requires, -
(a) "Act" means the Companies Act, 1956 (1 of 1956);
(b) "company" means a company registered under the
Companies Act, 1956 and a foreign company falling under
section 591 of the Act;
(c) "defaulting company” means a company registered under
the Companies Act, 1956 and a foreign company falling under
section 591 of the Act, which has made a default in filing of
documents on the due date(s) specified under the Companies
Act, 1956 and rules made there under;
(d) "designated authority" means the Registrar of Companies
having jurisdiction over the registered office of the company.
(iii) Applicability: - Any “defaulting company” is permitted to file
belated documents in accordance with the provisions of this Scheme:
Provided that any defaulting private company or public
company which has not increased its paid capital up to the threshold
limit of rupees one lakh and rupees five lakh respectively as provided
in sub section (3) and (4) of section 3 of the Companies Act, 1956, as
the case may be, shall first file its documents to increase their paid up
capital up to the threshold limit under the scheme and thereafter
would be allowed to file other belated documents;
(iv) Manner of payment of fees and additional fee on filing belated
document for seeking immunity under the Scheme - The defaulting
company shall pay statutory filing fees as prescribed under the
Companies Act and rules made there under along with an additional
fee of 25 percent of the actual additional fee standardised under sub-
section (2) of Section 611 of the Companies Act, 1956, payable on
the date of filing of each belated document;
(v) Withdrawal of appeal against prosecution launched for the
offences- If the defaulting company has filed any appeal against any
notice issued or complaint filed before the competent court for
violation of the provisions under the Act in respect of which
application is made under this Scheme, the applicant shall before
filing an application for issue of immunity certificate, withdraw the
appeal and furnish the proof of such withdrawal along with the
application;
(vi) Application for issue of immunity in respect of document(s)
filed under the scheme - The application for seeking immunity in
respect of belated documents filed under the Scheme may be made
electronically in the Form annexed, after closure of Scheme and after
the document(s) are taken on file, or on record or approved by the
Registrar of Companies as the case may be, but not after the expiry of
six months from the date of closure of the Scheme. There shall not be
any fee payable on this Form;
(vii) Order by designated authority granting immunity from the
penalty and prosecution - The designated authority shall consider
the application and upon being satisfied shall grant the immunity
certificate in respect of documents filed in the Scheme;
(viii) Scheme not to apply to certain documents - (a) This Scheme
shall not apply to the filing of documents for incorporation or
establishment of place of business in India or where specific order for
condonation of delay or prior approval under the provisions of the
Companies Act, 1956 is to be obtained from the Company Law Board
or the Central Government or Court or any other Competent Authority
is required;
(b) This Scheme shall not apply to companies against which action
under sub-section (5) of section 560 of the Act has been initiated by
the Registrar of Companies;
(ix) After granting the immunity, the Registrar concerned shall
withdraw the prosecution(s) pending if any before the concerned
Court(s);
4. At the conclusion of the Scheme, the Registrar shall take necessary action
under the Companies Act, 1956 against the companies who have not availed
this Scheme and are in default in filing of documents in a timely manner.

Easy Exit Scheme, 2010 [Circular No.2]

