<ul><li><keyword id="375780" type="ORGANIZATION" weightage="20" keywordseo="DDT">DDT</keyword> is the tax payable by companies which give dividends to its shareholders. The existing taxation laws in India do not levy taxes to the investors on the income made through dividends. </li><li><keyword id="7836802" type="UNKNOWN" weightage="20" keywordseo="Budget-2020">Budget 2020</keyword> abolishes DDT and passes on the tax burden to the investors by treating the income through dividends on par with other regular income. </li><li>What has changed now with DDT and how it impacts taxpayers – here we discuss in this article.</li></ul>Dividend refers to the returns a company gives to its shareholders on the profits it earned in a given fiscal year. Income Tax laws in India had earlier exempted the investors from having to pay taxes on the income they made from dividends received from Indian companies. On the other hand, the companies had to pay <keyword id="181115" type="PERSON" weightage="20" keywordseo="dividend-distribution-tax">Dividend Distribution Tax</keyword> (DDT). This kind of taxation procedure is akin to TDS (Tax Deduction at Source) operating in many other taxing formats. Budget 2020 has brought in a change in how incomes through dividends will be taxed henceforth in India. Who had to pay DDT and what was the rate of DDT? All the provisions related to DDT are mentioned in Section 1150. Before Budget 2020, a company in India declaring dividend needs to pay DDT at the rate of 15% on the gross value of the dividends payable to the investors. The calculations would work out as 17.65% taxes on the total amount of the dividend. If the surcharges and cess are added, the resulting rate of dividend would be 20.56%. Only when the income through dividends received by individuals and Hindu Undivided family or partnership and private trusts exceeded ₹10 lakhs, it would invite 10% tax. What concerns were raised on DDT Market participants like brokers have been pressing for so long to scrap the DDT. Industry experts find DDT adding up to the burden of the corporate and they argued that it made the markets less attractive. In addition to the DDT, the other tax burdens the other taxes levied on market instruments include the Securities Transaction Tax (STT) and Long-Term Capital Gains (LTCG). Earlier in the Union Budget 2018, the former Finance Minister Arun Jaitley had introduced DDT on the equities of mutual funds. What has changed with DDT in the Union Budget 2020 Budget 2020 has abolished Dividend Distribution Tax (DDT) and the FM Nirmala Sitharaman stated that income through dividends, shares and mutual funds will henceforth be treated on par with the regular income and the taxes will be applied on such category of incomes on par with the tax slab rates applicable in the said individual’s case. The latest budget says that all types of dividend incomes will hereafter be fully taxable. This move will increase the burden of taxable income of individuals. While this can mean a higher tax burden on the small and medium scale investors not making more than ₹10 lakhs in earnings through dividends, corporates might choose to increase dividends. Without tax, companies would have surplus funds to distribute to their shareholders.

What Is dividend distribution tax and what has changed with DDT in budget 2020

New Delhi, Mar 19 () The government has notified the rules and online forms to be filled by taxpayers for availing the direct tax dispute resolution scheme 'Vivad Se Vishwas'. Under the proposed scheme, taxpayers willing to settle disputes will be allowed a complete waiver of interest and penalty if they pay the entire amount of tax in dispute by March 31 this year. After March 31, an additional 10 per cent of disputed tax will have to be paid over and above the tax liability. However, disputes related to wealth tax, commodity transaction tax, securities transaction tax and equalisation levy are not covered. The scheme would remain open till June 30. The Revenue Department notified five forms for various steps under the scheme, which are required to be filled online. The eligible assessees are required to submit their declaration in Form 1 to the designated authority, which is a very detailed form covering different scenarios. Further, an undertaking waiving the right to seek or pursue any remedy or any claim in relation to tax arrears under any law shall have to be furnished by the declarant in Form 2. The declaration form (Form 1) seeks detailed information relating to the nature of tax arrears, assessment year, details of order, amount of tax arrears already paid, etc. Further, the form provides the manner of computation of 'tax payable' under the scheme in different scenarios (i.e. for declarations relating to disputed tax/ TDS/TCS/ disputed interest/ disputed penalty or fee). On receipt of the declaration form and undertaking, the designated authority shall, within 15 days, issue an order (in Form 3) directing the assessees to make payment of sum payable after adjusting the amounts already paid. The assessee has also been given a 30-day period (as per Form 3) for payment of the prescribed sum and give intimation of such payment to the designated authority. The intimation of payment is required to be made in Form 4, specifying the details of payment like the serial number of challan, date of payment and amount. In case of non-payment of the amount determined within the prescribed time period, the declaration shall be treated as void and shall be deemed to have never been made. Finally, the designated authority shall issue a certificate (in Form 5) granting immunity and specifying the details of dispute settlement. Meanwhile, Nangia Andersen Consulting Chairman Rakesh Nangia said the forms and rules have been notified merely 10 days before the due date, if taxpayers want to obtain maximum benefits under the scheme. Additionally, all the forms are required to be filled online and utility/ e-forms are yet to be released, which may take another 1-2 days. So practically, taxpayers may have only around 7-9 working days to avail the scheme on/before March 31, 2020, he said. "Therefore, practically, it may be extremely difficult both for the taxpayers as well as designated authorities to examine all the cases and make payment on/ before 31st March 2020," Nangia said. Further, the turmoil due to the coronavirus pandemic makes matters worse as various offices and tax practitioners have started working from home. "The scheme designed to provide relief to taxpayers stuck in long drawn litigation becomes less attractive and practically very difficult to implement owing to the stringent deadlines, which must be extended by the government," Nangia added. JD ABMABM

