19th July is celebrated as Guru Purnima in India and Nepal. Guru is the One who dispels the darkness of spiritual ignorance in humanity and bestows upon them spiritual experiences and spiritual knowledge. On a more earthy level, we tend to equate Guru with Teacher, Preacher, Master or Mentor. He is none of them. Infact he is much beyond all of them with no exact equivalent in the English language.
While we loosely use Guru in the common parlance out of respect for a Teacher, all Teachers are not Gurus. It is said just as a shishya seeks a Guru, a Guru comes in search of a good Shishya. He is the one who shows the path of self-discovery – learning through discovery as against tutoring and conditioning the mind to think only in a particular way or worse still, not to think at all as most schools, colleges and coaching classes do nowadays. They are ‘coaching factories’ where students are fed ‘pre-fabricated learning modules’ and end up as ‘unfinished products’ ! It is time we move away from this system of learning on to the path of discovery and seeking. Today thanks to technology – age, language or geography is no more a barrier to learning. You can find the course you want and the teacher you want but getting a Guru who ‘removes the darkness of ignorance’ is still a struggle. Continue to seek !
On a more mundane level, scroll down to read what regulatory changes are happening at MCA, RBI, IT, SEBI etc. in this 152nd issue of LexSpeak. Should you wish to refer to any of our older issues of LexSpeak, do visit our Resource Centre at sharadasc.com.
MCA has made certain key amendments to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
➣ Filing of return of appointment: Return of Appointment of Key Managerial Personnel (KMP) in Form MR-1 is not required to be filed for the appointment of CEO, CS and CFO.
➣ Employee remuneration: Number of disclosures relating to employee remuneration linked to performance of the company reduced.
➣ Remuneration limits enhanced: Names of only top 10 employees who are drawing more than Rs. 1.02 crore per year or Rs. 8.50 lakh per month to be disclosed in Board’s Report. Earlier, details of every employee drawing Rs. 60 lakh per year or Rs. 5 lakh per month had to be disclosed.
This will be applicable for Board’s Report for the FY 2015-16.
Certain classes of companies are required to rotate their auditors every 5 years if it is an individual auditor and every 10 years if it is an audit firm and every company, existing on or before the commencement of the 2013 Act is required to comply with these provisions within 3 years from 1st April, 2014.
MCA has clarified that, 3 years transition period should be counted from AGM to AGM and not from the commencement of the 2013 Act. Therefore the auditors will hold office upto the AGM of the financial year 31st March, 2017 and at that AGM, a new auditor would be required to be appointed.
Under section 9 of the Income-tax Act, 1961, any income arising from transfer of any share of or interest in a foreign company or entity that derives its value substantially from the assets located in India, is deemed to accrue or arise in India. For this purpose, Rules have been notified covering the following:
– Manner of computation of Fair Market Value of Indian and global assets of the foreign company or entity
– Determination of income attributable to assets situated in India, and
– Information or documents required to be maintained and furnished by the Indian concern under section 285 of the Act.
The Rules relating to taking credit of Tax paid in territories outside India which have Double Tax Avoidance Agreement (DTAA) with India have been amended to take effect from 01.04.2017. Tax credit shall be available against the amount of tax, surcharge and cess payable under the Income Tax Act but not in respect of any sum payable by way of interest, fee or penalty. The tax credit will be allowed, inter-alia, on furnishing the statement of income in the foreign territory in Form 67, statement or certificate from the tax authority or from the person deducting tax or by the assessee along with relevant proof of payment of tax.
IFSC Banking Units (IBUs) are branches of Indian Bank or Foreign Banks set up in International Finance Service Centers (IFSCs) in SEZ under a scheme of RBI. CBDT has clarified that IBUs are to be treated as Offshore Banking Units (OBUs) which enjoy exemption from TDS. Accordingly no TDS is applicable on interest paid by IBUs on deposit made on or after 1st April, 2005 by non-resident or a person who is not ordinarily resident in India or on borrowing made on or after 1st April, 2005 from such persons.
SEBI has allowed more time for listed companies to submit their financial statements that are compliant with the new accounting standards since Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS Rules) are yet to become applicable. Until then the listed entities shall adopt Companies (Accounting Standards) Rules, 2006 (AS Rules) as prescribed by MCA and continue submitting unaudited/audited quarterly financial results in the existing format to the stock exchanges until 31st December, 2016.
SEBI has also issued clarification and implementation of Ind – AS.
Central Government notified 10 Income Computation and Disclosure Standards (ICDS) effective from 01.04.2015 i.e. PY 2015-16 (AY 2016-17). Owing to a number of clarifications and representations received from various stakeholders, the Expert Committee constituted has recommended revision of ICDS including the Tax Audit Report. Accordingly ICDS will be effective from 01.04.2016 i.e. PY 2016-17 (AY 2017-18).
Information or document shared as declaration by assesses under the Income Declaration Scheme (IDS) 2016 shall not be shared by the Government officials with any other department or law enforcement agencies. Central Government has directed officials to maintain confidentiality.
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