©orporate Updates on 12.9.2019
Ø SBI to sell 4.5% stake in SBI Life for Rs. 3,465 crore
Ø Hong Kong Exchange makes $39 bn bid for LSE
Ø India wants industry protected in RCEP deal: Goyal
Ø Indian high tech sector have potential to attract $21 bn
Ø PNB, UBI & OBC forms groups to oversee merger
Ø NCLAT impleads SEBI as a party in the plea filed by RIL in Alok Industries matter
Ø ONGC signs MoU with Assam to invest Rs 13,000 cr for exploration
Ø India hopes to tap $1-billion of jewellery export opportunity to US
Ø China exempts 16 US goods from retaliatory tariffs ahead of trade talks
Ø Tata Motors global sales decline 32% to hit 72,624 units in August
Ø JSW's August crude steel output dips 13% YoY to 1.25 million tonnes
Ø India to align trade remedy rules with global best practices
Ø India agrees to lower import duties on Indonesian palm oil
Ø Azim Premji, group cos. sell ₹7,300-cr worth shares in Wipro buyback
Ø IL&FS gets bids worth ₹13,000 cr for road assets
Ø Cyient signs pact with UK defence firm QinetiQ Target Systems for unmanned target systems avionics
Ø Strides Pharma buys 70% stake in Switzerland’s Fairmed Healthcare
Ø Warburg Pincus exits ICICI Lombard; sells remaining 2.7% stake for $194.5 mn
Ø Schneider expects to complete L&T’s electric unit acquisition by early 2020
Ø India plans to set up ultra mega solar parks worth $1.5 billion each
Ø Adani Power’s Tiroda plant gets MERC nod for higher coal price
Ø HDFC Bank doubles mid-corporate loan book to over Rs 90,000 crore in 3 years
Ø Advance intimation of steel imports will help industry face challenges
Ø Rupee rises by 5 paise to 71.66 vs USD, extends gains for 5th day
Ø Gold prices fall Rs 372; silver too drops Rs 1,150
Ø Blackstone plans Rs. 15,000 crore investment in Allcargo unit
Ø Debt crisis hurts corp bond market
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🌱 TAXATION UPDATES 🌱
Tax implications of share trading in India
Many Individual investors have started investing in the equity and derivative market due to lot of exciting opportunities that the share market offers. However, most are unaware of taxability of such transactions made by them.
Here are tax implications of share transactions based on various provisions of Direct Tax Laws.
Capital Gains Tax on Equity Shares Sale
Short-term capital gains and losses
If listed equity shares are sold before 12 months from date of purchase, the seller makes short term capital gain/loss.
Calculation of Short-term capital gain = Sale price - (Expenses on Sale + Purchase price)
If this figure is negative, then there is short term capital loss - Short term capital gains are taxable at 15%. Irrespective of tax slab of your other income
Any short term capital loss from sale of equity shares can be set off against short term or long term capital gain from any capital asset. If the loss is not set off entirely, it can be carried forward for a period of 8 years and adjusted against any short term or long term capital gains made during these 8 years.
Long-term capital gains and losses
If listed equity shares are sold after 12 months of purchase, the seller makes long-term capital gain or long-term capital loss.
As per the provisions of the Union Budget of 2018, if a seller makes long term capital gain of more than Rs. 1 lakh on sale of equity shares or equity-oriented units of mutual fund, the gain made (above Rs.1 Lakh) will chargeable to capital gains tax @10%. Also, the benefit of indexation will not be available to the seller. These provisions apply to transfers made on or after 1 April 2018. Before the introduction of these provisions long term capital gains on listed equity shares were exempt from tax.
Long Term Capital Loss can be set off only against Long Term Capital Gains (LTCG) and unabsorbed loss can be carried forward to subsequent 8 years to set off against LTCG.
Taxation of Derivatives Trading (Futures & Options)
Income from trading futures & options on recognized exchanges is categorized under non-speculative business income. Profit / Loss resulted from trading in futures & options must be reported as a business income in Income Tax Return. It should be noted that this also applies to individuals. You don't have to be formally incorporated as some legal entity to earn business income.