PrintPDF General Circular No. 2 /2010
F. No. 2/7/2010-CL V
Government of India
Ministry of Corporate Affairs
5th Floor, A Wing, Shastri Bhavan,
Dr. R.P. Road, New Delhi
Dated the 26th May, 2010
To
All Regional Director,
All Registrar of Companies.
Subject: Easy Exit Scheme, 2010
Sir,
It has been observed that certain companies have been registered
under the Companies Act, 1956, but due to various reasons some of them are
inoperative since incorporation or commenced business but became
inoperative later on and are not filing their due documents timely with the
Registrar of Companies. These companies may be defunct and are desirous
of getting their names strike off from the Register of Companies.
2. In order to give an opportunity to the defunct companies, for getting
their names strike off from the Register of Companies, the Ministry has
decided to introduce a Scheme namely, “Easy Exit Scheme, 2010” under
Section 560 of the Companies Act, 1956. The details of the Scheme are as
under:-
(i) The Scheme shall come into force on the 30th May, 2010 and shall
remain in force up to 31st August, 2010.
(ii) Definitions - In this Scheme, unless the context otherwise requires, -
(a) “company” means a company registered under the Companies
Act, 1956;
(b) “Collective Investment Management Company” means the
company as defined in clause (h) of sub-regulation of 2 of
Securities and Exchange Board of India (Collective Investment
Companies) Regulations, 1999;
(c) “defunct company” means a company registered under the
Companies Act, 1956 which is not carrying over any business
activity or operation on or after the 1st April, 2008 and includes
a company which has not raised its paid up capital as provided
in sub sections (3) and (4) of section 3 of the Companies Act,
1956;
(d) “Non-Banking Financial Company” means a company as
defined under clause (f) of section 45-I of the Reserve Bank of
India Act, 1934;
(e) “Scheme” means the “Easy Exit Scheme, 2010”, being
specified through this Circular;
(f) “vanishing company” means a company, registered under the
Companies Act, 1956 and listed with Stock Exchange which,
has failed to file its returns with Registrar of Companies and
Stock Exchange for a consecutive period of two years, and is
not maintaining its registered office at the address notified with
the Registrar of Companies or Stock Exchange and none of its
Directors are traceable.
(iii) Applicability: -
(a) Any “defunct company” which has active status on Ministry of
Corporate Affairs portal may apply under EES, 2010 in
accordance with the provisions of this Scheme for getting its
name strike off from the Register of Companies;
(b) Any defunct company which is a Government Company shall
submit ‘No Objection Certificate’ issued by the concerned
Administrative Ministry or Department or State Government
along with the application under this Scheme.
(c) The purpose of the Scheme is to allow eligible companies to avail
of this opportunity to exit from the Register of Companies after
fulfilling the requirements laid down herewith and the decision of
the Registrar of Companies in respect of striking off the name of
company shall be final.
(iv) Scheme not applicable to certain companies: - The Scheme does not
cover the following companies namely:-
(a) listed companies;
(b) companies registered under section 25 of the Companies
Act, 1956;
(c) vanishing companies;
(d) companies where inspection or investigation is ordered and
being carried out or yet to be taken up or where completed
prosecutions arising out of such inspection or investigation
are pending in the court;
(e) companies where order under section 234 of the
Companies Act, 1956 has been issued by the Registrar and
reply thereto is pending or where prosecution if any, is
pending in the court;
(f) companies against which prosecution for a noncompoundable
offence is pending in court;
(g) companies accepted public deposits which are either
outstanding or the company is in default in repayment of
the same;
(h) company having secured loan ;
(i) company having management dispute;
(j) company in respect of which filing of documents have
been stayed by court or Company Law Board(CLB) or
Central Government or any other competent authority;
(k) company having dues towards income tax or sales tax or
central excise or banks and financial institutions or any
other Central Government or State Government
Departments or authorities or any local authorities.
(v) Procedure for making an application:-
(a) Any defunct company desirous of getting its name strike off
the Register under Section 560 of the Companies Act, 1956
shall make an application in the Form EES, 2010, annexed;
(b) The Form EES, 2010, should be filed electronically on the
Ministry of Corporate Affairs portal namely www.mca.gov.in
and there shall be no fee payable for filing of the same;
(c) In case, the application in Form EES, 2010, is not being
digitally signed by any of the director or Manager or Secretary,
a physical copy of the Form duly filled in, shall be signed
manually by a director authorised by the Board of Directors of
the company and shall be attached with the application Form at
the time of its filing electronically;
(d) In all cases, the Form EES, 2010, shall be certified by a
Chartered Accountant in whole time practice or Company
Secretary in whole time practice or Cost Accountant in whole
time practice;
(e) The company shall disclose pending litigations if any,
involving the company while applying under this Scheme;
(f) The Form shall be accompanied by an affidavit annexed at
Annexure- A of Form EES, 2010, which should be sworn by
each of the existing director(s) of the company before a First
Class Judicial Magistrate or Executive Magistrate or Oath
Commissioner or Notary, to the effect that the company has not
carried on any business since incorporation or that the
company did some business for a period up to a date (which
should be specified) and then discontinued its operations and
has not carried on any business after the 1st April, 2008, as the
case may be;
(g) The Form EES, 2010 shall further be accompanied by an
Indemnity Bond, duly notarized, as annexed at Annexure B of
Form EES, 2010, to be given by every director individually or
collectively, to the effect that any losses, claim and liabilities
on the company, will be met in full by every director
individually or collectively, even after the name of the company
is struck off the register of Companies;
(h) The Company shall also file a Statement of Account
annexed at Annexure C, prepared as on date not prior to more
than one month preceding the date of filing of application in
Form EES, 2010, duly certified by a statutory auditor or
Chartered Accountant in whole time practice, as the case may
be.
(vi) Simplified procedure for Registrar of Companies for removal of
name of defunct companies:-
(a) The Registrar of Companies, on receipt of the application,
shall examine the same and if found in order, shall give a notice
to the company under section 560(3) of the Companies Act, 1956
by e-mail on its e-mail address intimated in the Form, giving
thirty days time, stating that unless cause is shown to the
contrary, its name be struck off from the Register and the
company will be dissolved;
(b) The Registrar of companies shall put the name of applicant(s)
and date of making the application(s) under Easy Exit Scheme,
2010, on daily basis, on the MCA portal www.mca.gov.in, giving
thirty days time for raising objection, if any, by the stakeholders
to the concerned Registrar;

