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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 APRIL 2012 (Budget Special)
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• INDEX
• Direct Taxation
• Indirect Taxation
• Corporate and Other Laws
• International Trade and Finance
• Statutory Due Dates for March 2012

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• DIRECT TAXATION Index
• The Finance Minister presented the budget on
  16th March 2012. Following are the highlights of
  the same
• The Finance Minister proposed raising the Income
  tax exemption limit for individuals to Rs 2 lakh
  per annum from Rs 1.80 lakh. Further he also
  increased the limit to Rs 10 lakh under the 20
  per cent tax slab. The current limit is Rs 8
  lakh.
• Individual will have to pay 10 per cent tax on
  income between Rs 2 lakh and Rs 5 lakh 20 per
  cent between Rs 5 lakh and Rs 10 lakh and 30 per
  cent for above Rs 10 lakh.
• The exemption limit for the senior citizens
  between 60 and 80 years of age will be Rs 2.50
  lakh 10 per cent will be levied on income
  between Rs 2.5-5 lakh, 20 per cent between Rs
  5-10 lakh and 30 per cent above Rs 10 lakh.
• For very Senior Citizens (80 years and above),
  the income tax exemption limit will be Rs 5 lakh
  20 per cent will be levied on income between Rs
  5-10 lakh and 30 per cent for above Rs 10 lakh.

Newsletter April 2012
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• DIRECT TAXATION Index
• No deduction is available under Sec 80C towards
  insurance premium on the insurance policies
  issued after 1st April 2012 where premium exceeds
  10 of the actual capital sum assured.
• The deduction for spending up to Rs 5,000 on
  preventive medical checkups to be allowed within
  80Dlimit. These could include blood tests for
  diabetes, cardio-vascular tests and so on.
  Further 80D will help more elderly individuals
  claim higher deductions on health insurance
  premium. Section 80D allows tax relief of up to
  Rs 15,000 on health insurance premium paid for
  self, spouse and children.One can further claim
  tax deduction of Rs 15,000 if he/she is paying
  premiums for parents' health policy. If the
  individual (or parents) are senior citizens, this
  limit goes up to Rs 20,000. Earlier, only
  individuals above 65 years were considered as
  senior citizens for this benefit. The Budget has
  lowered the age to 60 years.
• Budget proposes to leave savings bank interest up
  to Rs 10,000 per year out of the tax net.
• The Finance Minister has announced the Rajiv
  Gandhi Equity Savings Scheme that will allow
  deduction of 50 to new retail investors with an
  annual income of less than Rs 10 lakh. To claim
  the same, they will have to invest up to Rs
  50,000 directly in equities, with the maximum
  deduction amounting to Rs 25,000.

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• DIRECT TAXATION Index
• Cash donations in excess of Rs 10,000 will
  not be eligible for deduction under Section 80G
  80GGA.
• Long term capital gains on sale of
  residential property not taxable where the net
  consideration is reinvested in the equity
  of manufacturing small and medium enterprises ad
  where other conditions
• are met.
• The threshold limit for getting accounts
  audited has been proposed to be raised to Rs 1
  Crore from Rs
• 60 Lakh for businessmen and to Rs 25 lakh
  from Rs 15 lakh for professionals.
• The threshold limit of total turnover or
  gross receipts required to be covered under the
  presumptive
• tax has also been proposed to be raised
  from Rs. 60 lakh to Rs 1 crore.
• Tax Returns are made compulsory for
  individuals owning assets abroad. Individuals
  will also have
• to present records of such assets for up
  to 16 years if demanded by tax officials.

Newsletter April 2012
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• DIRECT TAXATION Index
• The Finance Minister has imposed TDS on real
  estate deals and gold transactions in cash.1 tax
  on cash transactions of bullion and jewellery
  worth over Rs 2 lakh will be deducted at source.
  Any transfer of immovable property, except
  agriculture land, worth over 50 lakh in urban
  areas and over 20 lakh in other areas will be
  subject to 1 TDS. These withholding taxes on
  gold and property will be effective from July and
  October respectively.
• VDIS (Voluntary Disclosure of income Scheme) is
  been introduced and been given the time till 30th
  June 2012 to report the black money. The
  government has proposed a tax ranging from 30 to
  90 on any unexplained sum of money, credit,
  investments or expenditures discovered by tax
  officials during the course of a search. The
  holder will be liable to pay this tax
  irrespective of the income bracket.
• It is proposed to amend Sec 194Jto provide that
  tax is required to be deducted on remuneration to
  be paid to Director at the rate of 10 of such
  remuneration. (applicable from 1st July 2012 )

