ICSI-NIRCMonthly l XXXVIX l

ICSI-NIRCMonthly l Volume l XXXVIX l Page 1-52 l No.2 l February 2021

NEWSLETTERInsight

U n i o n B U d g e t 2021-22

northern IndIa regIonal councIloffIce bearers

CS Vimal Kumar GuptaChairman, NIRC

CS SuSShil DaGaVice Chairman, NIRC

CS DeVenDer SuhaGSecretary, NIRC

CS himanShu harbolaTreasurer, NIRC

members

ex-offIcIo members

regIonal dIrector-nIro

CS amit GuptaRegional Council member

CS Gurvinder Singh SarinRegional Council member

CS Saurabh KaliaRegional Council member

CS Surya Kant GuptaRegional Council member

CS bhupesh GuptaRegional Council member

CS monika KohliRegional Council member

CS Suresh pandeyRegional Council member

CS Vinay ShuklaRegional Council member

CS Sonia baijalRegional Director-NIRO

CS hitender Kumar mehtaEx-Officio Member

CS manish GuptaEx-Officio Member

CS npS ChawlaEx-Officio Member

CS ranjeet pandeyEx-Officio Member

CS Vineet K. ChaudharyEx-Officio Member

ICSI-NIRC NewSleTTeR I FebRuaRy 2021 I 3

ContentS

the reGional CounCilChairman

CS ViMal KuMar GuptaVice-chairman

CS SuSShil DaGaSecretary

CS DEVEnDEr SuhaGtreasurer

CS hiManShu harbOlamembers (in alphabetical order)

CS aMit GuptaCS bhupESh Gupta

CS GurVinDEr SinGh SarinCS MOniKa KOhliCS Saurabh KaliaCS SurESh panDEy

CS Surya Kant GuptaCS Vinay ShuKla

Ex-Officio MembersCS hitEnDEr MEhtaCS ManiSh GuptaCS npS Chawla

CS ranjEEt panDEyCS VinEEt K. ChauDhary

regional DirectorCS SONIa baIjal

inside:

- From the Chairman, NIRC

- Glimpses

- articles

- CSbF

NIRC-ICSI NewSleTTeR » NIRC-ICSI Newsletter is generally

published every month. » articles on subjects of interest to company

secretaries are welcome. » Views expressed by contributors are their

own and the nirC-iCSi does not accept any responsibility.

» The NIRC-ICSI is not in any way responsible for the result of any action taken on the basis of the advertisements published in the newsletter.

» all rights reserved. » no part of this newsletter may be

reproduced or copied in any form by any means without the written permission of the nirC-iCSi.

» the write-ups of the issue are also available on the website of the nirC-iCSi.

published by :CS Sonia baijal, regional Director for and on behalf of northern india regional council of the institute of Company Secretaries of india, 4, prasad nagar institutional area, new Delhi-110005; E-mail: [email protected]; phones: 493433000; published at: nirC-iCSi, 4, prasad nagar instl. area, new Delhi.

© the northern india regional Council of the institute of Company Secretaries of india

4 I ICSI-NIRC NewSleTTeR I FebRuaRy 2021

Dear professional Colleagues,

Greetings from iCSi-nirC!

it is a matter of great privilege & honour for me

to communicate with you as Chairman, nirC. i am

indeed humbled by the best wishes and blessings

bestowed on me by all of you on taking over this

responsibility in our region. at the outset, i take

this opportunity to convey my sincere thanks &

gratitude to all my regional Council colleagues

for reposing confidence in me and electing me as

Chairman for the year 2021. i would also like to

place on record my heartfelt thanks to the senior

members of the profession who by their untiring

efforts, continued commitment and wholehearted

dedication have nurtured this profession to the

present level.

On behalf of Team NIRC, my heartiest

congratulation to CS nagendra D. rao & CS

Devendra V. Deshpande, newly elected president &

Vice president, iCSi respectively, on assuming their

august office for the year 2021. i am sure that under

their able leadership and guidance our profession

will attain newer heights. we got the opportunity to

felicitate CS nagendra D. rao, president, iCSi & CS

Devendra V. Deshpande, Vice-president, iCSi.

the year 2020 will be remembered in the history

of mankind for different reasons. but i will remember

it for the courage and determination shown by

human beings. we all have read that the true test

of character of person can be judged at the time of

difficulty and i must say that we all had shown the

most passionate side of human, be it distribution of

money, sanitizers, masks or empathy shown towards

the sufferers. i salute the Doctors, nurses, police force

and all the front line worriers. Further, i wish to place

on record the tremendous efforts put in by the team

iCSi in keeping the pace of the varied activities.

From the Chairman


Friends, it has been continuous endeavor of the

nirC to provide best possible services and facilities

to all its stakeholders. i take this opportunity to briefly

highlight some of the major activities / developments

that have taken place during the month of january &

February 2021:

one DaY Seminar

nirC organized Seminar on ‘appearances before

tribunals & Special Session on Stress Management’

on Sunday, the 17th january, 2021 at itC Fortune

Select hotel, Gurgaon. CS (Dr.) u. K. Chaudhary, past

president, iCSi & Senior advocate and Shri amogh

lila prabhu, Vice president, iSKCOn temple, Dwarka

were the Guest Speakers. this was the first physical

Seminar organized by nirC after a gap of around

10 months.

iCSi ConVoCation CeremonY oF northern

reGion

nirC organized iCSi Convocation Ceremony of

northern region on Monday, the 18th january, 2021

at itC Fortune Select hotel, Gurgaon. CS ranjeet

pandey, past president and Council Member, iCSi,

CS Manish Gupta, Council Member, iCSi and CS

Suresh pandey, immediate past Chairman, nirC-iCSi

distributed the certificates to around 600 members in

staggered timings.

CelebrationS oF 72nd republiC DaY

72nd republic Day was celebrated on tuesday,

the 26th january, 2021 at nirC prasad nagar, Delhi.

Flag hoisting ceremony was done following Social

Distancing norms. CS nagendra D . rao, president,

iCSi and CS Devendra V. Deshpande, Vice-president,

iCSi graced the occasion.

Webinar on union buDGet 2021-22

with a view to apprise all about the essence

of the union budget 2021-22, iCSi organized

webinar on tuesday, the 2nd February, 2021.

northern india regional Council-iCSi hosted the

webinar for all the Members and Students of

iCSi and we live stream the webinar on Social

Media - Facebook, twitter, youtube link, across the

country. More than 6000 participants attended

the live program throughout the Country. Dr. Girish

ahuja, Eminent tax Expert & past Central Council

Member, iCSi, CS bimal Kumar jain, Eminent tax

Expert were the Guest Speakers. CS nagendra

D . rao, president, iCSi and CS Vimal Kumar

Gupta, Chairman, nirC-iCSi addressed during the

webinar. the webinar witnessed rich deliberations

and extensive exchange of thoughts. the webinar

was well appreciated by the participants.

ViSit to ChapterS

with an objective to give hand holding with

the new team at Chapters and to have first- hand

assessment of the needs of the chapters and with a

motive of empowering and motivating the chapters,

i have personally visited Karnal Chapter of the

northern region and encouraged them for providing

all the facilities to students as well as members locally.

i have assured full support from nirC to them.

From the Chairman


proGramS bY ChapterS oF northern

reGion

Many chapters of nirC of iCSi are organizing

online as well as physical programs/webinars for

members like webinar on union budget 2021-

22. Social Distancing norms were followed by the

Chapters. it is observed that the attendance in

webinars is quite healthy. i request you to kindly

attend these online programs/ webinars and physical

programs in huge numbers and take advantage of

the faculties who are addressing on various topics of

relevance for us.

StuDentS aCtiVitieS

the Valedictory Session of 313th batch of

MSOp of nirC held on 30th january, 2021. we

distributed the MSOp Completion Certificates to

all the participants. we have also organized 8

days online Executive Development program for

students. we are organizing Online Classes for the

students of OtC at nirC for Executive programme

& professional programme. we organized Online

Career awareness programs for Students and

teachers of various Schools and Colleges. we

apprised the students and their parents about the

role of Company Secretary, Company Secretary

in Employment, Company Secretary in practice and

Eligibility, Validity and Cut-off Dates for registration

in CS. if you know schools/colleges that are willing

to organize Online/physical Career awareness

programs on ‘Career as a Company Secretary’

for their students, please write to us with details of

schools/colleges at [email protected]

ForthCominG aCtiVitieS

nirC is organizing various professional

development programs in the month of February,

2021 and March, 2021 on the various topics of

professional interest for our members. we have

started with One Day Seminars in physical at

Delhi/nCr. we will organize these Seminars by

following the social distancing norms and maximum

capacity allowed in mind. this is the reason that pre-

registration for the Seminars is must. the details of all

the programs are being uploaded on www.icsi.edu/

niro for your kind reference. i request all of you to

attend all these professional Development programs.

Friends, it is my earnest desire to have continued

interaction with all of you. i sincerely solicit opinion

and suggestions from all of you for further betterment

of the activities of nirC. please send your suggestions

at [email protected] .

with best regards,

CS Vimal Gupta

Chairman-nirC of iCSi

mob. 9983324282, 9314324282

From the Chairman


Republic Day celebRations on 26th JanuaRy, 2021 at niRc builDing, pRasaD nagaR, Delhi

l to r: CS himanshu harbola, treasurer, nirC-iCSi, CS Manish Gupta, Council Member, iCSi, CS nagendra D. rao, president, iCSi, CS Vimal Gupta, Chairman, nirC-iCSi, CS Devendra V. Deshpande, Vice-president, iCSi, CS Suresh pandey, immediate past Chairman, nirC-iCSi and CS Devender Suhag, Secretary, nirC-iCSi.

