Finance Bill 2018: SE Dastur, Bansi Mehta & Other Experts Explain Implications Of Proposed Amendments

Four eminent tax experts, being S. E. Dastur, Bansi S. Mehta, Saurabh Soparkar and Dr. Girish Ahuja, have conducted an in-depth analysis of the Finance Bill 2018 and explained all of its important amendments. Advocate Sashank Dundu has meticulously summarized the views of the four experts and highlighted the important aspects. The summary will prove invaluable to all taxpayers and professionals

The Finance Bill, [2018] 401 ITR (St.) 36,  has been analysed by various Senior Advocates and Chartered Accountants. Some of the important amendments, points, and the views of the speakers have been summarised for the benefit of tax professionals and readers, as under:

Video of Mr. S. E. Dastur’s talk

Video of Mr. Bansi S. Mehta’s talk

Video of Mr. Saurabh Soparkar’s talk

Video of Dr. Girish Ahuja’s talk

Section 2(22) & Section 115-O : Deemed Dividend and Tax on distributed profits of Domestic Companies (Clause 3 & Clause 38):

S. E. Dastur, Senior Advocate :

With regard to S.2(22)(e) which treats as dividend any loan or advance made by a company to a shareholder who beneficially holds 10% of the share capital of the company. Up till now such amount which was regarded as dividend was assessable in the hands of the recipient. And the company who advanced the loan did not have to pay DDT in respect of that. It had to pay DDT for all other dividends but not this. Now for some reason, it is provided that the individual will not have to pay tax on this amount but the company must pay DDT on it @ 30%. So even if you advanced a loan of 5L, the company will have to pay tax @30%. Leave aside equities about it. Now as I said earlier, this provision would come into play if the loan is given to a person who holds 10% of the beneficially holds 10% of the share capital of the closely held company. Now Mr. A is a shareholder, B, C and D who are also shareholders are his benamidars and assuming that it is permitted under the benami act, it does not fall foul of it. Now if A, B, C and D hold more than 10% then the company will have to deduct tax from that. But how will the company know whether B C and D are nominees of A? The company is to pay tax when a loan is given to a person who beneficially holds 10%. But there is no mechanism for the company to know that B, C and D are nominees. So the company would say I am  not at fault, how do I deduct tax if I don’t know that A does not hold 10% but holds 8% but B, C and D hold 8 % each, so in effect, he holds 32%. How will the company know whether it is a nominee. If the company does not know,  even the declaration under the companies act will not apply, so if the company does not know this, then you can’t hold the company responsible. The individual shareholder will say, now I am no longer responsible for paying tax on dividend u/s 2(22)(e). So you may end up with a situation where the individual is not liable and the company pleads correctly that is no way in which I can implement this so you cannot penalize me. Now this again shows how provision is made from imposing liability @30% without having regard to the implementation of the provision. So this provision which is there, it is overenthusiastic provision. The amendment has been made and this is what the provision says, how do they justify it in the explanatory memorandum that it has been made to bring clarity and certainty. What is the clarity? In fact you are introducing uncertainty. So what is the certainty that you are bringing. So words are being used to justify in being rational, in being, to make it apparent, transparent, etc, etc. nut words must have some meaning, and if they don’t, and you don’t adhere to such meaning, it makes no sense.

Saurabh N. Soparkar, Senior Advocate :

Now, the proposal is, the liability to pay tax would be shifted from the recipient from the dividend to the distributor of the dividend in the form of loans & advance namely the company. So like all other dividend distribution tax- regular dividend distribution tax u/s 115O – saying that this provision would not apply to deemed dividend u/s 2(22)(e) now, that exception is withdrawn & therefore whenever a company gives loans or advance which is to be treated as deemed dividend u/s 2(22)(e) the proposal is company shall pay tax before distributing the amount of loan or advance @ 30% flat. So now there is no differing rate there is a flat rate @ 30%. Only thing differentiation is normal dividend distribution is 15% which continues to be @ 15% & normal dividend distribution tax on being given @ 15% is to be grossed up in the hands of the company and this 30% is not required to be grossed up. So loans and advances not to be taxed on the hands of the recipient shareholder but in the hands of giver company @ 30% flat without grossing up but at net basis.

Further, dividend that is received from equity oriented mutual fund now before such mutual fund will distribute dividend that such mutual fund will also have to deduct that tax  @ 10% so now the mutual fund is taxable now, not in the hand of the shareholder. Taxable at the hand at the mutual fund & will have to pay tax @ 10%, sec 115R is appropriately being amended. These are the amendments in the field of dividend.

Bansi S. Mehta, Chartered Accountant :

There is an extended division of dividend u/s 2(22). It’s inclusive of a lot of things like amount capital deduction, distribution of dividends, advancing of loans but all of these are governed by one common factor this is accumulated profits. Now if there is no accumulated profits the deemed dividend does not apply. There is a provision if there is an amalgamation, the profits of the amalgamating company will also be considered for finding out what are the accumulated profits of the merged entity. The first thing is that to incorporate the effect of merger, in incorporating the effect of the merger the guidance note which Mr. Malegham prepared, treatment of reserves in amalgamation which is now incorporated in an accounting standard. However in many cases the reserves lose their identity because of the losses of the transferee company (cause you set off, one against another) however according to a famous legal term: once a mortgage always a mortgage, similarly if you say that there are profits then those profits must be considered even though there are no physically no profits continuing. As far as amalgamation is concerned, if you think someone is doing an aggressive tax planning, you have the NCLT . NCLT has to keep an open mind and give effect to it. This is what Gujarat high court held in Wood Polymer Ltd., In re [1977] 109 ITR 177 (GUJ.) (HC),  “if a court is satisfied, that the amalgamation sold or dominant objective was to gain a tax advantage then it is the duty of the court to reject this case” to say that no we will take the amalgamating companies accumulated profits is not workable. It is true as explanatory statement states that they have noticed that somebody devised the scheme which you first converted the reserves into share capital through amalgamation thereafter the loan was given & the tribunal in the case of ACIT v. Gautam Sarabhai Trust No. 23 [2002] 81 ITD 677 (Ahmadabad), upheld the SC contention that there are no accumulated profits because they are all being converted into share capital & the attempt of the proposed amendment is to do away with this tribunal decision.

However, there are several problems with that to give effect to an amalgamation you have to follow the accounting principles, & sometimes even the scheme itself provides the manner of treating the assets , liabilities, reserves etc. so you’re giving effect to a judicial order. Now how will you able to keep track after 5 years and 6 years what are the profits of the amalgamating company. There is an amendment to this affect.

Dr. Girish Ahuja, Chartered Accountant :

S.2(22)(e) i.e. deemed dividend is known by all. Taxable in the hands of the Assessee. A notice was also sent to the company for non-deduction of TDS. Now, an amendment has been brought i.e. if any advance or loan has been given by a closely held company, to a shareholder holding more than 10% voting power, or to a concern in which such shareholder holds 20% or more voting power, then the amount of loan or advance would be treated as deemed dividend and the company would have to pay the tax. The rate of tax  is 30% without grossing. DDT is around 20.3% but in this case, a tax of 30% has to be given by the company. The day on which the dividend has been distributed, the DDT has to be paid within a period of 14 days from the date of distribution of such dividend u/s 115O. A circular has also been released that if such loan or advance is proved to be a business advance or a business loan then such deeming provision would not take effect i.e. no tax @30% needs to be paid. The difficulty which would arise is, in Form 3CD under item no. 36, a declaration has to be given as to details w.r.t. 115O, how much dividend has been deposited and what is the time limit. Now the dispute would be whether such a loan or advance would be a business loan or business advance? Even though there is a ruling of the Supreme Court that tax must be paid, the question would arise that how can a company pay the tax since it cannot be considered as a shareholder. Now everyone is caught in this net. I suggest and advice that no closely held company should try to give any loan or advance, even if such loan or advance is being repaid the next day, it shall still be treated as deemed dividend. Even if interest is charged, even that will be considered as deemed dividend. Now no closely held company can give any loan or advance. Only those companies may be able to give a loan or an advance, which does not have any accumulated profit at all. If there exists accumulated profits, then the loan or advance to the extent of the Accumulated profits exclusive of the capitalised profit, will be liable for DDT at the rate of 30%.  Alternatives could be, show a loan first and as a repayment of loan, such payment can be made or some money is already due and payment is against such due, then there should not be a problem. But if there is nothing outstanding, then even one rupee of a loan, can be considered as a deemed dividend to the extent of the Accumulated Profits and tax could be levied.