The another important point in reporting business income is that you can claim expenses incurred to earn that income. Expenses that can be claimed against F & O profits are brokerage, internet charges, professional fees, subscription to related journals, salary of assistants if any, etc. If the turnover is less than 2 crores the profit can be calculated @ 6% of turnover irrespective of actual expenses incurred
How to calculate Turnover in case of Derivatives
The turnover in case of Futures and Options transactions is calculated as follows:
1. The sum of favourable and unfavourable differences shall be taken as turnover.
Aggregate of both positive as well as negative differences will be taken together to calculate turnover in case of derivatives, futures & Options transactions. Or in other words both profits and losses will be added to calculate the turnover.
2. Premium received on sale of options is also to be included in turnover.
3. In respect of any reverse trades entered, the difference thereon, should also form part of the turnover.
Intraday trading
Profit made from intraday trading is treated as Speculative Business Income under Tax Laws. Tax treatment is similar to other business income tax. It is taxed as per the tax slab you fall in while losses can be offset only against speculative profits. You can claim expenses against profit earned from intraday trading as in the case of derivatives trading.
Conclusion
All individuals including salary earners are advised to show their share trading income in income tax returns to avoid further notices and litigation.Reporting all your sources of income is mandatory. Even if there is loss, it can't be carried forward unless you file Income Tax Return.
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Banking / Financial News at a Glance
🍒 Securities Tribunal Sets Aside Rs 3 Lakh Fine Levied on Central Bank of India : The Securities Appellate Tribunal (SAT) on Monday set aside a penalty of Rs 3 lakh levied by markets regulator Sebi on Central Bank of India for the violation of debenture trustee norms. The tribunal let off the lender on censure for the violations, according to an SAT order. "The order of the Adjudicating Officer imposing monetary penalty upon the appellant is set aside instead the appellant is let off on censure for the violations," the tribunal said in an order. In July 2018, markets regulator found that the lender had not entered into written agreements with the issuer companies in respect of Britannia Industries and Deepak Fertilizers and Petrochemicals Corp. Besides, the Central Bank, while acting as a debenture trustee of IL&FS Ltd provided loan to it and the bank's director held directorship positions in the company. In addition, the bank had not disseminated all information and reports on debt securities including compliance reports filed by the issuers and debenture trustees to the investors and general public by placing the same on its website among other violations. The Securities and Exchange Board of India (Sebi) had held that by indulging in such activities, the bank has violated the provision of debenture trustee regulation and imposed a fine of Rs 3 lakh. With regard to the loan provided to IL&FS Ltd, SAT noted that the violation was "technical" in nature and "...the disbursement of loan to IL&FS was the cause of old standing relations between the appellant and the Company which could not have been suddenly stopped due to amendment of the DT Regulations in between." Sebi had further contended that the Central Bank was required to communicate the compliance of the term of issues by the issuer companies and default in payment of interest to the debenture holders on half yearly basis and said that "while the show cause notice is regarding five companies the appellant has given explanation regarding only one Company namely IL&FS." "In the circumstances, the violation of the Regulation is clearly established in the present case," the tribunal said With regard to dissemination of information on the website, SAT held that "since there were no default, the requirement of posting information in this regard was merely a formality. The appellant was disseminating other information in substance as detailed above. The default, if any, was therefore only technical in nature." news18.com
🍒 SBI, Bank of Baroda to laterally hire 500 people : Public sector lenders State Bank of India (SBI) and Bank of Baroda (BoB) are looking outside their ranks to hire nearly 500 people for specialist roles, ranging from information technology to managing the small business segment. While SBI will hire 477 candidates for information technology roles, Bank of Baroda will hire 15 sector specialists to market its MSME products, two separate newspaper advertisements on Tuesday showed. According to the SBI, the proposed lateral hires are in the grades of assistant manager, deputy manager, manager and chief manager. These include developer, database administrator, cloud administrator, infrastructure engineer, IT security expert, cyber security - threat hunting and cyber security - and digital forensic, among others. Of the 477 vacancies in SBI, 248 are for candidates belonging to the general category, while the rest are reserved. The highest number of vacancies is for developers (181), followed by IT security expert (94) and 47 system or server administrator. At present, SBI hires a mix of probationary officers, junior associates, lateral hires and management trainees. - Live Mint
