CBDT clarifies its stand on section 269ST – NBFCs will breathe a sigh of relief
/0 Comments/in Direct Taxes, NBFCs /by Vinod Kothari ConsultantsBy Abhirup Ghosh (abhirup@vinodkothari.com)
One of the major highlights of the Finance Budget 2017 was the introduction of section 269ST of the Income Tax Act, 1961. The section was introduced with an intention to curb black money by reducing the scope of large ticket size cash transactions in the economy. As per the provisions of the section, no person can accept an amount of Rs. 2 lakhs or more: Read more →
No pass through status to trusts if the beneficiaries are not identified on the date of institution of trust.
/0 Comments/in Direct Taxes, Securitisation /by Vinod Kothari ConsultantsBy Nidhi Bothra & Vijaylakshmi Agarwal, (finserv@vinodkothari.com)
Executive summary
This tax update summarises a recent ruling of Chennai Income Tax Appeallate Tribunal (“Chennai ITAT”) in the case of TVS Investments iFund Vs ITO[1] wherein the issue before Chennai ITAT was whether interest income of beneficiaries rolled over to another venture capital fund would be taxed in the hands of the iFund or in the hands of the new fund (TVS Shriram Growth Fund). While contemplating on the issue, the matter pertaining to determinacy of the trust/ fund and tests relating to the same to achieve pass-through status under the Income Tax Act was also briefly discussed. Read more →
Section 94B: Thin capitalization rules may impede operations of NBFCs, by Nidhi Bothra & Kanishka Jain, 24th May, 2017
/0 Comments/in Direct Taxes, NBFCs, Taxation /by adminGenesis of the thin capitalization rules
The genesis of the thin capitalization rules lies in the distinction between tax treatment of debt and equity. A company typically finances its projects either through equity and debt or mixture of both, equity being costly in terms of cost and ownership is less attractive than the debt financing where interest is a deductible expense. Debt is not only less expensive to service, it also reduces tax liabilities and enhances return on equity.
Legal Implication of Business Transfer Agreement, by Legal Team, on 22nd May, 2017
/4 Comments/in Direct Taxes, Taxation /by adminBusiness restructuring is a comprehensive process be it financial or technological or market or organisational. There are various modes by way of which it can take place such as re-organisation of capita, compromise/arrangement, merger/amalgamation, demerger, acquisition/takeover, slump sale, strategic alliance and such other similar modes. The primary motive behind undertaking any such rearrangement would be to prosper both in size and profits. The corporate restructuring process can be either be by any of the much traversed gradual way or a much faster way of selling off the business undertaking. Read more →