Update>
Livemint
http://www.livemint.com/budget2013?gclid=CLvT-M2V4rUCFYwa6wodwEoAvg
ICL
Budget 2013: Direct Tax Proposals - Introduction
<> On the mentioned Budget Proposal to mandating TDS of 1% on certain transactions in ‘immovable property’,- earlier proposed in the last Budget but later dropped like a hot potato,- has been sought to be reintroduced; albeit with some modification(s). In one’s perspective, however, it has obviously been so done yet again, mindlessly, without the very much needed/desired home work.
For an appreciation of the remark, what ought not to be over sighted is the still live/ continuing provision for tax exemption of capital gains- e.g. section 54 and 54 EC (subject to cor4rdction, if one is making a mistake in believing so). Should a taxpayer opt to, or intend opting for, such exemption, by complying with the stipulated conditions within the specified time frame, then he gets an extended time (2/3 years) for being taxed/to pay tax. The other inter-related/connected provisions, which require to have been correspondingly changed are noted to have been left untouched, To be focused on is, besides the saving section 197, section 199 , (rwr 37BA there under).
If one were to go by the latest public announcement, the DTC Bill has the prospects of being introduced in the Parliament for enactment before long. According to the last seen text of the Bill, the above referred present scheme of tax exemption is slated to undergo a significant change. For deliberation on the subject TDS, one might have to wait to know how it is going to be covered in the ‘simplified code’.
Turning to experts wishing to share more thoughts!
SG
Budget 2013-14 – Analysis of Income Tax Provisions
Re. Item 16,new section 194IA, mandating TDS of 1% on certain transactions in ‘immovable property’,earlier proposed in the last Budget but later dropped like a hot potato,has been sought to be reintroduced; albeit with some modification(s).In one’s perspective, however,it has obviously been so done mindlessly, without the very much needed/desired home work.
For an appreciation of,- ‘why to say so’, as one sees it (experts may correct, if wrong) what ought not to be oversighted is the very much live/ continuig provision for tax exemption of capital gains- e.g. section 54,54 EC. Should a taxpayer opts to, or intends opting for, such exemption,by complying with the stipulated conditions, then he gets an extended time (2/3 years) for taxation. The other inter-related/connected provision requiring to remain focussed on is, besides the saving section 197,section 199 (rwr thereunder). It is noted,as of now, there has been not even any indication of correspondingly warranted canges in those provisions.
If one were to go by the latest public announcement, the DTC Bill has the prospects of being introduced in the Parliament for enactment before long. According to the last seen text of the Bill, the above referred extant scheme of tax exemption is slated to undergo a significant change. For any further deliberationn on the subject TDS, it is anyone’s guess what will be its new avatar thereunder, hence left clueless.
Over to experts,who are supposed to be better equipped and enlightened, for more thoghts and useful sharing of views.
Taxmann
| Finance Bill 2013 - Tax Impact Legally Analyzed | |
Taxmann brings you the legal analysis of tax impact of substantially all the clauses of the Finance Bill 2013. For detailed analyses visit www.taxmann.com or click on the following links:
1) Tax Residency Certificate - No More Conclusively Sufficient (Read More)
2) Re-incarnated GAAR proposed to be effective from 01-04-2016 (Read More)
3) Second innings for Investment allowance; bouncer of disallowance for State owned undertakings (Read More)
4) Dividend sprouts from 'Buy-back' of unlisted shares; AAR ruling in RST's case confirmed (Read More)
5) Liability in case of 'buy-back' shifted from shareholders to company (Read More)
6) Affordable houses to costs less with additional deduction for interest paid on housing loans (Read More)
7) Yet another attempt to impose TDS on transfer of immovable property (Read More)
8) Term 'tax' given wide interpretation when it's recoverable from director or partner of Co. or LLP (Read More)
9) Old is not 'Gold' anymore; Royalty and FTS taxable at flat rate of 25%, irrespective of date of agreement (Read More)
10) One more loophole plugged in provisions of deemed gift under Sec. 56 (Read More)
11) Seized assets are no longer available for adjustment towards advance tax liability (Read More)
12) AO gets additional time for assessment if 'special audit' directed by him is set aside by the Court (Read More)