Section 9: Income Deemed to Accrue or Arise in India (Clause 4):

S.E. Dastur, Senior Advocate:

Presently, income from business connection is deemed to accrue in India if the business connection springs from an activity carried on by a non-resident through a person who has authority and habitually exercises authority in India to control contracts on behalf of the non-0residemnt. Unless such activity is confined to purchase of goods in India. That is the scope of business in India. Now it is widened. Even if the person doesn’t have such authority, but habitually controls contracts on behalf of the non-resident or even habitually plays a principal’s role leading to the conclusion of the contracts by the non-residents, it would be regarded as business connection. So, one looks at whether a person has habitually exercised this right, not whether he has the power to exercise such power or not. And provided of course, the contracts are in the name of the Non-resident or for the transfer of ownership of Goods or property belonging to the non-resident or for the grant of the right to use the property which the non-resident which the non-resident has the right to use. For eg: the non-resident has tenancy in India and it gives the right to use the property to someone else, it may be regarded as giving a right to use the property of which the non-resident is possessed of. A contract of performance of services by the non-resident, even though the services are performed from outside India is also taken into the scope of business connection. The exception that there would be no business connection where goods are purchased for export or to promote purchase in India is removed. So therefore now, even if goods are purchased in India for a non-resident, it may result in a business connection and a liability in the hands of the non-resident. Not only the action but significant economic presence of the non-resident in India now results in the non-resident having a business connection. What is meant by significance economic presence? It is defined as including transactions in respect of goods, services to property carried out by the non-resident if the aggregate claimant arising therefrom exceeds a limit which is to be prescribed. So that will be regarded as significance presence of the non-resident. Further the transaction in question would include provision of download of data or software in India. Significant economic presence also includes systematic and continuous soliciting of business or engaging in interaction with such number of users as through digital means, as may be prescribed. Now, how will you determine the number of persons who have been contacted through digital means, I don’t know but this is what is stated in the Act. And how it cannot be disputed. Is it so that you will summon that person, I have never contacted him. So therefore I think persons who draft there amendments should also take into account the consequence and what it will result into. It is extremely vague and litigation prone, which is of course to the benefit of all of you and all lawyers. The first proviso says that a non-resident can have significant economic presence in India even though he does not have a residence or place of business in India. Obviously, if he has a place of business in India, he would have presence in India and he would have been chargeable, but, this is what is provided. These amendment have been made, the reason which has been provided is important. Reason – To bring in line the provision of the Act with the widening scope now prevailing under the DTAA as per BEPS plan 7 and Multilateral conventions to implement tax treaty related measures. So, you are trying to bring the Act, bring into the Act, the provision of DTAA which are against the assessee. Here thereto the philosophy has always been that the act is paramount and DTYAA is subsidiary. S.90(2) brings that up that nothing in the DTAA, which is contrary, shall affect the Act. Now you are amending it, that is the Act, to make it compliant with DTAA requirements overlooking that the DTAA requirements may not apply if the other party, if the country of the other party has not accepted this. So therefore, it may be you are introducing an amendment in the Act which will affect the assessee even though, the DTAA, which you are following, may not be applicable in third case because t he other party in Singapore or Mauritius has not accepted that amendment. So, I think, it’s a bit topsy tervy, as to, what is paramount, the Act or the DTAA? I would think it has to be the Act and the DTAA has to be tuned to be in line with the ACT if at all and give some concessions but not the other way round. “Jack’s greed knows no limits, and that is the only reason I can give for this but Jack’s greed sometimes overlook the consequence of greed is indigestive”. So again I think, incorporating into the act what is in the DTAA, adverse to an assessee, is not the best philosophy.

Saurabh N. Soparkar, Senior Advocate:

If there is a foreign company, or a foreign partnership firm, which has some business in India, now how do you conduct a business-if you conduct it through an agent, who is an independent agent, & there is no permanent establishment over here, there is no need to pay any tax. You have to pay tax only if you are doing a business through a dependant agent. And in that your dependant agent will be your P.E, depending upon the services rendered through that dependant agent, the foreign entity will have to pay tax.

This provision is in the model double taxation avoidance treaty under which there is a definition of P.E. (Permanent Establishment) & this model is followed by all the countries, the provision is- a foreign country has a P.E in another country if & only if the agent over there is an dependant agent. A dependent agent who is carrying out negotiation for & in the name of non- resident principal & he has authority to conclude contract on behalf of the non-resident. In other words, taking a situation, tomorrow a U.S company, wants to set up something in India, it appoints Mr. X as an agent if Mr. x only has only a right to discuss, find out & explore the possibilities & report back to the principal about the scenario, then there is no P.E in India, and there is no income attributable to that foreign entity. But if that local agent has the right to do business in the name of that foreign entity, right to conclude & negotiate business, it will be assumed that the foreign entity has a P. E in India & tax will have to be paid by that foreign entity on that part of the income which is attributable to Indian operations. 

Internationally, it was found that this definition of dependent agent was being misused because dependant agent is defined to recollect as a person who has authority to negotiate, conclude contract. What was being found was that companies were internationally appointing agents in other countries, the rights would have the right to negotiate, & just before the negotiation is going to result into conclusion of contract, the agent will walk out. He will not be there for the purpose of concluding the contract. The person negotiation and the person concluding the contract would be 2 different people. It was found that by splitting the activity more than once, they were able to get out of the definition of P.E internationally. To this, the Org. of all countries, gave a serious thought to it, & in its Base Erosion & profit shifting (BEPS) action plan No. 7, it recommended modification of Article 5, Para 5, so as to expand the scope whereby it was proposed, that if a person is appointed by a foreign entity as an agent in another country, who habitually either concludes contract or who habitually plays principal role relating to conclusion of contract, , he may not conclude but he may play a principal role in the matter of conclusion of contracts in the name of non- resident. Then even that agent who is not concluding the contract, who is playing primary /preliminary part for the purpose of concluding the contract even  that part is considered P.E of that non-resident & income would be to the extent to his services taxable in the source country. Looking @ the BEPS recommendation there is a multilateral convention to implement tax treaties related measures, a policy document signed by all governments, that if we make a change in this policy document, the said change will be applicable to all mutually accepting countries, India is a party to it, by signing the document as a result which under international law as applicable by the treaty by signing the document, the treaty automatically gets modified.  We all know that between treaty &domestic law whatever is more beneficial to the assessee’s is to be preferred. Here is the situation where, treaties with various countries by virtue of this indirect method, are amended & not only an agent that actually concludes the contract but even an agent who principally takes part of the conclusion, in the earlier stages is also considered as P.E. that is the provision under treaty. under domestic law we still have the old law. In order to bring domestic law in par with international law, domestic law is being narrowed against the assessee or broadened in favour of revenue. Now the amendment is in the same lines of which treaty are being amended namely if you have an agent of foreign entity sitting in India who may have no right to conclude negotiations to enter into contract but who plays principle role in the matter of negotiation which would result into conclusion of contract then a foreign entity has a P.E in India, the tax would have to be paid in India. Question would arise what is the principal role? That is all matter of facts of each case to be interpreted, it’ll be decided by the courts of law. Whether the role is principal or supplementary or major or minor. One thing What’s proposed is, to expand the scope of levy of tax or the persons connected with foreign entities, either it may have not been a P.E but now it will be regarded as a P.E of a foreign country.

Dr. Girish Ahuja, Chartered Accountant:

An inclusive definition in S.9 has been given for business connection. Till now, if you have a business connection in India, it would be taxable in India. It says, if a person has and habitually exercises the authority to conclude contracts on behalf of Non-resident, it will be treated as having PE in India or having business connection India. Now what has been changed is, if he has or habitually has the authority to exercise a concluded contract and concludes contract and plays an important role which leads to conclusion f contract on behalf of the non-resident. So even if he plays an important role, which leads to conclusion of contract, it will lead to permanent establishment in India. According to him, this tinkering in the section has been rightly done since people are concluding the contracts but they are showing that they are not concluding contracts. It is being shown that they are concluding the contracts by the non-residents there and they are not paying the taxes here. But if you play a vital role or an important role in the conclusion of the contracts which leads to the conclusion of the contracts, that will also be treated as a Business Connection in India. The last time, e-commerce had been introduced, saying that we had introduced an equalization levy on electronic advertisement. Now here, we have a concept of e-commerce where people are doing business but their location is not known. A lot of business is being provided but the person who is providing, their location is not known not their place of residence and how to tax such a person. A similar concept had also been brought into BEPS i.e. Base Erosion Profit Shifting, where this concept of e-commerce was taken. This time, they have inserted an explanation saying that if there is economic presence in India to a certain in India to a certain amount, a certain economic physical presence in India, that will also be considered as economic physical presence. We are not talking about Actual Physical presence, but only economic physical presence exceeding a certain amount to be specified, then it will also be considered as business connection in India which means it would be taxed in India.

Section 10(23C) : Exemption from tax in respect of certain funds (Clause 5(b)(ii)):

S.E. Dastur, Senior Advocate:

S. 10(23C) grants exemption from tax in respect of certain funds universities, hospitals, etc. The proviso lays down conditions to be fulfilled to avail of the exemption. For example; the prescribed portion of the income has to be applied for the purposes for which the fund is formed. Now it is provided that if a payment has been made in cash for achieving the objects of more than 10000 on a day, that will not be regarded as an application. Similarly, if you have to determine the prescribed percentage has been made, disallows 30% of the sum paid to a resident if tax is not deducted at source. So therefore, say if a hospital or an educational institution pays to a doctor or to a teacher an amount without deducting at source, and that will not be regarded as application of income. But only 70% of income will be regarded as application of income. So if you spend 100, only 70 will be regarded as application, if you do not fulfil the requirement of application, you may not get exemption u/s 10(23C). Now what happens is, the fund makes a payment to a doctor or to a teacher without deducting tax, pays 100, only 70 will be regarded as application. Now if you are aware, if you omit to deduct tax at source, the revenue can demand that amount from u, if the recipient has not paid tax. So, supposing the doctor does not pay tax and the revenue demands that amount from u, you will again have to pay and question will arise, will that payment be regarded as application for the purposes of the fund or will they say, no no, this is not application for the purposes of your fund, this is to make good the default in non-deducting taxes. So therefore, even though ultimately, you pay 70 today, you pay 100, don’t deduct tax, only 70 will be regarded as application, if subsequently you pay the 30, you will not get the benefit of application. Now this has to be thought through that can you impose something like that. It’s very good to say that I will collect more money, but you have to be realistic. You have to consider, what are the other possibilities which may arise and whether it will because unnecessary hardships to the assessee. Then it is provided that in the section that provisions of 41A and 43 will be applied mutatis mutandis. Now I think it would be much better if you specify exactly what you mean because it is again very vague and may raise several issues which will  have to be decided. The new provision speaks of provisions of S.40 applying mutatis mutandis done will be better now.

