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Showing posts from January, 2009

tax-free bonds - interest rate of up to 8 percent

No.402/92/2006-MC (01 of 2009)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi dated the 20th January 2009
PRESS RELEASE

The Central Board of Direct Taxes (CBDT), vide Notification No.09/2009, have approved the issue of tax-free bonds of India Infrastructure Finance Company Limited carrying an interest rate of up to 8 percent aggregating to an amount of Rs.10,000 crore during the financial year 2008-09.
The income from interest on the investment in these bonds will be exempt from income tax in the hands of the investor. In order to be eligible for exemption from income tax, the bonds must be registered in the name of the holder.

Deduction in respect of LIC premium, Deferred Annuity, PF, etc. Sec80C

Deduction in respect of LIC premium, Deferred Annuity, PF, etc. Sec80C
In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums undermentioned, as does not exceed one lakh rupees.
1. Life Insurance premium- Paid by the assessee during an assessment year on the life of himself, spouse and children and also in case of HUF any member of family.
Important point to be kept in mind is that such premium (during the year) should not exceed 20% of the capital sum assured (amount of final claim). This is important because many people in order to get greater tax benefits deposit amount in excess of 20% of assured amount, but they do not get corresponding exemption.
For e.g. where an assessee has taken life insurance policy of Rs.100000 and has deposited premium of Rs.30000 duri…

Limited Company – General Points

Annual Accounts
Companies Act does not prescribe the books of accounts required to be maintained by a company. It, however, provides that the same should be kept on accrual basis and according to the double entry system of accounting and should be such as may be necessary to give a true and fair state of affairs of the company.
It requires every company to maintain proper books of account with respect to the following:
# All sums of money received and expended and the matters in respect of which the receipt and expenditure take place
# All sales and purchases of goods by the company
# The assets and liabilities of the company
# In case of companies engaged in manufacturing, processing, mining etc, such particulars relating to utilization of material or labour or other items of cost.
The first annual accounts of a newly incorporated company should be drawn from the date of its incorporation upto to the day not preceding the AGM date by more than 9 months. Thereafter, the accounts should be d…

Limited Company Tax Registration (PAN & TAN)

A company incorporated shall obtain PAN card in its name by making an application to the revenue department and shall also obtain TAN (Tax Deduction Account Number) where businesses are liable to withhold (deduct) tax . Both the PAN and the TAN must be indicated on all the returns, documents and correspondence filed with the Revenue Department. Filling of PAN and TAN details available herin in the blog.

Documents to be filed with the Registrar -Incorporation

Documents to be filed with the Registrar
Once the name is approved by the Registrar, the applicant shall file following documents with the Registrar:
1. Memorandum of Association - The Memorandum of Association and Articles of Association are the most important documents to be submitted to the ROC for the purpose of incorporation of a company. The Memorandum of Association is a document that sets out the constitution of the company.
2. Articles of Association - The Articles of Association contain the rules and regulations of the company for the management of its internal affairs.
3. If any managing director or a whole time director is proposed to be appointed ,then the agreement entered by the company with such person must be filed with the registrar.

The ROC will issue the certificate of incorporation after the required documents are presented along with the requisite registration fee, and which is incorporated with the share capital , as stated in its Memorandum. A private company can c…

Incorporating a Company

1Procedure for incorporation

1. Association of persons – There must be a proper association of persons who are desirous to form a company. The no. of persons must be at least 2 in case of a Private company and 7 in case of incorporation of a Public company. The object for which the company is proposed to be incorporated should not be unlawful, immoral or against the national integrity.
2. Availability of Name – An application in Form No.1A shall be made to the registrar for ascertaining the availability of the proposed name. Registrar shall be Registrar of Companies (ROC) in the State/Union Territory in which the company will maintain its Registered Office. This approval is provided subject to certain conditions: for instance, there should not be an existing company by the same name. Further, the last words in the name are required to be "Private Ltd." in the case of a private company and "Limited" in the case of a Public Company. The application should mention at …

Registration of a Company

The Companies Act, 1956 lays down rules for the incorporation of public and private companies. The most commonly used corporate form is the limited company, unlimited companies being relatively uncommon. A company is formed by registering the Memorandum and Articles of Association with the Registrar of Companies of the state in which the main office is to be located.

Foreign companies engaged in manufacturing and trading activities abroad are permitted by the Reserve Bank of India to open branch offices in India for the purpose of carrying on the following activities in India:-
1. To represent the parent company or other foreign companies in various matters in India, for example, acting as buying/selling agents in India, etc.
2. To conduct research work in which the parent company is engaged provided the results of the research work are made available to Indian companies
3. to undertake export and import trading activities
4. to promote possible technical and financial collaboration betw…

Leave Travel Concession

Under sec 10(5) in computing the total income of a previous year of any person, any income by way of Leave Travel Concession/ Assistance shall not be included.
In the case of an individual, the value of any travel concession or assistance received by, or due to, him,
(a) from his employer for himself and his family, in connection with his proceeding on leave to any place in India ;

(b) from his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service,
subject to such conditions as may be prescribed, regard to the travel concession or assistance granted to the employees of the Central Government :

Provided - That the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.

Explanation – The above section states that any concession received by an employee for himself or his family for traveling t…

SERVICE TAX ON RENTING OF IMMOVABLE PROPERTY

Service tax initially included 3 services namely General Insurance, Stock broking & telephones, now the count has increased to 107 services.
Renting of immovable property was introduced as a service in the Union budget 2007-08 and is effective from 01 June 2007.

What is important to know is:
1. Meaning of Immovable property
2. Renting of immovable property
3. Scope of taxability

a. Immovable property
Explanation (1) to Section65 (105) (zzzz) states that immovable property includes
(i) building and part of a building, and the land appurtenant thereto;
(ii) land incidental to the use of such building or part of a building;
(iii) the common or shared areas and facilities relating thereto; and
(iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate,
But it excludes
 Land used for agriculture, aquaculture, farming, forestry
 Lands whether or not having facilities incidental to the use of such land
…