GlimpSeS

Felicitation oF cs nagenDRa D. Rao, pResiDent, icsi anD cs DevenDRa v. DeshpanDe, Vice-President, icsi on 26th January, 2021


seminaR on appeaRances beFoRe tRibunals & special session on stRess management on sunDay, 17th JanuaRy, 2021 at itc FoRtune select hotel, guRgaon

CS (Dr.) u. K. Chaudhary, past president, iCSi & Senior advocate and Shri amogh lila prabhu Vice president, iSKCOn temple, Dwarka addressing the participants. also Seen CS ranjeet pandey, past president and Council Member, iCSi, CS Manish Gupta, CS Suresh pandey and CS Monika Kohli, regional Council Member, nirC-iCSi.

Felicitation oF cs suresh Pandey, immediate Past chairman, nirc-icsi on sunday, 17th JanuaRy, 2021 at itc FoRtune select hotel, guRgaon

GlimpSeS


icsi Webinar on union budget – 2021 -22

Valedictory Function – 9th online msoP (313th batch)

1st Foundation day oF Karnal chaPter oF nirc-icsi

Dr. Girish ahuja, Eminent tax Expert & past Central Council Member, iCSi, CS bimal Kumar jain, Eminent tax Expert, CS nagendra D. rao, CS Vimal Gupta, CS Susshil Daga, Vice-Chairman, nirC-iCSi and CS himanshu harbola addressing the participants.

Screen View: CS Vimal Gupta, CS Susshil Daga, CS Devender Suhag, CS himanshu harbola, CS Suresh pandey and CS GS Sarin, past Chairman, nirC-iCSi addressing the participants during Valedictory Session.

Screen View of participants of 9th Online MSOp (313th batch).

CS Vimal Gupta, CS himanshu harbola, CS Surya Kant Gupta, regional Council Member, nirC-iCSi, CS GS Sarin, CS Sanjay bansal, Chairperson, Karnal Chapter of nirC-iCSi and other dignitaries.

GlimpSeS


brieF proFile

NIRC-ICSI GReetS pReSIdeNt & VICe-pReSIdeNt, ICSI

CS naGenDra D. raopresident, the iCSi

a Fellow Member of the iCSi, CS nagendra D. rao is a law Graduate from university of Mumbai and has a bachelor’s Degree in Commerce. he is a Designated partner and Founder of CS nagendra D. rao and associates, llp, a firm of practising Company Secretaries in bengaluru. he was elected to the Central Council of the iCSi for the term 2019-2022 and served as Vice-president of the iCSi for the year 2020 before being elected as president for 2021.

with over 15 years of experience in Corporate Sector he specializes in Corporate and Securities laws, Capital Markets transactions, business planning, Mergers & acquisitions, Financial restructuring, Strategic investment, Funds planning & arrangement etc. prior to setting up his whole-time practice, he has also worked in multinational companies.

he has been associated with the iCSi for several years now. he was elected to the Southern india regional Council for two terms viz., 2011-2014 & 2015-2018 and has served as Chairman for the year 2015. prior to that he was elected to the Managing Committee of the bengaluru Chapter of the iCSi for the period 2007-2010 and was elevated as Chairman during the year 2009.

CS nagendra D. rao was a member of the Central taxes, Corporate laws & GSt Committee of the Federation of Karnataka Chambers of Commerce & industry for the year 2018-19. he was a member of the Corporate affairs and taxation Committee of the bangalore Chamber of industry & Commerce during the period 2000 – 2004. as a recognition for his outstanding service rendered in the field of education CS nagendra D. rao was conferred the title “ViDya ViKaS” by Dr. D.G. Shetty Educational Society (r), Dharwad, Karnataka.

CS DeVenDra V. DeShpanDeVice president, the iCSi

a Fellow Member of the iCSi and a post Graduate in Commerce from pune university,CS Devendra V. Deshpande was elected to the Central Council of the iCSi for the term 2019 - 2022. he was the Chairman of iCSi Centre for Corporate Governance, research and training (CCGrt), Mumbai and iCSi Centre of Excellence (CoE), hyderabad in 2020. he is a nominee Director at iCSi iip. CS Deshpande also headed the Information Technology Committee of the ICSI for the year 2019. he was member of various committees Constituted by iCSi including Executive Committee, Corporate laws and Governance Committee, training & Educational Facilities Committee, placement Committee, pMQ Course Committee, Election reforms Committee and international affairs Committee for the year 2019.

he has been actively associated with the institute since 2004. Elected to the wirC of lCSi, for the term 2015 – 18, he served as Chairman of pune Chapter of wirC of iCSi in the year 2013 and was an active Managing Committee member for the period from 2007 - 2014.

CS Devendra V. Deshpande has been a practicing Company Secretary since 2004 and specialises in the field of Corporate laws, Foreign Exchange laws, audits under Company law and allied laws, Secretarial audit and Corporate restructuring.


brieF proFile

OFICe BeAReRS OF NIRC-ICSI FOR YeAR 2021CS Vimal Gupta, Chairman, nirC-iCSiCS Vimal Gupta is the Chairman of nirC of the institute of Company Secretaries of india and regional Council Member of nirC of iCSi for the term 2019-22. he was the former chairman of jaipur Chapter of nirC of iCSi during the year 2008 and 2012. he was also a Member of Management Committee of jaipur Chapter of nirC of iCSi from 2007-2018. he is a member of tax Consultant association and also member of various other professional Organisations. he had worked as a whole time Company Secretary for 10 years in jSEl Securities (subsidiary of jaipur Stock Exchange). Currently he is practicing Company Secretary under his firm, Vimal Gupta & associates as a corporate consultant.

CS Susshil Daga, Vice-Chairman, nirC-iCSiCS Susshil Daga is Managing partner amicus legal, advocates & Consultants. he is ll.b, Faculty of law, rajasthan university and is affiliated to bar Council of rajasthan. he is a Company Secretary heading the Commercial and Corporate litigation of the firm. his forte is arbitration matters pertaining to infrastructure companies. he regularly appears before hon’ble high Courts, Commercial Courts, nClt’s, nCDrC and pMla court. Further, he has various judgments to his credit while appearing as arguing counsel before hon’ble Supreme Court of india. he has represented various domestic and international clients on various commercial and contractual issues before various Courts and tribunals. he has been advising his clients on the issues pertaining to corporate structuring, financing, acquisition and joint ventures. he has also been designated as visiting faculty in various esteemed private and government institutions which mostly encompasses indian institute of Corporate affairs (Ministry of Corporate affairs), Department of public Enterprise, institute of Company Secretaries of india, institute of Chartered accountants of india, jaipur national university, Manipal university, rajasthan tax Consultant association, etc. apart from the profession, he has qualified to be designated as an independent Director of indian institute of Corporate affairs. he is a virtuous leader and elected representative of nirC of iCSi. he is currently the Vice Chairman of nirC of iCSi. he is Secretary, nClt bar association (2018- till date).

CS Devender Suhag, Secretary, nirC-iCSihe has been currently working as aGM legal & Secretarial with San jose india, a Spanish conglomerate having its business more than 20 countries. he is an experienced Company Secretary with a demonstrated history of working in the construction industry. Skilled in negotiation, Contract Management, joint Ventures and FDi. he Qualified in 2008 from iCSi and law graduated from rajasthan university, jaipur in 2009, he has enriched experience working with corporates giants i.e. hero Group, honda Group and GMr Group. he is a Spanish speaker, holing advance level diploma from an instituto Cervantes, Madrid, Spain. apart from CS employment his contribution towards iCSi, he has been Chairman of Gurgaon Chapter of nirC of iCSi in the year 2017, he elected in 2018 as regional Council Members of nirC of iCSi for the term 2019-22, at present, he is Secretary of nirC of iCSi for the year 2021.

CS himanshu harbola, treasurer, nirC-iCSiCS himanshu harbola is a fellow member (FCS: 9357) of “institute of Company Secretaries of india” and a corporate lawyer. he is b.a., ll.b (hons.)- 5 year integrated law Course from national law College, Gurgaon- 2009. he is managing partner and founder of one of the fastest growing boutique Corporate law firm based in new Delhi “Corporate juris, Corporate law advisors”. his prime area of practice is before national Company law tribunal (across all benches in india) and national Company law appellate tribunal (nClat) based at new Delhi wherein he represents leading Corporate Clients in complicated Corporate restructuring & Corporate law related matters majorly under the Companies act, 2013, the insolvency & bankruptcy Code, 2016 & the llp act, 2008. he is presently the treasurer of the northern india regional Council (nirC) of the institute of Company Secretaries of india for the year 2021. he is also a regular speaker at various academic forums on topics related to Company law, ibC law and other related corporate law matters. previously he had worked Corporate law firm “alpha partners” based in nOiDa as an associate and with one of the group companies of “religare” brand as an in- house legal Counsel and Company Secretary.


articles on themeUnion BUdget

2021-22


UNION BUdGet 2021-22: A LONG-CheRIShed VISION FOR empOweRmeNt OF INdIAN eCONOmY

introDuCtionin the backdrop of COViD-19 situation, the

economic booster union budget 2021-22 was presented on February 1, 2021 by Finance Minister Smt. nirmala Sitharaman. this is the first ever digital budget in indian history. its crystal clear vision emphasises for overall growth of indian economy and alternatively a Self-reliant india (atmanirbhar bharat). it rests on six pillars of growth: health and wealthbeing, physical and Financial Capital and infrastructure, inclusive Development for aspirational india, reinvigorating human Capital, innovation and r & D and Minimum Government and Maximum Governance.