Adjustment of “Advance Tax in respect of Fringe Benefits” for A.Y. 2010-11 against “Advance Tax” [Circular No.2]

PrintPDF CIRCULAR NO. 2/2010.
Dated 29/01/2010
F. N0.385/05/2010-IT (B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Sub: Adjustment of “Advance Tax in respect of Fringe Benefits” for
Assessment Year 2010-11 against “Advance Tax” – matter regarding.
……….
The Finance Act, 2005 introduced a levy namely Fringe Benefit Tax (FBT)
on the value of certain fringe benefits as contained in Chapter XII H (Sections 115
W to 115 WL) of Income Tax Act, 1961. By the Finance (No. 2) Act, 2009 a new
Section 115 WM was inserted to abolish the FBT with effect from Assessment
Year (A.Y.) 2010-11. Consequently, benefits given to employees are taxed as
perquisites in the hands of employees in terms of amendments to Clause 2 of
Section 17 of Income Tax Act, 1961. However, during the current Financial Year
2009-10 some assessees have paid “advance tax in respect of fringe benefits” for
Assessment Year 2010-11. In such cases the Board has decided that any
installment of “advance tax paid in respect of fringe benefits” for A.Y. 2010-11
shall be treated as Advance Tax paid by assessee concerned for A.Y. 2010-11.
The assessee can adjust such sum against its advance tax obligation in respect of
income for A.Y. 2010-11 or in case of loss etc claim such payment as refund as
advance tax paid in A.Y. 2010-11.
2. This circular may be brought to the notice of all officers in the field for
compliance.

TDS on payment of interest on time deposits under Section 194A by banks following CBS software [Circular No.3]