Section 11(1): Income from property held for Charitable or Religious purposes (Clause 6):

S.E. Dastur, Senior Advocate :

An amendment similar to that of 10(23C) also applies in the case of exemptions claimed by a charitable trust because u/s 11, application for charitable purposes has to be at least 85% of the income unless you accumulate for future application following the prescribed procedure. Then an interesting point which arises in connection with the provision for S.11 application. S.80 of the income tax act says that if you have, you are a charitable trust, if you incur, if you want to set off any capital loss in the future you will have to file the return of income in time and the loss will have to be determined. Now what happens, you file a return disclosing your professional income and a capital loss. The officer accepts your income, does not determine the loss. The section requires, S.80, that the loss must be determined. Does it mean, it is impliedly determined by not upsetting something in the return or do you then have to file an appeal and the only ground being, direct the officer to determine the loss. Or make an application for mistake apparent from the record. So again here in 80, using the word determined, nobody has raised this issue until now, but using the word determined, may prevent an assessee from giving credit for losses which is already incurred.

Saurabh N. Soparkar, Senior Advocate :

Income Registered u/s 10(23C) or Sec. 11 is not required to pay tax under normal provisions of law , essentially paying tax on receipt versus payment, all payments are taxable as well as deductible. In relation to payments, no restriction as to what kind of payments was allowed. The government found that a large number of charitable trusts & 10(23C) institutions, are either making payment in cash in excess of 20,000 or they are not deducting tax in source before making the payment. These trusts are brought at par with a businessman who would attract disallowance u/s 40A(3) & 40(a)(ia) respectively. So now it will be regarded as not being applied at charitable purposes, unless you fall in that 15% criteria on that amount you will have to pay tax.

Bansi S. Mehta, Chartered Accountant :

Unfortunately, if you see or analyse, what are the amendments, S.11 will win hand thumb. Almost in every financial year, an amendment has been made in Section 11. Now there are 2 broad comments that every time you make an amendment concerning a charity trust, you are affecting to the trusties, you are affecting those who benefit from the charity trust, so you are affecting the community. But I can understand that there was something which was, let’s say, in terms of equity, wrong, or Govt. is entitled to modify. But what they have done is something very curious. Basic Point: They are 3 different occasions/tiers – First is when the income is earned, second is when the income is applied and the third is when the income is accumulated. There are 3 stages. Now the law provides that if the charity trust applies on the objects of the trust and accumulates upto 15%, then it will enjoy exemption. In simple language, that the provision of S.11. Now , somehow or the other, the FM believes that he would like to incorporate disallowance provision of the income tax act in computing the charity trust income. Disallowance provisions by 2 grounds i.e. one is when payment is not made via account payee cheque and the other is that no tax is deducted at source. Now I am not able to understand that how this amendment will be made applicable. Now as I said, o1st stage is income. There are several judgements and board’s circulars which state, that income much be income as commercially understood. It is not computed under Income tax act, but it is computed under commercial principles. The second is applied. Now application something like in corporate entity like appropriation. Something which is applied on the objects of the trust is called as application. The third is the  net result which is accumulated. Now which is the stage in which there could be some relevance for examining whether an expense is allowable or not allowable. On the first, there is no relevance, because, income has to be understood in the commercial sense, it’s not total income, the boards own instruction says that it would be commercial income. There is not stage for allowing or disallowing, it can only be at the time of application, that is when income is applied, first is if tax is not deducted or not deducted, if tax is deductible. The second thing is when it is paid otherwise in my payee’s account cheque, according to the amendment, it would be disallowed. Disallowed from being considered as Application. We use charities to supplement what the government has done or what it’s not done & it’s best to leave charities  open. If it’s found that somebody is misusing the charitable funds for purposes which are not covered by the objects by all means hang them up. But you cannot affect charity trust because you want to collect some taxes.  Historically, both under the Income tax act 1922 & 1961, charity has been exempted because they are doing something itself what the government wants to do, to do public good. But there is a provision, a proposal- unsure about how it will work- because only at the stage of application. The limit for cash payment is 10,000 (eg- somebody has to make a payment to a person who has to make a payment to the hospital- without which he will  not receive a discharge. & it comes upto 1,50,000.  The law says that have to pay by payees Account check. – your diluting charity. Not enhancing it.

Suppose a person is poor- and has to pay for his son’s education – charity trust gives an amount it’s not taxabale and there is no concept of deducting taxes. What they are mixing  up is- when you pay salary to your staff and your not deducted it will not be considered. But that is not in application its computing commercial problem  the amendment is confines to Application. So to that extent the amendment can be reviewed. – if the govt wants to make sure that expenses can be disallowed or tax is not deducted then they can do that. But the wider point is that who are you affecting? Your affecting the public. I am not suggesting that charity trusts that are set up for purposes other than public good should get away with what they are doing or not doing –that is not the point. The point is like this is mob firing, where your affecting people who need all the help. As far the earlier coalition was concerned, they claimed that they were secular. However this government has no claim to be secular, infact they insist, so many trusts including religious trusts will be affected this. For nobody’s benefit this has been made. There is not even a reference in the finance ministers speech to this amendment. All charity trusts will be prejudicially affected by this.

The finance bill as far as possible spend money through payees account cheque and not by cash. From the govt. point of view it’s a very good objective. But as my previous example of medical examination. Now charity trusts as far as Gujarat and Maharashtra is concerned will have to comply with this requirement. Don’t know if an amount like 20,000 to a small time charitable trust in godra, will be workable.

Dr. Girish Ahuja, Chartered Accountant :

S.11 is a section where charitable trust or institution or a religious trust can get exemption. We have a S.40(a)(ia), where if no tax has been deducted, then 30% would be disallowed, or if not deposited to the govt. and also mentioned that if the tax is deposited in any other previous year, such deduction would be allowable then, but that is only for business. We have another section i.e. S.40A(3), where the payment for a transaction exceeds Rs.10,000, it should be paid by way of an account payee cheque or account payee draft or an electronic clearing system, otherwise such expense would be disallowed. Both the sections are for business assessees. Charitable Trusts of religious trusts do not do business but they are also supposed to deduct TDS, they are also making payment exceeding 10000 but they may be making the payment in cash, to cut short that, a proviso has been inserted u/s 10(23C) and secondly, an explanation has been inserted under s.11(1) explanation 3. The explanation says :  For the purpose of determination of the amount of application of the fund i.e. applied for the fund for claiming the deductions, the provisions of S.40(a)(ia) and S.40A(3) shall mutatis mutandis also apply as they are applicable for computing the profit or gain from business or profession. Hence from now onwards, if any payment exceeding 10000 is paid in cash or no tads has been deducted where it was required to be deducted, such payment will not be regarded as payment for the purposes of application of funds. 30% shall be disallowed of the application amount.

A question arose that if 90% of the funds are applied, and after application of 90%, u/s 40A(3) and 40(a)(ia) – 5% is disallowed, but even then, I get the total exemption since 15%-5% would be 10%, which I have already claimed, then would there be an issue? Doctor says, s.11 states that an exemption upto 15% is available for the amount which is set apart for accumulation, which means, the exemption is available only for such amount which is set aside for accumulation. Now in the present example, only 10% is set aside and the rest of 90% is used or applied for charitable purposes. Since the exemption is only 10%, the disallowance will also be from such 10%. S.164(2) states, if there is an income which is not exempt under s.11(1), then such income shall be taxable.

Section 16 & Section 17: Deduction and Definition (Clause 7 & Clause 8):

S.E. Dastur, Senior Advocate :

Then, one comes to another, all these are provisions adverse to the assessee. Then there are certain provision, you will be surprised, are also in favour of the assessee. For eg: a salaried employee gets a flat deduction of Rs.40,000. Flat deduction was done away with from the AY 2006-07. At that time, it was provided that the flat deduction will be Rs.30,000. Now it is Rs.40,000. But, everything is not chocolates and sweets. Simultaneously, it is provided that the exemption upto Rs.15,000 which is available where the employer reimburses the medical cost to the employee, will no longer be available. Further, the benefit of conveyance/transport allowance, which today is Rs.19,200 per year will also not be available. So though, you get a flat deduction of Rs.40,000, you are at the same time deprived of deduction of Rs.15,000 and Rs.19,200, which means if my mathematics is correct, that you get an advantage only of Rs.5,800. Now in the speech, it is emphasised, look we have done so much for the employees, but what about the hidden costs which the employee has to bear?

Dr. Girish Ahuja, Chartered Accountant :

S.16 : Abolished 2006-07 : Standard Deduction : 33.5% of salary subject to maximum of Rs.30,000/- was the deduction earlier till 2006-07. Now it has been reintroduced. The amount of salary or the amount of Rs.40,000/-, whichever is less, would be allowed for deduction. However, many have raised the contention that the transport allowance of Rs.19,200/- and the medical reimbursements of Rs.15,000/- paid by employer have now been withdrawn. Therefore Rs.34,200/- was taken away and the net benefit was only Rs.5,800/-, so nothing substantial has been done by the government. Let me tell you, the major beneficiaries would be, 1) retired officers or persons above 60 years, since salary includes pension, and the retired persons don’t get and transportation allowance. 2) For small employers, the employees are given ESI i.e. Employee State Insurance, they don’t get any reimbursement of medical employee since they are anyways receiving state insurance. Maybe, they don’t even receive any sought of conveyance allowance. And the last 3) Everyone else, has definitely benefitted by at least Rs.5,800/-, and also, they may not be required to now produce false medical bills to claim the medical reimbursement deduction. So definitely, a benefit exists.