Govt notifies rules, forms for Vivad Se Vishwas scheme

A three-month <keyword id="45210" type="ORGANIZATION" weightage="20" keywordseo="extension">extension</keyword> in deadlines for tax payment and filing of returns notwithstanding, the Income-Tax Department has asked field formations to contact large taxpayers over phone or email to follow up on pending collections. <keyword id="331683" type="PERSON" weightage="20" keywordseo="Rakesh-Gupta">Rakesh Gupta</keyword>, Commissioner of <keyword id="47201" type="COMPANY" weightage="20" keywordseo="income">Income</keyword> Tax (Coordination &amp; Systems), Central Board of Direct Tax (CBDT), last week asked field formations to submit a daily report on follow-ups on pending tax collections from large taxpayers. While most tax officers working from home in view of the lockdown announced to check the spread of Covid-19, it is possible to continue working in today's connected world, the message to officials said. "While the ITBA (Income Tax Business Application) platform is not available to the officers for discharging statutory functions, it is still possible to follow up the pending collection matters by contacting large taxpayers telephonically/electronically," Gupta wrote. The message came within days of Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> announcing three months extension in the deadline for filing of income tax returns as well as payment of delayed advanced tax, self-assessment tax, regular tax, tax deducted at source, tax collected source, and securities transaction tax. The directive from CIT (C&amp;S) has not gone down well with officers with their association writing to CBDT Chairman against it. The joint body of Income Tax Employees <keyword id="22143" type="COMPANY" weightage="20" keywordseo="federation">Federation</keyword> &amp; Income Tax Gazetted Officers' Association in the letter expressed surprise at the direction "to pressurize the assesses/defaulters to pay taxes when the Finance Minister has recently announced various extensions of the statutory compliances including the extension of the last date for the (dispute resolution scheme) Vivad se Vishvash scheme and also reduced the penal interest rates." "The people's backlash in the wake of such pressures to pay taxes in the present scenario is very much evident," the convenor Ravi Shankar wrote. The association said it was not possible for assessing officers (AOs) to furnish a daily report for daily collection of current/arrear demand or applications received under the Vivad se Vishvash Scheme as the contact information of assessees/defaulters was not available at homes of the officers.Also, the officers did not have access to the ITBA platform. It asked the chairman to direct the authorities below him "to remain positive, sensitive towards the present situation, adopt a humane approach and avoid pressing the panic button within the department". The Finance Minister had on March 24 announced an extension in last for filing income tax returns for 2018-19 fiscal to June 30 as well as linking of income tax PAN with biometric ID Aadhaar by a similar three months. Also, a three-month extension in the deadline was announced for those opting for the tax dispute resolution scheme 'Vivad se Vishwas' scheme by paying the principal amount. Previously the deadline for payment of such amount was March 31 and any payment after that was to be charged with an additional 10 per cent. Now, no additional 10 per cent amount requires to be paid if payment made by June 30, 2020. Similarly, "due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for rollover benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law where the time limit is expiring between March 20, 2020, to June 29, 2020, shall be extended to June 30, 2020," an official statement issued on March 24 had said. For delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between March 20, 2020 and June 30, 2020, the reduced interest rate at 9 per cent instead of 12/18 per cent per annum will be charged for this period, it had said adding no late fee/penalty would be charged for the delay. ANZ MKJ