Newsletter April 2012
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• DIRECT TAXATION Index
• It is proposed that a person other than a Company
  who has claimed deduction under any section
  (other than Sec 80P)included in Chapter VI A
  under the heading C-Deduction in respect of
  certain incomes or under Section 10AA and whose
  income is more than Rs 20lakh shall be liable to
  pay Alternate Minimum Tax (AMT). The tax is
  proposed to be 18.5.
• Special Deposit Scheme For Non-Government PF,
  Superannuation Gratuity Funds
• Notification no. 5(4)-B(PD)2011dated 13th March
  2012 notified that the deposits made under the
  Special Deposit Scheme for Non-Government
  Provident, superannuation and gratuity funds
  shall with effect from 1st December 2011 and
  until further orders bear interest at 8.6per
  annum.

Newsletter April 2012
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• INDIRECT TAXATION Index
• Service Tax
• The rate of Service tax has been increased from
  10 to 12 (with effect from 1st April 2012).
• Service Tax rate for Composition scheme for
  works contract service has been increased to
  4.8from 4 (with effect from 1st April 2012).
• Rate of Service Tax on life insurance policies is
  increased on 1st year premium from 1.5 to 3.
  For 2nd year it is 1.5. (with effect from 1st
  April 2012).
• Time limit for issuance of invoice increased from
  14 days to 30 days and 45 days in case of banking
  and financial institutes.
• Common registration format for service tax and
  central excise is proposed. And simplified one
  page common return for service tax and excise is
  introduced.
• The rate of CENVAT reversal for exempt services
  has been increased to 6 from 5 presently (with
  effect from 1st April 2012).
• Now the taxation will be based on what is
  popularly known as Negative List of services.
  It means any activity meets the characteristics
  of service' it is taxable unless specified in
  negative list comprising 17 heads.
• Also 9 services has been specified as declared
  services.
• The word service is defined.
•  

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• INDIRECT TAXATION Index
• Draft of guidance paper on place of provision of
  service is released. They will substitute
  existing Export of Service Rules and Taxation of
  Service Rules.
• The scheme is being introduced for three services
  (namely hiring of a motor vehicle designed to
  carry passengers, supply of manpower for any
  purpose, works contract service) where the
  service provider is either an individual or a
  firm or LLP and a recipient is a body corporate,
  both service provider as well as recipient are
  liable to pay service tax.
• At present service provider can adjust only 2lakh
  out of excess service paid/ deposited. Now this
  adjustment is allowed without any monetary limit.
• Monthly and quarterly returns are introduced
  based on service tax liability and type of
  entity.
• Now the interest will be levied only when the
  wrongly availed credit is utilized.
• Limitation period of show cause notice which is
  one year at present is been extended to 18
  months.

Newsletter April 2012
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• INDIRECT TAXATION Index
• Customs
• DGFT vide Notification no. 106(RE-2010) 2009-14
  DATED 12TH March 2012 has withdrawn the earlier
  Notification no. 102 imposing ban on export of
  cotton and now the export of cotton is free
  subject to the condition prior registration of
  contract with DGFT.
• The method of computation of Education cess and
  secondary and Higher Education Cess on imported
  goods is being simplified. The portion of cesses
  leviable on the CVD portion of customs duty is
  being exempted so as to avoid computation of such
  cess twice.
• The condition is being inserted requiring the
  importer of specified goods to declare state of
  destination where they are to be sold for the
  first time after import and VAT registration
  number. This will apply to goods imported on or
  after 1st May 2012.
• CENVAT credit rules are being amended to permit
  transfer of unutilized credit of SAD lying in
  balance at the end of each quarter to other
  registered premises of the same manufacturer.
  (w.e.f 1st April 2012)

Newsletter April 2012
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• INDIRECT TAXATION Index
• With the aim of keeping a tab on the high current
  account deficit, finance minister has proposed to
  raise the import duty on gold and platinum. The
  FM doubled basic customs duty on standard gold
  and platinum bars from the existing two per cent
  to four per cent, and on non-standard gold from
  five per cent to 10 per cent. The duty increase
  was also extended to gold ore/concentrate and ore
  bars for refining from one per cent to two per
  cent.
• The basic customs duty /CVD is increased from 60
  to 75 on completely built units of large cars
  /MUVs/SUVs permitted for import without type
  approval.10to 30 on bicycles and 20 on parts
  of bicycles. All these increase in duties will
  take immediate effect (i.e. from midnight of 16th
  March 2012)
• Full customs duty exemption is been provided to
  new textile machinery and concessional 5 duty is
  available to specified textile machinery.
• Mega power plant equipments imports will attract
  21 customs duty.