Section 28: Insertion of Clause e: Profits and Gains of Business or Profession (Clause 9):

S.E. Dastur, Senior Advocate:

Compensation received by any person by whatever name called in connection with the termination or modification of the terms and conditions of any contract relating to his business is to be assesses as Profits or gains of business, which means the above becomes a revenue receipts if it’s in case of termination of contract relating to business. Now this goes counter to all concepts of what is when is compensation can be regarded as a capital receipt and when as a revenue receipt. If the compensation puts an end to a contract then that is certainly not a revenue receipt but  a receipt on capital account. This has been laid down by several decisions. One of the decisions being, the decision of Khanna & Annadhanam v. CIT [2013] 351 ITR 110 (Del.), where they held that a receipt for termination of a particular assignment would be a receipt from capital account. This follows that the compensation is to be regarded as income and it is to be regarded as income from other sources. Again I think this sought of an amendment as well as the next one I am going to refer to, really shows how a distinguishment between a capital receipt and a revenue receipt is now a being almost extinguished because S.2(24) has been amended which defines income, innumerable number of times to tax the income, what is not income under any concept of law. The other compensation of this type is, where one receives compensation of a salaried employee, receives compensation on account of the alteration of the terms and conditions of his employment or in the termination of his employment, this is to be assessed as Income from other sources. Now it is overlooked that presently s.17(3)(i) provides the profit in lieu of salary is an accountable as income. So we now have 2 provisions dealing with the same subject and providing that it is to be regarded as income. One is 17(3)(i) and the other is S. 56(2)(xi). Obviously there is a conflict and the [person w2ho drafted this amendment in 56(2)(xi) was not conscious that there is already a [provision in S.17(3)(i) to this effect.

Dr. Girish Ahuja, Chartered Accountant:

Till now – when there was an agreement entered into and there was termination of such contract thereafter or modification of the terms of conditions, due to which, any amount is received as compensations, there has always been a dispute with regard to it that it could either be a capital receipt or mesne profit, etc, which is not taxable, or a revenue receipt and taxable. Now the government has cleared such ambiguity, by now including such amount received as compensation under the ambit of business income i.e. revenue receipt.

Section 28 : Insertion of Sub-Clause (via)  : Conversion of Inventory into Capital Asset (Clause 9):

S.E. Dastur, Senior Advocate:

Hitherto this subject is not dealt with in the Act. A conversion of a capital asset into stock in trade is dealt with. It is stated that this can be regarded as a transfer u/s 2(47) but Capital against tax can only e recovered when that asset is sold and not before that. Now insofar as conversion of an inventory into a capital asset is concerned, it is provided that the fair market value of the inventories as on the date of conversion will  be treated as profits and gains from business. So, it would follow that not the entire value of the fair market value on conversion is to be income but obviously it is to be taken into account under the head profit and gains and one will get deductions of the cost for acquiring that stock in trade. It is also provided that when the capital asset is sold, stock in trade converted into capital asset, this capital asset is sold then the capital gain will be the sale price minus the fair market value of the inventory as on the date of conversion because that difference has already been assessed and further more indexation has to be allowed only from the date of conversion, not from the date on which the stock in trade was acquired, It is also been made clear that in determining what is a short term capital gain, you will have regard to the holding from the date on which the conversion takes place. So after converting, if it is sold within one year, it will be regarded as a short term capital gain.

Saurabh N. Soparkar, Senior Advocate:

If I have shares which are my capital asset and convert them into stock in trade. SC in CIT v. Bai Shirinbai K. Kooka [1962] 46 ITR 86 (SC), said no tax is payable & therefore Sec.45(3) was introduced. However even prior to this SC case way back in the matter of Sir Kikabhai Premchand v. CIT [1953] 24 ITR 506 (SC), said that if I am withdrawing stock in trade from the business & make it a capital asset there is no taxing given. SC took an interesting example that if a grain merchant for the purpose of making rice at home, takes some grain from his shop or godown, he is not selling to himself & therefore law is well settled that conversion of stock in trade into capital asset was not taxable. Now the proposal is that the year in which you convert stock in trade into capital asset the difference between the cost & the value on the date of conversion would be taken to be your business income, eventually when you will sell the capital asset in the market, the value at which you have converted would be allowed to you as a cost & the period during which you have held the capital asset as capital asset would be as the period of holding u/s 2(42A). Situation – I have a stock in trade worth Rs.20,00,000., market value is worth Rs.50,00,000 today. I convert my stock in trade into capital asset on the difference between 50 & 20. On the basis of Rs.30,00,000 I will have to pay business tax. I retain this capital asset for a period of 2 years, it’ll be a short term capital gain, but if I hold it for more than 3 years from date of conversion then it will be considered as a long term capital asset. So the 2 things required to be stated are 1. The tax will be levied on the hidden income on the year of conversion. Mark u/s 45(3) when you convert from capital asset to stock in trade, hidden income is to be taxed only when the asset is sold or transferred. In a reverse situation, the gain is subjected to tax in the very year of conversion. The holding period, there was confusion – if I so convert, do I take holding from period of date of original holding or date of conversion. They’ve made it very clear, from the date of conversion.

Dr. Girish Ahuja, Chartered Accountant:

S.2(41) states that conversation of a capital asset into stock in trade is a transfer. S.45(2) states that where there is a capital asset converted into stock in trade, it will be regarded as a transfer, but the capital gain will arise, not in the year of conversion but in the previous year in which such converted asset is sold or otherwise transferred.  If a Share is converted into  Stock in trade, then, up to the date of conversion, whatever profit arose, when we sell, was taxed as capital gain and thereafter was treated as business income. But no clarity was provided with a vice-versa situation i.e. what will happen when the stock in trade into a capital asset? Now,  in S.28, clause b(ia) has been inserted, which states that, fair market value of the asset on the date of conversion or treatment of such asset into capital asset, shall be treated as income. So now, when the inventory is converted into capital asset, the day when such conversion takes place, the fair market value of such asset as on that day, would be treated as the business income of the assessee, irrespective of whether such converted asset has been sold or not.

Example: If there are shares of a company bought at the rate of Rs.500 per share, which, after a while were converted when he fair market value of such a share was Rs.900/-. The amount treated as business income on conversion would be Rs.900/- and not Rs.500/-. Now a question would arise that whether the amount of Rs.500/- paid for the acquisition of the share would be deductible which calculating the amount of income. The answer is, no, the cost of acquisition i.e. Rs.500/- would not be considered and the total amount of Rs.900/- would be taken. The reason for this is, the opening value on the date of conversion would be Rs.900/- however, there would be no closing stock since the share is now converted. The calculation states that amount to be taxed is Op. Stock plus purchases minus Cl.stock. In the present scenario, there is no cl.stock, hence the entire amount of Rs.900/- would be taxable. Now one more question would arise with respect to how to calculate the capital gain on sale of such converted asset. What would be the cost of acquisition and what would be the period of holding? In S.49, sub-section 9 has been inserted which states that the fair market value as on the date of conversion of such stock in trade into capital asset, i.e. Rs.900/- is the present case, would be treated as the cost of acquisition for the capital asset. Under S.2(42A), the amendment states that the period of holding would be the period starting from the date of conversion of the stock in trade into the Capital Asset.

Hence it is advisable that the stock in trade is not converted into Capital asset otherwise, the entire fair market value would be treated as business income without considering the cost of acquisition.

Section 36 & Section 40A : Deductions : Income Computation and Disclosure Standards (Clause 10 & Clause 11):

Saurabh N. Soparkar, Senior Advocate :

S. 145(A) prescribes that Assessee must follow a particular method of accounting. It also says that, the ICDS issued by the Income tax department which are 10 in number, sec. 145A(2) stated that wherever the ICDS has been issued then the income will have to be taxed in accordance with the notification prescribing ICDS. The problem arose that some of the ICDS was conflicting with the existing law, but if they are contradicting, then law will prevail. This created lot of confusion, ICDSR to be made effective from April 15th extended to April 17th. This ICDS was challenged by the Delhi high court by the chamber of tax consultant in a judgement reported in 87 taxman.com pg 92. Delhi high court has examined each of ICDS in great detail & it found that some of the clauses of ICDS are patently illegal. ICDS were issued a notification. Notification is a subordinate legislation. Subordinate legislation cannot go beyond the parent legislation according to the Income tax Act. So the Delhi high court took the view that these ICDS parts are invalid., because they were not according to the provisions of the Income tax act but by the notification issued u/s 145(2). Sec 145A itself is being amended & wherever the government wanted to bring changes in the accounting not withstanding what the Delhi high court has said those areas now amendments are proposed by statutory provision. In one area where govt is agreeable to what Delhi high court has to say. ICDS which was not a part of statute but it was a notification under  statute now is being recognized as part of a statute, so the fundamental ground as per what Delhi high court held that ICDS cannot go beyond the statute now that fundamental ground itself will go away, because ICDS itself is a statute and an statute always overrides to override any judgement of any court.

ICDS from notification is now a part of statute.

