INDIA BUDGET 2019-20

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Non-Corporate Assessee Enhancement in Surcharge rate for super rich

person [w.e.f AY 2020-21] Individual, HUF, AOP, BOI or Artificial Judicial Person having taxable income of more than ₹ 2 Crs. and upto ₹ 5 Crs. shall have to pay surcharge @ 25% on the tax amount resulting in maximum marginal rate (MMR) of 39%. The said assessees having taxable income above ₹ 5 Crs. shall have to pay surcharge @ 37% on tax amount resulting in MMR of 42.74%. Hitherto, they were liable to surcharge of 15%.

Deduction of interest on loan taken for acquiring affordable house [Sec. 80EEA] [w.e.f AY 2020-21] New deduction u/s 80EEA upto ₹ 1.5 lacs proposed to be granted in respect of interest on loan taken for residential house property from any financial institution for loan sanctioned during the period 01-04-2019 to 31-03-2020, provided the assessee does not own any residential house property on the date of sanction of loan and the stamp duty value of such house property does not exceed ₹ 45 lacs. Above

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deduction is over and above the deduction of ₹ 2 lacs already available u/s 24(b).

Deduction of interest on loan taken for purchase

of Electric Vehicle [Sec. 80EEB] [w.e.f AY 2020-21] New deduction u/s 80EEB upto ₹ 1.5 lacs proposed to be granted in respect of interest on loan taken for purchase of electric vehicle from any financial institution for loan sanctioned from 01-04-2019 to 31-03-2023.

Deduction of Tax at Source on payment made for contractual work or professional fees by an Individual or HUF [Sec. 194M] [w.e.f 01-09-2019]

Sec. 194M proposed to be inserted to provide for deduction of tax at source by an individual or HUF (who are not required to deduct tax u/s 194C or 194J) @ 5% on the sum paid or credited on account of contractual work or professional fees to a resident if the aggregate payment exceeds ₹ 50 lacs in a year. Such tax can be deposited using PAN and obtaining of TAN is not required.

Mandatory filing of Return of Income by certain person [Sec. 139] [w.e.f AY 2020-21]

It is proposed that a person who claims rollover benefit of exemption from capital gain on investment in a house or a bond or other assets u/s 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB, shall necessarily be required to furnish its return of Income, if before claim of the rollover benefits, his total income is more than the maximum amount not chargeable to tax.

It is proposed that a person who enters into certain high value transactions like deposit of sums above ₹ 1 Cr. in current account, foreign travel expenditure above ₹ 2 lacs or electricity bill above ₹ 1 lac has to compulsorily furnish his Return of Income.

Incentives for investment in eligible start-ups [Sec. 54GB] [w.e.f AY 2020-21]

To incentivise investment in eligible start-ups, exemption from Capital Gains on transfer of residential property u/s 54GB proposed to be amended as under:

- Sunset date for availing exemption u/s 54GB

extended from 31-03-2019 to 31-03-2021. - Condition of having minimum shareholding

or voting power of 50% has been relaxed to 25%.

- Erstwhile restriction of transfer of new computer or computer software reduced from 5 to 3 years.

Other Amendments

Tax relief allowable u/s 89 (in case of salary

paid in arrears or advance) to be considered while computing self-assessment tax u/s 140A, interest u/s 234A, 234B & 234C [w.r.e.f AY 2007-08].

Threshold limit of tax payable for initiation of prosecution proceedings u/s 276CC for non-filing of Return of Income proposed to be increased from ₹ 3,000/- to ₹ 10,000/-. Hitherto, tax payable is computed by granting credit for advance tax and TDS. It is now proposed to also grant credit for TCS and self-assessment tax paid before the expiry of the assessment year [w.e.f AY 2020-21].

Exemption u/s 10(12A) on withdrawal from

National Pension System Trust (NPS) on either closure of account or opting out of pension scheme proposed to be increased from 40% to 60% of the total amount payable to him [w.e.f AY 2020-21].

Sec. 80CCD granting deduction for

contribution to NPS proposed to be amended to provide increased deduction of 14% of salary (currently 10%) to employee where contribution is made by Central Government [w.e.f AY 2020-21].

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Sec. 80C proposed to be amended to provide deduction for amount deposited by a Central Government employee as contribution to Tier-II account of the pension scheme for a fixed period of not less than 3 years and in accordance with scheme to be notified [w.e.f AY 2020-21].

