Daily Updates and News

RBI

Reserve Bank of India (RBI) has issued Master Direction on Reserve Bank of India (Financial Services provided by Banks) Directions, 2016. As per the Direction, a Bank is not allowed to contribute more than 10% of its Paid up capital and reserves as per last audited balance sheet in factoring subsidiaries and factoring companies. Further it is not allowed to contribute more than 49% in the equity of a Debt funded NBFC. The master Direction does not allow a bank to undertake Mutual fund or Insurance business with risk participation except through a subsidiary set up for the same purpose. An AD Category I Scheduled Bank can become a trading or clearing member if its net worth is more than 500 crores and its NPA does not exceed 3%. The Master Direction came into force from 28^th May, 2016.

SEBI

Securities and Exchange Board of India (SEBI) has notified Disclosure of the Impact of Audit Qualifications by the Listed Entities. The circular requires a Listed Entity to disseminate the cumulative impact of all the audit qualifications in a separate format, while submitting the annual audited financial results to the stock exchanges to ensure that the investment decisions can be taken wisely by investors. This will ensure that the information is available to the investors, without delay, enabling them to take well informed investment decisions. It will further dispense with the existing requirement of filing Form A or Form B for audit report with unmodified or modified opinion respectively and requirement of making adjustment in the books of accounts of the subsequent year. The management of the Companies shall have the option to explain its vies on the audit qualifications. The Circular shall be applicable to all the Listed Companies submitting their Financial Year ended 31^st March, 2016.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

SEBI

SEBI has made amendments to the existing Takeover Regulations and issued the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2016 which shall come into force on the date of their publication in the Official Gazette. Through this amendment definition "willful defaulter" of has been be inserted, which means any person who is categorized as a willful defaulter by any bank or financial institution or consortium thereof, in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India and includes any person whose director, promote or partner is categorized as such. Further the restriction has been imposed, that no person who is a willful defaulter shall make a public announcement of an open offer for acquiring shares or enter into any transaction that would attract the obligation to make a public announcement of an open offer for acquiring shares under these regulations.

 

FEMA

In terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000, to ensure more transparency and greater disclosure, it has now been decided to disseminate the information pertaining to compounding orders, and to host the compounding orders passed on or after June 1, 2016 on the Bank’s website and shall be updated at monthly intervals. Further, the amount imposed is calculated based on guidance note. It may, however, be noted that the guidance note is meant only for the purpose of broadly indicating the basis on which the amount to be imposed is derived by the compounding authorities in Reserve Bank of India. The actual amount imposed may sometimes vary, depending on the circumstances of the case taking into account the factors prescribed.

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Meetesh Shiroya

Daily Updates and News

MCA

MCA has amended Rule 4 relating to ‘CSR Activities’ of Companies (CSR Policy) Rules, 2014. The amended rules may be called as the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2016 and shall come into force on the date of their publication in the Official Gazette. The amendment states that board of a company may decide to undertake its CSR activities approved by CSR Committee, through: (a) a company established u/s 8 of Companies Act, 2013 / registered trust / registered society, established by the company, either singly or alongwith any other company, or (b) company established u/s 8 / registered trust / registered society, established by Govt. It further clarifies that if, Board of a company decides to undertake its CSR activities through, such company / trust / society shall have an established track record of 3 years in undertaking similar projects. 

CBDT

Central Board of Direct Taxes (CBDT) has issued Clarification on the Income Declaration Scheme, 2016. The said declarations were issued to cover large number of query by stakeholders. The clarification covers all the important queries that may be raised by an assessee regarding their undisclosed income. As clarifies that the information given by assesses shall be kept confidential; the Income should be declared as whole not in parts; It is not mandatory to file the valuation report of the undisclosed income represented in the form of investment in asset along with the declaration and where a search/ survey operation was conducted and the assessment has been completed but certain income was neither disclosed nor assessed, such undisclosed income can also be declared under the Scheme.

Thanks & Regards,

 Meetesh Shiroya

Daily Updates and News

MCA

The Ministry of Corporate Affairs is receiving references from professionals/companies seeking clarification on the forms/process to be followed for alteration in the Memorandum of Association of Section 8 Companies. The professional/companies are filing Form RD-1 seeking approval to change in Memorandum of Association. However, as per the applicable laws read with Rules and relevant Circulars & Notifications, power for approving change in Memorandum of Association has been delegated to the Registrar of Companies. In the background of this development the professionals/companies are advised to apply the request for change in Memorandum of Association of Section 8 Companies in Form GNL-1 instead of filing form RD-1. MCA notification no. S.O. 1353 (E) dated May 21, 2014 wherein the Central Government has delegated the powers and functions vested in Central Government, amongst others, under section 13 (2) to the Registrar of Companies. Section 13 deals with Alteration of Memorandum.