Dr. Girish Ahuja, Chartered Accountant :

A Delhi High Court in the case of Chamber of Tax Consultants v. Union of India [2018] 400 ITR 178 (Del.) (HC), had stayed the application of ICDS stating that one cannot overrule the judicial decisions since it was mentioned in it that it would overrule the judicial decisions. To overcome such a stay, the government has changed the law itself. Now all the ICDS have been incorporated into the income tax act. First in S.36(1), it was inserted that mark to market loss will be allowed to you, but then they have inserted in S.40A that Mark to market loss which are not specified will not be allowed to you. Then S.43AA has been inserted with respect to foreign income currency computation as per Income Computation Disclosure Standard. Then 43C has also been inserted in which the ICDS i.e. Percentage Completion Method will be followed and not completed method, which has already been inserted under section 43C . It has also been mentioned that Retention money will not be considered as income as per the ICDS. S.145A and 145D have not now been introduced in place of the old section 145. S.145A talks about Inventory Valuation and 145D about grants and interest on enhancement of cost, etc of the ICDS, all have been included in the Income Tax Act now. They are applicable for A.Y. 2017-18. Hence all ICDS have to be followed now. Now one has to be careful that all sections i.e. 145A, 145B, 36(1), 40A(3), 43AA, etc have to be followed since all are included under the income tax act.

Section 50C : Full Value of Consideration in certain cases (Clause 19):

S. E. Dastur, Senior Advocate :

Now, under the Act today, the stamp duty value has to be taken in certain circumstances, for eg: u/s 50C, if a capital asset is transferred but the fair market value as per the stamp duty authorities exceeds the fair market value disclosed, then the stamp duty amount will be regarded as the fair market value and capital gain computed accordingly. Similarly under 43CA which is inserted in the AY 14-15, where there is a transfer of a land or building or both, which are held as stock in trade, and there is this differential between the stamp duty value and the value disclosed, again the stamp duty value will be taken. Further, under 56(2)(10), which was inserted last year, stamp duty value has to be substituted in the hands of the recipient, when he received the property from another person and if the difference between the value as disclosed, and the stamp duty value, the stamp duty value will be taken. Now it is provided that, one will take the stamp duty value which is also known as the circle rate value only if a play of 5% is not satisfied. So therefore, if you show a consideration of 100, but the stamp duty value is not more than 105, it will not be applied. It is for consideration whether, just a 5% adjustment with the stamp duty value is sufficient. But what you have really  to think is, when the stamp duty value was made compulsory, did not the FM think that you can’t have such a provision, because there may be several reasons why a stamp duty value in an area may not be comparable to the property you are dealing with. Because stamp duty in an area is on a uniform basis, your building may be dilapidated, the stamp duty value will be the same.  You can appeal to the stamp duty authorities but should not in income tax a larger play be allowed. And why was in the first place, a provision introduced without any play.

Saurabh N. Soparkar, Senior Advocate:

If I sell land or building or both held by me as a capital asset or stock in trade at a price below the jantri price. Difference between the jantri price and the sale price is deemed to be my income. Correspondingly in the hands of the purchaser u/s 56(2)(x) difference between the purchase price & the jantri price is taken to be as his income.

Govt. has accepted that there could be variety of reason as to why an assessee may not have possibility of realising the full jantri price, so now there is a small window, the window says if you receive up to 5% of the jantri price then there will be no addition. Eg: jantri price is Rs. 1 crore, I sell for Rs. 95,00,000 then I don’t have to pay tax nor the purchaser has to pay tax on Rs. 5,00,000. But mark, this is not a standard deduction, so if I sell for Rs. 94,00,000 I as well as the purchaser will have to pay tax on a difference of 6,00,000. So this being not a standard deduction, so either you are within 5% no addition or your beyond 5% addition of a whole.

Dr. Girish Ahuja, Chartered Accountant:

Now , we have S.43CA, 50C and S. 56(2)(x). S.50C states that where the consideration accruing from the transfer of any capital asset being land or building, is less than the consideration price already received, then for the purpose of the purpose of computing the capital gain, the consideration price will be deemed to be the stamp duty price. The difference between the value of the property and the stamp duty value, tax has to be paid on that irrespective of whether it is a business asset u/s 43CA or a capital asset as considered under section 50C. S.56(2)(x) states that the difference between the stamp duty value and the purchase price will be treated as income under income from other sources. Now what new has been brought in is, only 5% variation has been allowed. The wordings are as under: Provided that f the Stamp duty value assessed or assessable, does not exceed 105% of the actual consideration, then the consideration price may be taken as the actual consideration. Even u/s 56(2) also it is inserted that if the difference between the Stamp Duty value and the purchase price is in excess of the higher of the following two i.e. stamp duty value and 105%.

Section 54EC : Capital Gain not to be charged on Investment in Certain Bonds (Clause 20):

S. E. Dastur, Senior Advocate:

Then there are various provisions for exemption from payment of capital gains tax if an investment is made in certain specified assets. S.54 and 54F deal with the case of sale of residential accommodation. That has not been disturbed but other provisions are no longer applicable i.e. 54A, 54E, 54EA, 54EB, 54ED, etc because they all dealt with certain transactions before a particular date which have not elapsed. So there are only two provisions now which are applicable i.e. 54EC and 54EE. 54EC provides for investment of the capital gain in bonds, redeemable after 3 years and not earlier which are issued by the national highway authority or the rural electrification corporation. 54EC will apply from AY 2019-20 only in respect of capital gain arising from transfer of long term capital assets being land or buildings or both. That is not from gains from the transfer of any other asset. And further that investment is to be in the bonds is to be redeemable after 5 years. So the 3 year period is now extended to 5 years. S.54EE is interesting. It was inserted last year and provides from exemption from tax on all long term gains where investment is made in units issued before 1/4/19 by notified funds. I have not been able to find any funds having been notified as such up till now. So therefore 54EE, though more than an year has elapsed, is still a non-starter. Further, both in 54EC and EE investment is to be made within 6 months of the transfer and you cannot get exemption for more than 50Lakhs invested. So if we invest 60Lakhs, the exemption will be confined only to 50Lakhs. This is dubbed here in the explanatory memorandum and are also capital gains from transfer of only land and buildings. Now these amendments have been done as rationalisations. What does one mean by rationalisation? There is a section which you have not made effective and there is another section in which you have imposed further terms, what is rationalisation in that? I understand that therefore now if nothing is prescribed under 54EE by 1/4/2019, which is just about 14 months away, 54EE will be a dead letter for all time to come.

Saurabh N. Soparkar, Senior Advocate:

If I sell a long term capital asset & have long term capital gain and I do not want to pay long term capital gain in tax I have a right to invest up to 50,00,000 in the bonds under sect. 54EC irrespective of the asset I have sold. Proposal now is, govt. is very keen to recover that 10% tax on shares. Only if you sell land, or building or both & you have long term capital gain & if you invest in such long term capital gain, only then this section would be beneficial. Also, these bonds will have to held by you for a period of 5 years.

Dr. Girish Ahuja, Chartered Accountant:

54EC : It states that any long term capital gain arising to any assessee from the transfer of any capital asset shall be exempt to the extent such capital gain is invested in the specified bond within a period of 6 months from the date of transfer and the exemption is limited to Rs.50,00,000/-. Now it has been amended. Now it states the long term capital asset should arise to any assessee from the transfer of any land or building or both and not from any capital asset.  Now it is also mentioned that the lock in period for holding the bond will be 5 years and not 3 years. If the benefit of 3 years is desired, then such investment in bonds should be done before 31st march, 2018. But if the investment is done after 31st March 2018, then the lock in period would be 5 years.

Section 79 : Carry forward and set off of losses in case of certain Companies (Clause 22):

S.E. Dastur, Senior Advocate:

Under section 79, if there is a change in shareholding, you do not get the benefit of carry forward. This is now amended to provide, that if the change in the shareholding is on account of a plan framed under the bankruptcy code whereby there would be a change in shareholding, that will not affect the right of carry forward.

Saurabh N. Soparkar, Senior Advocate:

3 changes are being proposed.-

Restructuring schemes would suggest that shares of the company held by the promoter should be handed to the new promoter whose resolution plan will be accepted by the NCLT.

States sec. 79 of the Income-tax Act. This was creating a complication, people were not willing to give a resolution plan when they were not getting the benefit of carry forward loss. Now the first proposal is, that if a company is undergoing insolvency resolution plan, approved by NCLT then sect. 79 will not be implemented. Provided  reasonable opportunities given to jurisdiction principles Cit  in the proceeding in front of the NCLT.

Confusion being what is reasonable opportunities, which will later because confusion.

On a large number of cases as a part of restructuring, banks were required to take a hit, would have to waive principal amount, they may have to waive interest amount, creditors will have to give up money all of this will be regarded as income as per sect. 41. Suddenly companies will have to pay tax, companies that have losses and that will not be able to sustain on its own, because of restructuring plan, and it can be revived.

While working out restructuring packages, insolvency professionals were asking banks to take more cut, so the additional tax will go in payment of taxes. Those bodies represented to the government, so “mat” provision is to be amended. Provision of “mat” is that carry forward loss or depreciation whichever is lower, as per books is to be allowed. The proposal is: carry forward loss and depreciation both to be allowed, and the words “as per books” are no longer there. Which say that you are entitled tax laws and tax depreciation collectively for the purpose of computing the net liability for the purpose of such companies.

Who would file return of income for such companies, BOD gets displaced as soon as resolution profession is appointed. Provision is the company before the NCLT the obligation to file return of income is on the resolution professional.

Dr. Girish Ahuja, Chartered Accountant :

S.79: Carry forward and set off of losses in case of certain companies : It’s for a closely held company : This section states that where there is a business loss in respect of a closely held company, this business loss will not be allowed to be carried forward unless the shareholder carrying 50% of the voting power as on the date when the loss was incurred and also as on the date when the loss is set off, should be same. That is, only if 51% of the shareholders are the same as on the date when the loss was incurred and as on the date when the loss is sought to be set off, for the purpose of claiming the benefit of carry forwarding the loss.

