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CBDT Issues Interim Action Plan for F.Y. 2024-25: Emphasizes Adherence

editor — Tue, 09 Apr 2024 04:36:03 +0000

The Central Board of Direct Taxes (CBDT) has released a Circular dated April 05, 2024, denoted as F.No. 380/01/2024, intended for internal departmental utilization. This circular delineates the Interim Action Plan tailored for the Financial Year 2024-25. It is imperative to disseminate this document among all officers within your jurisdiction for requisite action and to ensure unwavering compliance within the specified timeframes for each critical area of focus.

The comprehensive Interim Action Plan for the Financial Year 2024-25 is available for reference and download at the following link: https://www.nyca.in/wp-content/uploads/2024/04/CBDT_Releases_Interim_Action_Plan_for_F.Y._2024-25__for_departmental_use-_Urges_Strict_Compliance.pdf

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RBI defers implementing directions on exchange-traded forex derivatives to May 3

editor — Fri, 05 Apr 2024 05:28:15 +0000

The Reserve Bank of India (RBI) has announced an extension of the deadline for implementing rules regarding exchange-traded forex derivatives to May 3, extending it from the previous deadline of April 5. This decision comes following concerns raised regarding participation in the exchange-traded currency derivatives (ETCD) market in light of the RBI’s currency derivative norms.

The RBI emphasized that the regulatory framework for ETCDs has remained consistent over the years and that there is no change in the RBI’s policy approach. This extension was made after considering feedback and concerns from various stakeholders.

According to a circular issued on January 5, investors must ensure the existence of a valid underlying contracted exposure, which has not been hedged using any other derivative contract. They should also be able to establish the same if required. The term “underlying” in derivatives contracts refers to the order bill or receipt for exporters and importers, or documents supporting the transaction in the case of remittances.

Source: https://www.moneycontrol.com/news/business/rbi-defers-implementing-directions-on-exchange-traded-forex-derivatives-to-may-3-12576811.html

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Understanding the Contrast: Income Tax vs Tax Deducted at Source (TDS)

editor — Wed, 20 Mar 2024 09:27:10 +0000

Distinguishing Income Tax:

Income tax and Tax Deducted at Source (TDS) represent distinct facets of taxation, each with its own operational framework.

Income tax constitutes a levy imposed on an individual’s or company’s yearly earnings within a specific financial period. Governed by the Income-Tax Act (ITA) of 1961, it delineates the procedures for tax computation, evaluation, and collection.

This tax is applicable to various income streams such as salaries, rental income, professional profits, and capital gains. Individuals surpassing the threshold of Rs 2.5 lakh under the old tax system or Rs 3 lakh under the new regime are liable to pay income tax. Attempting to evade income tax constitutes a punishable offense under the law.

Decoding TDS:

On the other hand, Tax Deducted at Source (TDS) pertains to tax deductions made from the source of income and promptly remitted to the government. In TDS, entities disbursing specified payments like salaries, interest, rents, or professional fees are mandated to withhold a designated tax percentage before disbursing the amount. This measure aids in curbing tax evasion and streamlines the tax collection process.

Comparison: Income Tax Return (ITR) vs TDS:

Income Tax Return (ITR):

Tax Deducted at Source (TDS):

Key Differences between Income Tax and TDS:

Timing of Payment: While income tax is settled at the culmination of the financial year, TDS is deducted periodically throughout the year at the income source.
Taxation Responsibility: TDS is deducted by the payer, whether an employer or financial institution, and remitted to the government, whereas income tax is directly paid by the taxpayer after determining their tax liability.
Tax Rate Determination: TDS rates are predetermined by the government based on the nature of payments, whereas income tax rates are structured according to income slabs as stipulated by tax laws.
Scope of Application: TDS applies to specific payments such as salaries, interest, rents, and professional fees, while income tax is levied on the total annual income, including salaries and capital gains.

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Extension of Peer Review Mandate for CA Firms in Phase II & III

editor — Mon, 18 Mar 2024 10:01:54 +0000

Revised Guidelines on ICAI Peer Review Mandate

The Institute of Chartered Accountants of India (ICAI) has extended the applicability of the Peer Review Mandate for Chartered Accountant (CA) firms covered under Phase II & III. This revision aims to ensure adherence to enhanced quality standards within the profession.