PrintPDF RCULAR NO- 03/2010.
F.No.275/66/2007-IT (B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
……
New Delhi, the 2nd March, 2010.
Sub: Tax Deduction at Source on payment of interest on time deposits under
Section 194A of the Income Tax Act, 1961 by banks following Core-
Branch Banking Solutions (CBS) software – reg.
…..
As per provisions of section 194A of the Income Tax Act 1961, income tax
has to be deducted at source at the time of credit of interest income to the account
of the payee or at the time of payment thereof in cash or by issue of a cheque or
draft or by any other mode, at the rates in force if such interest amount exceeds
specified limit. Further, Explanation to section 194A states that “for the purpose of
this section, where any income by way of interest as aforesaid is credited to any
account, whether called ‘Interest payable account’ or ‘Suspense Account’ or by
any other name, in the books of account of the person liable to pay such income,
such crediting shall be deemed to be credit of such income to the account of the
payee and the provisions of this section shall apply accordingly”.
2. Representations have been received from Indian Banks Association (IBA)
seeking clarification regarding deduction of tax at source from payment of interest
on time deposits by banks using Core-Branch Banking Solutions (CBS) software.
In case of banks using CBS software, interest payable on time deposits is
calculated generally on daily basis or monthly basis and is swept & parked
accordingly in the provisioning account for the purposes of macro-monitoring
only. However, constructive credit is given to the depositor’s / payee’s account
either at the end of the financial year or at periodic intervals as per practice of the
bank or as per the depositor’s / payee’s requirement or on maturity or on
encashment of time deposits; whichever is earlier.
3. The matter has been considered by the Board. Explanation to section 194A
was introduced with effect from 1.4.1987 by the Finance Act, 1987 to plug the
loophole of avoiding deduction of tax at source by crediting interest in the books
of accounts under accounting heads ‘interest payable account’ or ‘suspense
account’ instead of to the depositor’s / payee’s account. Therefore, the
Page 2 of 2
Explanation is not meant to apply in cases of banks where credit is made to
provisioning account on daily/monthly basis for the purposes of macro monitoring
only by the use of CBS software.
4. In view of the above position, it is clarified that since no constructive credit
to the depositor’s / payee’s account takes place while calculating interest on time
deposits on daily or monthly basis in the CBS software used by banks, tax need
not be deducted at source on such provisioning of interest by banks for the
purposes of macro monitoring only. In such cases, tax shall be deducted at source
on accrual of interest at the end of financial year or at periodic intervals as per
practice of the bank or as per the depositor’s / payee’s requirement or on maturity
or on encashment of time deposits; whichever event takes place earlier; whenever
the aggregate of amounts of interest income credited or paid or likely to be
credited or paid during the financial year by the banks exceeds the limits specified
in section 194A.