Now, in case of insolvency where the adjudicating authority has admitted the application, now different shareholders will come. So now when the shares will be purchased by the new shareholders, then how the loss would be carried forward? Now the law has made it clear u/s 79 that S.79 would not be applicable, once the application has been admitted by the adjudicating  authority. Then Business loss can be carried forward even if 51% shareholders are not the same. Also u/s. 115JB: When we compute the book profit, then brought forward loss or unabsorbed depreciation, whichever is lesser, would be deducted, but in case of insolvency as referred above, both the brought forward loss and the unabsorbed depreciation, both will be deductible.

The benefit of 115JB has been given to the insolvency cases along with the S.79 benefit, it is a good proposal, since, if the losses are not going to be set off or even on the losses we are going to pay MAT, then no one would opt for it, hence such an amendment has taken place.

Section 80AC : Deduction not to be allowed unless Return furnished (Clause 23):

S. E. Dastur, Senior Advocate:

As per section 80AC, deduction was not admissible under 6 provisions unless the return was filed in time. 80IA, 80IAB, 80IB, 80IC, etc etc,. Now it is stated that unless the return of Income is filed within the time prescribed in 139(1), no deduction under chapter VIA part C, no deduction will be available. And part C covers section 80H to 80TTA. So, the requirement may now, ofcourse, 23 is to file the return and now presently the provision applies only for 6 types. Now for the entire provisions, the return is to be filed in tie and there is no exception permitted. An individual has fallen sick and he could not file the return in time, he will not get carry forward, he will not get a certain deduction he is entitled to. Should there not be some provision for  unforeseen contingencies to be taken into account. They say that equity and tax are strangers but do they have to be enemies?

Dr. Girish Ahuja, Chartered Accountant:

S.80AC : Till date, deduction was not allowed u/s 80-IA, 80IAB, 80IB, 80IC, 80ID or 80IE, shall not be allowable unless return is furnished within the due date u/s 139(1).  There are 4 chapters. First chapter talks about miscellaneous, second chapter talks about expenditures which are deductible which come under 80C to 80GGC. The third chapter talks about the Incomes which are deductible which start from 80IA to 80RRB. And the Fourth chapter starts with 80TTA to 80U. Now, with the new amendment, the total chapter C i.e. from 80IA to 80RRB, the deduction shall not be allowable if the return has not been filed within the due date.

Section 80D : Deduction in respect of Health Insurance Premia (Clause 24):

Dr. Girish Ahuja, Chartered Accountant:

S.80D : For senior Citizens : “i can call it a senior citizen budget”: There were 2 concepts i.e. senior citizen and very senior citizen. Senior citizen would be more than 60 and very senior citizen would be above 80. It was told that, since insurance may not be taken by the very super senior citizens, they were allowed a deduction on the actual amount of medical expenditure up to a maximum of Rs.30,000/-. Now, what has been changed is the term ‘VERY’ i.e. the word very from very senior citizen has been removed and it has been made applicable to both the senior citizens and the super senior citizens. Also, the limit of 30,000/- has been increased to Rs.50,000/-.

Section 80DDB : Deduction in respect of Medical Treatment, etc (Clause 25):

Dr. Girish Ahuja, Chartered Accountant:

S. 80DDB : Expenditure incurred on any specified ailment or disease for yourself or dependent on you. If not senior citizen, then deduction up to Rs.40,000 and if senior citizen, then deduction up to Rs.60,000/-. Very senior citizen – Rs.80,000/-. Now, with the new amendment, the term ‘Very” has been removed and only senior citizen is retained i.e. now, to every senior citizen, a deduction is allowed up to Rs.1,00,000/-. And all this is in addition to 80D.

Section 80IAC : Special Provision in respect of Specified Business (Clause 26):

Saurabh N. Soparkar, Senior Advocate:

New start-up’s section i.e. S.80IAC- the extension has become 2021, but you have to ensure that you remain small. The moment your turnover extends 25 crores you will lose the benefit. So you have to be good but you don’t have to be so good that you grow.

Dr. Girish Ahuja, Chartered Accountant:

S.80IAC : Small change : Initially 80IAC had come into existence for Start up specified businesses, where 100% deduction for 3 years is available, provided the profit does not exceed 100 crore. 3 consecutive years from 7 years. Now, the definition of eligible business has been enlarged. Further, the commencement of such business was supposed to be between 1/4/2016 and 31/3/2019, and now the time limit has been extended by 2 years i.e. till 31/3/2021. It has also been mentioned that such deduction of 100% for 3 years would be applicable provided the turnover of the company does not exceed 25 crores for a period of 7 years.

Section 80JJAA : Deduction in respect of Employment of New Employees (Clause 27):

Dr. Girish Ahuja, Chartered Accountant:

S. 80JJAA : A good Deduction : It mentions that employ workmen with a pay not more than 25,000/-. The additional cost of the additional employment, shall be allowed deduction at the rate of 30%  for a period of 3 years if the pay is not more than 25,000/- and they have been employed for at least 240 days. But some industries are seasonal, like the apparel industry and hence, the term has been reduced to 150 days for them. Now the change brought is, along with the apparel industry, the leather and footwear industry has also been brought under lesser term of 150 days employment. Now it has also amended, for good, that in case an employee has been employed for less than 240 days or 150 days as the case maybe, due to year ending before completion of the number of days as required, even then, if the employee is continued in employment in the subsequent year, and completes the stipulated number of days, the deduction shall be allowable. Which means, whenever the person is employed, deduction shall be allowed, if not in the current year, at least in the subsequent year.

Section 80TTB : Deduction in respect of Interest on deposits of Senior Citizens (Clause 30):

Dr. Girish Ahuja, Chartered Accountant:

S.80TTB: A beneficial and good section for senior citizens : “Mr. Modi has done a brilliant job by inserting this provision”: Interest on account of deposits in savings account for senior citizen. Deduction up to Rs.50,000/- with a banking company, co-operative bank or a post office.

It is praise-worthy that so many deductions are provided to the senior citizens. Rs.50,000 is provided under this section, then Rs.50,000 is given under the medical benefit and Rs. 40,000 is given to the pensioners. In total, a number of benefits have been provided to the Senior Citizens.

Section 112A: Tax on Long Term Capital Gains in certain cases (Clause 31):

S. E. Dastur, Senior Advocate:

What the president referred to about long term capital gains and transfer of equity shares. Today, there is complete exemption in respect of shares sold on the stock exchange or units of a equity fund or units of a business fund provided STT has been paid, both at the time of purchase and at the time of sale where the purchase take place after October 2004, when the STT provisions came into force. If therefore it is felt I presume, that capital gain, first assessees get undue advantage on account of the exemption from charge of capital gains. And it is said even in the explanatory memorandum, that the reason for making this changes is that S.10(38) inherently biased against manufacturing and has encouraged diversion of investment in financial assets. What does that  mean? Does it mean that today, an individual who invests in financial assets will now go into manufacturing because he does not get this exemption. You may use words to justify that we are doing this very worthwhile thing but does it make sense. And does the explanatory memorandum think, probably members of parliament don’t read the explanatory memorandum, but does the framer think that anybody who reads it will not look at it rationally, whether it serves any purpose. It is better not to justify an assessee unfriendly amendment rather than given= such reasons which do not really stand scrutiny. It is also stated that the exemption of capital gains has led to abusive use of tax arbitrage opportunities. Abusive use of tax arbitrage opportunities. Assuming 5that it is correct, what have you framed GAAR for? Apply GAAR. If all that could come within GAAR and you could challenge it is not made intersection itself, then where will GAAR come into play. So if you think some unfair advantage has been taken and it is not according to the intention is, apply GAAR. But you don’t need to make these amendments. Then in certain circumstances, I do not know, I think, you gentlemen and ladies are more adapt at determining it, whether it would be advantageous for an assessee to claim application of section 112 as existing at the moment and which still continuous rather than to go under 112A. He may be better off by not selling on the stock exchang3e, I think that is feasible. If I think, what I feel is right, then you think that it may give raise now, to people advertising that they will purchase shares at a rate which is given. So the person who wants to sell shares will get advantage of 112. The person who buys the shares will buy it at lesser than the market price, so he will gain also. They have not yet said so, but they could have said, that this will be the result and this could result in greater employment. Because greater employment flouted all over the explanatory memorandum, but they have not said it probably because they have not thought of it.

Saurabh N. Soparkar, Senior Advocate:

If you have long term capital asset in the form of equity shares or units of equity oriented mutual funds, if you hold them for than 1 year & if you sell on the floor stock exchange & pay security transaction tax, you are not required to pay any long term capital gain tax. Therefore, these transactions are completely exempt. The government has to say only those who have shares get the benefit the rest don’t & govt. also needs money. They expect that Rs.40,000/- crores gets raised by virtue of elimination or removal of this exemption. Even thought the exemption is removed. The transaction is not taxable.

Capital gain up to 31st January, 2018, is to be held tax-free. Proposal is if I have long term capital asset in the form of equity shares, which I was holding prior to 31st January. If I sell prior to 31st march,2018 the law continues what it is. The new law comes into force only from 1st April. If I sell after 1st April, supposedly my cost is Rs.2,00,000/-, market value as on 31st January 2018 is Rs.9,00,000/- & I sell the share at Rs.10,00,000/- then I have the right to claim from the sale price of Rs.10,00,000/- as cost. My actual cost of Rs.2,00,000/- or market value as on 31st Jan 2018, whichever is higher. In other words, my capital gain up to 31stjan, is protected & made exempt.