🍒 RBI panel suggests new intermediary under NHB : A Reserve Bank of India (RBI) panel, which was tasked with reviewing the existing state of housing finance securitization, and suggest measures to make the market more attractive, has recommended that an intermediary be set up under the National Housing Bank (NHB), wherein the government will have a 51% ownership. The six-member committee, which was set up on 29 May under the chairmanship of Harsh Vardhan, senior advisor, Bain and Co., has submitted its report to RBI governor Shaktikanta Das, the central bank said on Monday. Mortgage securitization involves pooling of loans and selling them to a special purpose vehicle (SPV), which then issues securities, called pass-through certificates (PTCs). The PTCs will be backed by the loan pool. Securitization is a mechanism to convert illiquid loans on the lenders’ balance sheet into tradable securities.- Live Mint
🍒 Government stake in some PSBs has shot up to over 90%, limiting huge capital infusion : The Centre’s holdings in PSU Banks have seen a steep Rs 1.6 lakh crore erosion in value over the past five years, even as it pumped in a massive Rs 2.5 lakh crore of capital into these banks. But aside from costing the Centre dearly, the huge capital infusion has also led to a peculiar situation. Over the past five years, the stake of the government in many PSU Banks has shot up from 60-70 per cent to over 90 per cent. Year after year, the government is issued shares in PSBs, in lieu of the capital infused by it. This has led to sharp rise of its holdings in these banks. Much of the sharp rise in government holdings has happened in the last two years, thanks to the humungous infusion of Rs 1.96 lakh crore in 2017-18 and 2018-19 alone. - Business Line
🍒 SBI mulls lending ₹35,000 cr to NHAI for highway projects: Rajnish Kumar : The bank is examining NHAI’s proposal to raise funds through securitisation of toll proceeds. State Bank of India, India’s largest lender, is “examining” a proposal from the National Highways Authority of India (NHAI) to lend as much as ₹ 35,000 crore through securitisation of toll receipts to part-fund highway projects this year, Chairman Rajnish Kumar has said.“We are examining NHAI’s proposal to raise funds through securitisation of toll proceeds. We are looking at ₹ 30,000-35,000 crore, but not all of that will be funded by SBI,” Kumar told BusinessLine on the sidelines of a road show organized by NHAI on Monday. “NHAI has huge cash flows. We are ready to give money to whoever needs it. It depends on how much and which route/model needs money,” he said. - Business Line
🍒 Bank fraud case: ED attaches assets worth Rs 92 cr of Kolkata firm : The ED said on Tuesday that it has attached assets, including three luxury apartments, worth Rs 92 crore of a Kolkata-based firm in connection with its probe into the alleged bank fraud and money laundering by the company. The agency said a provisional order for attachment of the properties of the company, SPS Steel Rolling Mills Ltd, has been issued under the Prevention of Money Laundering Act (PMLA). The company was known for producing ‘Elegant Steel’ brand and its control was taken over by another Kolkata-based firm in April after the alleged bank default was detected some years ago. “The attached assets consist of shares of an entity owning a 5-star hotel, three luxurious apartments, office building and 0.33 acres of land,” the Enforcement Directorate (ED) said in a statement.- Business Line
🍒 Paytm registers over 1.2 billion merchant payments in first quarter : Digital payments major Paytm on Monday said that it has processed over 1.2 billion merchant payments in this fiscal's first quarter, apart from P2P and money transfer transactions, enabling it to maintain its leading position in offline payments. Accepted at 14 million retail outlets, Paytm, owned by One97 Communications Ltd, currently has 70% share in the sector. It had announced that this year it will shift its focus from peer-to-peer (P2P) transactions to increasing the usage of digital payments at kirana stores, restaurants, commutes and other such daily spends. Paytm said that it has also launched a major drive to make users aware of how to scan any QR code at outlets through their Paytm app for instant payments, and this augments the merchants' efforts for this purpose. - Live Mint.