buDGet hiGhliGhtSKeeping in view of empowering indian economy,

this budget significantly includes, alters and amends various provisions on the following aspects:

i. MCa Version 3.0 ii. Companies act iii. llp actiV. SarFaESiV. Other Economic lawsVi. Direct taxVii. indirect taxesthese are briefly elucidated herein below.

i. launChinG mCa VerSion 3.0with the rapid growth of ai (artificial

intelligence) worldwide and the bare necessity for ease of doing business, this reformist and visionary Government has taken gigantic steps to lead india

on the path of development. it will soon introduce Data analytics, artificial intelligence through the machine language-driven 3.0 version of MCa portal. as a result E-Scrutiny, E-adjudication and Compliance management would be simplified

ii. amenDment in CompanieS aCt,2018 1. Small companies definition revised for their

easy complianceGiving a huge relief to small entrepreneurs from

huge compliance burden the Financial Minister declared on the budget Speech 2021-2022 that the benefits provided for small companies shall be extended to more companies. MCa has notified the Companies (Specification of Definitions Details) amendment rules, 2021 to further amend the Companies (Specification of Definitions Details) rules, 2014, which shall come into force on april 1, 2021. the amendments are carried out to extend the scope of the term ‘Small Companies provided under Section 2(85) of the Companies act, 2013. accordingly the threshold limit of paid up capital has been increased from 50 lacs to 2 crore and turnover increased from 2 crore to 20 crore. the Companies with paid-up capital and turnover not exceeding rupees two crores and rupees twenty crores respectively shall be considered as small companies.

2. one person Companies (opC)in line with the amendments for OpCs in union

budget 2021, the MCa has notified the Companies (incorporation) Second amendment rules, 2021 to further amend the Companies (incorporation)

CS pradeep Kumar ray, [email protected]

* the views expressed are personal views of the author and it should not be taken as views of the nirC-iCSi

“the new reforms announced in the budget not only give a boost to the economy but also aim at the economic empowerment of every citizen in the country.”

…. prime minister narendra modi on indian budget 2021-22

artiCle


rules, 2014, which shall come into force on april 1, 2021. the amendment substitutes a) rule 6 related to One person Company to

Convert itself into a public Company or a private Company in Certain Cases

b) rule 7 related to Conversion of private company into One person Company.

Following are the consequences of such amendment:(i) thresholds of paid-up capital exceeding rs

50 lakhs or turnover exceeding rs 2 crores for Compulsory conversion into non-OpC public/private Company is removed.

(ii) Form inC-6 can now be used for both – conversion from private/public to OpC or OpC to private/public.

(iii) For conversion of a non-OpC to OpC, thresholds of paid up capital rs 50 lakhs or less and turnover of rs 2 crores or less is removed. irrespective of Capital/turnover, non-OpC can get itself converted into OpC.

3. nri can setup one person Companythe budget allows non-resident individuals

(nris) to setup One person Company to grow without any restriction in Share Capital or turnover. the residency limit for an indian citizen to set up an OpC has been reduced from 182 days to 120 days, and also allows non-resident indians to incorporate OpCs in india. the move will benefit startups and innovators and will also help nris with entrepreneurial potential to enter the indian market. this will be a big boost for startups,

4. the Government would bring initial public Offer (ipO) of liC in 2022

iii. amenDment in llp aCt, 2008Decriminalisation of Offenceswith the object of unleashing the entrepreneurial

spirits of our youth and to remove the fear of criminal prosecutions for non-substantive minor and procedural omissions and commissions in the normal course of their business transactions, MCa initiates the process of De-criminalisation of compoundable offences under the limited liability act, 2008, for greater ease of doing business for law-abiding llps. MCa has adopted 3 principles for Decriminalization of

1. Compoundable Offences, which includes (a) Offences that relate to minor/ less serious

compliance issues, involving predominantly objective determinations are proposed to be shifted to the in-house adjudication Mechanism (iaM) framework instead of being treated as a criminal offences.

(b) Offences that are more appropriate to be dealt with under other laws, are proposed to be omitted from the llp act, 2008 and

2. non-Compoundable offences that are very serious violations entailing an element of fraud, intent to deceive and caused injury to the public interest or non-compliance of the order of statutory authorities impinging on effective regulation, Status Quo would be maintained.

iV. amenDment in SarFaeSiSarFaESi allows lenders a faster way to

recover assets than going to civil courts. to improve credit discipline while continuing to protect the interest of small borrowers, for NbFCs with a minimum asset size of 100 crore rupees, the minimum loan size eligible for debt recovery under the Sarfaesi act is proposed to be reduced from the existing level of 50 lakh rupees to 20 lakh rupees.

V. amenDment in other laWS(i) Govt. to consolidate following acts into a

single Securities Market Code a) SEbi act, 1992, b) Depositories act, 1996 c) SCra (ii) FDi in the insurance sector to be increased

from 49% to 74% with foreign control but with safeguards

(iii) SEbi will be notified as a regulator for a gold exchange

Vi. amenDment in DireCt taXFinance bill proposes 86 clauses to amend the

direct taxation laws. the bill will impact existing 70 Sections, while inserting 11 new Sections and substituting 4 sections. amendment to 4 provisions are to be applied retrospectively. these are summarises as follows:

artiCle


1. tax rates tax rates as applicable for assessment year

2021-22 shall continue to apply for assessment year 2022-23 and Subsequent years.

2. Profits and gains from business and professiona) llps are not eligible for presumptive taxation

scheme under Section 44aDab) increase in threshold limit for tax audit to

promote digital transactions- if at least 95% of the business receipts and payments are made through electronic modes, the threshold limit for the tax audit is proposed to be increased from rs. 5 crores to rs. 10 crores with effect from the assessment year 2021-22.

c) no depreciation shall be allowed on goodwill (i) amend section 2(11) provides that “block

of assets shall not include goodwill” be it acquired or self-generated.

(ii) amended section 55 provides that if the assessee has claimed depreciation on goodwill prior to the assessment year 2021-22, then the cost of purchase of such goodwill in his hands will be reduced by such amount of depreciation while computing capital gains

d) no Equalisation levy on consideration received or receivable for specified services or for e-commerce supply which is taxable as royalty or fees for technical services.

e) ‘Online Sale of Goods’ includes one or more of the following activities taking place online:

(a) acceptance of the offer or sale;(b) placing the purchase order;(c) acceptance of the purchase order;(d) payment of consideration ;or(e) Supply of goods or provision of services,

partly or wholly

3. Capital Gainsa) all types of transfer as specified under

Section 2(47) shall now be covered within the scope of slump-sale

b) transfer of capital asset to partner/ member on the dissolution of the firm/ aOp/ bOi taxable as capital gains- where a partner/member receives any money or other asset at

the time of dissolution or reconstitution of the firm/aOp/bOi which is more than the balance appearing in the capital account (without considering revaluation), the profits or gains arising from such receipt shall be chargeable under the head ‘capital gains’ as income of such firm, aOp or bOi of the previous year in which such money or other asset was received by the specified person.

c) taxation of unit linked insurance policy (ulip)- Section 10(10D) provides exemption in respect of sum received under a life insurance policy if the premium payable for any of the years during the terms of the policy does not exceed 10% of sum assured.

d) Extension in the time limit for transfer of residential house property for Section 54Gb exemption- Section 54Gb provides for exemption from the capital gain arising from the transfer of a residential property on or before 31-03-2021 if the assessee utilisesthe net consideration for investment in the equity shares of an eligible start-up. the Finance bill 2021 has proposed to extend the said outer date of transfer of residential property to 31-03-2022

4. other sourcesa) revision in the ‘Safe harbour limit’ in respect

of the transfer of immovable property below SDV- where an immovable property is transferred for consideration below its stamp duty value, it gives rise to tax implications in the hands of the seller and the buyer. as per Section 43Ca, the stamp duty value of the property is deemed as sale consideration in the hands of the seller. whereas, as per section 56(2)(x), the difference between stamp duty value and the actual consideration of the property is chargeable to tax under the head other sources in the hands of the buyer. however, both these provisions do not apply if the variation between the actual consideration and stamp duty value is up to 10% (‘Safe harbour limit’).

b) taxability of interest on provident Fund-exemption shall not be available for the interest income

artiCle


accrued during the previous year on the recognised and statutory provident fund in the account of the person to the extent it relates to the contribution made by the employees in excess of rs. 2,50,000 in a previous year

5. Charitable trusta) Set-off of deficit not to be allowed to

Charitable institutions- no set-off/ deduction/ allowance of any excess application of any preceding year shall be allowed while computing income required to be applied or accumulated during the previous year by such institutions

b) amount applied out of loans not to be considered as an application of income-utilization of borrowed money shall not be considered as an application of income for charitable or religious purposes. however, when loan or borrowing is repaid from the income of the previous year, such repayment shall be allowed as an application in the previous year in which it is repaid

c) Corpus Contributions to be exempt only if invested-Voluntary contributions made with a specific direction that it shall form part of the corpus shall be eligible for exemption only if it is invested/ deposited in modes specified under Section 11(5) maintained specifically for such corpus. Further, the amount spent from such corpus shall not be considered as an application against the mandatory 85% application of non-corpus income

d) Exemption to educational or medical institutions having annual receipt of up to 5 crore rupees- Educational or Medical institutions are entitled to exemption under section 10(23C)(iiiad) and 10(23C)(iiiae) respectively, if the annual receipt of such institutions does not exceed 1 crore rupees-. the said limit is proposed to be increased to 5 crore rupees-.