CBDT

Central Board of Direct Taxes (CBDT) has issued Draft Rules to determine fair market value of Indian assets in case of indirect transfer. As per the Indian Income Tax Act, 1961, As per provisions of Indian Income Tax Act, 1961 any income arising from transfer of assets is deemed to accrue or arise in India. Further, Section 285A of the Act mandates reporting requirement on the Indian concern through or in which the foreign company or entity holds the assets in India. The information to be furnished and its manner is also required to be prescribed. In this regard, draft rules and forms which are required to be incorporated in the Income-tax Rules, 1962 have been formulated for comments from stakeholders and general public.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

MCA

Ministry of Corporate Affairs has notified new version of e-Forms AOC-4 XBRL (Form for filing XBRL document in respect of financial statement and other documents with the Registrar), CHG-1 (Application for registration of creation, modification of charge (other than those related to debentures)), CRA-4 (Form for filing Cost Audit Report with the Central Government), DIR-3C (Intimation of Director Identification Number by the company to the Registrar DIN services), FC-1 (Information to be filed by foreign Company), SH-9 (Declaration of Solvency) and LLP Form 11 (Annual Return of Limited Liability Partnership (LLP)) w.e.f 23^rd May, 2016. Stakeholders are advised to download the latest version before filing. Form- wise date of last version change is available at on the website of MCA.

DVAT

DVAT authorities have announced their new initiative wherein the Registration formalities under DVAT & CST may be completed in just One Day using DVAT Mseva App. Using the latest technology advancements, the Department of Trade and Taxes has developed a mobile application DVATMsewa to provide various services to traders. One of the services to be provided through the new App is registration of dealers under the DVAT Act, 2004 and CST Act, 1956. The detailed procedure has been prescribed to deal with requests for registration of dealers received through DVATMsewa App without verification of business premises by VAT Inspector and to complete the registration process almost instantaneously. The Registration Certificate would be made available in the login of dealer on the same day and signed copy of the RC would be dispatched to the dealer by post till the online dispatch facility through digital signatures is extended to all Registration Authorities of the department. All Assessing Authorities are directed to follow the aforesaid process. In case of applications not received through mobile App, the existing process of registration after VATI verification will continue.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

IRDA

Insurance Regulatory And Development Authority (IRDA) has issued Guidelines on Corporate Governance for Insurance Companies. The revised guidelines combine the stipulations regarding the Corporate Governance practices, appointment of MD/ CEO/ WTD and other KMPs as well as the appointment of Company Secretaries as compliance officer to insurers. These guidelines shall be applicable to all insurers granted registration by IRDA. As per the guidelines each insurer should designate Company Secretary as the Compliance officer whose duty will be to monitor continuing compliance with these guidelines.

MCA

MCA has notified the Special Courts and provisions of the Section 435 to 438 (both inclusive) and Section 440 of the Companies Act, 2013. The Central Government MCA (Ministry of Corporate Affairs), after obtaining the concurrence of the respective Chief Justices of the High Courts, designates the Courts as Special Courts for the purposes of trial of offences punishable under the Companies Act, 2013 with imprisonment of two years or more in terms of section 435 of the Companies Act, 2013 and also announced that sections 435 to 438 (both inclusive) and Section 440 to come into form from 18^th May, 2016.

Thanks & Regards,
Meetesh Shiroya

Daily Updates and News

DVAT

The Delhi VAT Department has further extended the last date of filling of online/ hard copy of DVAT return for Q4 of Financial Year 2015-16 (i.e. Jan.-March 2016), in Form DVAT-16, DVAT-17 and DVAT-48 along with required annexures/ enclosures upto 23rd May 2016. However, the tax due shall continue to be paid in the usual manner as per the provisions of section 3(4) of the DVAT Act, 2004. The dealers filing the returns through digital signature need not file hard copy of the return/ Form DVAT 56.

Ministry of Finance

Ministry of Finance has announced Income Declaration Scheme, 2016. The government is providing a 4-month window starting from June 1, 2016. Under the scheme, income as declared by the eligible persons, would be taxed at the rate of 30 per cent plus a Krishi Kalyan Cess of 25 per cent on the taxes payable and a penalty at the rate of 25 per cent of the taxes payable, thereby totalling to 45 per cent of the income declared under the scheme. The scheme shall apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

MCA

MCA has issued clarification with regard to the provisions of the Corporate Social Responsibility under Section135 of the Companies Act, 2013. It is clarified that the Companies, while undertaking Corporate Social Responsibility activities under the provisions of the provisions of the Companies Act, 2013, shall not contravene any other prevailing laws of the land including Cigarettes and Other Tobacco Products Act (COTPA), 2003.