Hitherto, tax is deducted u/s 194DA @1% on

gross amount paid under life insurance policy which is not exempt u/s 10(10D). It is now proposed to deduct tax @5% on net amount i.e. only on the income component (total sum received less insurance premium paid) [w.e.f 01-09-2019].

Every person required to quote his PAN can

now quote his Aadhaar number and such person shall be allotted a PAN in the prescribed manner [Sec. 139A] [w.e.f 01-09-2019].

Corporate Assessee Tax rates [w.e.f AY 2020-21]

Corporate Tax Rate for domestic companies having annual turnover or gross receipts ≤ ₹ 400 Crs. (earlier ≤ ₹ 250 Crs.) in FY 2017-18 shall be 25%. For other domestic companies, Corporate Tax Rate remains unchanged @30%.

Tax on Buy-back of shares by listed companies

[Sec. 115QA & Sec. 10(34A)][w.e.f 05-07-2019] Sec. 115QA proposed to be amended to provide that buy-back of shares by listed companies shall be charged to additional income tax @20%. Hitherto, it is applicable only on buy back by unlisted companies. Consequentially, income arising to shareholders on account of such buy-back of shares shall also be exempted from income tax u/s 10(34A).

Amendment for eligible start-ups [w.e.f AY 2020-21]

Hitherto, for eligible start-ups, carry forward of losses is allowable u/s 79, if all the shareholders continued to remain shareholder despite breaching 51% of voting criteria as required for other closely held companies. It is now proposed to allow carry forward of losses by eligible start-ups by satisfying either 51% voting criteria or number of shareholders criteria.

Hitherto, Sec. 56(2)(viib) is not applicable on issue of shares by start-up companies on the aggregate consideration received in excess of FMV of shares on fulfilment of certain notified conditions. It is proposed to tax the excess consideration over the face value of shares in the year in which such notified conditions are violated.

Other Amendments

Sec. 2(19AA) proposed to be amended to

provide that in case of tax demergers, the requirement of recording property and liabilities of the undertaking(s) at book value by the resulting company shall not be applicable where the same is required to be recorded at a different value in order to comply with IND AS requirements [w.e.f AY 2020-21].

Hitherto, Sec. 43D provides that interest

income in relation to certain categories of bad/doubtful debts received by certain institutions, banks, corporations or companies is chargeable to tax in the year of credit to Profit & Loss Account or actual receipt, whichever is earlier. It is proposed to extend said benefit to deposit-taking NBFCs and systemically important non-deposit taking NBFCs [w.e.f AY 2020-21].

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Sec. 79 restricts carry forward of losses if there is specified change in shareholding. Hitherto, such restriction was not applicable if there is change in shareholding for the companies pursuant to resolution plan approved under Insolvency and Bankruptcy Code, 2016. Such benefit is proposed to be extended to companies & its subsidiaries (including step down subsidiary) where NCLT makes order for changing the Board of Directors & Shareholding u/s 242 of the Companies Act, 2013. Amendment also proposed in Sec 115JB for allowing set off of aggregate amount of unabsorbed depreciation and losses brought forward to the said companies [w.e.f AY 2020-21].

International Taxation & Transfer Pricing Provisions of Deemed Income u/s Sec. 56(2)(x)

extended to persons outside India [Sec. 9(1)(viii)] [w.e.f 05-07-2019 (AY 2020-21)] It is proposed that any sum of money paid or property situate in India transferred by a person resident in India to a person outside India, on or after 05-07-2019, without or for inadequate consideration [& not exempt under sec. 56(2)(x)], shall be deemed to accrue or arise in India in the hands of such person and taxable under & in terms of sec. 56(2)(x). The treaty benefits, if any available, shall continue to apply to such income.

Conditions for Special Taxation Regime for offshore funds relaxed [Sec.9A] [w.r.e.f AY 2019-20] (i) Hitherto Corpus of the offshore fund was required to be at least ₹ 100 Crs. at the end of previous year in which it was established or incorporated. Now it is proposed that the said criteria is to be met at the end of a period of six months from the end of the month of its establishment or incorporation or at the end of such previous year, whichever is later; (ii) the remuneration paid to an eligible fund manager is not less than the amount calculated in such

manner as may be prescribed (instead of existing arm’s length criteria).

