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INDEX Direct Taxation Indirect Taxation Corporate and Other Laws Accounting and Auditing

TM. We are dependable and trustworthy knowledge processing partner. Although we are a separate entity, we are an integrated part of your organization, like a slice of a wholesome pie. NEWSLETTER – AUGUST 2011. INDEX Direct Taxation Indirect Taxation Corporate and Other Laws

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INDEX Direct Taxation Indirect Taxation Corporate and Other Laws Accounting and Auditing

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  1. TM We are dependable and trustworthy knowledge processing partner. Although we are a separate entity, we are an integrated part of your organization, like a slice of a wholesome pie. NEWSLETTER – AUGUST 2011

  2. INDEX • Direct Taxation • Indirect Taxation • Corporate and Other Laws • Accounting and Auditing • Statutory Due Dates for August 2011 TM Newsletter – August 2011

  3. DIRECT TAXATION Index • IT returns: CBDT widens scope for e-filing under digital signature • Partnership firms, individuals and Hindu Undivided Family (HUFs) subjected to mandatory tax audits will now be required to file their income tax (IT) returns only electronically and that too under digital signature. • This regime would be applicable for assessment years 2011-12 (financial year 2010-11) and subsequent years, the Central Board of Direct Taxes (CBDT) has said. Hitherto, such assessees had an option to file their income tax returns either electronically under digital signature or transmit the data electronically and also physically file a supplementary return. Now this option has been done away with and all income tax returns of such assessees would have to be filed electronically under digital signature. • Currently, partnership firms, HUFs, individuals with turnover of Rs 60 lakh and above in a financial year are subject to mandatory tax audit by a chartered accountant. Similarly, professionals with gross receipts of over Rs 15 lakh have to come under the tax audit net. • “The latest CBDT move is a welcome move. It will reduce the misuse of CA names and their membership numbers by non-chartered accountants,” Mr G. Ramaswamy, President, Institute of Chartered Accountants of India (ICAI), told Business Line. He also felt that CBDT must take strict measures such as levy of penalty (under Section 271B) for non-obtaining of tax audit reports from chartered accountants. TM Newsletter – August 2011

  4. INDIRECT TAXATION Index • CBEC relief to services sector • Giving some relief to the services sector, the Central Board of Excise and Custom (CBEC) has clarified that issuance of invoices will henceforth be subject to the service taker certifying ‘completion of services'. • Despite hectic lobbying from the advertising industry, it has refused to change the 14-day norm. • The new rules for the services sector, known as the Point of Taxation Rules 2011, have been effective from July 1, 2011. Responding to requests regarding clarification on ‘Completion of Service', the board said, “the Service Tax Rules 1994 require that invoice should be issued within a period of 14 days from the completion of taxable service. The invoice needs to indicate inter-alia the value of service so completed.” • The board further clarified that it is important to identify the service so completed. It would include not only the physical part of providing the service but also the completion of all other auxiliary activities that enable the service provider to be in a position to issue the invoice. It has defined auxiliary activities as activities like measurement, quality testing etc which may be essential pre-requisites for identification of completion of service. • Tax experts compare this clarification with completion certificate for a building. They say, from the date of issuance of certificate by service taker that he has received the service and he is satisfied, the service provider needs to raise the invoice within 14 days. TM Newsletter – August 2011

  5. CORPORATE AND OTHER LAWS Index • SEBI raises open offer trigger to 25 per cent • The Securities and Exchange Board of India (SEBI) has raised the ownership trigger for a mandatory open offer in a company to 25 per cent from 15 per cent, based on the recommendations of the Takeover Regulations Advisory Committee (TRAC). Further it has decided to increase the minimum offer size from the existing 20 per cent of the total issued capital to 26 per cent. It did not accept the recommendation of TRAC to provide for delisting pursuant to an offer and proportionate acceptance. All shareholders would be given exit at the same price. There would be no separate provision for non-compete fees, said U.K. Sinha, Chairman SEBI while addressing a press conference here after its Board meeting. • In cases of competitive offers, the successful bidder can acquire shares of other bidder(s) after the offer period without attracting open offer obligations. Voluntary offers have been introduced subject to certain conditions. A recommendation on the offer by the Board of target company has been made mandatory, SEBI said. The Board approved amendment to the SEBI (Prohibition of Insider Trading) Regulations, 1992 mandating certain disclosures to be made by promoters and persons who are part of promoter group of a listed company. The amendment relates to initial disclosures relating to their shareholding at the time of becoming promoter or part of promoter group; and also continuous disclosures whenever there is a change in their holdings exceeding Rs. 5 lakh in value or 25,000 shares or one per cent of total shareholding or voting rights, whichever is lower. Presently, similar disclosures are required to be made by the directors and officers of the company The merchant bankers are required to exercise due diligence in the pre-issue and post-issue activities of issue management, takeover, buyback and delisting of securities. TM Newsletter – August 2011

  6. ACCOUNTING AND AUDITING Index • External auditors may have to certify new mode of filings • The Centre plans to ask statutory auditors of companies to certify the correctness of accounts when they are converted into XBRL mode and filed with the Ministry of Corporate Affairs. India Inc is, however, not in favour of any such move as it would add to their compliance costs. • In a circular issued in early June, the Corporate Affairs Ministry made it mandatory for companies to file financial statements for 2010-11 and onwards using XBRL (eXtensible Business Reporting Language). • XBRL is a ‘digital' language that has been developed to provide a common, electronic format for business and financial reporting. • All listed companies in India and their Indian subsidiaries, all companies having paid-up capital of Rs 5 crore and above, and all companies having turnover of Rs 100 crore and above are required to file XBRL information for 2010-11 by September 30 this year. Exceptions have been made for banking, insurance and power companies, and NBFCs. Currently, all documents that are to be filed with Corporate Affairs Ministry have to be certified by a professional. TM Newsletter – August 2011

  7. STATUTORY DUE DATES FOR AUGUST 2011 Index • Statutory Due Dates Calendar for August 2011 TM Newsletter – August 2011

  8. Get in Touch www.nyaasa.com +91.98228 70043 +91.98231 18326 +91.20.3234 1738 +91.20.6500 8738 contact@nyaasa.com

  9. TM THANK YOU ! Newsletter – August 2011

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