India plans extra tax on vegetable oil imports to boost domestic output: Sources

Source: The Economic Times, Aug 26, 2019

India plans to impose an extra 5% tax on vegetable oil imports within weeks and use the revenue to help boost the country’s stagnating oilseed production, two government sources said.

India is the world’s biggest importer of vegetable oils, buying nearly $10 billion worth a year, its biggest import after crude oil and gold.

The country’s consumption of vegetable oils – including palm oil and soyoil – has trebled over the last 20 years as the population grew and incomes rose, while output has increased by less than a third. Read the rest of this entry »

Small startups with turnover up to Rs 25 cr to get promised tax holiday: CBDT

Source: ETRetail.com, Aug 23, 2019

New Delhi: Seeking to allay concerns on tax holiday for startups, the tax department on Thursday said only small startups with a turnover of up to Rs 25 crore will get tax holiday on fulfilling certain conditions.

It did not recognise the Rs 100-crore turnover definition of a small startup put up by the Department for Promotion of Industry and Internal Trade (DPIIT).

“Since the intention was to support the small startup, the turnover limit of Rs 25 crore was considered reasonable for granting profit linking deduction,” the Central Board of Direct Taxes (CBDT) said in a statement. Read the rest of this entry »

Income Tax dept relaxes assessment and scrutiny norms for start-ups

Source: Business Standard, Aug 09, 2019

New Delhi / Bengaluru: The income tax (I-T) department has relaxed its assessment and scrutiny norms for start-ups.

In a circular it directed its officers not to raise additional tax demands for start-ups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).

This will be done in cases where scrutiny is limited to Section 56 (2) (viib) of the Income Tax Act, or what is called in popular parlance angel tax.

Angel tax refers to income tax payable on capital raised by unlisted firms by issuing shares where the share price is considered more than the fair market value. Read the rest of this entry »

CBDT raises limit for appeals to reduce litigations

Source: The Economic Times, Aug 08, 2019

NEW DELHI: The revenue department on Thursday enhanced the monetary limits for the filing of appeals by the Income Tax Department at various tribunals in order to reduce litigation.

The monetary limit for an appeal before the Income Tax Appellate Tribunal has been increased to Rs 50 lakh from Rs 20 lakh earlier, the Central Board of Direct Taxes (CBDT) said in a statement.

In case of high courts, the limit has been doubled to Rs 1 crore and in case of Supreme Court, the revised limit for filing appeal has been increased from Rs 1 crore to Rs 2 crore, it said.

The department said the limits have been increased to “effectively reduce taxpayer grievances/litigation and help the Department focus on litigation involving complex legal issues and high tax effect.

The CBDT noted there is a substantial pendency of appeals of the Income Tax Department before various appellate fora.

The limits were last revised in July, 2018.

Tax incidence on expats to go up for companies

Source: The Economic Times, Jul 24, 2019

MUMBAI: Companies that have employed high-paying expatriates may have to set aside an amount equal to as much as 74% of such executives’ take-home salaries to pay tax, so as to insulate them from a budget proposal to increase the surcharge on super-rich taxpayers.

This is because of the pay structures that many of the expat executives work out with their employers, to ensure that they won’t be affected by changes in tax rates.

While moving to India, most expatriates bargain on the net, or after-tax, salary, say industry trackers. When there is a change in tax rates, their employers adjust their gross salaries and pay the tax on their behalf. Read the rest of this entry »

Why new tax surcharge has stunned foreign portfolio investors

Source: The Economic Times, Jul 15, 2019

India’s tax revenue structure has seen some volatility in the nearly two decades since the turn of the millennium.

In 2000-01, Indian direct taxes, which include individual income taxes (taxes on salaries, house properties, capital gains, etc) and corporate income taxes accounted for barely 36.31% of total tax collection. This percentage share grew steadily in the subsequent years, to peak at 60.78% in 2009-10. Thereafter, it fell to 49% in 2016-17, recovering to 52% in 2017-18, more or less contributing an equal share as indirect taxes such as GST (goods and services tax) and customs duty. The budget estimates for 2019-20, however, shows the government is hoping the share of direct taxes will go up again the next year, as after several rounds of lowering of GST rates in 2018-19, the actual GST collection will be somewhat subdued. Read the rest of this entry »

Budget extends tax on NRIs for receiving gifts from resident Indians

Source: The Economic Times, Jul 09, 2019

NEW DELHI: The expensive gift that you kept for your overseas cousin or friend may attract tax from this year with the Budget 2019-20 proposing to impose withholding tax all such transfers, plugging an earlier loophole that allowed its tax- free treatment.

The Finance Bill 2019 has imposed tax on any sum of money paid or any property situated in India, transferred by a person resident in India to a person outside India, as it would be deemed to accrue or arise in India. The changes will be applied for all such transfers made on or after July 5, 2019.

Currently gifts given by Indian residents to non-resident Indians – apart from the specified list of relatives – would be claimed as non-taxable. This is because the earlier tax put the onus on the recipient of the gift to make the disclosure and pay tax. As a gift to NRIs means that income is accrued abroad, it remained outside the tax net. Read the rest of this entry »