Understanding Peer Review:

Peer review involves the assessment of a professional’s work by another professional of similar standing. It encompasses the examination of systems and procedures implemented by the Practice Unit (PU) to ensure quality assurance, as per technical, ethical, and professional standards. However, it does not focus on identifying isolated engagement failures.

Applicability in India:

Since 2017, peer review has been mandatory for all practicing Chartered Accountants and firms in India. Newly constituted firms, operating for less than one year, can undergo peer review voluntarily if the member (proprietor/partner) possesses a minimum of five years of post-qualification experience with a full-time Certificate of Practice (COP).

Revised Applicability (Phase II & III):

In response to requests from Practice Units, ICAI has outlined the following extensions in the applicability of the Peer Review Mandate:

Phase II:

Practice Units intending to conduct statutory audits for unlisted public companies meeting specific criteria, such as high paid-up capital, turnover, or outstanding loans, now require a Peer Review Certificate.
Similarly, Practice Units offering attestation services and employing five or more partners must possess a Peer Review Certificate before undertaking statutory audits.
This mandate is effective from July 1, 2024, with a grace period until June 30, 2024.

Phase III:

Practice Units engaged in statutory audits for entities that raised substantial funds from public sources or financial institutions during the review period must obtain a Peer Review Certificate.
Additionally, Practice Units with four or more partners providing attestation services are required to hold a Peer Review Certificate before accepting statutory audit engagements.
This requirement has been in place since January 1, 2015.

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SEBI New Rule: Big Relief for foreign investors! SEBI approved the new rule, know what changes happened

editor — Mon, 18 Mar 2024 08:48:22 +0000

SEBI, the regulatory body for the stock market, recently announced significant changes aimed at facilitating foreign investors (FPIs). One of the key developments is the introduction of the Same Day Settlement System, a pilot project known as T+0. This system enables the buying and selling of shares to be completed within the same trading day, unlike the previous T+1 system where settlements occurred a day later.

Simplification of Alternative Investment Funds (AIFs) Rules:

Additionally, SEBI has streamlined the rules governing Alternative Investment Funds (AIFs), providing much-needed relief for investors. These changes were approved during the SEBI board meeting and are set to alleviate complexities for foreign investors operating in the Indian market.

Relief Measures for Foreign Investors:

SEBI has addressed concerns regarding rumors impacting share prices by implementing specific rules. Furthermore, foreign investors holding over 50% investment in a single company or group listed on the stock market and lacking a specific promoter will no longer be subjected to additional information requirements. This exemption comes with certain conditions to ensure regulatory compliance.

Extension of Timeframes:

Foreign funds now have extended timelines for submitting crucial investment information, with the window expanded to 30 days from the previous 7 days. Moreover, in cases where a foreign fund wishes to terminate its registration in India, it has 180 days to sell its entire investment instead of the previous 30 days. An additional 180 days may be granted, contingent upon depositing 5% of the sale as a penalty into SEBI’s Investment Protection and Education Fund (IPEF).

Simplified Issuance Process:

SEBI has also simplified the process for companies issuing shares by eliminating the requirement of a 1% security deposit for public and rights issues. Additionally, the definition of the promoter group has been revised, now including non-promoter companies holding a 5% or higher stake post-IPO.

Understanding T+0 Settlement:

Under the T+0 settlement system, transactions involving the purchase or sale of shares are completed on the same trading day. This seamless process ensures immediate payment upon buying shares and swift transfer to the demat account. The new system is slated to be implemented from March 28, providing investors with the flexibility to choose between T+0 and T+1 settlement options.

Transition from T+1 Settlement System:

Previously, the T+1 settlement system mandated that payment and ownership rights for shares bought or sold would be received the next trading day. This shift marks a significant change from the previous T+2 settlement system, which delayed payment and ownership changes by an additional trading day. The T+1 system was introduced on January 27, 2023, replacing the previous T+2 settlement process.

Source: https://www.timesnownews.com/business-economy/markets/sebi-eases-regulations-for-foreign-portfolio-investors-check-details-article-108539187

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