Interest on rupee denominated bonds [Sec.10(4C)] [w.r.e.f AY 2019-20] Exemption is proposed to be granted to non-residents in respect of interest on offshore rupee denominated bond (referred to in Sec. 194LC) issued by any Indian Company or a business trust, during the period from 17-09-2018 to 31-03-2019 payable to a non-resident including a foreign company.

Advance Pricing Agreements (APA) – power of AO [Sec. 92CD] [w.e.f 01-09-2019] Where Return of Income has been modified in accordance with Advance Pricing Agreement (APA) after completion of assessment or re-assessment proceedings, it is proposed that the AO will be entitled to modify total income only in accordance with APA and no other modification can be done. [This amendment being clarificatory in nature may be claimed as retrospective in operation]

Secondary Adjustment Provisions under Transfer Pricing (TP) rationalized It is proposed that Secondary Adjustment under TP provisions shall not apply to APAs signed before 01-04-2017. It is further proposed to clarify that secondary adjustment shall not be applicable up to AY 2016-17 and that for any subsequent AY(s), the same is not applicable, if the primary adjustment does not exceed ₹ 1 Cr. [Sec. 92CE] [w.r.e.f AY 2018-19]. Under Secondary Adjustment Provisions, interest at the specified rate (One Year MCLR of SBI plus 325 bps in case of INR transactions and 6 months’ LIBOR plus 300 bps in case of Foreign Currency Transactions) on primary adjustment (treated as excess amount or advance) is required to be considered as income if the excess money is not repatriated within prescribed time. An option now has been proposed to the assessees to pay one time additional income tax @ 18% (plus

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surcharge thereon @ 12% & Cess @ 4% on tax & surcharge) on such excess money in case of non-repatriation within the prescribed time and no interest shall then be computed from the date of payment of such tax [Sec. 92CE] [w.e.f 01-09-2019].

Scope of Master File Provisions widened [Sec. 92D] [w.e.f AY 2020-21] Provisions relating to filing of ‘Master File’ are proposed to be made applicable to constituent entity of an international group even if there is no international transaction undertaken by such constituent entity.

Online Application for nil or lower Withholding Tax [Sec.195] [w.e.f 01-11-2019] Online filing of applications u/s 195(2) and 195(7) proposed to be allowed; the form of application and the manner of determination of appropriate portion of sum chargeable to tax to be prescribed.

Withholding Tax on payment to non-residents – Relaxations Provisions related to deductor not being treated as assessee in default for non-deduction of tax from payment made to residents, now proposed to be extended to payment to non-residents, upon fulfilment of prescribed conditions. Similarly, provisions relating to levy of interest are also proposed to be extended to payment to non-residents [Sec. 201] [w.e.f 01-09-2019]. It is proposed that there will be no disallowance u/s 40(a)(i) and 40(a)(ia) in such cases [w.e.f AY 2020-21].

Provisions for Cross-country Tax Recovery expanded: [Sec. 228A] [w.e.f 01-09-2019] Recovery of tax by the Foreign Government from a resident in India and by Indian Government from a resident of a foreign country is proposed to be permitted even if the property details are not available.

Accounting Year of Country-by-Country Report (CbCR) rationalized [Sec. 286] [w.r.e.f AY 2017-18] It is proposed that Accounting Year in case of Alternate Reporting Entity of an International Group, resident in India, shall be an annual accounting period as applicable to the parent entity for the purpose of CbCR provisions.

Other Relevant Proposals Sec. 12AA proposed to be amended to provide

that at the time of granting registration to a Trust or Institution, the Pr. CIT/ CIT shall also satisfy himself about the compliance with the requirement of any other law which is material for achieving the object of the Trust or Institution. The Pr. CIT/ CIT may cancel registration of the Trust or Institution, if it is found that they are not complying with the requirement of any other law and such non-compliance has either not been disputed or has attained finality [w.e.f 01-09-2019].

Sec. 111A proposed to be amended to extend concessional rate of tax for STCG (@15%) to funds set up for disinvestment of Central Public Sector Enterprises [w.e.f AY 2020-21].

Sec. 194-IA proposed to be amended to provide for deduction of tax at source not only on sale consideration for transfer of immovable property but also on all charges in the nature of club membership fee, car parking fee, electricity and water facility fees, maintenance fee, advance fee or other similar charges incidental to transfer of immovable property [w.e.f 01-09-2019].