Tax department asks officers to chase 'large dues' as they work from home

New Delhi, Jan 31 () A cut in personal income tax, sops for rural and agriculture sectors as well as an aggressive push on infrastructure spending are likely to be part of Finance Minister Nirmala Sitharaman's "feel-good" second Budget.
 Facing the worst economic slowdown in more than a decade, Sitharaman is expected to pull out all stops to spur consumer demand and investment, government sources and economists said.
 Sitharaman's second Budget, to be presented on February 1, is expected to announce measures to restore economic growth and to set out a clear road map for achieving the ambitious target of USD 5 trillion economy by 2025.
 Investments have failed to pick up despite corporate tax cuts and other stimulus measures, higher FDI inflows, plans to consolidate state-owned banks and monetary easing.
 After corporate tax cuts in September last year, speculation is rife about possible reduction in personal income taxes. A combination of an increase in the basic exemption limit and/or the introduction of a differentiated tax rate structure for higher incomes may be on the cards.
 To cushion the impact on collections, these tweaks might be accompanied by rationalisation in tax rebates.
 "The government announced a slew of stimulus measures in the last four months but consumer confidence is missing. Not many are eager to take loans to buy homes or cars fearing the worst. The feel good factor in the economy is missing," a senior government source said.
 "I think the Budget will be a feel-good Budget that will try to restore faith in the economy and spur spending and investments," the source said.
 With disbursements under the PM-Kisan scheme to farmers being less than the budgeted amount, the Budget may also see measures to get states to onboard more eligible farmers under the scheme.
 Also, there would be announcements for sectors such as renewable energy, e-vehicle, power, affordable housing, real estate, and exports, they said.
 Financial markets are expecting relief on Securities Transaction Tax (STT), Long Term Capital Gains Tax (LTCG) and removal of dividend tax.
 Capital infusion in public sector banks and liquidity measures for Non-Banking Finance Companies (NBFC) may also be on the horizon.
 Both the government sources and the economists felt the Budget would reaffirm the focus on infrastructure spending after the rollout of an ambitious National Infra Pipeline (NIP) in December.
 Social sector schemes such as rural electrification, MGNREGA, healthcare, education and skill training may also find mention in the Budget.
 However, all such measures would come at the cost of fiscal slippage.
 The Economic Survey for 2019-20, released on Friday, has already laid the ground by suggesting to the government to keep the focus on reviving growth and letting go of fiscal discipline a bit.
 The RBI, armed with a favourable inflation backdrop, defended slowdown risks last year with 110 basis points cut in interest rates. As it puts a brake on the easing cycle, due to an unseasonal spurt in food prices leading to above-target inflation, the ball is in the government's court to revive growth.
 Sitharaman would have to do a balancing between efforts to boost growth and the need for fiscal restraint. Economists expect a slight policy tilt towards prioritising growth.
 Real GDP growth is estimated to fall to an 11-year low of 5 per cent in FY20 from 6.1 per cent in FY19. Estimated nominal growth at 7.5 per cent in FY20 is the lowest since 1975-76 (FY76) as per the FY12-based GDP series.
 IIP growth turned positive but remained low at 1.8 per cent in November 2019 after contracting by (-) 4 per cent in October 2019.
 CPI inflation increased to a 65-month high of 7.4 per cent in December 2019, its fifth sequential rise, mainly due to persistently rising vegetable prices.
 Also, growth in bank credit fell to a 25-month low of 8 per cent in November 2019. ANZ RAM
RAM

'Feel good' Budget may see cut in tax rate, sops for social sectors

<img class="gwt-Image" src="/photo/56887241.cms" /> 
<a href="http://www.businessinsider.in/searchresult.cms?query=Indian+stock+market&amp;sortorder=effectivedate">Indian stock market</a> was quite upbeat since December about <a href="http://www.businessinsider.in/searchresult.cms?query=Budget+2017+&amp;sortorder=effectivedate">Budget 2017 </a>but the happiness may be shortlived as few analysts are predicting possibilities of the government changing the <a href="http://www.businessinsider.in/searchresult.cms?query=long-term+capital+gains+tax&amp;sortorder=effectivedate">long-term capital gains tax</a> (<keyword id="6357448" type="ORGANIZATION" weightage="100" keywordseo="LTCG">LTCG</keyword>) in the upcoming <keyword id="6360189" type="COMPANY" weightage="20" keywordseo="Union-Budget">Union Budget</keyword> 2017. 
 
If the experts are to be believed, the benchmark equity indices are trading near key resistance levels and a bout of profit booking cannot be ruled out should the government decide to restructure the LTCG structure. 
 
Currently, for a holding period of over 1 year, the long-term capital gains tax on equities is zero and the short-term capital gains tax continues to be at 15%. However, in context of other instruments such as debt mutual funds, the definition of holding period for computation of long-term capital gains tax has changed to three years, while for equities it has remained one year. 
 