🍒 Paytm in discussion to buy stake in Yes Bank from co-founder Rana Kapoor : Digital payments major Paytm is in discussions to buy stake in Yes Bank from co-founder Rana Kapoor, according to sources. The sources, privy to the discussions, said Kapoor has held preliminary discussions with Paytm. They said the structure of the deal would depend on the approval from the Reserve Bank of India (RBI), given that Paytm founder Vijay Shekhar Sharma already owns stake in Paytm Payments Bank.Paytm declined to comment on the matter.Kapoor and associated entities own a 9.6 per cent stake in Yes Bank. Rana Kapoor could not be reached for comments. Also, banking sources declined to comment whether plans are afoot by Rana Kapoor and family to sell their entire stake in the bank.- Business Line
🍒 At Rs 3,960 crore, losses mount 165% for Paytm parent One97 : Paytm’s losses widened 165% in the last financial year while revenue increased marginally, at a time when the digital payments leader faces increased competition from Google Pay and PhonePe. Paytm’s parent One97 Communications posted Rs 3,959.6 crore in net losses for the fiscal year ending March 31, 2019 against Rs 1,490 crore for the same period in the previous year, according to details released by the company that were shared with shareholders.The company’s standalone revenue stood at Rs 3,319 crore, compared to Rs 3,229 crore in 2017-18. On a consolidated basis, which includes businesses like Paytm Money for mutual fund investments, Paytm Financial Services, Paytm Entertainment Services and others, the company reported a net loss of Rs 4,217 crore. - economic times
🍒 IRDA warns Reliance Nippon Life for excessive expenses : Reliance Nippon Life Insurance (RNLIC) has been rapped by the Insurance Regulatory and Development Authority (IRDA) for around ₹600 crore worth excessive expenses beyond prescribed limit, a copy of the insurance regulator’s order issued in July showed. IRDA left RNLIC with a warning as it was observed that the expenses had not affected the insurance policy holders, the order said. IRDA said that in seven years, if RNLIC received two warnings it would lead to investigation and valuation of funds and expenses under applicable provisions. IRDA said it had observed that RNLIC incurred management expenses to the tune of ₹1,632 crore against the allowable limit of ₹1,069 crore and explanation was sought from the company. IRDA had observed that the insurer had been non-compliant with expense on management (EoM) limit in six out of eight years between financial year (FY) 2008-09 to 2015-16. - Business Line
🍒 For seamless three-way merger, PNB goes on consultant recruitment drive : On the heels of the big-bang merger announcement involving Punjab National Bank, Oriental Bank of Commerce and United Bank of India, the management of PNB has now embarked on a massive drive to engage banking industry experts as consultants and advisors to ensure that the three-way amalgamation proceeds smoothly. External consultants and advisors will be engaged in as many as 21 banking domain areas, said sources close to the developments. Such consultants and advisors will be responsible for steering the bank in facing the issues that may arise during the course of amalgamation, they added. It may be recalled that the PNB board had recently given an in-principle approval for the amalgamation of OBC and United Bank of India with PNB. All external consultants and advisors will be hired on contractual basis The engagement will be for a period of six months to one year initially, which will be reviewed by the bank annually. Also, the engagement will automatically expire permanently on completion of five years or 65 years of age, whichever is earlier, it is learnt. Only those with at least five years of experience in a public sector bank or public sector enterprise, regulatory body, Central government or private organisation will be eligible for the posts of consultants/advisors. - Business Line
🍒 RBI cracks the whip on office account misuse : Amid a rise in frauds, the Reserve Bank of India has alerted all lenders of instances where ‘intermediary’ or transitory accounts in banks have been misused to hide bad loans or mask money laundering. The banking regulator has directed banks to carry out internal review of such unauthorised transactions and submit their findings by October. Funds often lie for a day or two in intermediary or office accounts opened in bank branches before the money is credited to the actual beneficiary. A branch manager may dip into such an account to give unauthorised overdraft facility to enable a borrower regularise a loan and avoid default before the close of a quarter or the due date for servicing the loan or just before the loan account is about to be classified as non-performing asset (NPA). - economic times
🍒 Aditya Birla Capital to raise Rs 2,100 cr via preferential allotment : Aditya Birla Capital Ltd (ABCL) is planning to raise Rs 2,100 crore through issuance of equity shares on a preferential basis to Jomei Investments Ltd, promoter Grasim Industries, members of the promoter group and PI Opportunities Fund-I. The financial services conglomerate of the Aditya Birla Group is seeking to mop up Rs 1,000 crore and Rs 770 crore from Jomei Investments Ltd and Grasim Industries, respectively. Towards this end, the company will be issuing 10 crore and 7.70 crore fully paid up equity shares at a price of Rs 100 (including a premium of Rs 90) to Jomei and Grasim, respectively. - Business Line..