6. Deductionsa) Section 80-iba deduction to rental housing

projects- Section 80-iba provides for deduction of an amount equal to 100% of

the profits and gains derived by an assessee from the business of developing and building affordable housing project approved on or before 31-03-2021. this date has been proposed to be further extended to 31-03-2022

b) Extension in the due date for the incorporation of start-up co. for Section 80-iaC- a start-up is eligible for deduction under section 80-iaC if it satisfies certain conditions. One of the conditions provide that it should be incorporated between 01-04-2016 and 31-03-2021. the Finance bill 2021 proposes to extend the outer date of incorporation to 31-03-2022

c) Extension in the time-limit for sanction of housing loan for deduction under Section 80EEa- additional deduction under Section 80EEa for the interest on housing loan is allowed if such loan is sanctioned on or before 31-03-2021. the Finance bill proposes to extend the said outer date for sanction of such housing loan by one year to 31-03-2022.

7. tDS/tCSa) tDS on purchase of goods- new Section 194Q

is proposed to be inserted for deduction of tDS by a person (whose turnover exceeds rs. 10 crores) who is paying any sum to any resident for purchase of any goods of the value exceeding rs. 50 lakhs in any previous year. the tax shall be deducted at the rate of 0.1%, which shall be increased to 5% if the seller does not provide his pan.

b) non-filer shall be subject to tDS/tCS at higher rates- new Section 206ab and Section 206CCa to provide for deduction and collection of tDS and tCS at the higher rates in case of non-filers of the income tax return. the rate of tDS/tCS shall be at the double of the specified rate or 5%, whichever is higher. these provisions shall not be applicable where the tax is required to be deducted under sections 192, 192a, 194b, 194bb, 194lbC or 194n of the act.

c) tDS at a concessional rate on the income from

artiCle


securities held by Fpis- any person responsible for paying any income (other than the interest payable in respect of rupee Denominated bond of an indian company or Government Security) to foreign portfolio investors (Fpis) in respect of securities is liable to deduct tax under section 196D. the said section provides for deduction of tax at the rate of 20%.

d) no tDS on dividend distributed by SpV to the business trust-business trusts (rEits or inVits) have been provided with the status of a pass-through entity whereby they are allowed to pass certain income to their unit holders without paying tax at their end. One of such income is the dividend received from special purpose vehicle (SpV). as business trust can freely pass the dividend received from SpV to its unit-holders, it is proposed to provide that no tax shall be deducted on payment of dividend by the SpV to the business trust

e) relief from interest for any deficit in the advance tax liability due to dividend income- if the shortfall in the advance tax instalment or the failure to pay the same on time is on account of dividend income, it has been proposed that no interest under section 234C shall be charged provided the assessee has paid full tax in subsequent advance tax instalments

8. return of incomea) reduction in the time limit for filing of belated

or revised return- the time limit for filing of belated return or revised return is proposed to be reduced by 3 months. now the belated or revised return can be filed on or before December 31 of the assessment year or before the completion of the assessment, whichever is earlier.

b) Exemption from the filing of return by an individual whose age is 75 years or above- resident Senior citizen who is of the age of 75 years or above shall not be required to file the return of income if he has only pension income and interest income from the same bank in which he is receiving his pension. however, the bank shall be required

to deduct tax at the rates in force.c) reduction in the time limit for processing of

itr and issuance of notice- the time-limit for processing of income-tax return and sending of an intimation to the assessee has been proposed to be reduced from 1 year to 9 months from the end of the financial year in which the return is filed. also, the time-limit to serve a notice for scrutiny assessment is proposed to be reduced from 6 months to 3 months from the end of the financial year in which the return of income is furnished.

d) adjustments to be made by CpC while processing itr- the CpC while processing the return of income under section 143(1) can make an adjustment for any increase in income due to mismatch in the income disclosed in the tax audit report and income computed in the income-tax return.

e) notice to file the return of income can be issued by the prescribed authority- to enable centralised issuance of notices in an automated manner, the prescribed income-tax authority would be empowered to issue a notice under Section 142(1) requiring a person to furnish his return of income. Earlier, this notice could be issued only by the assessing Officer.

f) Curative amendment for extension in due date for filing of return by a partner- the due date for filing of return of income for partners of a firm, which is required to furnish report referred to in section 92E, shall be 30th november of the assessment year.

9. assessment & appeala) reduction in time limit for reopening of cases-

the budget introduced a completely new procedure of assessment in case of search and income escaping assessment.

b) reduction of time limit for completion of the assessment proceedings- the time limit for completion of scrutiny assessment under Section 143 and best judgment assessment under Section 144 is proposed to be further reduced by 3 months. now, the time for completion of assessment shall be 9 months from the end of the assessment year in which

artiCle


the income was first assessable.c) Constitution of DrC for small and medium taxpayers-a new scheme is proposed for setting up

of Dispute resolution Committee (DrC). taxpayers having a taxable income of up to rs. 50 lakh and disputed income of up to rs. 10 lakh shall be eligible to approach the Committee. the assessee would have an option to opt or not to opt for the dispute resolution through the DRC

e) new Scheme for re-assessment and Search assessment- the Finance bill 2021 proposes to substitute existing sections 147, 148, 149 and 151 and also inserts a new section 148a making a complete change in the assessment proceedings related to income escaping assessment and search-related cases. Consequential amendments have also been proposed to Section 151a, 153a and 153C.

f) Discontinuance of income-tax Settlement Commission- income-tax Settlement Commission (itSC) is proposed to be discontinued with effect from 01-02-2021 and an interim board of Settlement is to be constituted for pending cases. the Central Government is empowered to notify a scheme for settlement in respect of pending applications by the interim board

10) Cut-off DatesDue dates have been revised as follows:

sl. events existing due date revised Due Date1 Filing of original return of income (as the case may

be)31-07-202131-10-202130-11-2021

No Change

2 Filing of belated or revised return of income 31-03-2022 31-12-20213 processing of return under Section 143(1) 31-03-2023 31-12-20224 issue of notice for scrutiny assessment under Section

143(2)30-09-2022 30-06-2022

5 Completion of scrutiny assessment under Section 143(3)

31-03-2023 31-12-2022

6 Completion of best judgment assessment under Section 144

31-03-2023 31-12-2022

7 issue of notice under new Section 148 within time-period specified in new Section149 after following the procedure laid down in Section 148a (as the case may be)

31-03-202631-10-202830-11-2038

31-03-202531-10-2032

8 Completion of re-assessment under Section 147 (as the case may be)

31-03-202731-10-202930-11-2039

31-03-202631-10-2033

11) Faceless income tax appellate tribunal (itat)

in order to provide transparent tax appellate mechanism, it is proposed to notify a faceless scheme for disposal of appeal by the itat. this shall eliminate the interface between the itat and parties to the appeal to the extent technologically feasible. all communication between the tribunal and the appellant shall be electronic. where a

personal hearing is needed, it shall be done through video-conferencing.

Vii. inDireCt taXeS

1. CuStomSa) Few of the items on which Customs Duty rates

are revised are as follows:i. reduced duty on copper scrap from 5% to

2.5%

artiCle


ii. basic and Special additional excise duty on petrol and high-speed diesel oil (both branded and unbranded) is reduced

iii. increased duty on solar inverters from 5% to 20%

iv. raised duty on solar lanterns from 5% to 15%v. the basic customs duty on gold and silver

reduced.vi. the department will rationalise duty on

textile, chemicals and other productsvii. the revised rates will be applicable from 2nd

February 2021 onwards.viii. Custom duty increased on agricultural

products on cottons, silks, alcohol, etc.b) new tariff items under 2404 11 00 and 2404

19 00 have been inserted in accordance with upcoming hS 2022 nomenclature. Further, nCCD of 25% is prescribed on these tariff items with effect from 1st january 2022.

c) a new initiative called ‘turant Customs’ will be introduced for faceless, paperless, and contactless customs measures.

d) regarding agricultural products, the customs duty is increased on cotton, silks, alcohol,

etc.e) the exemption on import of leather will

be withdrawn as they are domestically produced.

2. aGriCulture inFraStruCture anD DeVelopment CeSS (aiDC)a) aiDC shall be effective from February

02,2021 on import of specified goods and on production/ manufacturing of petrol and high Speed Diesel

b) Value of imported goods shall be calculated in the same manner as the value of goods is calculated for customs duty under Section 14 of the Customs act

c) this cess would be used to finance the improvement of agriculture infrastructure and other development expenditure

d) the rate of cess varies from 1.5 % to 100 %e) agriculture infrastructure and Development

Cess (aiDC) has been newly imposed on petrol and diesel at rs2.5 and rs.4 per litre respectively.

f) Exemption of Social welfare Surcharge on the value of aiDC imposed on gold and

artiCle


silver. therefore, these items would attract surcharge at the normal rate, only on value plus basic customs duty.

3. CGSt aCt CGSt act was amended for several provisions

as follows:a) Section 16 amended to allow taxpayers’

claim of the input tax credit based on GStr-2a and GStr-2b.

b) Section 50 of the CGSt act is being amended to provide for a retrospective charge of interest on net cash liability with effect from the 1st july 2017.

c) Section 35 and 44 amended: Mandatory requirement of furnishing the GSt reconciliation report signed by the specified professional is relaxed by allowing the filing of annual return on a self-certification basis. the Commissioner can exempt a class of taxpayers from the requirement of filing the annual return.