Sec. 239 proposed to be amended to provide that furnishing of Return of Income u/s 139 shall be sufficient to claim refund and filing of Form No. 30 is not required [w.e.f 01-09-2019].

Sec. 270A proposed to be amended to cover mechanism for levying penalty for under-reporting and misreporting of income in case Return of Income is furnished for the first time u/s 148 [w.r.e.f AY 2017-18].

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Sec. 43B proposed to be amended to provide for deduction of interest payable on loans/borrowings from deposit-taking NBFCs or systemically important non-deposit taking NBFCs on payment basis [w.e.f AY 2020-21].

Sec. 80-IBA proposed to be amended to provide that a housing project approved on or after 01-09-2019 shall be eligible for tax holiday if the carpet area of each residential unit does not exceed 60 sq. mtrs. (if project located within metropolitan cities) or 90 sq. mtrs. (in other cases) and stamp duty value of a residential unit in the housing project does not exceed ₹ 45 lacs [w.e.f AY 2020-21].

Rule 68B of the Second Schedule of the Act proposed to be amended to extend the period of limitation from 3 years to 7 years for sale of attached immovable property. Board is authorised to extend it by further 3 years for reasons recorded in writing [w.e.f 01-09-2019].

Income Declaration Scheme, 2016 introduced by Finance Act, 2016 proposed to be amended to authorise Central Government to extend time limit for payment of tax, surcharge and penalty payable under the scheme along with interest @ 1% p.m. Further, provisions enabling refund of tax, surcharge and penalty for excess amount paid also proposed to be inserted [w.r.e.f 01-06-2016].

For the purpose of levy of STT in case of sale of options, where the option is exercised, the value of taxable securities transaction proposed to be the difference between strike price and settlement price, instead of settlement price [w.e.f 01-09-2019].

Sec. 115UB r.w Sec. 10(23FBA) provides for pass through of income of Category I & II AIF to unit holders except business income which is taxable at AIF level. However, pass through of losses is not permitted to be carried forward. It is now proposed to amend Sec. 115UB to provide mechanism for carry forward of losses in the following manner :

- Business loss shall be carried forward and set off in the hands of AIF.

- Losses under other heads shall be available

for utilisation and carry forward in the hands of the unit holder provided corresponding units are held by him for at least 12 months. In any other case, such loss shall be ignored.

- Losses other than business loss accumulated

at the AIF level upto 31-03-2019 shall be deemed to be the loss of the unit holder who held the units as on 31-03-2019 and shall be eligible to be carried forward for the remaining period, computed from the year of incurrence of loss in the hands of AIF.

It is proposed that every person who does not

have a PAN but enters into certain prescribed transactions like purchase of foreign currency or huge withdrawal from banks shall apply for allotment of PAN [w.e.f 01-09-2019].

To enable pre-filling of return of income, Sec. 285BA proposed to be amended to widen the scope of reporting of financial transactions by certain prescribed persons and threshold limit of ₹ 50,000/- has also been done away with. Failure to comply with the above requirement, shall result in penalty of ₹ 50,000/- [w.e.f 01-09-2019].

Sec. 50CA [FMV of unlisted shares deemed to be Sale consideration for computing Capital Gains] & Sec. 56(2)(x) [receipt of property for no or inadequate consideration] proposed to be amended to provide that both the sections shall not apply to certain class of persons to be notified by the Board and subject to certain conditions [w.e.f AY 2020-21].

Sec. 56(2)(viib) proposed to be not to apply where consideration for issue of share is received by a venture capital undertaking from Category II Alternative Investment Fund regulated by SEBI (Alternative Investment Fund) Regulations, 2012 [w.e.f AY 2020-21].

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Sec. 206A proposed to be amended for filing quarterly return electronically instead of computer readable media (Floppy, diskette, etc.). Further, amendment is proposed to increase the limit for payment of interest by banking company, co-operative society or public company for filing quarterly return from ₹ 10,000/- to ₹ 40,000/- [w.e.f 01-09-2019].

To encourage payments other than cash, in

addition to existing permissible modes of payments in the form of account payee cheque, account payee bank draft or electronic clearing system, other electronic modes (to be prescribed) are proposed to be included in all the relevant sections of the Act.

Sec. 194N proposed to be inserted to provide for deduction of tax at source by a Banking Company, Co-operative Bank or Post Office @ 2% on cash withdrawal exceeding ₹ 1 Cr. during the previous year [w.e.f 01-09-2019].