Finance Act, 2016

The Finance Bill was presented in the Lok Sabha on February 29, 2016. On May 5, 2016, the Lok Sabha passed the Finance Bill, 2016 and later on it was approved by the Rajya Sabha. The Finance Bill, 2016 received the presidential assent on May 14, 2016. Now it becomes the Finance Act, 2016 (28/2016). Most of the provisions including the Krishi Kalyan Cess are effective from 1^st June 2016. 

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

RBI-FEMA

Reserve Bank of India (RBI) has issued the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015. These Regulations dealt with the exports, the declaration to be filed, the realization of export value etc. The FEM (Export of Goods and Services) Regulations 2015 clarify that in case for the export of services where no Form has been prescribed, the exporter may be permitted to export such services without furnishing any declarations, provided the exporter realises the full value of the services exported within the prescribed time and the payments for the services are made in the specified manner. This regulation shall come into effect from 12^th May, 2016.

MCA

MCA has again relaxed the additional fees on all forms.  As per the latest circular, relaxation of additional fees and extension of last date of filing of various e-Forms under the Companies Act. It has been decided to extend the period for which the one time waiver of additional fees is applicable to all e-forms which are due for filing by companies between the 25th March 2016 upto 31st May 2016 as well as extend the last date for filing such documents and availing the benefit of waiver to 10.06.2016.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

RBI

Reserve Bank India (RBI) has issued The Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016. The provisions of these Directions shall apply to every co-operative Bank licensed or permitted to carry on banking business in India by the Reserve Bank of India. The direction requires a Co-operative Bank to pay interest on deposits of money (other than current account deposits) accepted by them or renewed by them in their Domestic, Ordinary Non-Resident (NRO), Non-Resident (External) Accounts (NRE) and Foreign Currency (Non-resident) Accounts (Banks) Scheme {FCNR(B)} deposit accounton certain prescribed terms. The direction prohibits the Co-operative banks to create any kind of lien, direct or indirect, against NRE savings deposits. This Direction shall come into effect from 12^th May, 2016.

CBDT - DOUBLE TAXATION AGREEMENT

Protocol for amendment of Convention for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and capital gains between India and Mauritius has been signed between both the countries on 10^th May, 2016. This protocol enables India to levy Capital Gains Tax on alienation of shares in Indian companies which will be acquired on or after 1 April 2017. The Protocol contains a two-year transition period during which a reduced tax rate would apply for capital gains. The reduced tax rate will be limited to 50% of the domestic tax rate of India, subject to the fulfillment of the conditions prescribed. The major impact of the protocol is that, it will help to tackle the long pending issues of treaty abuse and streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius. It will improve transparency in tax matters and will help curb tax evasion and tax avoidance.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

Insolvency and Bankruptcy Code 2016

Rajya Sabha passed the Insolvency and Bankruptcy Code 2016. The new code will provide a framework for dealing with bankruptcies, replacing multiple laws dealing with the issue, including the Companies Act. It will cover individuals, companies, limited liability partnerships and partnership firms. It will also help creditors recover loans faster. Under the new code, employees and workmen will have first right during liquidation of assets under the law followed by secured creditors. A debtor could be jailed for up to five years for concealing property or defrauding creditors under the new law. Bankrupt individuals would be barred from contesting elections. The code is yet to receive the presidents assent.

SEBI

Securities and Exchange Board of India has issued guidelines for public issue of units of Infrastructure Investment Trusts (InvITs). The detailed guidelines as placed at Schedule-A of the circular shall be applicable to public issue of units of InvITs. The circular provides detailed guidelines which covers filing of offer document, price and price band and general conditions to be observed while offering public issue of units of InvITs. Further, SEBI has provided the formats of Due Diligence Certificate to be given by merchant banker at various stages of the public issue, formats of post issue reports and format of abridged version of the offer document. These guidelines have to be read with SEBI (Infrastructure Investment Trusts) Regulations, 2014. The Circular is available on SEBI website under the categories “Legal Framework” and under the drop down “Circulars”.

