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INDEX Direct Taxation Indirect Taxation Corporate and Other Laws International Trade and Finance

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 –MARCH 2012. INDEX Direct Taxation Indirect Taxation Corporate and Other Laws

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INDEX Direct Taxation Indirect Taxation Corporate and Other Laws International Trade and Finance

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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 –MARCH 2012

  2. INDEX • Direct Taxation • Indirect Taxation • Corporate and Other Laws • International Trade and Finance • Statutory Due Dates for March 2012 TM Newsletter – March 2012

  3. DIRECT TAXATION Index • No Tax Returns for Salary up to Rs. 5 Lakh • The Central Board of Direct Taxes (CBDT) has specified that individuals with total income of up to Rs 5 lakh in a financial year and comprising only incomes under the head ‘salaries' and ‘income from other sources' would be exempt from filing their income-tax returns for assessment year 2012-13 (financial year 2011-12). ‘Income from other sources' should only be by way of interest from a savings account in a bank, not exceeding Rs 10,000/- • Parliamentary panel for raising income tax exemption limit to Rs 3 lakh • A Parliamentary Panel scrutinizing the proposals of the new direct taxes code has recommended a sharp increase in the tax exemption limit on basic income to 3 lakh and on investments to 2.5 lakh. The recommendation represents a 67% increase over the current limit on basic income tax exemption limit of 1.8 lakh and 65% over the 1.55 lakh limit for investments, including health insurance. Health Inurance for senior citizen parents will be eligible for another 20,000 rebate, the same as the current limit. TM Newsletter – March 2012

  4. INDIRECT TAXATION Index • Excise Net May Cover More Goods • The finance ministry may levy excise duty on some of the exempted goods in the forthcoming Budget, to meet the objectives of moving towards Goods and Services Tax (GST) and bringing more items under the tax net to increase revenues. • About 240 goods are exempted from central excise. The ministry is considering a proposal to add items to the list of 130 goods that attract one per cent excise duty, while some goods taxed at one per cent might be moved to a higher tax bracket of five per cent. Another option before the ministry is to increase the minimum rate from one to two per cent. The idea is to gradually move towards GST by minimizing exemptions. Under the GST concept, exempted list of items are expected to be minimum because zero-tax items go out of the chain and producers do not get input credit on them. TM Newsletter – March 2012

  5. CORPORATE AND OTHER LAWSIndex • Simplification and Revision of SOFTEX Procedure • Considering spurt in volume of software exports from India in recent times, the complexity of work contracts involved, the voluminous nature of contract agreement and duration involved in execution of each contract as well as time consuming process involved in certification of SOFTEX forms, the procedure was revised. • The software exporter whose annual turnover is at least Rs. 1000 crore or who files at least 600 SOFTEX forms annually, will be eligible to submit a statement in excel format giving all particulars to STPI . Then STPI will verify the details. Under the revised procedure the exporter will have to provide information about all the invoices including the one lesser than US$25000 in the bulk statement in excel format. • The procedure will be effective initially in Bangalore, Hyderabad, Chennai, Pune and Mumbai with effect from 1st April 2012. TM Newsletter – March 2012

  6. CORPORATE AND OTHER LAWS Index • Release of Foreign Exchange for Imports – Further Liberalisation At present, applications by persons, firms and companies for making payments, exceeding USD 500 or its equivalent towards imports into India must be made in Form A-1.But based on suggestions received from the various stake holders, the said limit has been reviewed and it has been decided as a measure of liberalization to raise the above limit for foreign exchange remittance towards imports without any documentation formalities, from USD 500 or its equivalent to USD 5000 or its equivalent, with immediate effect. It is clarified that the Authorized Dealers need not obtain any document, including Form  A-1, except a simple letter from the applicant containing the basic information viz., the name and the address of the applicant, name and address of the beneficiary, amount to be remitted and the purpose of remittance, as long as the exchange being purchased is for a current account transaction (and is not  included in the Schedules I and II of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, the amount does not exceed USD 5000 or its equivalent and the payment is made by a cheque drawn on the applicant's bank account or by a Demand Draft. TM

  7. INTERNATIONAL TRDAE AND FINANCE Index • Only pure FDI in realty • The Reserve Bank of India (RBI), which has taken a firm stand against allowing external commercial borrowings (ECBs) in the real estate sector, now wants to clamp down on overseas investments in the sector through instruments that carry a fixed or variable internal rate of return. The central bank seems to be clear on allowing only pure foreign direct investment (FDI) in real estate where not firms but only specified projects can accept these foreign funds. • Despite a recent clarification from the commerce ministry, the RBI has maintained that such instruments were in the nature of an overseas loan and, hence, should be subjected to ECB rules. Since ECB rules do not permit foreign investment in the real estate sector, this would close a crucial source of financing for real estate companies. The RBI's emphasis is that only ‘pure equity’ should flow into the real estate sector. • In other sectors where ECB is allowed, the RBI is approving foreign investment into such instruments, subject to the investors and the investee companies adhering to ECB rules, which specify the usage of such funds. TM Newsletter – March 2012

  8. STATUTORY DUE DATES FOR FEBRUARY 2012Index • Statutory Due Dates Calendar for March 2012 TM Newsletter – March 2012

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  10. TM THANK YOU ! Newsletter –March 2012

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