Instructions for issue of certificate u/s 197 mandatorily through ITD system

PrintPDF May 25, 2010
Instruction No. 4/2010
Section 197 of the Income-tax Act, 1961 – Deduction of tax at source – Certificate of lower deduction or non-deduction of tax at source – Instructions for issue of certificate u/s 197 mandatorily through ITD system
I am directed to bring to your notice on the subject of issue of certificates u/s 197 that by Instruction No. 8/2006 dated 13/10/2006, it was laid down that certificates for lower deduction or nil deduction of tax at source u/s 197 are not to be issued indiscriminately and for issue of each certificate, prior administrative approval of the concerned Range Head shall be obtained by the AO. Subsequently, Instruction No. 7/2009, dated 23/12/2009 read with letter F.No.275/23/2007-IT(B), dated 8/02/2010 has laid down monetary limits for prior administrative approval of the CIT-TDS or DIT-Intl. Taxation, as the case may be. Such certificates are normally being issued at present, manually rather than through the ITD system.
To maintain centralized data of issue of such certificates and facilitate better processing of the TDS returns filed by the deductors and in continuation to the above instructions, I am directed to communicate that henceforth w.e.f………….the certificates u/s 197 shall be generated and issued by the AO mandatorily through ITD system only.
In case due to certain reasons, it is not possible to generate the certificate through the system on the date of its issue, the AO shall upload the necessary data on the system within 7 days of the date of issue (manually) of the certificate.
The manner of issue of certificate u/s 197 through the system, uploading of data in situation covered in para 3 above and the prior administrative approval by the Range Head and by the CIT-TDS / DIT-Intl. Taxation is given in the enclosed Annexure for guidance of all concerned.
The content of the above Instruction may be brought to the notice of all officers working in your charge for strict compliance.
Note for issue of certificate u/s 197 mandatorily through the system
Chapter-XVIIB of the IT Act 196l provides for deduction of tax at source by person responsible for making payment of some specified nature mentioned in Sec 192 to Sec 194 LA (hereof. The tax so deducted is deposited to Govt. a/c on monthly basis. The deductor of tax is liable to file quarterly returns of TDS wherein data about the amount paid, tax deducted, rate of deduction, date of deduction, date of payment of tax to Government, identification of the payees/recipients (by specifying their PAN) and some other prescribed details are furnished.
While processing the TDS return, the information contained therein is matched with the legal provisions (prescribed rates of deduction), due dates for payment, the information of tax payment received from banks etc. and defaults, if any, are generated. The defaults are mainly non-deduction (including short deduction), non-payment of tax deducted (including part payment) and interest for default or delayed payment.
Sec 197 of the IT Act, 1961 provides for issue of certificate for no deduction or deduction of tax at lower rate if the Assessing Officer is satisfied that the issue of such certificate is justified in view of total income of the recipient. Till FY 09-10 the certificates u/s 197 were being issued manually by the concerned Assessing Officer. The present system of issuance of 197 certificates suffers from the following deficiencies:
There is no check as to whether such certificate has been issued by the authorized/ competent assessing officer having jurisdiction.
There is no information available in the system as regards number of certificates issued at Nil/Lower rate authorized by AO or the quantum of revenue involved.
Such certificates are being presently issued without any systematic reference number which could be amenable to verification. In the TDS returns, since neither reference numbers of 197 certificates are being captured nor is it possible to compare such numbers in the light of manual issue of certificates, it is not possible to ascertain the veracity of claim, of the deductors about no/low deduction having been made on the strength of a 197 certificate actually issued by the department.
The extent of default, for FYs 2007-08 and 2008-09, generated as a result of deductors making 'mistakes' in ticking relevant column (about 197 certificates) in TDS returns is to the extent of more than Rs 10,000 crores. This is indicative of the magnitude of revenue involved in issuance of 197 certificates, which are being otherwise issued by the field officers without perhaps being aware of the extent of revenue involved.
Therefore, processes have to be put in place which enables thedepartment to take policy decision on the issue on one hand and on theother help the field officers to verify the genuineness of claims being made in TDS returns as also to decide about the extent of such certificates which are to be issued.
It is reported that in the middle of FY 09- 10, facility was provided in the TDS module of ITD system to generate certificates Under section u/s 197 through the system.
Some of the benefit of issue of certificate u/s 197 through the system would be that:
Entire information about the deductor and deductee, nature of payment (related section), the lower rate authorized, dates of validity of certificate and quantum of payment would he available to the department in the system.
Element of reconciliation on part of deductors and regulation in the case of field officers (so far as issuance of the certificates is concerned) would be introduced.
The information (as above) can he used while processing the TDS returns and matching the data provided by the deductor in TDS return.
The information/statistics would help the CBDT in taking an informed policy decision on the issue in future.
The non-deduction defaults detected by the system while processing the TDS returns would be substantially reduced or almost eliminated, if all certificate u/s 197 are issued compulsorily through the system.
Under these facts, it is proposed that all certificates u/s 197 be issuedmandatorily through ITD system. However, considering that these certificates are issued by the AOs scattered throughout the country, there may be exigencies/situations when these may not be generated through the system. In such cases, the procedure may involve suitable measures to capture the data on the system by the AO within 7 days of the date of issue (manually) of the certificate.
The entire procedure is open for suggestions, modifications andamendments as considered necessary.

Exemption for payment of gratuity [No.43]

PrintPDF No.402/92/2006-MC (30 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi the 11th June 2010
PRESS RELEASE
The Central Board of Direct Taxes has approved notification of ten
lakh rupees as the maximum amount of gratuity entitled to exemption under
sub-clause (iii) of clause (10) of section 10 of the Income Tax Act 1961.
The notification will be applicable to employees who retire, or
become incapacitated before retirement, or expire, or whose services are
terminated, on or after the 24th May 2010.
[Notification No.43/2010; F.No.200/33/2009-ITA.I]

CII for F. Y. 2010 - 11

PrintPDF Section 48, Explanation (v) of the Income-tax Act, 1961 - Capital gains - Computation of - Notified Cost Inflation Index for financial year 2009-10 - Amendment in Notification No. S.O. 2292(E), dated 9-9-2009Notification No. 59/2010 [F.No.142/11/ 2010-TPL] , dated 21-7-2010In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes number S.O. 2292(E), dated the 9th September, 2009, namely:-In the said notification, in the Table, after serial number 29 and the entries relating thereto, the following serial number and entries shall be inserted, namely :-"30 2010 - 2011 711"