Sec. 269SU proposed to be inserted to provide that any person carrying on business and having annual sales turnover or gross receipts exceeding ₹ 50 Crs. in the immediately preceding previous year shall provide facility for accepting payment through the prescribed electronic modes. Sec. 271DB is also proposed to be inserted to levy penalty of ₹ 5,000/- per day for failure to comply with the above [w.e.f 01-11-2019].

Various incentives proposed to be granted for business carried on from an International Financial Service Centre (IFSC) like exemption from DDT, specified Capital Gains, exemption of specified interest income, tax holiday of 100% for 10 years and others.

Hon’ble Finance Minister highlighted in her

budget speech that :

- cases selected for scrutiny shall be allocated to assessment units in a random manner and notices shall be issued electronically by a Central Cell without disclosing the name, designation or location of the AO.

- pre-filled tax returns will be made available to assessee which will contain details of salary income, capital gain, bank interest and dividend, etc.

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Goods and Services Tax Amendments proposed in the Central Goods & Services Tax Act, 2017 (Effective date to be notified coinciding with amendments in SGST Acts. Some of these amendments, formalised in the Act, were already notified and made effective earlier) Alternate Composition Scheme (concessional tax

@ 3% CGST and 3% SGST)

Available to supplier of services or a mixed supplier (goods and services) with an aggregate

turnover in the preceding FY upto ₹ 50 lacs. Interest or Discount received from deposit, loans & advances not to be included for computation of aggregate turnover for the composition levy [Sec. 10(2A)].

National Appellate Authority for Advance Ruling (NAAAR) constituted [Sec. 101A to Sec. 106]

National Appellate Authority for Advance Ruling (NAAAR) is proposed to be constituted for hearing appeals against conflicting advance

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rulings by the Appellate Authorities in appellant’s own case.

Facility for inter head transfer [Sec. 49]

Facility for transfer of amount from one account head to another in electronic cash ledger is proposed to be permitted through new Form PMT-09 [Sec. 49].

Other Amendments Amendment proposed for composition

taxpayers to furnish annual return instead of quarterly return. However, Quarterly payment of tax to continue [Sec. 39].

Threshold exemption for registration

proposed to be increased to ₹ 40 lacs for supplier of goods only [Sec. 22].

Commissioner proposed to be empowered to

extend due date for furnishing GSTR – 9 (Annual Return), GSTR – 9C (GST audit certification) and monthly/annual statement by the E-Commerce Operator [Sec. 44 and Sec. 52].

Interest on delayed payment of tax proposed

to be calculated on tax payable less ITC. Not applicable for cases where returns are filed consequent to proceedings initiated by Revenue [Sec. 50].

Refund of State taxes proposed to be

disbursed by Central Government also [Sec. 54].

To encourage electronic payments,

specified suppliers are mandatorily proposed to be required to give Digital Payment option and mode to its customers [Sec. 31A].

Taxpayer identification through Aadhaar

authentication of Authorised person for specified class of existing/ new taxpayers are proposed to be introduced [Sec. 25].

National Anti-profiteering Authority is proposed to be empowered to impose penalty equivalent to 10% of the profiteered amount. No penalty in case the profiteered amount is deposited within 30 days from passing of the order [Sec. 171].

Service Tax (subsumed in GST) Retrospective Exemptions provided in respect

of the following:

Service Period of service

Services provided by the State Government for grant of liquor license against consideration (license fee or application fee)

01-04-16 to 30-06-17

Services provided by the IIMs except Executive Development Programme

01-07-2003 to 31-03-16

Services of granting long term lease of 30 years or more of plots for development of infrastructure for financial business, by the State Government Industrial Development Corporations or Undertakings owned by Government, where the Consideration is collected in the name of upfront amount (called as premium, salami, cost, price, development charges or by any other name)

01-10-13 to 30-06-17

Excess tax paid, if any, proposed to be refunded upon filing of application within six months of enactment of Finance Bill, 2019.

Central Excise (Non-GST items) [w.e.f 06-07-2019] Exemption provided to the goods specified under

Chapter 24 (Tobacco and manufactured tobacco) has been withdrawn and new rates introduced in the respective Chapter heading.

Excise Duty on crude petroleum (Pitch Coke) levied by ₹ 1 per tonne.

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Road and Infrastructure Cess and Special Additional Excise Duty levied on Motor Spirit (Petrol) and High Speed Diesel Oil increased by ₹1 per litre each.