However, there has been a try by the <a href="http://www.businessinsider.in/searchresult.cms?query=Finance+Minister&amp;sortorder=effectivedate">Finance Minister</a>, dispel fears regarding LTCG tax, analysts predict more probability that the holding period of equities could be changed from one year to maybe two or three. 
 
According to the analyst who ET talked to, predicted these three scenarios: 
 
Scenario 1: 
 
This is the worst-case scenario as the government could enforce a five percent tax rate on LTCG while aligning the securities transaction tax (STT) and short-term capital gains tax with the income-tax slab. 
 
<a href="http://www.businessinsider.in/searchresult.cms?query=Dalal+Street&amp;sortorder=effectivedate">Dalal Street</a> won’t take it nicely and the benchmark indices could backfire. Some analysts see up to 10 % correction in the index in such a situation. 
 
"This is a more likely to happen in this Budget. Initially, the market may react negatively, but it will ultimately be guided by other macro factors,” Pankaj Pandey, Head of Research, ICICI Securities, told ET. 
 The hope in the <keyword id="6355178" type="UNKNOWN" weightage="20" keywordseo="Dalal-Street">Dalal Street</keyword> has already raised the Nifty50 to 8,600 level from 7,900 in December. The index is now facing resistance at 8,700 and requires fresh triggers to move higher. However, a five percent fall from the current level would bring down the index to about 8,100, which will lend initial support to the Nifty50. Also, a 10 % fall would take it to about 7,700 level, which would be more devastating for investors. 
 
"There are murmurs of the long-term capital gains being altered. The market is not yet apprehensive enough. If the market remains at elevated levels till the Union Budget and there is some change in the long-term capital gains tax (LTCG) structure, we could clearly see a 5-10 per cent correction in the market, which would a sentiment dampener,” Nilesh Shah, MD &amp; CEO, Envision Capital, told ET. 
 
Scenario 2: 
 This is the base case scenario and according to the experts, the lock-in period could change from one year at present to two or three years, the securities transaction tax gets abolished and <keyword id="569463" type="ORGANIZATION" weightage="20" keywordseo="STCG">STCG</keyword> remains unchanged at 15%. 
 
Experts suggest that the STT is majorly killing the depth of capital markets by keeping the high-frequency traders away. The expectation from the government is to completely abolish STT to promote the equity culture in India. 
 
"There is a 65 per cent probability that the lock-in period could change to either two or three years and STT could go away,” Harsha Upadhyaya, CIO - Equity, Kotak Mutual Fund, told ET. 
 
"In that case, we could see some knee-jerk reaction, but volatility should ease soon. It will help inculcate a longer-term investment focus. There is a 35 per cent probability that everything remains status-quo, and in that case we could witness relief rally in the short term,” he told ET. 
 
Scenario 3 
 
This scenario can be the best-case scenario if there won’t be tinkering with LTCG and life will go on. The STT, too, will remain as it is and STCG will remain at 15%. 
 
"If the best-case scenario materialises, expect a breakout, which could take the Nifty50 above the 9,000 level,” experts told ET. 
 "If the government refrains from tinkering with LTCG in this Budget and leaves the other two (STT and STCG) as they are, it will give a big push to the market. The Nifty50 will zoom past the 9,000 level,” Renjith RG, Associate Director at Geojit <keyword id="87153" type="CITY" weightage="20" keywordseo="BNP-Paribas">BNP Paribas</keyword>, told ET.

Markets will plunge if government tinkers with LTCG tax in Budget 2017. Here’s how