4. Central SaleS taX aCti. petroleum crude, hSD, petrol, natural gas and

atF are currently governed by the provisions CSt/Vat laws in case of interstate sales.

ii. interstate sales of these goods to persons registered under the CSt act in specified cases are eligible for the Concessional rate of CSt of 2%

iii. Goods used in telecommunications network or in mining or in the generation or distribution of electricity or any other form of power excluded from the entitlement of concessional rate of CST

ConCluSionthe union budget 2021-22 will increase the confidence

of our nation. it would certainly fill the economic voids created by deadly COViD-19 and cater to the plethora of needs and necessities and we hope that under the vibrant and dynamic leadership of this reformist Government, india once again sit on the driver’s seat and propel the chariot of economy on the path of progress and prosperity and fructify the dream of becoming a Self-reliant india.

artiCle


UNION BUdGet FOR the YeAR 2021-22

the Finance minister emphasizes on 6 pillars for the development.

i. health and wellbeingii. physical & Financial Capital, and infrastructureiii. inclusive Development for aspirational indiaiv. reinvigorating human Capitalv. innovation and r&Dvi. Minimum Government and Maximum

Governance

KeY taKeaWaYS From buDGet 2021-22

• INTRODUCTION OF SCRAPPING POLICYVoluntary scrapping policy to phase out old and

unfit vehicles in order to encourage fuel efficient, environment friendly vehicles thereby reducing vehicle pollution and oil import bill.

Vehicles would undergo fitness tests in automated fitness centres after 20 years in case of personal vehicles, and after 15 years in case of commercial vehicles.

• ATMA NIRBHAR BHARAT- PRODUCTION linKeD inCentiVe SCheme (pli)

Finance Minister emphasis that for a uSD 5 trillion economy, our manufacturing sector has to grow in double digits on a sustained basis. Manufacturing companies need to become an integral part of global supply chains, possess core competence and cutting-edge technology. to achieve all of the above, pli schemes to create manufacturing global champions for an atma nirbhar bharat have been announced for 13 sectors. For this, the government has committed nearly 1.97 lakh crores, over 5 years starting Fy 2021-22. this initiative will help bring scale and size in key sectors, create and nurture global champions and provide jobs to our youth.

• INFRASTRUCTURE FINANCING - DEVELOPMENT FinanCial inStitution (DFi)

• a professionally managed Development Financial institution was also proposed to act as a provider, enabler and catalyst for infrastructure financing and an initial fund of rs. 20,000 crores was proposed for its establishment.

• Consolidation of the provisions of SEbi act, 1992, Depositories act, 1996, Securities Contracts (regulation) act, 1956 and Government Securities act, 2007 into a rationalized single Securities Markets Code.

• a scheme of Mega investment textiles parks (Mitra) will be launched to support textile industry and 7 textile parks will be established over 3 years.

• increase in FDi limit from 49% to 74% in insurance Companies with majority of Directors on the board and key management persons would be resident indians, with at least 50% of Directors being independent Directors, and specified percentage of profits being retained as general reserve.

• Setting up an asset reconstruction Company limited and asset Management Company would be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to alternate investment Funds and other potential investors for eventual value realization.

• Decriminalization of the limited liability partnership (llp) act, 2008 was also proposed.

• revision in definition under the Companies act, 2013 for Small Companies by increasing their thresholds for paid up capital from “not exceeding `50 lakh” to “not exceeding `2 Crore” and turnover from

CS Deepak pathak, [email protected]


artiCle


“not exceeding `2 Crore” to “not exceeding `20 Crore”, which will benefit more than two lakh companies in easing their compliance requirements.

• pensioners over 75 years of age have been exempted from filling income tax returns. this exemption is proposed to be made available to such senior citizens who have only interest income apart from the pension income and full amount of tax payable has been deducted by the paying bank.

• nri’s will not have to pay double tax for foreign retirement funds.

• in order to reduce compliance burden, the time-limit for re-opening of assessment is being reduced to 3 years from the current 6 years. re-opening up to 10 years is proposed to be allowed only if there is evidence of undisclosed income of ` 50 lakh or more for a year.

• it is also proposed to reduce the time limits for general assessment or processing of income tax return by three months.

• in order to provide relief to taxpayers, advance-tax liability on dividend income shall arise only after the declaration/payment of dividend.

• the dividend paid to real Estate Infrastructure Trusts or Infrastructure investment trusts (rEit/invit) shall be exempt from tDS.

• it is also proposed to clarify that deduction of tax on incomes including dividend income of Foreign portfolio investors may be made at treaty rate.

• it is also proposed to exempt dividend payment from levy of Minimum alternate tax (Mat) for foreign company if the applicable tax rate is less than the rate of Mat.

• For reducing litigation and to give an impetus to the dispute resolution for small taxpayers, a Dispute resolution Committee is proposed to be constituted. a taxpayer having taxable income up to 50 lakh and disputed income up to 10 lakh shall

artiCle


be eligible to approach the Committee. For ensuring efficiency, transparency and accountability, the procedure of the Committee will be conducted in a faceless manner.

• in order to provide transparent tax appellate mechanism, it is proposed to the make the income tax appellate tribunal faceless and jurisdiction-less. a national Faceless income tax appellate tribunal Centre shall be established and all the communication between the tribunal and the appellant shall be made electronically. wherever personal hearing is needed, it shall be done through video-conferencing.

• in order to facilitate the transition of urban Co-operative bank (uCb’s) to Small Finance bank (SFb’s), it is proposed to provide tax neutrality for the transition of uCb’s to SFb’s. hence, the uCb shall not be required to pay capital gains for the assets transferred to the SFbs.

• in order to incentivise purchase of affordable house, union budget to extend the eligibility period for claim of additional deduction for interest of 1.5 lakh paid for loan taken for purchase of an affordable house to 31st March 2022.

• in order to increase the supply of affordable house, union budget proposed to extend eligibility period for claiming tax holiday for affordable housing project by one more year to 31st March, 2022.

• For setting-up of more start-ups in the country, union budget proposed to extend the eligibility period to claim tax holiday for the start-ups by one more year to 31st March, 2022.

• in order to incentivise investment in start-up, union budget proposed to extend the eligibility period of claiming capital gains exemption for investment made in the start-ups by one more year to 31st March, 2022.

• to incentivise digital transactions and to reduce the compliance burden of the person who is carrying almost all of their transactions digitally, union budget proposed to increase the limit for tax audit for persons who are undertaking 95% of

their transactions digitally from 5 crore to 10 crore.

• Delay in deposit of the contribution of employees towards various welfare funds by employers result in permanent loss of interest/income for the employees. in order to ensure timely deposit of employee’s contribution to these funds by the employers, union budget proposed to reiterate that that the late deposit of employees’ contribution by the employer shall never be allowed as deduction to the employer.

• in order to discourage the practice of not filing returns by the persons in whose case substantial amount of tax has been deducted/collected, union budget proposed to provide that a person in whose case tDS/tCS of 50,000 or more has been made for the past two years and who has not filed return of income, the rate of tDS/tCS shall be at the double of the specified rate or 5%, whichever is higher. this provision shall not be applicable for the transactions where full amount of tax is required to be deducted e.g. salary income, payment to non-resident, lottery, etc.

• in order to widen the scope of tDS, union budget proposed to levy a tDS of 0.1% on a purchase transaction exceeding 50 lakh in a year. in order to reduce the compliance burden, it is also proposed to provide that the responsibility of deduction shall lie only on the persons whose turnover exceeds 10 crore.

• to encourage renewable energy and to build up domestic production capacity, import duty has been raised on solar invertors from 5% to 20%, and on solar lanterns from 5% to 15%.

• in order to ease compliance for the taxpayer, details of salary income, tax payments, tDS, etc. already come pre-filled in income tax returns. to further ease filing of returns, details of capital gains from listed securities, dividend income, and interest from banks, post office, etc. will also be pre-filled.

• imposition of agriculture infrastructure and Development Cess on specified goods w.e.f. 2.2.2021.

artiCle


the UNION BUdGet 2021-22

article 112 of indian constitution requires the government to present to parliament a statement of estimated receipts and expenditure in respect of every financial year

the pandemic year had burdened the financial constraints of the government. Most of middle class had braced for some relief by way of tax rebate and the wealthy were fearful that the government might introduce additional taxes. there was no sign of rebate and the fears also proved to be unfounded but there are many changes to affect the financial planning.

buDGet & taXation

emploYeeS proViDent FunD until now EpF enjoyed exempt treatment but the

finance minister has restricted the tax exemption on interest income earned from this scheme to Employee’s contribution of rs. 2.5 lakh. now if you contribute more than rs. 2.5 lakh a year, the interest earned on the excess amount will be taxable.

SuppOSE- if you invest rs. 4 lakhs in a year, the interest on rs. 2.5 lakhs will not be taxable but the interest on balance rs. 1.5 lakh will be taxable at your slab rate.

the restriction will apply to contributions made on or after april 1, 2021.

unit linKeD inSuranCe planS Section 10(10D) of income-tax has been

amended to prevent certain high net worth individuals from investing large amount of premium and claiming exemptions.

uilps if the annual premium exceeds rs. 2.5 lakhs will be taxed at a rate of 10% on capital gains. Such tax treatment will now be at par with equity mutual funds.

this new cap will only be applicable on policies taken on or after February 1, 2021

leSS haSSle For Senior CitiZenSthe budget has attempted to reduce the

compliance burden on senior citizens above 75 years of age having only pension and interest income by exempting them from filing tax returns. however, if they have any other incomes, they will have to file tax returns.

For implementation the government plans to notify few banks as specified banks for the purpose. the pensioner will have to furnish a declaration to the specified bank containing the particulars specified by the government.

aiDC (aGriCulture inFraStruCture DeVelopment CeSS)

the imposition of aDiC on a range if items including petrol, diesel, gold and alcoholic beverages in a move that aims to further boost the farm infrastructure and other development expenditure.

aDiC of rs. 2.5 per litre has been imposed on petrol and rs. 4 per litre on diesel. however, the cess will not put an additional burden on the consumers and consequently the basic excise duty and Special additional excise duty have been reduced.

