Corporate and Professional Updates on 9th February 2019

Direct Tax Updates:

• May Raise Investment Limit of Angel Tax Concessions for Startups from existing INR 10 Crore to INR 25-40 Crore.
• Monetary limits prescribed for filing of IT appeals are made applicable to wealth tax appeals.
• Startups are demanding complete exemption from angel tax but the government may increase investment limit for tax exemption to Rs 25-40 crore. CBDT Chairman Sushil Chandra has recently stated that they have received several suggestions from startups on exempting them from Section 56(2) (viib) of the Income Tax Act.
• Officials of the department for promotion of industry and internal trade (DPIIT) and Central Board of Direct Taxes (CBDT) are holding series of meetings to find a solution of the angel tax issue being raised by startups. These meetings come against the backdrop of various startups raising concerns on notices sent to them under the section 56 of I-T Act to pay taxes on angel funds they have received.
• The section provides that the amount raised by a startup in excess of its fair market value would be deemed as income from other sources and would be taxed at 30 per cent.

Indirect Tax:

• Residential properties A Group of Ministers (GoM) favours cut in GST to 5% from effective rate of 12%
• GST is levied at 12 per cent with input tax credit (ITC) on payments made for under construction property or ready to move in flats where the completion certificate has not been issued at the time of sale.
• A Group of Ministers (GoM) formed to analyses tax rates and issues being faced by the real estate sector under the goods and services tax (GST) regime has favored reducing GST rate on under-construction residential properties to 5 per cent without input tax credit from current effective rate of 12 per cent, after abatement of value of land. The panel is also leaning in favour of a lower rate for affordable housing at 3 per cent from 5 per cent at present.

Other Updates:

• ITAT benchmarked LIBOR and EURIBOR to determineALP of interest charged on sum advanced to AE.
• Transmission of shares of deceased to his widow without considering other legal heirs was illegal.
• High Court quashes notification on ‘Disqualification of Directors of MCA.
• RBI cuts repo rate by 25 basis points, changes policy stance to neutral.
• Fortis denies violating order on sale of controlling stake to IHH Healthcare.
• Govt. has the right to demand interim dividend.
• MRF Q3 profit skids 18% to 279 crore.
• RBI doubles limit, banks to treat 2 crore and more as bulk deposits.
• ICICI Bank-Videocon loan case.
• RBI permits cos participating in insolvency process to tap ECB route.
• to set up unified authority for regulating financial services in IFSCs.
• Debt ETF may have G-Secs in portfolio.
• Dish TV declares Q3 results, reports operating revenues of Rs. 1,517 crore.

Key Due Dates:

• TDS return for the month of January 2019 is 10th February 2019.
• Return of outward supplies for January month by regular and casual suppliers having turnover more than 1.5cr. Is 11th January 2019.
• ISD return for the January month is 13th February 2019.

Quote of the Day:

“Courage is rightly esteemed the first of human qualities because it is the quality which guarantees all others.”