13) Only blue collared employees can bring fortune to their employer of additional deductions. (Read More)
14) Return of income filed without payment of self-assessment tax to be treated as defective return (Read More)
15) EPFO given additional time to decide the fate of pending applications seeking exemptions (Read More)
16) Approval of JCIT for assessment is not sacrosanct if CIT's approval is taken, proviso clarifies (Read More)
17) Deduction may be available soon for Medical Insurances under State Govt. Health Scheme (Read More)
18) Relaxation on cap of 10% of sum assured to enable disabled persons to claim Sec. 80C benefit (Read More)
19) Compulsory higher penalty if AIR not furnished even after expiry of notice period (Read More)
20) Income distributed by securitization trust not taxable in hands of recipients (Read More)
21) Reduction in STT rates and additional levy of Commodity Transaction Tax (Read More)
22) Contribution to National Children Funds would fetch 100% deduction (Read More)
23) Rationalization of tax on income distributed by Mutual Funds (Read More)
24) Exemption extended to 'Investor Protection Fund' set-up by Depository (Read More)
25) 'Venture Capital' entities re-defined (Read More)
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ICAI
Union Budget 2013-14 – ICAI Perspective
TOI
6 hours ago ... An assurance from Centre on the tax treaty with Mauritius soothed investors and resulted in a steady late session on Friday with the sensex ...
Fii | EconomicTimes.Indiatimes.com |
ICL
Budget 2013: Taxation as a Solution to a Governance Problem
<to comment
Tax fears of foreign investors allayed
"He stated that this merely means that certain treaties MAY HAVE two conditions -- a condition of residency and BENEFICIAL OWNERSHIP . As far as residency is concerned, TRC would be acceptable and for beneficial ownership it will be a question of fact and law. "
Poser; Has the FM been fair enough or be rightly regarded to have been 'responsible' in making such a statement before the august house, if regard be had to what the treaties in force precisely say or do not say, -on the 'condition' spoken of by him ?
So far as one could recall or know, none of the treaties as of now(to double check with experts) contain any such 'condition' of 'beneficial ownership', much less any explicit one, - as seem to be implied by the FM.
Even granting for a moment that there be in anyone or more of the treaties which speak of suchb a condition, that, in any case, is an aspect which would be required to be acted upon only with the treaty partner, through 'mutual agreement procedure' as provided for in the treatyb itself; certainly not a matter 'of law and facts', so as to , in the vent of a conflict', be regarded to be amenable to any recourse to litigation, especially in domestic courts.
Cross Refer> Taxman Published Articles* on the TREATY IMPLICATIONS, etc. !
* (2008) 13 CPT pg. 514, (2009) 176 TAXMAN 129, etc.
So far as one could recall or know, none of the treaties as of now(to double check with experts) contain any such 'condition' of 'beneficial ownership', much less any explicit one, - as seem to be implied by the FM.
Even granting for a moment that there be in anyone or more of the treaties which speak of suchb a condition, that, in any case, is an aspect which would be required to be acted upon only with the treaty partner, through 'mutual agreement procedure' as provided for in the treatyb itself; certainly not a matter 'of law and facts', so as to , in the vent of a conflict', be regarded to be amenable to any recourse to litigation, especially in domestic courts.
Cross Refer> Taxman Published Articles* on the TREATY IMPLICATIONS, etc. !
* (2008) 13 CPT pg. 514, (2009) 176 TAXMAN 129, etc.
<> Since noted, the quoted statement is reported to have been made by the FM by way of clarifying the government's stance/philosophy, not in the Budget speech, but in his post-budget speech!
Be that as it may, it is after all a public statement made by the concerned responsible Minister, hence cannot simply be ignored or taken lightly as of no significance or consequence.
In case, in all or anyone or more of, the treaties, there is no such 'condition of beneficial ownership', that too in unequivocal and indisputable terms, then it is NOT, according to the very scheme of things, so also as per the categorical view taken by the SC, a matter which could be regarded to be open to any debate or dispute, or even adjudication by domestic court , on a unilateral basis, as if it is a question of "fact and law".