CuStom DutY hiKe on eleCtroniCSto give a push to the atmanirbhar policy, the

Centre revised the custom duty structure. in sectors like electronics, they may lead to further price hikes in the coming months.

Key electronic components like printed circuit board assembly, camera module and connectors will now attract 2.5 per cent duty.

in the automobile sector, Customs duty rates for dozens of items, like safety glasses, parts of the signaling equipment, brakes and ignition wire sets have been raised to 15 per cent from 10 per cent.

CS robbin, [email protected]


artiCle


re openinG oF taX aSSeSSment Currently, an assessment can be reopened up

to six years and, in serious tax fraud cases, for upto 10 years. as a result, the taxpayers remain under a cloud of uncertainty for a long period of time.

the time-limit is now proposed to be reduced to three years. Further, in case of serious tax-evasion cases, only where there is evidence of concealment of income of rs 50 lakh or more in a year, can be reopened up to 10 years only after approval of principal chief commissioner.

time limit For belateD anD reViSeD returnS

the limit for belated or revised returns is shorter and these now can be filed three months before the end of the relevant assessment year or before the completion of tax assessment, whichever is earlier.

a FaCeleSS rather Virtual inCome taX appellate tribunal

a move to reduce the cost of compliance for taxpayers the budget proposed to make the proceedings before the income-tax appellate tribunal (itat) Faceless. the virtual proceedings

will increase the transparency in disposal of appeals and help in better work distribution in different branches resulting in best utilization of resources.

buDGet & leGiSlationS

uniFieD SeCuritY marKet laW the budget proposed consolidation of four

Securities act into a single Securities Market Code. the government will consolidate the SEbi act, 1992, Depositories act, 1996, Securities Contracts (regulation) act, 1956 and Government Securities act, 2007 into a single rationalised

Securities Markets Code. SEbi (Securities Exchange board of india) will be the gold exchange regulator.

DeCriminaliSation oF limiteD liabilitY partnerShip (llp) aCt, 2008

the Finance Minister proposed to take up the decriminalisation of the llp act, 2008 similar to the Companies act in the procedural and technical compoundable offences under the llp act.

DeFinition oF ‘Small CompanieS’the Centre proposes to revise definition under

artiCle


Companies act, 2013 for small companies by increasing their threshold for capitalisation to not exceeding rs. 50 lakh to not exceeding rs. 2 Crore

turnover of companies not exceeding rs. 2 Cr has also been revised to not exceeding rs. 20 Crore.

by the new definition of small companies under the Companies act, a large number of startups will be recognised as small companies.

reViSionS in ‘one perSon CompanY’ ruleS

it is proposed to incentivise the incorporation of One person Companies (OpCs). there will be no restrictions in the paid-up capital and turnover of OpCs. they can convert into any other type of company at any time without any restriction.

GSt auDit aboliSheDthe proposed that sub-section (5) of section 35

of the CGSt act is being omitted so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional.

Section 44 of the CGSt act is being substituted

so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis. it further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return.

inCome taX auDitat present, businesses having turnover of

rs. 1 crore and individuals having income from profession of rs. 50 lakh must undergo tax audits. to promote digital transactions, the mandatory audit threshold has been raised to rs. 5 crore, where the cash receipts or payments by a business don’t exceed 5% of the specified threshold.

DiViDenDthe budget proposed that: • Dividend payment to real estate investment

trusts or new infrastructure trusts will be exempt from tDS requirements.

• Dividend income of nris will be subjected to a lower rate of tDS.

• advance tax liability on dividend income will only arise after its declaration

artiCle


buDGet & eConomY

reDuCtion oF FiSCal DeFiCitthe centre has pegged fiscal deficit for the

coming year 2021-22 at 6.8% of GDp and aims to bring it back below the 4.5% mark by 2025-26.

the original fiscal deficit target for 2020-21 was 3.5%. however, in reality, the deficit shot up to a high of 9.5% of GDp due to the double impact of the COViD-19 pandemic.

priVatiSation oF 2 pSbS anD hanGeS in inSuranCe SeCtor

the budget intended to privatise two public Sector banks (pSbs) and one General insurance company. the disinvestment target of rs. 1.75 trillion for the next financial year, the government expects rs. 1 trillion to come from its disinvestment of its stake in pSbs and Financial institutions.

the budget confirms that life insurance Company (liC) to see its ipO in the Financial year 2021-22

the insurance act 1938 will be amended to “increase the permissible FDi limit from 49 per cent

to 74 per cent in insurance companies and allow foreign ownership and control with safeguards.

CleaninG oF banKS’S booKSthe banks’s books got a further fillip with a move

to set up an asset reconstruction Company (arC) and an allied structure to buy-out and turn around stressed assets. asset Management Company (aMC) would be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to alternate investment Funds (aiFs) and other potential investors for eventual value realisation.

otherS• union budget 2021 stated that the

government intends to go ahead with a “Vehicle Scrappage policy”. the idea is to phase out cars and commercial vehicles which are older than 20 or 15 years. this will boost-up the automobile Sector.

• the three upcoming dedicated freight corridors are expected to be complete by june 2022 to reduce the logistics cost under national rail plan 2030.

artiCle


‘UNION BUdGet 2021-2022’the budget

union budget 2021-22 is inflection point for india’s economy. the thrust of government has shifted gears with focus on providing allocation for higher capital expenditure for infrastructure, healthcare and financial sector. the intent of government is to expand supply side of economy to create employment, jobs by building long term assets for the country. this will lead to strong fundamentals & higher GDp growth for decades to come.

On the other hand, no tax increase has been proposed even after tax collection is negatively impacted due to covid impact. infact, higher fiscal deficit has been embraced for next 4 to 5 years. Stock market cheered transparency shown in the budget speech. Disinvestment of strategic & non-strategic government enterprises has been planned in big way starting with liC ipO. infact disinvestment has been the best resource to tap funds every time government faces budgetary pressure.

the purpose of my article to draw attention towards Sovereign wealth Fund and how government of india may leverage this structure & instrument in big way for capital expenditure for infrastructure, healthcare etc. without borrowings & at the same time creating financial wealth for humanity at large. let’s understand what SwF is!

Sovereign Wealth FundSovereign wealth fund has existed for more

than a century and has been gaining massive importance since 2000. Mostly countries rich in natural resources like Oil have budgetary surpluses. SwF has been the best structure to park surplus money and make investment naturally & globally in a variety of real and financial asset classes such as stocks, bonds, real estate, precious metals, and alternative investments such as private equity fund or hedge funds. Currently, China, norway, uaE, Kuwait, Saudi & russia lead the way in privately owned Sovereign wealth Fund. india can lead way in public listed Sovereign wealth Fund.

CS Sumeet agrawal, [email protected]


artiCle


Why india for world 1st public listed Sovereign Wealth Fund

india’s has rich culture of largest democracy, young population, entrepreneurship, innovation, open market for global companies to tap india & global market. india is best placed to lead world growth in post-covid era.

it is best placed to tap and launch world’s 1st public listed SwF on domestic stock exchange. this can be achieved in two ways or mix of both:-

1. listing SwF backed by underlying assets; and/or

2. listing SwF as Special-purpose acquisition Company (SpaC);

3. Mix of bothi shall cover both the routes in more detail in

my next article. also, i’ll also touch on how inr 77 trillion domestic & international capital will line up to subscribe to this instrument in my next article. For now, i invite you to contemplate on it and share your thoughts, feedback & suggestions.

investment/Deployment of inr 77 trillion under ppp model (a sample):-

1. 11 trillion for 500 airports. 500 Smart Cities. 5000 Smart Villages under ppp model.

2. 11 trillion for infrastructure: rail (plus bullet & Metro), road, water, Sea & air under ppp model.

3. 11 trillion for startups, innovation, science, technology & space sector under Funds of Fund model.

4. 11 trillion for manufacturing, IoT, Defense,

agro food processing under ppp model.5. 11 trillion for agriculture, healthcare &

Education industry under ppp model6. 11 trillion for natural resources industry like

mining, telecom etc. under ppp model7. 11 trillion for investment in international

Corporations which is financially viable & of strategic importance to india.

Future road mapOnce central government implements it, all 29

state governments & 500+ municipal corporations will follow suit to list their sovereign wealth funds.

Benefit1. india’s Supply side infra will expand.2. Domestic equity capital to infuse growth for

india growth to $ 20 trillion economy over next 20 years.

3. Massive wealth, job, innovation creation for india’s mass population

4. Era of high economic growth for india & world

5. india at par with China in Sovereign wealth Fund category

6. Equitable growth of all parts of india -Metro city, tier 1/2/3 cities & villages

7. Efficient supply chain due to robust transportation

8. ultimately india will reclaim its golden era of Sone Ki Chidiya & be a Vishwaguru again to guide world of new way of growth.

i look forward to hear your suggestions & feedback.

artiCle


UNION BUdGet 2021: A COmpANY SeCRetARY’S dAUNtLeSS mOVe

admist Covid-19 pandemic, the largest Democratic nation has presented its “not so bad” union budget on 1st day of February ,2021. when the crisis & economic recession is omni-present, we as a country (fairly populated) dared to come over and dauntlessly embraced the challenge.