Newsletter April 2012
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• INDIRECT TAXATION Index
• Excise
• The standard rate of Central Excise Duty for
  non-petroleum products has been enhanced from 10
  to 12 ad valorem.
• The merit rate of excise duty for non-petroleum
  goods that attract 5 duty has been increased to
  6.
• Similarly rate of duty of 1imposed on 130 items
  has been increased from 1 to 2.
• 1 levy of Excise Duty on precious metal
  jewellary will now be applicable on branded as
  well as unbranded goods (except silver jewellary)
• Excise duty on small cars is hiked from 10 to 12
  and on big cars it is hiked from 22 to 24.
• Excise Duty on environment friendly goods has
  been reduced from 10 to 6,

Newsletter April 2012
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• CORPORATE AND OTHER LAWS Index
• Registration of Companies or LLPs which have one
  of their objects is to carry on the profession of
  CA, CWA, CS, Architecture etc.
• Vide General circular no. 2/2012, MCA said that
  at the time of incorporation of companies where
  one of the objects is to carry on the business of
  banking, insurance or to practice the profession
  of CA, CS, CWA then the concerned Registrar of
  Companies shall incorporate the same only on
  production of in-principle approval/NOC from the
  concerned regulator/professional institute. And
  where business or profession is of Architecture
  the Registrar shall incorporate the same on
  production of in-principle approval/NOC from
  concerned regulator.
• PAN based DIN
• Ministry of Corporate Affairs vide General
  Circular No. 2/2012 dated 9th March 2012 has
  further extended the time limit for obtaining PAN
  based DIN by the directors to 30th April 2012.

Newsletter April 2012
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• CORPORATE AND OTHER LAWS Index
• Bank Rate increased
• RBI announced that with effect from the close of
  business of 13th February 2012, the bank rate
  will stand increased by 350 basis points i.e. 6
  to 9.5p.a.
• Prior intimation to RBI for raising the aggregate
  FII and NRI Limits for investment under the
  Portfolio Investment Scheme
• RBI vide Circular no. 94 dated March 19, 2012
  states that the Indian Company raising the
  aggregate FII investment limit of 24to the
  sectoral cap/statutory limit as applicable to the
  company or raising the NRI Limits for investment
  of 10 to 24should necessarily intimate the same
  to RBI immediately along with the Certificate
  from the company Secretary stating that all
  relevant provisions of FEMA and Foreign Direct
  Policy as amended from time to time have been
  complied with.

Newsletter April 2012
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• INTERNATIONAL TRDAE AND FINANCE Index
• Easier ECB pledging norms to help Infra companies
• In a move, which could provide additional
  liquidity to Indian companies and ease borrowing
  from outside India, the government is set to
  allow promoters of Indian companies to pledge
  shares against external commercial borrowings
  (ECBs). The move will also ensure additional
  security to the ECB lenders and enable
  infrastructure companies, who are the highest
  recipients of overseas loans, raise ECBs easily.
  The move is part of the new Foreign Exchange
  Management Act (FEMA) guidelines, which is being
  amended after 10 years. However, RBI has directed
  that no person would be allowed to pledge shares
  if he doesnt have a no-objection certification
  (NOC) from a bank, which is an authorised dealer.

Newsletter April 2012
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• STATUTORY DUE DATES FOR APRIL 2012 Index
• Statutory Due Dates Calendar for April 2012

Due Date Statutory Compliance
5th April 2012 Payment of Service Tax/ Excise duty
7th April 2012 Payment of TDS
15th April 2012 Payment of Provident Fund contribution/ Profession Tax
15th April 2011 Filing of Quarterly TDS Return ( January to March Qtr)
25th April 2012 Filing of Service tax Return
21st April 2012 Payment of ESIC/ MVAT
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