<ul><li>There has been a growing clamour for respite both financial as well as regulatory (like taxation and other compliances).</li><li>Over 500 people have been infected by the virus while nine of them have died as of March 23.</li><li>Follow the comprehensive coverage of the coronavirus pandemic and its impact, and other useful resources that can help you in the fight on <a href="https://www.businessinsider.in/searchresult.cms?query=coronavirus&amp;sortorder=effectivedate">Business Insider India</a>.</li></ul>Indian Finance Minister Sitharaman had announced a series of measures to deal with the economic crash as India, along with the rest of the world, battles the Coronavirus pandemic. Over 500 people have been infected by the virus while nine of them have died as of March 23. As many as 22 Indian states and 80 districts are under lockdown and that has brought an already weak economy to its knees. There has been a growing clamour for respite both financial as well as regulatory (like taxation and other compliances).These are some of the big announcements made by Sitharaman on March 24: <ol><li>Tax returns for financial year 2018-19 can be filed by June 30.</li><li>No extension of penalty on delayed deposit of TDS (tax deducted at source). However, the penalty has been halved to 9% from 18% currently.</li><li>The deadline for linking Aadhaar with PAN (Permanent Account Number) has been extended to 30 June 2020.</li><li>All investments for rollover benefit of capital gains under Income Tax act, Wealth Tax act, Prohibition of Benami Property Transfer Act, Black Money Act, Securities Transaction Tax law, equalisation levy law, 'vivaad se vishwaas' law — the amnesty scheme for tax disputes where the time limit was expiring on March 20 — now increased to 30 June.</li><li>The last date of filing returns for the months of March, April, and May 2020, including composition scheme, extended to June 30.</li><li>For companies with turnover less than Rs 5 crore, no late fees, penalties, and interest on deferred payment. </li><li>For companies with turnover over Rs 5 crore, there will be no late fees, penalties but there will be an interest of 9%, down from 18% currently.</li><li>Customs clearance will operate 24x7. It will be doing its duty as an essential service.</li><li>MCA-21 Registry: Moratorium issued from April 1 to September 30. No additional fees for late filing. The mandatory requirements for holding meetings of Board of Directors relaxed by 60 days. </li><li>Applicability of auditors' report order was supposed to be in force from financial year ending March 2020, that has now been delayed by a year.</li><li>For the year financial year 2020, independent directors will not be held for violation if they haven't held even one meeting.</li><li>For newly incorporated companies, there is a requirement to file declarations for commencement of business within 6 months. Now, we’re giving them an additional time of 6 more months.</li><li>There is a need to create a reserve for 20% of all the deposits maturing next financial year by April, that has been deferred to June.</li><li>Similarly, there was a need to invest 15% of the amount from maturing debentures during the next financial year (April to March 2021) by April. That has been deferred to June.</li><li>Threshold for default under the Insolvency and Bankruptcy Code has been raised by 100 times to ₹1 crore. This is effective immediately to stop the triggering of insolvency proceedings against micro, small, and medium enterprises. If the situation doesn't improve by April 30, the government may consider suspending Section 7, 9, and 10 of the bankruptcy law for a period of six months. </li><li>All sanitary import permits (shrimp, broodstock, and any aquaculture) set to expire by April 1 and April 15 2020, are being extended by three months. Even if your import is coming a month later, that will not be seen as a delay.</li><li>Re-booking for quarantine cubicles, for those cancelled consignments in aquatic quarantine facilities, will not entail additional booking charge.</li><li>The grant of no objection certificate and verification of documents for quarantine will be relaxed from 7 days to 3 days. </li><li>Debit card holders can withdraw cash from any bank ATMs for the next three months.</li><li>No fee will be charged for not having minimum balance in the savings account.</li><li>Bank charges will be reduced for digital transactions for trade and finance consumers.</li><li>The principle to be followed by Commerce Department: For procedural and eligibility point of view, extension of timeline will be given but there won't be an extension of scheme guidelines for modification. </li><li>We, both government and the regulator SEBI, are monitoring the stock market thrice a day. Various sub-groups of the task force on economy, as well outsiders, have made suggestions and we will soon come with an announcement.</li><li>Under Section 149(3) of the new Companies Act, every company is required to have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year. A violation will be condoned in the wake of the current coronavirus crisis.</li><li>Department of Financial Services will decide if there are to be any changes on equal monthly installments for borrowers. </li></ol>The clamour for radical measures ahead of these announcements from the Finance Minister Earlier, the CEO of government think tank NITI Aayog Amitabh Kant also batted for direct benefit transfer to those who lost their livelihoods due to the lockdown aimed at containing the virus. The state’s first responsibility should be towards people who are at the margin and are going to lose their jobs, and should be able to provide them with a source of livelihood. And that should be in the form of a direct benefit transfer,” he said in a <a href="https://www.youtube.com/watch?v=dGWsdvJBcgo&amp;feature=youtu.be">virtual interview</a> with the Observer Research Foundation. Here's a thread of some important demands for financial relief before the lockdown came into full force. 
	
	
	
	
	
	
	
	
	
	<div type="twitter" handle="iyer_sriram" handlename="Sriram Iyer" image="http://pbs.twimg.com/profile_images/1205780479690997763/9fDDa6o6_normal.jpg" favoritecount="6" retweetcount="2" status="It is great to see @FollowCII echoing the same sentiment as @BiIndia a few days ago We discussed this at length in… https://t.co/lUDXiQR1e3" createdat="1584771674000" id="1241248483350175745"></div>




















