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NEWSLETTER – MARCH 2011

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INDEX

• Direct Taxation

• Indirect Taxation

• Corporate Laws

• Accounting & Auditing

• Statutory Due Dates for March 2011

Newsletter – March 2011

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DIRECT TAXATION Index

• Union Budget 2011 HighlightsThe Union Budget for 2011-2012 was presented by the Finance Minister Mr. Pranab Mukherjee in Parliament on February 28, 2011. The following are some of the key highlights:

• DTC (Direct Tax Code) implementation postponed to April 1, 2012.

• MAT (Minimum Alternate Tax) rate proposed to be increased from 18% to 18.5%.

• Surcharge for domestic companies proposed to be reduced from 7.5% to 5%, Surcharge for foreign companies proposed to be reduced from 2.5% to 2%.

• SEZ Units and SEZ developers to be liable to MAT (Minimum Alternate Tax) and DDT (Dividend Distribution Tax).

• Deduction upto INR 20,000 prescribed for investment in notified long term infrastructure bonds for individuals or Hindu Undivided Families extended by one year.

• Due date for filing the Return of Income by a company which is required to report its international transactions in Form 3CEB is extended to November 30th.


DIRECT TAXATION (continued): Index

• Union Budget 2011 HighlightsIn some relief to general tax payers, Finance Minister Pranab Mukherjee enhanced the tax exemption limit by Rs.20,000 to Rs.1.80 lakh, gave additional benefits to senior citizens but excluded women from additional sops. While proposing to raise the income tax limit to Rs.1.80 lakh for general tax payers and Rs.2.5 lakh for senior citizens, the Minister in his budget proposals for 2011-12 has lowered the age for senior citizens to 60 years from 65 years now.Besides, a new category of "very senior" citizens of 80 years and above has been introduced with no tax on their income upto Rs. 5 lakh. Senior citizens will get tax exemption for income up to Rs. 2.5 lakh, higher from Rs. 2.4 lakh now.

• In the case of a resident woman below the age of 60 years, the basic exemption limit is Rs. 190,000.• In the case of a resident individual of the age of 60 years or above, the basic exemption limit is Rs. 250,000. • In the case of a resident individual of the age of 80 years of above, the basic exemption limit is Rs.500,000. • Surcharge is not applicable and Education cess is applicable @ 3 percent on income-tax.


Existing Taxable Income INR

Existing Rate % Proposed Taxable Income INR

Proposed Rate %

Upto 160,000 Nil Upto 180,000 Nil

160,001 to 500,000 10 180,001 to 500,000 10

500,001 to 800,000 20 500,001 to 800,000 20

800,001 & above 30 800,001 & above 30

INDIRECT TAXATION Index

• Union Budget 2011 HighlightsThe Union Budget for 2011-2012 was presented by the Finance Minister Mr. Pranab Mukherjee in Parliament on February 28, 2011. The following are some of the key highlights:

• GST (Goods & Services Tax) implementation date not announced.

• Peak Excise duty rate retained @ 10%, basic rate proposed to be increased from 4% to 5%.

• Excise duty of 1% (without input CENVAT) imposed on 130 items which were earlier exempted. For specified items, option provided to avail input credit and discharge duty @ 5%.

• Service Tax extended to services by air conditioned restaurants having liqour license and to short term accommodation in hotels/ inns/ guest houses etc.

• Point of Taxation Rules, 2011 introduced deeming the time of provision of service to be the date of provision of service OR date of invoice OR date of payment, whichever is earlier.

• Basic Customs duty rates of 2%, 2.5% and 3% to be replaced with median rate of 2.5%.


CORPORATE LAWS Index

• General Exemption Under Section 211 of the Companies Act 1956 NotifiedIn exercise of the powers conferred by sub-section (3) of section 211 of the Companies Act, 1956 (1 of 1956), the Central Government, being of the opinion that it is necessary to grant exemption in the public interest, hereby exempts following classes of companies from disclosing in their profit and loss account the information mentioned under column (3), against each class of companies mentioned under column (2) of the table given below subject to fulfillment of the conditions stipulated in paragraph 2 of this notification namely:

Conditions as stipulated in paragraph 2 of the Notification:

• The Board of Directors of the Company has given consent with regard to non disclosure of information referred to in para 1;• The Company shall disclose in the Notes forming part of the balance sheet and profit and loss account, the fact of grant of the exemption under this notification; • The company shall conform to the prescribed Accounting Standards;• The company shall ensure that its financial documents represent a true and fair state of affairs of its finances;• The company shall maintain and file such information as may be prescribed or called for or required by the government or the Reserve Bank of India or any regulator;• For representation of foreign currency holdings, if any, exchange rate as on date of closing of accounts shall be applicable;

The exemption in respect of the companies referred to in serial numbers 5 and 6 of the Table shall be applicable only for those goods which form less than ten percent of the total value of turnover, purchase, consumption of raw material etc, as the case may be;This notification shall be applicable in respect of balance sheet and profit and loss accounts prepared in respect of the financial year ending on or after the 31st March, 2011.


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CORPORATE LAWS (Continued): Index

• General Exemption Under Section 211 of the Companies Act 1956 Notified


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Sr. No. (1) Class of Companies (2) Exemptions from paragraphs of Part-II of Schedule VI (3)

1 Companies producing Defence Equipments including Space Research;

paragraphs 3(i)(a), 3(ii(a), 3(ii)(d), 4-C, 4-D (a) to (e) except (d).

2 Export Oriented company (whose export is more than 20% of the turnover);

paragraphs 3(i)(a) 3(ii)(a), 3(ii)(b), 3(ii)(d).

3 Shipping companies (Including Airlines); paragraphs 4-D (a) to (e) except (d).

4 Hotel companies (including Restaurants); paragraphs 3(i)(a) and 3(ii)(d)

5 Manufacturing companies/multi-product companies;

paragraphs 3(i)(a) and 3(ii)(a).

6 Trading companies; paragraphs 3(i)(a) and 3(ii)(b).

ACCOUNTING AND AUDITING Index

• Government notifies 35 accounting standards in line with IFRSThe government has notified 35 accounting standards with a view to update Indian accounting norms in line with the global reporting norms IFRS. The companies, however, will be given time to adjust to the new accounting standards as government has now deferred the implementation of the International Financial Reporting Standards (IFRS) beyond April 1 this year.The standards deal with preparation of accounts, valuation of financial assets, recognition of income and expenditure, among others. "We have put in place 35 accounting standards to be followed by large companies in the first phase. Implementation by companies will depend on how and when some issues like the ones related to taxation are resolved or not. But the implementation date is not April 1, 2011," a senior official in the Ministry of Corporate Affairs (MCA) said. The official said the implementation date will be decided after the Union Budget 2011-12 is announced on February 28.As per the earlier road map laid out by the MCA, companies will have to prepare their accounts as per the new norm in a phased manner, beginning with companies that have a net worth of over Rs.1,000 crore from April 1.Further, while scheduled commercial banks and urban cooperative banks will adopt IFRS from April 1, 2013, all insurance companies will convert their opening balance sheets with IFRS from April, 2012.Large, listed non-banking finance companies (NBFCs), will converge their opening books of accounts with IFRS norms from April 1, 2013.


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ACCOUNTING AND AUDITING (continued) Index

•Revised Schedule VI of the Companies Act, 1956This revised Schedule VI has been framed as per the existing non-converged Indian Accounting Standards notified under the Companies (Accounting Standards), Rules, 2006 and has nothing to do with the converged Indian Accounting Standards. This will apply to all the companies uniformly for the financial statements to be prepared for the financial year 2010-11 and onwards.Revised Schedule VI link: http://www.mca.gov.in/Ministry/pdf/Schedule_VI_28feb2011.pdf


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STATUTORY DUE DATES FOR MARCH 2011 Index

•Statutory Due Dates Calendar for March 2011


Due Date Statutory Compliance

5th March 2011 Payment of Service Tax/ Excise duty

7th March 2011 Payment of TDS

15th March 2011 Payment of Provident Fund contribution/ Profession Tax

15th March 2011 Payment of Advance Income Tax

15th March 2011 Payment of MLWF contribution

21st March 2011 Payment of ESIC/ MVAT

31st March 2011 Payment of Advance Income Tax/ Service Tax/ Excise duty for March 2011

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INDEX Direct Taxation Indirect Taxation Corporate Laws Accounting & Auditing

Documents

income tax limit

tax exemption limit

income upto rs

general tax payers

senior citizens

basic exemption limit

mat minimum alternate

basic rate