Another example- my cost is 2,00,000, market value as on 31st January 2018 is 9,00,000 & I sell the share at Rs.8,00,000. As compared to my original cost I have made a gain at 6,00,000 but as compared to market value as on 31st January, I have made a loss at Rs. 1,00,000. Government doesn’t want to take advantage of this notional loss. Proposal is, if you sell shares hereafter, 31st of March against consideration original cost or market value of the 2 whichever is higher to be allowed. But if the consideration is lower than the market value as on 31st Jan, then market value will not be allowed, the gain will be exempt.

Find out the market value as on 31st Jan,2018, of the script your selling. Find out @ the price your selling. If the price is higher pay the difference @ 10%, if the price is lower, you don’t have to pay any tax. If the price is so low to go below your actual cost, then you’re entitled to the capital loss. Otherwise there is no requirement to pay any tax. The only issue will be, those companies that are highly profitable , that have huge reserves, but they are not listed as on today, if they take listing hereafter, they will have no such protection. If they would have said, like units, in case of unlisted companies also the NAV or rule 11UA value as on 31st January would be allowed as the deduction probably would have been a better situation. Therefore, this amendment as to sec. 10(38) r/w sec.112A effectively sticks to levy long term capital gains on sale of shares, equity shares & units but to a very limited extent. This section also says that you have to pay security transaction tax at the end of purchase also if you acquire them on October 4th. We had a similar provision under the old regime also, where govt. had come with a notification significantly relaxing the requirement in today’s FAQ, they’ve said they are going to retain the same parameters. So if you have received the shares as bonus shares, as right share etc. then you may not have to worry about the fact that estate is not paid. 2 more things. i. normally when a tax is being levied at a flat rate, deduction under chapter VIA are not to be allowed or sec. 87A are not to be allowed, that’s a normal situation . In the present case, they have expressly stated, that on such capital gain, the deduction under chapter VIA will be allowed & rebate u/s 87A would also be allowed. So it is not as if there is a flat rate of 10% irrespective of deduction & the rebate. This is so far as sec 10(38) is concerned.

Bansi S. Mehta, Chartered Accountant:

The amendment made/proposed to be made, should have been discussed first amongst the general public and the effect of such amendment so that it is understood and absorbed. I feel, the persons who have framed this amendment, have not understood the philosophy behind Mr. Chidambaram’s budget years ago, by which he exempted Long term Capital Gains tax on stock market provided security transaction tax is paid. So he made an amendment that 10(23B) that this will be exempt provided STT is paid and STT is charged automatically on the stock exchange when the transactions are electronically conducted and recorded. In fact the government has got a lot of revenue from the levy of Security Transaction tax. But now, there is an amendment proposed to remove the Capital Gain tax exemption, however, by some curious process of reasoning, they say we’ll retain the STT. You have STT which was introduced to make good the loss on account of Capital Gain Tax, that plus LTCG tax would be chargeable. The amendment is  not very difficult to understand, they wanted to remove the exemption. However, what is now happening is that a bulk of investment in India comes from FIIs. Now, there are broadly 2 kinds of FII investment. One is which comes from a Double Tax Treaty jurisdiction and the others come from other jurisdiction. Now those who come from the DTAA jurisdiction and there is a provision for exemption of capital gain tax, then this amendment has no effect. However, most of the treaties in which capital gains tax was exempted, Cyprus, Mauritius, etc, Govt. of India has renegotiated the treaties and said that Capital Gain tax will be charged. However, there is one country, with which the govt. either has not been able to or not negotiated i.e. Netherlands. One country, where under the treaty, capital gain exemption tax is there. Now what is the effect of this? Effect is, FIIs who are short term players in the market, may not now invest since they will have to pay both i.e. STT and Capital Gain tax. Purely on Academic ground, the FM is right, i.e. somebody who worked by his own effort, is fully taxed and somebody who just takes advantage of the market, does not pay tax. But I think, inequities, imbalance, and something with which we, even today, why is CG taxed @ 10% under this budget whereas professional tax is paid @ 30% or more. So there is inevitably a distinction and this is so not because you want to favour someone, but because some other activity needs to be incentivised. So I personally don’t think that there is anything wrong with the old section 10(23) by which the exemption was given for LTCG tax. Provided there is one lacuna, the finance bill has required or has provided that STT should’ve been paid both at the time of purchase and at the time of sale. That was the position. However, there is a question and answer which has come today, I went through it. It said, even if no STT was paid at the time of purchase, because it was not payable, that should not disqualify. There is one doubt in my mind which has been resolved.

Dr. Girish Ahuja, Chartered Accountant:

S.112A : Important and Dangerous Provision : Long Term Capital Gain is not taxable. Rumours are that even though LTCG tax has been levied, STT should have been withdrawn. Such a rate of 10% has been chosen due to the presentation of wrong facts. It was told that there has been a Long Term Capital Gain of Rs.3,47,000 crore. And revenue through tax can be generated from here. Without appreciating that many companies would have also incurred a loss, and such loss may not have been set off against this figure of gain. Without doing so, tax has been levied. S.112A now states that, not withstanding anything contained in S.112, where gross total income of an assessee shall be taxable as per sub-section 2 of S.112A if there is a capital gain and the capital gain is on account of transfer of shares on which the securities transaction tax has been paid at the time of its acquisition as well as at the time of its transfer and if it is a mutual fund, STT should have been paid at the time of transfer. Also, it should be a long term capital gain. The amount of tax would be 10% on an amount exceeding 1,00,000/- i.e. only on the amount over and above 1,00,000/-. It has also been mentioned, that if the total income of an Individual or an HUF from other sources is less than the exemption limit, then, so much of the capital gain will be shifted to other income to claim full exemption of 2,50,000 or 3,00,000 or 5,00,000 as the case may be.

It would be advisable that such gain may now be earned in the name of the senior or very senior citizens so that it is profitable, in case they do not have any other source of income.

Sub-section 4 states that a notification will be issued to notify as to which transactions, even if the STT is not paid, there would not be a problem.

Sub-section 5 is adverse to the assessee where the benefit of indexation has not been provided to the assessee and if a non-resident, the no benefit of Proviso 1 as well. For eg: I have listed shares. If I sell it off-market, I have an option to pay, either a rate of 20% after taking the benefit of indexation or to pay a rate of tax @10% without taking the benefit of indexation. But if I have listed shares and I sell it on the stock exchange, then I will have to pay tax @10% and I will not even have the benefit of Indexation. But yes, in Sub-section 6, a grand-fathering clause has been inserted, which is very interesting. It has been mentioned that till 31st January, 2018, whatever appreciation in the value of the share has taken place, such amount shall not be considered for the purpose of taxation, if it is long term in nature, up to 31st January, 2018. The benefit is, no tax need to be paid on the profit and if there is a loss then the entire loss will be allowed. Eg: Cost of acquisition minus consideration will give us the Capital gain. How do we compute the cost of acquisition? Take A and B. A is the Actual cost of acquisition. B will be lower of the two i.e. fair market value on 31st January, 2018 and sale price. Now compare this amount with that of A and the higher of the two will have to be taken. For eg: share is taken at Rs.100, sold at 150, the grandfathered value is 120, then only the difference between Rs.120 and Rs.150 would be taxed @30%. But assuming there is a loss i.e. the share is sold at 90, then the loss i.e. difference between 120 and 90, would be allowed. Loss is allowed to be set off from Capital Gains. Further, S.10(38) is still available till 31/3/2018, hence if there is any Long term capital asset and there could be a possible gain, it is advisable to sell the same so that nothing is taxable as Long Term Capital Gain. And even if not sold, even then, gains till 31th January 2018 will not be taxable anyways.

It has also been clarified that no deduction is allowed under chapter VIA from such profit. Further no rebate u/s 87A is also permitted.

A FEW OTHER EXPLANTIONS BY THE EXPERTS:

Section 36(1) : Marked to Market Losses (Clause 10):

S.E. Dastur, Senior Advocate:

Then deduction is allowable for mark to market or other expected loss computed in accordance with the income computation and disclosure standards. I for my part, am at a loss to understand how you can compute this according to the standards and also say that not only mark to market but any other expected loss. Now how can you show this is an expected loss and I should get deduction and supposing the expected loss does not fructify, what happens?

Saurabh N. Soparkar, Senior Advocate:

On account of foreign exchange fluctuation etc. we have to bring down the foreign currency valuation mark to market was an acceptable way of recording this transaction, SC had made certain observations, court had accepted that. Yet, ICDS stated that mark to market losses would not be allowed as a loss. This is being corrected and the amendment u/s 36(1)(viii) is that now it is expressly being provided effectively from assessment year 17-18. It is now being expressly stated that mark to market loss would be allowed as deductible expenditure, but it’s also been stated by 40A still be allowed only if its computed in accordance with ICDS not beyond that. On principal ICDS is to be allowed but otherwise computation is to be left on ICDS method of calculation.

Section 43CB : Computation of Income from Construction and Service Contracts : Percentage Completion Method  (Clause 15):

S. E. Dastur, Senior Advocate:

Another amendment introduced is Percentage completion method has to be followed in construction contracts.

You cannot say that I will follow the completion method just so that I have presumed the first 30 or 40 % has not been regarded. But after you have considered the first 40 %, you will be chargeable to tax. This may mean that you are chargeable to tax in year 1, 2 and 3 but if your expectations don’t come true, in year 4 you may have a loss on the actual completion of the contract. This against pre-pones the time of charging the profit to tax. The same provision also applies in respect of service contracts. They have to be also on the basis of proportionate completion. But one exception, if the contract is not to last more than 90 days, but if it is to last for 91 days, you must apply the proportion completion method. Now again it is for consideration whether, by expediting the time of paying tax, is much achieved, because in the overall limit, you are not increasing the quantum of tax you will collect. The Bom HC has stated more than once, that we don’t see since in provisions, which impose a tax liability, in year 1, which could have as well been accounted in year 3. But then as I say, when you are in the fourth year of your government and are not really conscious as to whether you will be there after 5 years, you want to collect it as soon as possible.