Notified long-term infrastructure bond

PrintPDF Section 80CCF of the Income-tax Act, 1961 – Deduction – In respect of subscription to long-term infrastructure bonds – Notified long-term infrastructure bond

Notification No. 48/2010[F.No.149/84/2010-SO(TPL)], dated 9-7-2010


In exercise of the powers conferred by section 80CCF of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies bonds, subject to the following conditions, as long-term infrastructure bonds for the purposes of the said section namely :-

(a) (a) Name of the bond – The name of the bond shall be “Long-term Infrastructure Bond”.
(b) (b) Issuer of the bond – The bond shall be issued by :-
(i) (i) Industrial Finance Corporation of India;
(ii) (ii) Life Insurance Corporation of India;
(iii) (iii) Infrastructure Development Finance Company Limited;
(iv) (iv) a Non-Banking Finance Company classified as an Infrastructure Finance Company by the Reserve Bank of India;

(c) (c) Limit on issuance – (i) The bond will be issued during financial year 2010-11;

(ii) the volume of issuance during the financial year shall be restricted to twenty-five per cent of the incremental infrastructure investments made by the issuer during the financial year 2009-10;

(iii) ‘Investment’ for the purposes of this limit include loans, bonds, other forms of debt, quasi-equity, preference equity and equity.

(d) (d) Tenure of the bond. – (i) A minimum period of ten years:


(ii) the minimum lock-in period for an investor shall be five years:

(iii) after the lock in, the investor may exit either through the secondary market or through a buyback facility, specified by the issuer in the issue document at the time of issue;

(iv) the bond shall also be allowed as pledge or lien or hypothecation for obtaining loans from Scheduled Commercial Banks, after the said lock-in period;

(e) (e) Permanent Account Number (PAN) to be furnished – It shall be mandatory for the subscribers to furnish there PAN to the issuer;

(f) (f) Yield of the bond – The yield of the bond shall not exceed the yield on government securities of corresponding residual maturity, as reported by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as on the last working day of the month immediately preceding the month of the issue of the bond;

(g) (g) End-use of proceeds and reporting or monitoring mechanism – (i) The proceeds shall be utilizes towards ‘ infrastructure lending’ as defined by the Reserve Bank of India in the Guidelines : issued by it ;

(ii) the end-use shall be duly reported in the Annual Reports and other reports submitted by the issuer to the Regulatory Authority concerned, and specifically certified by the Statutory Auditor of the issuer;

(iii) the issuer shall also file these along with term sheets to the Infrastructure Division, Department of Economic Affairs, Ministry of Finance within three months from the end of financial year.

CHINA & AFRICA

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China is a economic super power country not by its GDP numbers or by fiscal stimulus packages. Its powerful since it knows when and where to apply the power. Just like our Indian business men Shri.Late Dhirubhai Ambani knew where to give SALAAM.

China is holding 60% of the US treasuries and is also having a strong balance sheet of reserves. China have been slowly and quietly building its reserves and now it is now busy in applying its resources to other economies where its sees the huge potentiality of growth. In may last write up I have depicted that china have signed 14 new agreements with Europe and Greece across various sectors and have invested around $300 billion dollars till now.

But you will be surprised that china is also doing huge quantum of investment in Africa. In fact china is replacing its positional crown with Africa as an emerging economy. The research, undertaken by the UN Conference on Trade and Development (UNCTAD), however shows China is among the most active investors in Africa,.

China invested $2.5 billion in Africa between 2006 and 2008, China as a matter of fact, recently invested $28 billion dollars in several nations on the African continent. China is doing this at very slow rate as compared with the total inflow of FDI in Africa. Southern Africa remained the largest recipient of FDI within Africa, even though inflows declined from a 2008 high propelled by the Industrial and Commercial Bank of China's purchase of 20% of Standard Bank for $5.5 billion. South Africa was the fourth-biggest recipient of FDI on the continent, with $5.7 billion of inflows in 2009.

Very recently their was an article published in newspaper that china don’t want to be in the first position of the ladder of FDI. I want to make one thing clear to my readers that FDI increases due to higher M&A deals. Its is a strategic way of investment rather than direct setting up of factories and manufacturing hubs in an economy. Its true since china have created manufacturing hubs in Africa and helping Africa to be an emerging economy. How many economies play the game like the one being played by china is question of deep thinking.