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# CBDT Circular No. 25/2019 dt. 09-09-2019
Relaxation of time-Compounding of Offences under Direct Tax Laws-One-time measure.
https://www.incometaxindia.gov.in/_layouts/15/dit/mobile/circular-notification/circular.aspx
# CBDT Circular No. 24/2019 dt. 09-09-2019
Procedure to identify & process Income Tax cases for prosecution.
# CBIC Circular No. 30/2019- Customs dt. 11-09-2019 : Disposal of Seized/Confiscated Foreign Origin Liquor.
http://www.cbic.gov.in/htdocs-cbec/customs/cs-circulars/cs-circulars-2019/Circular-No-30-2019.pdf
# Upcoming Due Dates
13-09-2019 - GSTR-6 for ISD
14-09-2019 - Issue of TDS Certificate for tax deducted under section 194-IA/194-IB in m/o July'19
15-09-2019 - IInd installment of Advance Tax for the A.Y 2020-21.
# Pay Membership Fees Online simply with Membership No. and DoB. Members with Individual/Proprietary practice can also claim GST credit.
https://www.icai.org/new_post.html?post_id=15946
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🍎CBDT launches one-time facility for compounding of income tax offences
https://economictimes.indiatimes.com/news/economy/policy/cbdt-launches-one-time-facility-for-compounding-of-income-tax-offences/articleshow/71086216.cms
✅ A one-time facility to apply for compounding of income tax offences has been launched and taxpayers can avail this opportunity by December 31, a latest CBDT directive said
☘Cases have been brought to the notice of CBDT where the taxpayers could not apply for compounding of the offence as the compounding application was filed beyond 12 months," the directive accessed by said
🌿taxpayer or an assessee, in order to avail the facility, will have to file an application for compounding a tax offence before the competent authority, that is a Principal Chief Commissioner or Chief Commissioner, Principal Director General or Director General of Income-tax department "on or before December 31, 2019", the CBDT directive issued on September 9 said
https://m.economictimes.com/news/economy/policy/cbdt-launches-one-time-facility-for-compounding-of-income-tax-offences/articleshow/71086216.cms
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GST: Telangana government feeling the pinch of economic slowdown:
READ MORE- https://www.gststation.in/gst-telangana-government-feeling-the-pinch-of-economic-slowdown/
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CBDT has notified the Income-tax (6th Amendment) Rules, 2019 which shall come into force on the 5th November, 2019.
Non-executive directors cannot be prosecuted for offenses committed by the company. The accounts are signed by such directors in a routine manner and they are not subject to vicarious liability. Rajendra Shah s/o. Ambalal Shah vs. State of Maharashtra (Bombay High Court)
Income Tax Section 12AA Registration cannot be cancelled unless CIT / Pr. CIT satisfied that activities of such trust or institution are not genuine. Case Name : St. Michaels Educational Association Vs CIT (Patna High Court).