 The former governor of RBI Raghuram Rajan said that it is hard to assess the economic impact of the pandemic. However, he said that the government needs to put medical supplies etc on priority as it heads to contain the virus. "We need to spend money on medical supplies, ventilators, masks — on getting protective equipment for medical workers. That means getting every resource in. pvt, public, defence, retired — every resource. And quickly. All this will require fiscal resources and this is the higher priority," Rajan said in a TV interview. While <a href="https://www.businessinsider.in/india/news/while-pm-modi-called-for-a-janata-curfew-the-kerala-government-implemented-some-serious-steps/articleshow/74717250.cms">Kerala</a> and <a href="https://www.businessinsider.in/india/news/coranavirus-cases-in-tamil-nadu-news-and-updates/articleshow/74785909.cms">Tamil Nadu</a> announced measures like free ration and a handout, no national level programme to support daily labourers and other small businesses has been announced. <ul></ul>SEE ALSO: <a href="https://www.businessinsider.in/india/news/coranavirus-cases-in-delhi-news-and-updates/articleshow/74773842.cms">The third stage of coronavirus spread in India can be delayed but not stopped, says ICMR</a> <a href="https://www.businessinsider.in/finance/news/live-sensex-and-nifty-news-updates/articleshow/74786064.cms">Sensex sinks to 26,193 after opening in the green, Nifty follows down to 7,000 mark</a> <a href="https://www.businessinsider.in/searchresult.cms?query=coronavirus&amp;sortorder=effectivedate">Follow the comprehensive coverage of the coronavirus pandemic and its impact, and other useful resources that can help you in the fight on Business Insider India.</a> <a href="https://www.businessinsider.in/finance/news/aadhar-pan-linking-itr-filing-deadline-extended-to-30th-june/articleshow/74790726.cms">Aadhar-PAN linking, ITR filing deadline extended to 30th June</a> <ul></ul>

The big announcements from India's Finance Minister Nirmala Sitharaman

<img class="gwt-Image" src="/photo/52396971.cms" /> 
 BJP MP and member of Maharashtra task force Poonam Mahajan has said that the commerce ministry is currently considering a proposal to declare an <keyword id="2024573" type="ORGANIZATION" weightage="100" keywordseo="International-Finance-Centre">international finance centre</keyword> (IFC) in Mumbai's Bandra Kurla Centre (BKC) in the coming six to eight months. 
 
This would get India its second IFC, the first one being in the neighbouring state of <a href="http://www.businessinsider.in/Students-of-IIM-A-are-helping-this-Gujarat-village-market-toilets-to-tribals-villagers/articleshow/51852988.cms">Gujarat</a>, which was launched last year. 
 
 
The finance ministry, along with the Maharashtra state government, is working on plans to accommodate the IFC within the rules of financial special economic zones (SEZs), which mark a minimum land requirement of 50 hectares. 
 
Also read: <a href="http://www.businessinsider.in/Mumbai-to-have-international-financial-district-soon/articleshow/50574982.cms">Mumbai has a great plan to attract global businesses and it is going to be huge</a> 
 
As of now, the proposed IFC has only 35 hectares, which is why the government officials are trying to look for an arrangement which would entitle it for the tag of a financial SEZ. 
 
As per top state government officials, Union Minister of State for Finance <a href="http://www.businessinsider.in/India-has-fortress-like-balance-sheet-Jayant-Sinha/articleshow/50948829.cms">Jayant Sinha</a> is working with the commerce ministry so that this rule can be eased and BKC can qualify as a SEZ. 
 
Sinha is also the chairperson of the task force that the Maharashtra government created to make IFC a reality, and Mahajan serves as the deputy chairperson. 
 If the proposal is accepted, BKC would be entitled to the same incentives as <keyword id="24861" type="COMPANY" weightage="100" keywordseo="Gift">GIFT</keyword> (<keyword id="3374255" type="UNKNOWN" weightage="100" keywordseo="Gujarat-Financial-International-Tech-City">Gujarat Financial International Tech City</keyword>), like tax holidays, exemption from dividend distribution tax, long-term capital gain tax, securities transaction tax and commodity transaction tax. 
 
<a href="http://www.jantakareporter.com/wp-content/uploads/2015/09/142071477844656902179.jpg">Image Source</a>

Maharahstra govt wants exceptions in minimum land rules for the proposed international finance centre to be declared an SEZ

<img class="gwt-Image" src="/photo/52155081.cms" /><a href="http://www.businessinsider.in/searchresult.cms?query=arun+jaitley&amp;sortorder=effectivedate">Finance Minister Arun Jaitley</a> said <a href="http://www.businessinsider.in/searchresult.cms?query=taxpayers&amp;sortorder=effectivedate">taxpayers</a> will have to pay an additional <keyword id="666547" type="UNKNOWN" weightage="20" keywordseo="dividend-tax">dividend tax</keyword> if their dividend income is above Rs 10 lakh. 
 
