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Scaling up skilling by using CSR funds: Any takers?

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Employment & Skilling has been identified as one of the top priorities for Vikshit Bharat in the Union Budget, 2024. To this end, the Govt has proposed a scheme that looks novel and innovative, and would supposedly encourage top 500 companies to use their CSR funds for providing internships to eligible youth. However, even if a large company takes 100 interns, it will use only Rs 6 lakh [100 X Rs 5000 X 12 – 90% govt. share] out of its CSR budget, which is trivial for a company of that size.

More details will possibly be rolled out over time, from whatever is available, it seems there is quite a lot of procedure for companies, who may opt for this scheme only at their discretion. 

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Bye bye to Share Buybacks

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– Finance Bill 2024 puts buybacks to a biting tax proposal w.e.f. 1st October, 2024

-Team Corplaw | corplaw@vinodkothari.com

Among the tax law changes proposed by Finance Bill, 2024, the one on share buybacks, explained as one intended to remove tax inequity, is perhaps the most unexplainable.  The proposed change, by introduction of a new sub-clause (f) to section 2 (22) [deemed dividend], and simultaneous amendments to sec. 46A and sec. 115QA, not only shifts the tax burden from companies to shareholders, but surprisingly, brings to tax the entire amount paid on buyback, irrespective of the excess realised by the shareholder. It  leaves the cost of shares to be claimed as capital loss and set off against potential capital gains, of course only if such gains arise  within the prescribed timelines for carry forward and set off.

Buyback of shares is the only way a company seeks to scale down its capital. The proposed amendment makes it impossible for companies to reduce their capital base by returning capital not needed, as the only other way is through reduction of share capital, which is subject to shareholders’, creditors’, and NCLT approval. It is surprising that this amendment by the very same Budget which proposes to introduce the novel concept of “variable capital companies”.

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India’s “green growth”: is the green skin-deep?

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– Payal Agarwal, Deputy Manager | corplaw@vinodkothari.com

Talking about green growth may seem like rhetoric. From policy-makers to economists, from corporate governance experts to environmentalists, everyone seems to be having “green growth” on the top of the agenda.

The Economic Survey dedicated a full chapter to climate change and related issues. The Budget also has green growth as one of the seven saptarishis, to guide the FM’s plans for our financial future.

Need of the hour

India has been taking small steps towards reaching its commitment to the net-zero emissions goal by 2070, as compared to a majority of countries committing to reach the net-zero targets by 2050. While the country contributes to a very low percentage of global emissions (only 4% of the cumulative global emissions from the period 1850-2019[1]), the global nature of the problem of climate change is what makes the country equally vulnerable to the problem, if not more. Further, given its long coastline, monsoon-dependent agriculture, and large agrarian economy, India is considered to be one of the most vulnerable countries to the climate change issue[2].

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CBDCs in India – Another step towards Digitalisation

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finserv@vinodkothari.com

Related write-ups:

  1. CBDCs in India – A Leap of Faith?
  2. Untangling the Mystery of Virtual Digital Assets
  3. The Rise of Stablecoins amidst Instability
  4. Recent Trends in Crypto-Industry: India & Abroad

CBDCs in India – A Leap of Faith?

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Introduction

Right from RBI’s (in)famous March 2018 Circular (‘Circular’) banning all operations by virtual currency exchanges (VCEs) to the Hon’ble Supreme Court’s verdict upholding the constitutionality of cryptocurrency and its exchanges, the debate over the adaptability of cryptos has led to a demographic split in India.

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