Saurabh N. Soparkar, Senior Advocate:

Being introduced from 1st April, 17, this section is in relation to method of accounting to be adopted for construction contract or for contract for providing services. ICDS has stated that you have to have only percentage of project completion method & you are not permitted to adopt project completion method. Delhi high court(supra) struck down this part of ICDS by holding that the only permissible method is not percentage completion method even  project completion method is acceptable. In order to now nullify the judgement the Sect. says that now you will have to follow only percentage completion method in accordance with ICDS, so what was held to be impermissible by Delhi high court like phoenix it’s being revived by being a part of the statute.

Even in relations to services contract, it will have to be on a percentage completion method, only exception is if the service is for less than 90 days, you can go by project completion method. If you are rendering multiple services, under 1 contract & it is not possible to find out what price is pertinent to what service then it will be spread over on a proportionate bases without applying of mind if important services rendered or yet to be rendered. This is a mandatory provision. But there is also a provision under sect. 145(1) an assessee in a given case can have cash or mercantile method of accounting. So if an assessee is rendering services like law, CA, architect etc. he is having cash method of accounting, but 43CB states you have to record profit only on percentage of completion method.

In ICDS (3) while computing income of a contractor whether the retention money will be taxed or not was an issue. Delhi high court states that retention money is not your income until the project is complete. & till the warranty period is over till then it will not be have offered to tax. There is again an amendment, for the purpose of computing revenue from a contract retention money will be taken as an income in the year in which it is received. Therefore Delhi high court judgement is held to be invalid.

Section 143 : Assessment (Clause 44):

S. E. Dastur, Senior Advocate:

I would like to draw your attention to one amendment and that is section 143(3): It is stated that the central government may frame a scheme to make assessments under 143(3) for, please hold your breaths, eliminating interface between the assessee and the AO so as to impart greater efficiency, transparency, accountability, optimising utilisation of resources through economies of scale and functional specialisation, introducing team based assessment, I do not know what team based assessment means, one officer will assess your capital gains, another officer will assess your income from other sources, with dynamic jurisdictional scheme and by notification, may direct, that provisions of the Act shall not apply or will apply with prescribed modifications, additions as specified in rules to be placed before the parliament. So therefore by rules, you can overcome whatever is the provision  in the Act. Is that constitutional? And what is meant by team based assessment? What is meant by Dynamic Jurisdiction? It is a good example of what Thomas Shandell observed 400 years ago, “ Words may be false and full of art if you don’t want to go back that long then you may quote Eliza Doolittle in my fair lady where she chunks ‘words, words, words, I am sick of words’…”. It is considered that eliminating face to face reaction with the officer is something good, but it only means that you have not confidence in your officers, because you think, face to face means corruption, but what about the honest assessee who wants to put forward his claim to an AO across the table. There are several things you cannot explain in writing, you may point to him, look at this I have done, how do you assess this? Which you cannot do when you write. Further, he makes an assessment, this all knowing CPU-central processing unit and you find some objection, they are supposed to give you a notice, you file an objection, who will it go before? Because there is a team of AOs. If you are objecting to Capital Gains, it will go to Mr. Nail, if you are objecting to IFOS, it will go to Mr. Patel, I don’t know. Further, you, what does he write, because he is supposed to peruse your response. I Have seen cases where the officer in rejecting your response says,, he repeats what he initially has dons and says, I have considered your response if any. Because the section says, he will consider the response if any. So if he is not sure that I have filed a response, how is he going to consider it? As is say, this is frustrating. One wants to pay tax honestly but doesn’t want to be cheated.

Then, Clause 6 of the proviso to 143(1), today says that, in making an intimation an addition cannot now be made under 143(1) for additional income appearing in form 26AS, form 16 or Form 16A. Does it mean that, he cannot make an intimation, but he can make an assessment invoking this? Now this, the real problem, with regard to these magical forces that you must have experienced, credit is not allowed for tax deducted, admittedly deducted, at source because the from filed by the payer who is the officer’s agent, not mine, he is deducting tax as the agent of the officer, not as my agent, the form filed does not reveal so much tax deducted at source, but there will be several reasons, but this is so. He may treat it as income of year one but the Assessee treats it as year 2 or the other way round. Then this action is contrary to decisions of all the HCs including the Bom HC in Yashpal Sahni vs. Rekha Hajarnavis, ACIT [2007] 293 ITR 539 (Bombay) (HC) as well as the decisions Asstt. CIT v. Om Prakash Gattani [2000] 242 ITR 638(Gauhati), Smt. Anusuya Alva v. Dy. CIT [2005] 278 ITR 206(Karn.), etc, which are to the effect that, ‘once tax is deducted at source, the person from whose income tax is deducted does not have to do anything further and the revenue has to give him credit for the tax which is deducted. The CPU in not granting proper credit, acts not only contrary to these decision, contrary to the provisions of 205 but also contrary to the circulars which the board has itself issued. And the board takes no action in the matter. You issue a circular to satisfy a person to show, that look, I have issued this. But do you implement it? Also the Delhi HC has laid down certain rules in the case of Court On Its Own Motion v. CIT [2013] 352 ITR 273 (Delhi)(HC). These are also flouted and what remedy do you have?

Saurabh N. Soparkar, Senior Advocate:

Now it’s being proposed that, that sec. 143(1) adjustments would not cover adjustments on account of discrepancy of return on income & form 26AS, 16A, or form 16.

Policy amendment, for greater efficiency transparency and accountability, we may not have assessments being carried out @ same geographical location at which assessee’s situated. So if I file my assessee in Ahmadabad it can go anywhere in India, not only that they intend to break up the return, on I assume some logical basis & then these people will interact with me only through email. The idea is that there is no interface between the assessee and the officers secondly they also want to bring specialization in the matter of assessment. But disadvantage is that in large number of cases personal hearing is necessary to communicate effectively, because a lot of times after communicating multiple times the assessee officer does not understand or does not want to understand. Because you need great communicating skills, even though there are great language barriers throughout in India. The proposal is by 31st March,2020 they will lay down the schemes, they have only taken the power to formulate the scheme but it’s not formulated yet. That it will happen first in the house of parliament and after the approval it will be implemented.

Section 253 : Appeals to the Appellate Tribunal (Clause 50):

S.E. Dastur, Senior Advocate:

271J provides for imposition of penalty on an accountant, a merchant banker or a registered valuer who was furnished incorrect information in a report or certificate, a penalty of 10000 per default can be charged. Now penalty is charged by either the AO or the commissioner. It is provided that by amending S.253, that where the penalty is charged by the commissioner, an appeal will lie to the tribunal, but there is no provision, that when there is a penalty would be charged by the AO, an appeal will lie to the commissioner. So if the AO imposes this penalty on an accountant, he has no recourse, but if the commissioner imposes it, he can file an appeal. So, again as I said, total irrationality.

Rate of Tax for Companies: W.E.F. A.Y. 2019-20:

S. E. Dastur, Senior Advocate:

A new era of tax rates have come into being. Its seeds were sown in 2017. I refer to the rate of 25% which will be applicable to the predominate % of companies. Where the turnover does not exceed 250 crores. If the turnover exceeds 250 crores then tax will be payable @ 30%. Apparently only 7000 companies have turnover in excess of 25 crores. And this is a very small percentage of the total number of companies registered.

Dr. Girish Ahuja, Chartered Accountant:

Promise of reducing the tax for domestic companies has been done i.e. from 30% to 25%. Last time an attempt had been made i.e. A.Y. 2015-16 that who had a turnover of over 250 crore, would be paying a tax of 25%. This time , turnover of 250crore or less, the rate has been reduced from 30% to 25%. There are 8,91,000/- whichever under this. Only 1% companies i.e. 9000 companies have turnover over 250 crores. Therefore 99% of the companies practically now will be paying tax @25%. Why not for partnership or LLP. Answer is they don’t stand on the same footing. In case of a company, after tax of 25%, cess and surcharge if any, they also have to pay Dividend Distribution Tax. DDT is around 20%. Therefore in effect it is 25% along with 20%. However, for LLP and partnership, such tax is not there. In case of partnership, one more thing is allowed i.e. interest on capital. Maybe 12%, but it is available. There is no question of deduction of interest of share capital. So the answer is very obvious why the companies and partnerships and LLPs stand on a different footing. For a company, some relaxation had to be given because of the reason of the high Dividend Distribution tax also.

Further, Analysis of Union Budget, 2018 – Public Awareness Programme, had been conducted by the Southern India Regional Institute of the Chartered Accountants of India, Bangalore Branchm where an interactive meeting with eminent panellists to understand the impact of Budget, was organised. The moderators were Mr. T.V. Mohandas Pai and Mr. Padamchand Khincha, Chatered Accountants.

The eminent panellists were Mr. K. S. Ravi Shankar, Advocate, Mr. N. G. N. Puranik, Mr. R. K. Misra and Prof. Pulak Ghosh.

Panellists have discussed impact of the Budget on various sectors such as Insurance Scheme, Agriculture, Education, Infrastructure, GST, Corruption, Tax terrorism, Lack of Accountability, Litigation, Urbanisation, etc.

Source: AIFTP Journal – February 2018

[For reference – Link available on itatonline.org]

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