This tax is besides the dividend distribution <a href="http://www.businessinsider.in/searchresult.cms?query=tax&amp;sortorder=effectivedate">tax</a> being paid by the companies declaring such dividends. 
 These amendments were made to the <keyword id="3352161" type="UNKNOWN" weightage="20" keywordseo="financial-bill-2016">Financial Bill 2016</keyword> and have been approved by the Lok Sabha. 
 
This amendment will be effective for the assessment year 2017-18 and subsequent assessment years. 
 
There were 21 amendments in the Bill. Another amendment cut the duration for holding of shares in an unlisted company for being classified as long term capital asset. The duration of holding has been reduced from 36 months to 24 months. 
 
Yet another amendment extended the benefit of weighted deduction of 150 per cent of expenditure incurred on notified agricultural extension projects till March 31, 2020 (FY2019-20 or Assessment Year 2020-21) instead of Budget proposal to restrict the deduction to 100 per cent from 2017-18 fiscal (Assessment Year 2018-19). 
 
Another amendment included Limited Liability Partnership (LLP) in the definition of 'start-up' firms. 
 
Jaitley had in his Budget provided exemption from payment of Securities Transaction Tax (STT) on transactions undertaken in foreign currency on a recognised stock exchange in International Financial Services Centre (IFSC) and extended the benefit of exemption for long term capital gains. 
 
However, by implication, benefit of 15 per cent of tax on short term capital gain under section 111A may have been denied in case of such transactions owing to non-fulfilment of condition of payment of STT. 
 
So, an amendment was brought "to provide that the concessional rate of 15 per cent on short term capital gain will be available in respect of the transactions which take place in foreign currency on a recognised stock exchange even if STT is not paid." 
 
(Image: Indiatimes)

Be ready to pay dividend tax if your dividend income is above Rs 10 lakh

<img class="gwt-Image" src="/photo/56624270.cms" />Investors in India and abroad have been grappling with changing laws on equity investors. Amid the uncertain environment, there are possibilities of an increase in capital gains tax on equities. It is to see whether <a href="http://www.businessinsider.in/searchresult.cms?query=arun+jaitley&amp;sortorder=effectivedate">Finance Minister Arun Jaitley </a>will announce tax measures in favour of investors or not in <a href="http://www.businessinsider.in/searchresult.cms?query=budget+2017&amp;sortorder=effectivedate">Budget 2017</a>. 
 
"A possible resolution of the tax issues in favour of investors this time around may drive outperformance in Indian equities after the Budget. If not resolved favourably, investor sentiment will be impacted negatively,” CLSA said in a note. 
 
As per the CLSA, tightening tax treaties will have a negative impact on <a href="http://www.businessinsider.in/searchresult.cms?query=indian+stock+market&amp;sortorder=effectivedate">Indian markets</a>. In May 2016, the government moved to tighten the India-Mauritius tax treaty, after which foreign portfolio investors (FPIs) ended up paying at the same short-term gains tax rate of 15% on Indian equities. Similar changes were made to the tax treaties with Cyprus and Singapore by the end of 2016. 
 
"Renegotiation of tax treaties with Mauritius, Singapore and Cyprus would raise taxes from April 2017 for investors using those routes,” CLSA said in a note. 
 
"We hope these issues are resolved in the Feb 1 Union Budget. If resolved in favour of investors, the underperformance of the domestic market would reverse, in the same way it did last year when similar concerns existed,” the note said. 
 
Also, the retrospective FPI tax fear is back again. The Indian Government had issued clarifications on indirect tax provisions that bring end-investors in a foreign fund under Indian tax laws. 
 
The clarifications impact those FPIs with over 50 per cent of AUMs in India with a concentrated end-investor base i.e. end-investor with less than 5 per cent of the AUM. 
 
"Some of the India-dedicated funds will likely be impacted. Large end-investors in these funds may be subject to double taxation with this development," said the CLSA note. 
 
Besides, if increased capital gains tax on equities in general happens, unit-linked insurance plans (Ulips) may see larger inflows. 
 
Listed shares in India attract long-term capital gains (over 1 year holding, LTCG) tax at 0 per cent and short-term (less than 1 year holding) capital gains tax at 15 per cent. This is against a 30 per cent top tax bracket on interest and personal income. 
 
The global brokerage firm is of the view that there is a possibility that short-term capital gains tax on equities which is partly being offset by the Securities Transaction Tax currently may be raised. "If any of the above happens, Ulips may gain prominence as they enjoy a tax advantage," it said.