Custom Duty Customs Duty Rates [w.e.f 06-07-2019]

Customs duty exempted on certain imported parts used in electrical vehicles.

Customs duty exemption provided on import

of defence equipment and their parts.

Export duty reduced on raw hides and semi-finished leather.

Basic Customs duty on input and raw

materials reduced in some sectors like Chemicals, Textile, Steels and other base metals & capital goods.

Customs Act, 1962 [To be effective from the date

of enactment of Bill]

Filing of Departure Manifest by a notified person (other than the person-in-charge of a conveyance) proposed to be allowed [Sec. 41].

Personal identification through Aadhaar No.

proposed to be introduced as an anti-smuggling measure [Sec. 99B].

Body scan by Customs Officer in certain

cases proposed to be permitted [Sec. 103].

Power to arrest any person for any offense committed under the Customs Act, 1962 even if he is in outside India is proposed to be inserted [Sec. 104].

Power to provisionally attach bank account

to protect the interest of the revenue, which may be released upon fulfilment of certain conditions is proposed to be inserted [Sec. 110].

Penalty is proposed to be imposed in case any person obtains an instrument by fraud, wilful misstatement or suppression of facts and uses it for payment of duty. Further, if the duty involved exceeds ₹ 50 lacs, it shall also be a punishable offence [Sec. 114AB & 135].

Maximum general penalty cap increased [Sec.

158] - For violation of Rules and Regulations from

₹ 50,000 to ₹ 2,00,000 - For violation of provisions of the Act from ₹

1,00,000 to ₹ 4,00,000

Others

Introduction of Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 [effective date to be notified]

New Amnesty Scheme proposed to be

introduced for disposal of tax disputes (including cess), under Central Excise, Service Tax and other Miscellaneous Central Acts, pending before adjudicating or appellate authority as on 30-06-2019. It is proposed to be applicable to all persons with certain exceptions and conditions.

Relief proposed under the scheme:

Conditions Relief where

quantum of duty involved ₹

50 Lacs Pending at SCN stage

70% of Duty 50% of Duty

Pending as amount in arrear

60% of Duty 50% of Duty

Matter at enquiry/audit stage

70% of Duty 50% of Duty

Full waiver of penalty & interest

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Benami Property Transactions Act, 1988 Sec. 23 proposed to be amended to empower

Initiating officer to conduct inquiry on issuance of notice u/s 24(1) without prior approval [w.r.e.f 01-11-2016].

For provisional attachment of property, period of 90 days shall be computed from the end of the month in which notice is issued instead of date of notice[w.e.f 01-09-2019]

While computing period of limitation for various provisions, period during which proceedings is stayed by an order or injunction of court shall be excluded. Further, it is proposed that the minimum number of days available with the Initiating Officer for passing the order after excluding the aforesaid period shall be 30 days [w.e.f 01-09-2019].

Sec. 54A proposed to be inserted for levy of penalty of ₹ 25,000 for each failure to comply with summon or furnish information without sufficient cause [w.e.f 01-09-2019].

AMENDMENT OF OTHER ACTS – AT A GLANCE

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Sec. 54B proposed to be inserted to consider entries in the records or other documents in the custody of an authority as admitable evidence in prosecution proceedings [w.e.f 01-09-2019].

Prior permission of “Competent Authority” instead of “Board” required to be obtained before institution of any prosecution against any person under this Act. Competent Authority means a Commissioner, Director, Principal Commissioner or Principal Director of Income-tax [w.e.f 01-09-2019].

Black Money Act, 2015

It is proposed to widen the definition of

“assessee” to include therein person being a non-resident or not ordinarily resident in India, if he was resident in India either in the previous year to which the income relates, or in the previous year in which the undisclosed asset located outside India was acquired. Further, Sec. 17 of Black Money Act is proposed to be amended to enhance power of CIT(Appeals) to vary the penalty order so as to enhance or reduce the penalty [w.r.e.f 01-07-2015].

Reserve Bank of India Act, 1934 (RBI) Sec. 45-IA proposed to be amended to empower

RBI to specify amount of net owned funds (NOF) not exceeding ₹ 100 Crs. (from ₹ 2 Crs. earlier) and different amounts of NOF for different categories of NBFCs.