We find a host of countries in Africa which have attracted the FDI inflow . The biggest local company abroad in 2008 was cellular group MTN with $13.3 billion of foreign assets, followed by Sasol ($6.7 billion), Sappi ($5.9 billion), Netcare ($5.6 billion), Steinhoff ($5 billion), Gold Fields ($4.8 billion), Medi-Clinic ($4.8 billion) and Naspers ($3.8 billion).

Africa has suffered once upon time due to the tussle among the strong economic nations. In plain words the battle between Europe and US have made Africa to suffer lots of pain. History bears the facts of America and European horrid brutalities in Africa. History clearly indicates that African peoples have been left in the lurch by foreign powers from America and Europe and the pathetic underdevelopment, the abject poverty and the desperate human conditions on the African continent has zero input from China and Chinese corporation.

America and Europe have been in Africa for almost a thousand years! And evidences about of how America and Europe have pauperized Africa by stripping the continent of tangible and intangible resources, ranging from human beings during slave trade, to raw materials during industrial revolution. More recently, stripping of African gold, diamond, petroleum and cheap labor. A movie was also made on this theme named Black Diamond. The nadir economic and political conditions in Africa are directly related to slavery, colonialism, apartheid etc.

China had a least role in all these heavy weight counter fights among the powerful nations. This is the main reason why Africans have readily accepted china’s proposal of investments and other policies. What makes china to make investments suddenly in Africa. Prime reasons are many, but among them top reasons includes:

• Diversification of its economic reserves.

• Utilization of low cost manufacturing as labour rates are abnormally low in Africa as compared with the rest of the world and

• Last but not the least China is in dire need of sustained and uninterrupted energy supply. Hydrocarbon is the demand in China and Africa has this huge reserve of hydrocarbon in its womb.

What ever be the reason but its far from the cruelty being offered by US and Europe to Africa, If china needs hydrocarbon then its paying the cost by replacing the Africa from the crown of underdeveloped economy to emerging economy. China is reducing its risk by diversification of its reserves. Investors have faced the burns of doing investments in one basket in the 2008 crisis. For example Investments in Europe have fetched negative return of 13.14% as compared to Asia pacific index excluding Japan which rose to 7.8% ending 12 months respectively . To add further feather to the crown world's largest 500 companies are having presence in emerging economies as compared to the dominance of western economy.US $12trillion GDP accounts for 30% of the world GDP. Surprised to find out but this reflects that new opportunities new lands are invented and they are contributing in real terms.

So if Europe and US needs to reduce the unemployment then its needs to invest in emerging economies and send their people to other countries. But that space is very narrow .In fact US and Europe might be getting the blessings of the cruelty they created in history

Interest rates to remain unchanged till Oct: Bankers

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Leading bankers on Tuesday ruled out any rise in the interest rate regime in the second quarter despite the increased pressure on the rates following the Reserve Bank policy action.

Admitting that the Reserve Bank decision to raise the short-term lending (repo) and borrowing (reverse repo) rates will increase pressure on interest rates, bankers said they will take a call on interest rates in October when they expect an uptick in credit demand.

Reserve Bank Governor D Subbarao, however, told newsmen that lending and deposit rates will increase with the rising demand for credit.

"No immediate impact on the interest rate. In Q2 interest rate won't go up by and large," State Bank Chairman OP Bhatt told reporters after the monetary policy.

Increase in lending rates will be followed by hike in deposit rates, he said, adding, it is difficult to state for the banking industry as each bank would take a call depending on its asset liability position.

Canara Bank Chairman and Managing Director AC Mahajan said, "I don't see interest rates are going up before October."

Acknowledging that excess liquidity has disappeared from the system, ICICI Bank Chief Executive and Managing Director Chanda Kochhar said interest rates depend not only on policy measures but also on the liquidity situation.

"We are already witnessing a rise in interest rates for wholesale deposits," she said, adding "in the immediate future, I don't see any (upward) move on interest rates but as we go forward we will definitely see something on that line."