Indian market may see red due to these tax uncertainties

<img class="gwt-Image" src="/photo/51107848.cms" /> 
 The Indian capital market is betting big on the upcoming <keyword id="2783177" type="UNKNOWN" weightage="20" keywordseo="Budget-2016">Budget 2016</keyword>. With the global markets not performing well, market analysts are hoping that the government will announce key policy reforms in order to keep <keyword id="6355178" type="UNKNOWN" weightage="20" keywordseo="Dalal-Street">Dalal street</keyword> up and running. 
 
“There are huge expectations from the government, as already the international markets are keeping Indian economy on edges, Thus all eyes are set on the budget which can bring some shine back on the Dalal street,” said Rohit Gadia, CEO of Capital Via, one of the largest pure play financial market research and consulting company . 
 
He added, “One of the major expectation of the industry is smoothening of administrative procedures around refund claims and valuations which are plagued with inordinate delays in assessments coupled with huge revenue deposits which result in uncertainty and blockage of working capital for companies. The Government should focus on these aspects.” 
 
The market is hoping that the government will look at eliminating red-tapism which in turn will prove to be a boon for the government’s startup India initiative. “Due to delays in these procedures, many start-ups die an eventual death. Reduction in Corporate Tax is expected to promote the business environment as it is unfavourable as compared to other emerging economies,” he noted. 
 
Talking about the equity market, Gadia explained that the government will have to come up with innovative ways to create incentives for investing in the long term equity markets. “Considering the increase in cost of living, we may expect rise in the current basic exemption limit of 2.5 lakh to Rs. 3 lakh. We believe the consequent revival in economic activity will further bolster India’s position as one of the fastest growing economies in the world,” he suggested. 
 
Apart from this, lowering of securities transaction tax and removal of dividend distribution tax is also expected to work well for the markets. “Strained tax receipts given the general economic slowdown, implementation of the seventh pay commission, need to boost the rural economy after two years of subnormal monsoon and necessity of infrastructure and social investments place increased demands on the expenditure side,” he added. 
 
Thus, the Union Budget 2016-17 has an important task to keep up the positive economic outlook of India by bringing in major indirect tax reforms and addressing business concerns. In addition, the passing of Constitutional Amendment Bill for GST in this budget session, will not only help the Government to set up a positive environment but also will be a giant step towards reinforcing the perception about India as the next investment destination.

Dalal street looks at Budget 2016 to keep the steam running!

<img class="gwt-Image" src="/photo/46278841.cms" /> 

	 
	This is one of the most positive phases in the economy when the budget for FY2015-2016 would be declared. Are we expecting anything exciting from the budget? Yes, as in this year we have already seen the government taking lot of important steps each month to curb inflation, control <keyword id="52599" type="TECHNOLOGY" weightage="20" keywordseo="CAD">CAD</keyword> and to give a boost to economy.

	 
	We have seen lot of important steps for manufacturing sectors like the Make in India campaign. A boost in infrastructure will uplift the whole economy by creating huge job and growth opportunities for people across the country. And through Infrastructure Investment Trust (INVITS), the government has already started laying the foundation for the growth in Infrastructure sector in the FY2014-2015. 
	 
	CAD is already quite under control with fiscal deficit now less than 4.9%. And I am sure the focus would continue to be the same in the upcoming budget as well. Here are a few expectations from Union Budget 2015-16. 
	 
	1) Curb <keyword id="18712" type="ENTERTAINMENT" weightage="20" keywordseo="Gold">gold</keyword> imports 
	 
	To control the import of gold, we might see new schemes being launched by the government which will provide a good alternative apart from gold to hedge against inflation. 
	 
	2) Raise tax limit exemption 
	 
	Last year the tax limit exemption was extended upto Rs 2.5 lakh, which can now be further extended to Rs 3 lakh. This will act as a major relief to the majority of tax payers in the country and and would also give a boost to their savings. This would further bring up investment in the economy. Many developed countries are already opening up the doors for Investment in India, we might see important policy revisions to boost further Investment in India by foreign countries. 
	 
	3) Boost banking and infrastructure 
	 
	The banking and infrastructure are the two main sectors for which major positive announcements may be done. The government already has plans to dilute the shares of public sector banks to citizens of India and retail investors. The move will be welcomed by the people because it will provide the required liquidity to the public sector banks. It will also offer required resources to banks to support productive growth in the economy. 
	 
	4) Goods &amp; Services Tax (<keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword>) 
	 
	I also expect GST to be a positive revolution for the country which was stressed in the last financial year budget. Aa major move to expedite the process would be further welcomed. 
	 
	5) Reduce securities transaction tax 
	 
	On capital markets front, a reduction in STT of financial trading transactions can boost capital markets and further infuse confidence of domestic traders and investors to invest in the markets. 
	 
	About the author: This article is authored by Rohit Gadia, founder &amp; CEO, CapitalVia Global Research Limited

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