As part of strengthening the regulatory authority

of RBI over NBFCs:

- Sec. 45-ID and Sec. 45-IE proposed to be inserted to empower RBI to remove director from office or supersede Board of Directors for a period not exceeding 5 (five) years of NBFCs, in public interest and other prescribed situations.

- - Sec. 45MBA proposed to be inserted to

provide that RBI may frame a scheme involving amalgamation / reconstruction /splitting of an NBFC if it is in the public

interest or in the interest of financial stability. Such scheme may provide for reduction of pay and allowances of senior management, cancellation of shares held by senior management or sale of assets of NBFC.

- Sec. 45NAA proposed to be inserted to

empower RBI to furnish information relating to the business or affairs of Group Company of such NBFC or cause an inspection or audit of such group company.

Sec. 45MAA proposed to be inserted to empower

RBI to remove or debar the Auditor of any RBI regulated entity for a maximum period of 3 years in cases where auditor fails to comply with any direction or order of RBI.

National Housing Bank Act, 1987 (NHBA)

Amendment is proposed to transfer of regulatory

authority over the housing finance sector from the National Housing Bank to RBI.

Sec. 29A proposed to be amended to provide

mandatory registration and requirement of maintaining NOF of ₹ 10 Crs. (earlier ₹ 2 Crs.) for housing finance institutions which are companies.

Miscellaneous

Hon’ble finance minister highlighted in her

budget speech that minimum public shareholding in the listed company shall be increased to 35% from current 25%.

CONTACT US

To know more about Baker Tilly DHC, please visit www.bakertillydhc.co.in or any of our offices as mentioned below: Corporate Office: 701, Leela Business Park, Andheri Kurla Road, Andheri (E), Mumbai - 400 059 Tel: +91 (22) 6672 9999

Corporate Office: Constantia, "B" Wing, 7th floor, 11, Dr. U.N. Brahmachari Street, Kolkata - 700 017 Tel: +91 (33) 4002 1485

Ahmedabad 407-A, Pinnacle Business Park, Corporate Road Prahlad Nagar, Ahmedabad – 380 015 Tel: +91 (079) 4899 2768 Jaipur Office No. 42-43, 6th Floor, Mahima Triniti, Swage Farm, New Sanganer Road Jaipur – 302 019 Tel: +91 (0141) 495 3235

Bengaluru No. 45, 1st Floor, 2nd Main, Sankey Road, (Above Indian Bank) Lower Palace Orchards, Bengaluru - 560 003 Tel: +91 (80) 6454 2545/6454 2546 No. 202, 2nd Floor, Spearhead Towers, No. 50-56, Margosa Road, Malleswaram, Bengaluru – 560 055 Tel. No: +91 (80) 2346 7914/15

Chennai 5B, A Block, 5th Floor, Mena Kampala Arcade, New No 18 & 20, Thiagaraya Road, T. Nagar, Chennai – 600 017 Tel: +91 (44) 2815 4192 Old No: 27, New No: 36 Nathamuni Street T. Nagar, Chennai – 600 017 Phone: +91 44 2815 0159 +91 44 2815 0044 +91 44 2815 0259

Pune Office No.301, Third floor , Lalwani Icon, Viman Nagar, Pune – 411 045

Gurugram DCT # 231, 2nd Floor, DLF City Court, Sikanderpur, Gurgaon - 122 002 Tel.: +91 (124) 428 7244

Hyderabad 1st Floor, Plot No. 47, Above Indian Bank Vittal Rao Nagar, Madhapur, Hyderabad – 500081 Tel: +91 (40) 4200 7771/0

New Delhi 3rd floor, 52-B, Okhla Industrial Estate Phase III, New Delhi - 110 020 Tel: +91 (11) 4711 9999

Kolkata Bagrodia Niket, 1st floor, 19C, Sarat Bose Road, Kolkata – 700 020 Tel: +91 (33) 4603 3014/16

Mumbai 42, Free Press House, Nariman Point, Mumbai – 400 021 Tel: +91 (22) 2287 1099/807/808

Devarati, 1st Floor, 8. Dr. Rajendra Road, Kolkata – 700 020 Tel: +91 (33) 2474 6303 +91 (33) 4037 2700

7th Floor. 701 & 702, C- Wing, Sree Ramdev Commercial Complex, Kandivali (West), Mumbai – 400 067 Tel: +91 (22) 2809 0752/56

For more information or for any queries, write to us at info@dhc.co.in

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