On the contrary, in case of any conflicting stance, the treaty partners would require to have it settled amicably by having recourse to the only treaty provision, known as "MAP'.
Be that as it may, it is after all a public statement made by the concerned responsible Minister, hence cannot simply be ignored or taken lightly as of no significance or consequence.
In case, in all or anyone or more of, the treaties, there is no such 'condition of beneficial ownership', that too in unequivocal and indisputable terms, then it is NOT, according to the very scheme of things, so also as per the categorical view taken by the SC, a matter which could be regarded to be open to any debate or dispute, or even adjudication by domestic court , on a unilateral basis, as if it is a question of "fact and law".
On the contrary, in case of any conflicting stance, the treaty partners would require to have it settled amicably by having recourse to the only treaty provision, known as "MAP'.
itatonline
Finance Ministry Clarification Regarding Tax Residency Certificate (TRC)
(Click Here To Read More)
An Add-on>
@Gopal
Reaction:
On the points of doubt /reservation raised, one wonders whether even the FM and / or his coterie would have any satisfactory answer or solution to offer !.
Be that as it should, In the current Budget, wrt the changes proposed with the stated aim of rationalising the applicable ROT, it reads:
“147. Another case is the DISTRIBUTION OF PROFITS by a subsidiary to a foreign parent company in the form of royalty…..”
No one concerned, whatever be the individual’s level of ingenuity or faculty to understand, would not have failed to abruptly realise the wisdom, or lack of it, of the draftsman’, if not of the FM, in construing the very concept of ‘royalty’. The point is, it has come to be given such a violent twist as to offend the thus far obtaining common understanding thereof; even assuming that were dictated by the often claimed human faculty of ‘common sense’.
To dilate: One would have thought that ‘royalty’, basically an item of ‘expenditure’, – in accounting or legal or any other known parlance, or sense of the concept,, – could be, howsoever remotely, or with any of the ‘imaginative initiatives’- so generously attributed to the chief architect (FM) in certain quarters , read BSR’s article in Business Line – “Budget steers clear of populism” – be so contemptuously dubbed or sinfully decried as a ‘DISTRIBUTION OF PROFITS’.
For another view but with a different stroke (rooted in self-same ‘imaginary initiative’ or individual perspective), whatever one wishes to call it, refer indiacorpblog -” Budget 2013: Taxation as a Solution to a Governance Problem”
(leaving open to the enlightened Readers, to reflect and edit – add / modify)
NOTE: Intended reference was to BSR’s article titled -Booster shot for economy, wherein the FM has been copiously commended for his exemplary ingenuity in “a judicious blend of well-conceived incentives and imaginative initiatives.”
SG
As reported elsewhere, in his post-budget speech, besides the condition of ‘residency’, the FM has made a mention of another condition; that is, of “beneficial ownership”.
That reads, – “He stated that this merely means that certain treaties MAY HAVE two conditions — a condition of residency and BENEFICIAL OWNERSHIP . As far as residency is concerned, TRC would be acceptable and for beneficial ownership it will be a question of fact and law. ”
(Highlights supplied)
To one’s memory or knowledge, none of the treaties as of now (to double check with experts) contain any such ‘condition’ of ‘beneficial ownership’, much less any explicit one, – as seem to be implied by the FM.
On the premise that, in all, or anyone or more of, the treaties, there is no such ‘condition of beneficial ownership’, that too in unequivocal and indisputable terms, then it is NOT, according to the very scheme of things, so also as per the categorical view taken by the SC, a matter which could be regarded to be open to any debate or dispute, or even adjudication by domestic court , on a unilateral basis, as if it were a question of “fact and law”.
On the contrary, in case of any conflicting stance on any such treaty related or connected issues, the treaty partners would, strictly speaking, require to have it settled amicably by having recourse to the only treaty provision, known as “MAP’.
The applicable OECD Guidelines, besides case law and published articles in public domain (e.g. (2008) 13 CPT pg. 514, (2009) 176 TAXMAN pg. 129) may be noted to throw sufficient light on the foregoing aspects.
Putting Railways on profit track
Budget targets hinge on growth
Boost to infrastructure
Yet another missed opportunity
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