GST Council will interact with the Finance Commission during its September 20 meeting at Goa expected to submit its report by November 30. It will suggest the formulae for the distribution of taxes between the Centre and States for a five-year period starting April 1, 2020.
MCA has notified the National Financial Reporting Authority (Amendment) Rules, 2019. The amendment includes notification of the eForm in which the auditor shall file the annual return with NFRA.
ICAI PDC extended the last date for submission of online Multipurpose Empanelment Form for the year 2019-20 till 20th September, and Declaration is 25th September, 2019. For Jammu & Kashmir is 30th September, 2019 along with Declaration.
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Big relief for small-GST assessees: May be spared burden of filing FY18 annual return:
READ MORE- https://www.gststation.in/big-relief-for-small-gst-assessees-may-be-spared-burden-of-filing-fy18-annual-return/
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👉🏻CBDT eased prosecution norms for TDS, I-T return filing defaults
(CBDT has relaxed some norms relating to prosecution of income tax defaulters for delay in depositing TDS, under-reporting of income in the tax return or non-filing of I-T return)
👇🏻 👇🏻 👇🏻
http://bit.ly/2kguYbt
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GST Council likely to extend date of filing annual return, audit report for FY19:
READ MORE- https://www.gststation.in/gst-council-likely-to-extend-date-of-filing-annual-return-audit-report-for-fy19/
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Firms with annual income upto Rs 2 crore could get GST return relief:
READ MORE- https://www.gststation.in/firms-with-annual-income-upto-rs-2-crore-could-get-gst-return-relief/
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Biggest ever pan-India joint operation by Directorate General of GST Intelligence and Directorate General of Revenue Intelligence against fraudulently claiming refund of IGST by exporters
DGGI & DRI crackdown involved about 1200 officers
In the biggest ever joint operation by Directorate General of GST Intelligence (DGGI) and Directorate General of Revenue Intelligence (DRI) against exporters who were claiming refund of IGST fraudulently, pan-India searches were carried out at 336 different locations across the country yesterday. The operation covered entities in the states of Delhi, Haryana, Uttar Pradesh, Gujarat, Maharashtra, Tamil Nadu, West Bengal, Karnataka, Madhya Pradesh, Telangana, Punjab, Rajasthan, Himachal Pradesh, Uttarakhand and Chhattisgarh. The joint operation of the two premier intelligence agencies of Central Board of Indirect Taxes and Customs (CBIC), was a first of its kind in the history of CBIC which involved about 1200 officers from both the agencies.
On the basis of data analytics, an intelligence developed in close coordination by both the agencies revealed that some exporters are exporting goods out of India on payment of tax (IGST), being done almost entirely out of the Input Tax Credit (ITC) availed on the basis of ineligible/ fake supplies. Further, such IGST payment was claimed as refund on export. Based on the data provided by the Directorate General of Analytics and Risk Management (DGARM), analysis was conducted wherein certain ‘red flag’ indicator filters were applied to Customs’ export data in conjunction with the corresponding GST data of the exporters. It was also noticed that there was no or negligible payment of tax through cash by the exporters as well as their suppliers. In few cases, even the tax paid through ITC was more than the ITC availed by these firms. On the basis of this intelligence, massive searches were conducted on the premises of exporters and their suppliers.
The day long operation revealed that many of the entities spread across the length and breadth of the country were either non-existent or had given fictitious addresses. The preliminary examination of the records/documents resumed during the course of the joint operation along with the statements recorded of various persons indicated that an Input Tax Credit of more than Rs. 470 Crore (Invoice value of approx. Rs 3500 Crores) is bogus/ fake which has been further utilized by the exporters for effecting exports on payment of IGST through ITC and claiming consequential cash refund of the same. Besides, an IGST refund amount of around Rs 450 crore is under examination. Further, some live export consignments of these exporters have been intercepted at Vadodara Rail Container Terminal, Mundra port and Nhava Sheva port for examination in order to ascertain mis-declaration.
Further investigations in the matter are under progress.
Thanks for reading 😃