Echoing similar view, HDFC Bank Managing Director Aditya Puri said, "an upward bias on rates is definite. There will be an increase but I cannot give exact time-frame."

Union Bank Chairman and Managing Director MV Nair said credit growth would definitely take place this quarter but the area of concern is liquidity situation and deposit growth is much below expectation.

RBI hikes short term rates to tame inflation

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The Reserve Bank has raised its short-term lending and borrowing rates by 0.25 pc and 0.50 pc respectively to bring inflation to 6 pc by March 2011 from double digits now, but the move would put pressure on banks' interest rates.

In its monetary review, the central bank, however, kept its cash reserve ratio (CRR), the cash which banks are required to keep with RBI, unchanged.

The RBI raised upwards the inflation target from 5.5 percent to six percent and said that economy will grow by 8.5 percent, up from earlier projection of 8 percent, this fiscal.

The increase in short-term lending rate (repo) to 5.75 percent and short-term borrowing rate (reverse repo) to 4.5 percent will be effective immediately.

Earlier this month, RBI had hiked repo and reverse repo rates by 0.25 percent as inflation remained above 10 percent for the fifth month in succession.

Prior to this, RBI had raised thrice its key rates, since January.

"Inflationary pressures have exacerbated and become generalised with demand side pressures clearly visiblegiven the spread and persistence of inflation, demand-side inflationary pressures need to be contained," the RBI said.

RBI's projection of a higher inflation than the earlier estimate could partly be attributed to the government's move of raising fuel prices.

The central bank said there can be an up to one percent impact on WPI-inflation owing to fuel price hike.

In June, the government raised petrol prices by Rs 3.5 a litre while decontrolling them and hiked diesel prices by Rs 2 a litre, LPG by Rs 35 a cylinder and kerosene by 3 a litre.

The RBI said that the monetary policy stance would be aimed at containing inflation while it will be prepared to respond to any further build-up of inflationary pressures.

Revising upwards the GDP target for this fiscal, the RBI said that indications are that the economy is steadily reverting to its pre-crisis growth trajectory.

However, uncertainty over global recovery could have possible adverse consequences for India, the apex bank said.

If the global recovery slows down, it will affect all emerging market economies, including India, through the usual exports, financing and confidence channels, the RBI said.

A global slowdown also carries the significant risk of a potential slowdown in capital inflows, it said, adding that it may act as constraint to domestic investment.

On liquidity pressures in the system due to payment for spectrum, the RBI said though current market conditions indicate that liquidity pressures will ease, the system is likely to remain in deficit mode "for now".

In another significant move, the RBI said it will now undertake mid-quarter policy reviews, on the lines of major central banks abroad, "to take the surprise element out of the off-cycle actions."

These reviews will be conducted at an interval of about one and a half months, after each quarterly review, the central bank said.

CBDT on changes in Rules relating to e-filing of I-T returns No.402/92/2006-MC (35 of 2010)

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Government of India / Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

***

New Delhi the 12th July 2010

PRESS RELEASE

The Central Board of Direct Taxes (CBDT) has amended the Rules relating to electronic filing of income tax returns vide Notification No.49/2010 dated 9th July 2010. The amended Rules will apply with effect from the date of notification in the official gazette.

As per the amended Rules, it is now mandatory for all companies to file income tax return electronically in Form No.ITR-6 with digital signature. Earlier, companies could file their electronic returns with or without digital signature.

Further, now all individuals and Hindu Undivided Families (HUFs), who are required to get their accounts audited under section 44AB of the Income Tax Act 1961, are also required to file their income tax return in Form No.ITR-4 electronically with or without digital signature. Earlier, this condition was applicable only to companies and partnership firms.

Accounts are required to be audited under the income tax law, if turnover or gross receipts from business exceeds Rs.40 lakh (Rs.60 lakh from assessment year 2011-12 onwards), or if turnover or gross receipts from profession exceeds Rs.10 lakh (Rs.15 lakh from assessment year 2011- 12 onwards).

New Rupee Symbol of India - How to use in computers - Font

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http://www.youtube.com/watch?v=XSfhzuU7C