“atmanirbhar bharat” an expression converted into mission with wholistic coverage of six prime pillars namely;[i]. health & well being[ii]. physical & Financial Capital and infrastructure[iii]. inclusive Development for aspirational india[iv]. re-invigorating human capital[v]. innovation, research and Development[vi]. Minimum Government & Maximum

Governance.the said pillars are fair enough to depict the

ambitious intent & mood of economy. “infrastructure Development, Self- reliant, Foreign investment, Ease of doing business, 5 trillion economy are the words of solace, motivation and optimism.

budget 2021: Company Secretary profession (Gateway to new horizons)1). with announcement of higher Education

Commission, life Skill programmes, FDi enhancements in insurance Sector/ Education industry/ public Sector banks etc. the role, competencies, capabilities of a Company Secretary required a more aspirational and benchmark role. the focus is to be shifted from regular secretarial work to more strategic task.

2). Company Secretary has to inevitably prepare himself/herself to deal with e-Court System, MSMEs Framework, alternate Dispute resolution method etc.

3). professional’s strength has to be displayed while adapting with nClt framework to ensure fast resolution of cases.

4). the amendment in the definition of “Small

Companies” has definitely reduced the regular filing kind of work but standard setting, regulation, accreditation role has been enhanced.

5). Similarly, with the launch of Data analytics, MCa version 3.0, e-Scrutiny, e-adjudication, e- Consultation familiarity and comfort with it (information technology) has also expected manifold. Earlier which was only under the regime of an it professional now very well has become CS’s cup of tea too.

6). Compliance Management is the new benchmark. as traditionally, compliance was the key role for a CS has now been attributed to compliance management as well. this clearly reveals out that a CS has to be in parity with management expert.

7). under urjit Cluster programme, knowledge translation clusters would be set up across different technology sectors including new and emerging areas. to promote and expand the base of knowledge-driven enterprises, intellectual property creation and protection will play an important role. here an expertise of CS in ipr laws will play a pivotal role.

8). Start-up Consultancy is a new (not so new) rewarding field for CS to provide consultancy right from stretch, GeMs (Government e Marketplaces) are the next majorly focused move of the government.

9). Consultancy in international business, keeping in view the pM’s vision of “every district to be an export hub”, will be a win-win situation for every professional.

10). Most thrilling, significant and knowledge driven aspect of this union budget is launch of “artificial intelligence”.

Artificial Intelligence and Company Secretaryprofessionals are the body of knowledge,

expert with service ethic. any professional may

CS Shweta Jain, [email protected]


artiCle


it be CS, Ca, Doctor, lawyer feel threatened with the concept of ai but if we dig out deep, will find out that disaggregation of work shall become possible like in case of an advocate, the task can be disaggregated into defining the client’s problem, reviewing documents around the problem, and explaining the result of that analysis to the client. with the application of ai and Ml (Machine learning), machines substitute for the task of reviewing documents. thus, it helps to identify which professional tasks can be substituted by ai, and which tasks are complemented by ai. not to our surprise but we are already using ai in our day to day life sometimes in the form of alexa, Cortana or Siri.

artificial narrow intelligence, artificial General intelligence or artificial Super intelligence are categories of artificial intelligence depending upon the ai’s ability to mimic human intelligence or behaviour. as we see professional’s task is full of judgement and analysis whereas expert system cannot simulate the judgement and behaviour of a human. Company Secretary is said to be the backbone of management, taking care of uniformity, emotional cues and statutory threats at the same time within organisation. if we see closely, the administrative work including maintaining statutory registers, time-barred statutory filings, regular meetings can somewhere be shifted in the hands of ai/Ml but strategic task which is involving

decision making, long term planning, financial management still has to be manually taken care with the human touch.

in order to disseminate the information to all the stakeholders by MCa, the ai is to be taken on role. under the ayushman bharat scheme, health authorities and the Medical fraternity can target disease with an appropriately designed preventive regime. For fraud prevention following models or techniques are being used:

• Fuzzy logic• Supervised/ un-supervised risk Scoring

Models• Neural networks• Social Network analysis• Image analytics• Cluster and peer analysisthere are so many projects and missions

throughout the world which are looking at the governance of ai. a Company Secretary being a responsible, resourceful, proficient & impactful powerhouse for corporates required to pace with the changing times while providing inputs, advisory & suggestion in formulating policy and guidelines towards ai/Ml.

union budget 2021 itself with multifarious and wholistic approach all set to invite the professional’s fraternity of country to spread wings and underwrite whole heartedly with competence and capabilities towards economic revival up to next level.

artiCle


ImpACt OF BUdGet 2021 ON CORpORAte LAwS

(Company Law / FDI / LLP/ Security Market / Income Tax / GST / Custom / Labor Laws etc.):

the hon’ble Finance Minister (FM) of india, Smt Nirmala Sitharaman, on 01st February, 2021 has presented her third and ninth budget of Shri narendra Modi government. the budget 2021 is india’s first paperless budget. the FM hasn’t wasted a crisis and presented a bold growth-oriented budget.

in this write up, we are going to discuss the impact of Digital budget 2021 on various Corporate laws and upcoming changes in the various legislation Framework.

1. Vehicles related: a voluntary vehicle scrapping policy

Vehicles would undergo fitness tests in automated fitness centres after 20 years in case of personal vehicles, and after 15 years in case of commercial vehicles. Details of the scheme will be separately shared by the Ministry.

2. Infrastructure financing - Development Financial institution (DFi)

Debt Financing of inVits and rEits by Foreign portfolio investors will be enabled by making suitable amendments in the relevant legislations.

3. Financial Capital – Security lawConsolidation of the provisions of SEbi

act, 1992, Depositories act, 1996, Securities Contracts (regulation) act, 1956 and Government Securities act, 2007 into a rationalized single Securities Markets Code.

4. regulated Golf exchange:SEbi will be notified as the regulator and

warehousing Development and regulatory authority will be strengthened to set up a commodity market eco system arrangement including vaulting, assaying, logistics etc in addition to warehousing.

5. increasing FDi in insurance Sector• increase the permissible FDi limit from

49% to 74% in insurance Companies and allow foreign ownership and control with safeguards.

• the majority of Directors on the board and key management persons would be resident indians, with at least 50% of Directors being independent Directors, and

• specified percentage of profits being retained as general reserve.

6. Stressed asset resolution by setting up a new Structure

an asset reconstruction Company limited and asset Management Company would be set up to consolidate and take over the existing stressed debt.

7. Company law, llp and mSme law provisions• Decriminalization of Companies act, 2013

is completed• FM proposed decriminalization of the

limited liability partnership (llp) act, 2008.

• Small Companies definition revised : a) paid up capital from “not exceeding `50

lakh” to “not exceeding `2 Crore” and (+)b) turnover from “not exceeding `2 Crore” to

“not exceeding `20 Crore”

Benefits to OPC’si. incentivize the incorporation of One person

Companies (OpCs)ii. allowing OpCs to grow without any

restrictions on paid up capital and turnoveriii. allowing conversion of OpC’s into any other

type of company at any timeiv. reducing the residency limit for an indian

citizen to set up an OpC from 182 days to 120 days

v. allow non resident indians (nris) to incorporate OpCs in india.

CS lalit rajput, [email protected]


artiCle


Certain new provisions introduced:• nClt framework will be strengthened,• e-Courts system shall be implemented and• alternate methods of debt resolution and

MSME Benefits:• Special framework for MSMEs shall be

introduced.• provided rs. 15,700 crores to this sector.

professional with tech Knowledge: rise of Technology and Artificial Intelligence to the professionals

• launching of data analytics,• artificial intelligence,• machine learning driven MCa21 Version

3.0. (with additional modules for e-scrutiny, e-adjudication, e-Consultation and Compliance Management)

8. banking & ipo – investment Segment• privatization of two public Sector banks

and one General insurance company in the year 2021-22

• strategic disinvestment - bpCl, air india, Shipping Corporation of india, Container Corporation of india, iDbi bank, bEMl, pawan hans, neelachal ispat nigam limited.

• ipO of liC by 2021-22• policy of strategic disinvestment of public

sector enterprises

9. labour laws: implementation of the 4 labour codes:

• Social security benefits will extend to gig and platform workers.

• Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State insurance Corporation.

• women will be allowed to work in all categories and also in the night-shifts with adequate protection.

• Compliance burden on employers will be reduced with single registration and licensing, and online returns

10. establishment of Conciliation mechanismthe FM in his speech, propose to set up a

Conciliation Mechanism and mandate its use for quick resolution of contractual disputes.

11. taxation updates – budget 2021“Direct taxes unchanged but ease in

compliance on the way - outset”a. the burden of taxation on small taxpayers

was eased by increasing rebates.b. relief to Senior Citizens:■ reduction in compliance burden on senior

citizens who are 75 years of age and above)

■ Exemption from filing their income tax returns who only have pension and interest income.

C. reduction in time for income tax proceedings■ reduction in time-limit for re-opening of

assessment to 3 years from the present 6 years.

■ Further the above is applicable to serious tax evasion cases too, only where there is evidence of concealment of income of `50 lakh or more in a year, can the assessment be re-opened up to 10 years (approval of the principal Chief Commissioner mandatory).

D. Dispute resolution Committee■ Constitution of a Dispute resolution

Committee for Small tax payers.■ anyone with a taxable income up to ̀ 50 lakh

and disputed income up to `10 lakh shall be eligible to approach the Committee.

e. Faceless itat - income tax appellate tribunal■ introduced for ease of compliance and to

reduce discretion.■ establishment of a National Faceless Income

tax appellate tribunal Centre■ all communication between the tribunal and

the appellant shall be electronic (through video-conferencing).