Thanks & Regards,
Meetesh Shiroya

Daily Updates and News

CBDT

Central Board of Direct Taxes (CBDT) has granted relaxation of time for submitting Form ITR-V which were to be filed electronically without attesting digital signature. CBDT has permitted verification of such returns which were uploaded electronically by the taxpayer and which have remained incomplete due to non-submission of Form ITR-V for verification, in case of returns for Assessment Years from 2009-10 to 2014-2015 through Electronic Verification Code (EVC). Such verification process must be completed by 31.08.2016.However, this relaxation shall not apply in those cases where department has already taken recourse to any other measure as specified in the Act for ensuring filing of tax return by the taxpayer concerned after declaring the return as Non-est.

 

RBI  

RBI has notified Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 which deals with manner of Receipt and Payment to a person Resident outside India and transactions in Indian Rupees with Residents of Nepal and Bhutan. These regulations supersede Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000. Manner of payment in case of import of goods have been revised to include payment in rupees from international credit card/ debit card through the credit/ debit card servicing bank in India against the charge slip signed by the importer/ as prescribed by Reserve Bank from time to time. Regulation 6(2) has also been inserted which provides guidelines for payment by person resident in India. These regulations shall come into effect from the date of their publication in the Official Gazette.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

MCA

Ministry of Corporate Affairs has notified The Companies (Registration Offices and Fees) Amendment Rules, 2016. The Ministry has amended Forms GNL-1 and GNL-4 which shall be compatible with the latest V2 platform designed by the MCA. Stakeholders are advised to check the latest version of the Forms before filing / uploading the same. The said amendment shall come into force from the date of their publication in the Official Gazette.

DIPP - FDI

Department of Industrial Policy and Promotion (DIPP), has liberalized its FDI policy relating to Asset Reconstruction Companies (ARC). RBI has now permitted a person Resident Outside India to invest up to 100% in an ARC registered with Reserve Bank of India through Automatic Route. Investment limit of a sponsor will be governed by the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (SARFAESI ACT), 2002. RBI has also allowed total shareholding of an individual FII/FPI to be below 10% of the paid-up capital. Further FIIs/FPIs are now allowed to invest in the Security receipts (SRs) issued by ARCs registered with Reserve Bank of India. The Press Note will come to effect from 12.05.2016.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

MCA

Ministry of Corporate Affairs has notified new version of e-Forms of Forms PAS-3 (Return of allotment), CHG-1 (Application for registration of creation, modification of charge), DIR-12 (Particulars of appointment of Directors and the key managerial personnel and the changes among them), SH-11(Return in respect of buy-back of securities), FTE (Application for striking off the name of company under the Fast Track Exit (FTE) Mode). Stakeholders are advised to download the latest version before filing. Form- wise date of last version change is available at on the website of MCA.

RBI

RBI vide notification has repealed Foreign Exchange Management (Deposit) Regulations, 2000 and it has been superseded by the Foreign Exchange Management (Deposit) Regulations, 2016. These regulations seek to regulate deposits between a person resident in India and a person resident outside India. Under the revised regulations, no restriction shall be applicable for opening of rupee/ foreign currency deposit accounts by foreign diplomatic missions and diplomatic personnel or their family members in India with an Authorised Dealer in India. RBI also allowed banks to issue International Credit Cards (ICCs) to NRIs and PIOs. Certain restrictions under the revised regulations have been placed on individuals or entities of Pakistan or Bangladesh nationality/ownership. These regulations shall come into effect from April 1, 2016.

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

SEBI

SEBI has permitted Practicing Company Secretaries to certify refund procedure by Companies for privately placed securities. SEBI had earlier issued a circular prescribing the procedure to deal with cases involving offer / allotment of securities to more than 49 and up to 200 persons. Para 7 of the said Circular provided for submission of a certificate from an independent peer reviewed practicing Chartered Accountant certifying compliance as prescribed in the circular. It has now been decided that the certification as provided in the said Para 7 may also be provided by an independent peer reviewed practicing Company Secretary.

 

RBI 

RBI allowed in mid- foreign investors to buy up to 60 per cent sized private sector lender Yes Bank Limited. Yes Bank had passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs). FIIs/ RFPIs can now invest from existing 49 per cent up to 60 per cent of the paid up capital of YES Bank Limited under the Portfolio Investment Scheme (PIS), that is, the total foreign investment from all sources in the company shall not exceed 60 per cent. Therefore, further purchases of equity shares of this company would be allowed only after obtaining prior approval of RBI.
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Meetesh Shiroya

Daily Updates and News

MCA

MCA in exercise of the powers conferred by sub-section (1) of section 458 of the Companies Act (18 of 2013), the Central Government being satisfied that circumstances warrant, hereby delegates the powers to appoint Inspectors for inspection of books and papers of a Company under sub-section (5) of section 206 as ordered by Central Government to the 'Regional Directors'. according to Section 260(5), the Central Government may, if it is satisfied that the circumstances so warrant, direct inspection of books and papers of a company by an inspector appointed by it for the purpose.

CBDT

CBDT has clarified that if a resident deductor is entitled for the refund of tax deposited under Section 195 of the Act, then it has to be refunded with interest under section 244A of the Act, from the date of payment of such tax. The clarification issued by board in consequence to decision of the Hon’ble Supreme Court of India in the case of Tata Chemical Limited. It is further advised that no appeal may henceforth be filed on this ground by officer of the Department and appeals already filed on this issue may not be pressed upon.  

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

CBDT

Central Board of Direct Taxes has issued Income Tax (10th Amendment) Rules, 2016. The Board has made submission of report in relation to the approval of in-house research and development facility in Part A of Form 3CL and quantifying the expenditure incurred on in-house research and development facility by the company during the previous year and eligible for weighted deduction in Part B of Form No.3CL, electronic. It has also introduced a new Form 3CLA to be submitted electronically to the Secretary, Department of Scientific and Industrial Research on or before the due date specified in Explanation 2 to sub-section (1) of section 139 of the Act for furnishing the return of income, for each succeeding year. Significant changes in Form 3CK have also been notified. The amended rules shall come into force on the 1st day of July, 2016.

CBDT

Central Board of Direct Taxes has issued Income Tax (11th Amendment) Rules, 2016. A new Rule 26C has been inserted which provides that evidences shall be required from employees in Form 12BB for furnishing claims with regard to deduction of tax under section 192 of Income tax Act 1961. It has also amended the due dates of filing TDS Returns. Rules prescribed for mode of payment to Government account of tax deducted at source or tax paid under sub-section (1A) of section 192 also stand amended. Further, the Principal Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of the statements and shall be responsible for the day-to-day administration in relation to furnishing of the information and verification of the statements. The amended rules shall come into force from the 1st day of June, 2016.

  

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

Real Estate (Regulation and Development) Act, 2016

The Real Estate (Regulation and Development) Act, 2016 came into force on May 01, 2016. Union Ministry of Housing and Urban Poverty Alleviation (HUPA) notified 69 of the total 92 sections of the Act to bring it into force from 1 May 2016. This culminates the eight year long efforts in this regard. As per the notification, Rules under the Act have to be formulated by the Union and State Governments within a maximum period of six months from the act coming into force that is by 31 October 2016 under Section 84 of the Act.  Likewise, Regulatory Authorities, upon their constitution get three months time to formulate regulations concerning their day to day functioning under Section 85 of the Act and Real Estate Appellate Tribunals shall be formed within a maximum period of one year that is by 30 April 2017. These fast track Tribunals shall decide on the disputes over the orders of Regulatory Authorities in 60 days time.

CBDT

CBDT vide Press release dated 29-04-2016 made public the data on the total number of taxpayers in the country, income disclosed in IT returns by various category of taxpayers and number of PAN holders in the country. Under the 'time series' data, between 2000-01 to 2014-15 financial years, discloses the actual direct taxes collection made by the department, direct tax to GDP ratio, the cost of collecting the revenue for the government, number of effective assesses and workload and disposal of IT cases. The department has also published statistics filed by taxpayers in their return of income for Assessment year 2012-13. It also discloses the Permanent Account Number (PAN) allocation across various categories and gender by the end of 2013-14 fiscal. 

Thanks & Regards,

Meetesh Shiroya

Daily Updates and News

MCA

Ministry of Corporate Affairs has issued a clarification with regard to the accounting period for which the accounts would need to be prepared using the Accounting Standards, as amended through the Companies (Accounting Standards) Amendment Rules, 2016. The Ministry has examined the matter and clarified that the amended Accounting Standards should be used for preparation of accounts for accounting periods commencing on or after the date of notification i.e., 30^th March, 2016.

CLB

CLB has notified the amended Regulations further to amend the Company Law Board Regulation, 1991 through which official timing for hearing at CLB has been changed. With effect from 02.05.2016,  words  and  expression "10.30 a.m. to 1.30 p.m.  and 2.30 p.m. to 4.30 p.m." the words and  expression  "10.30 a.m.  to 1.00 p.m. and 2.00 p.m. to 4.30 p.m." shall be substituted in Regulation 9 of the said regulation.

Thanks & Regards,
Meetesh Shiroya