F. relaxation to nriFM, propose to notify rules for removing their

hardship of double taxation to avoid issues with respect to nri’s accrued incomes in their foreign retirement accounts due to a mismatch in taxation periods.

G. exemption from audit provisions:FM, propose to increase this limit for tax

audit for such persons from `5 crore to `10 crore to further incentivise digital transactions and reduce compliance burden.

artiCle


h. relief for Dividend provisions■ FM, propose to make dividend payment to

rEit/ invit exempt from tDS.■ FM propose that advance tax liability on

dividend income shall arise only after the declaration/payment of dividend.

■ FM, propose to enable deduction of tax on dividend income at lower treaty rate for Foreign portfolio investors.

I. Pre-filling of Tax Returns – To ease compliance for the taxpayer■ details of salary income, tax payments, tDS,

etc. already come pre-filled in income tax returns

■ details of capital gains from listed securities, dividend income, and interest from banks, post office, etc. will also be pre-filled.

J. rationalisation of taxfree income on provident Funds■ proposed to restrict tax exemption for the

interest income earned on the employees’ contribution to various provident funds to the annual contribution of ` 2.5 lakh.

■ this restriction shall be applicable only for the contribution made on or after 01.04.2021.

K. Clarification on Depreciation on Goodwill■ proposed to clarify that no depreciation on

Goodwill shall be allowed.■ the deduction for the amount paid for

acquiring Goodwill shall be allowed on sale of Goodwill.

12. relief to Small trusts■ reduction in compliance burden on small

charitable trusts running educational institutions and hospitals

■ FM, propose to increase blanket exemption to such entities, whose annual receipt does not exceed rs. `1 crore to rs. `5 crore

13. labour Welfarein order to ensure that employees’ contributions

are deposited on time, the FM, reiterate that the late deposit of employee’s contribution by the employer will not be allowed as deduction to the employer.

14. Tax benefit for Start-ups■ FM proposed to extend the eligibility

period to claim tax holiday for the start-

ups by one more year to 31st March, 2022.■ FM proposed to extend the eligibility

period of claiming capital gains exemption for investment made in the start-ups by one more year to 31st Match, 2022

15. indirect tax proposals

a. measures taken by department simplify the GSt :i. nil return through SMS,ii. quarterly return and monthly payment for

small taxpayers,iii. electronic invoice system,iv. validated input tax statement,v. pre-filled editable GSt return, andvi. staggering of returns filingvii. deployment of deep analytics and artificial

intelligence to identify tax evaders and fake billers

b. Custom Duty rationalization■ with effect from 1st October 2021, a

revised customs duty structure will placed, free of distortions.

■ FM propose that any new customs duty exemption henceforth will have validity up to the 31st March following two years from the date of its issue.

C. legislative Changes in the provisions of Central GSt act, 2017 (CGSt act) and integrated GSt act, 2017 (iGSt act)i. facilitating taxpayers, such as remove the

mandatory requirement of getting annual accounts audited and reconciliation statement, filing of the annual return on self-certification basis and charging interest on net cash liability with effect from the 1st july, 2017.

ii. improving compliance, such as availment of input tax credit only when the details have been furnished by the supplier in the statement of outward supplies, validity of provisional attachment for a period, zero-rating on payment of iGSt only in specified cases and linking it to the receipt of foreign remittances.

iii. making certain other changes relating to seizure and confiscation, filing of appeal only on payment of a sum equal to twenty-five per cent. of penalty imposed

iV. Section 35(5) of CGSt act, 2017 Scrapped – GStr 9C

artiCle


impact of budget 2021 on tax rates

1. rate oF inCome taX on inDiViDualS / huF / aop / boi(Optional alternate tax regime u/s 115baC available for individual & huF) a. General Category

Slab total inCome rate of tax taX CalCulator remarks I upto rs. 2,50,000/- 0 % NIl nO ChanGEII rs. 2,50,001/- to rs. 5,00,000/- 5% (total income –

2,50,000)*5%nO ChanGE

III rs. 5,00,001/- to rs. 10,00,000/-

20 % 12500 + (t.i. – 500000)*20%

nO ChanGE

IV above rs. 10,00,000/- 30 % 112500+(t.i.–10,00,000)*30%

nO ChanGE

2. Senior Citizen – age 60 Years and above:-Slab total inCome rate of tax taX CalCulator remarks I upto rs. 3,00,000/- 0 % NIl nO ChanGEIII rs. 3,00,001/- to rs. 5,00,000/- 5% (total income – 3,00,000)*5% nO ChanGEIV rs. 5,00,001/- to rs. 10,00,000/- 20 % 10000 + (t.i. – 500000)*20% nO ChanGEV above rs. 10,00,000/- 30 % 110000+(t.i.–10,00,000)*30% nO ChanGE

3. Very Senior Citizen – age 80 Years:-Slab total inCome rate of tax taX CalCulator remarksI upto rs. 5,00,000/- 0 % NIl No ChangeII rs. 5,00,001/- to rs. 10,00,000/- 20 % (t.i. – 5,00,000)*20 % No ChangeIII above rs. 10,00,000/- 30 % 1,00,000+(t.i.–10,00,000)*30% No Change

4. optional alternate taX reGime For inDiViDual & huF (u/S 115baC)Slab total inCome rate of tax taX CalCulator remarks I upto rs. 2,50,000/- 0 % NIl nO ChanGEII rs. 2,50,001/- to rs. 5,00,000/- 5% (total income – 2,50,000)*5% nO ChanGEIII rs. 5,00,001/- to rs. 7,50,000/- 10 % 12500 + (t.i. – 500000)*10% nO ChanGEIV rs. 7,50,001/- to rs. 10,00,000/- 15 % 37500+(t.i.– 7,50,000)*15% nO ChanGEV rs. 10,00,001/- to rs. 12,50,000/- 20 % 75000 + (t.i. – 10,00,000) * 20% nO ChanGEVI rs. 12,50,001/- to rs. 15,00,000/- 25 % 1,25,000/- + (t.i. – 12,50,000) *

25%nO ChanGE

VII above rs. 15,00,000/- 30 % 1,87,500/- + (t.i. – 15,00,000) * 30%

nO ChanGE

5. SpeCiFieD taX rateS in Certain CaSeS (SeleCteD SeCtionS onlY) - OVErriDinG thE rEGular taX ratESection nature of income income tax rate111a Short term Capital Gain – listed Equities & Equity MF 15%112 long term Capital Gain – Others 20%

artiCle


112a long term Capital Gain above rs. 1 lakhs – listed Equities, Equity MF, certain ulips

10%

115bb winning from lotteries, Crossword puzzles or race including hore race or Card Game or Sport in india or gambling or betting in any form or nature whatsoever

30%

6. rate oF inCome taX on partnerShip FirmS & llps(i) rate of income tax @ 30 % of total income Surcharge –if total income upto 1 Crore – nil if total income > 1 Crore – 12%health & education Cess – 4% of the Income Tax

& Surcharge (replaced 3% Cess in preceding year)(ii) Expenses that can be claimed only if mentioned

in the partnership Deed of the Firm

a) remuneration permissible to partners – subject to limit prescribed below:-

Book Profit (BP) of the Firm allowable remunerationIn case of loss rs. 150000/-book profit (bp) <= rs. 3 lakhs higher of rs. 1,50,000/- or @ 90 % of book profitsbook profit (bp) > rs. 3 lakhs 2,70,000/- + (bp – 3,00,000) * 60%

b) interest on partners Capital (if provided in the partnership Deed) is allowed upto a Maximum of 12 % p.a.

this historic Digital budget 2021 is aimed at overall development of india Economy and will create new development opportunities in all sectors to boost our economy. it is aimed to gain double-digit growth in the indian economy. the budget sought to ensure tax certainty and even where tax law provisions were changed, the idea was to provide

clarity and to minimize litigation. the union budget is classified into Capital budget, revenue budget and Expenditure budget. this budget targets to bolster an economy badly-hit by the novel coronavirus pandemic. this budget 2021 is much focused on higher infra spending, healthcare expenditure, boost to transport infra and public sector bank privatisation, while no major income tax relief has been provided to the common man.

artiCle


UNION BUdGet 2021-22

union Finance Minister nirmala Sitharaman on February 1 presented the union budget 2021 and revised the expenditure target for Fy 2021 at rs 34.50 lakh crore. She allocated rs rs 2,23,846 crore for health, rs 1.18 lakh crore for road infra, rs 1,10,055 crore for railways, Outlay over rs 3 lakh crore for power and set the divestment target for Fy22 at rs 1.75 lakh crore, among other things.

budget has gone paperless this time.budget session will be held in two phases jan

29 to Feb 15 and March 8 to april 8.

in order to reassure existing investors, the government could identify stressed business segments and provide a package of tax support

with india enduring the COViD-19 pandemic disruption, the Finance Minister has assured that the 2021 union budget will be like no other in the past and will help india emerge as the engine for global growth.

“In the midst of every crisis, lies great opportunity.”

—Albert Einsteinunion Finance Minister nirmala Sitharaman in

her budget 2021 speech on February 1 announced an entity in the form of an asset reconstruction

company/asset management company or more commonly called as a ‘bad bank’ to help the banking system get rid of the existing stock of problematic loans. the bad bank will absorb the existing stock of non-performing assets (npas) of the banks and will attempt resolution through a professional approach.

in the wake of the Covid-19 pandemic, nations are reordering their priorities, focusing on public health and planning for economic recovery. the right set of fiscal measures can help economies restart and reconfigure themselves. while state aid is an important pillar of the economy, capital inflow would contribute to economic activity and develop the workforce, allowing the government to direct its attention and financial support to other aspects of the recovery.

Foreign capital gravitates towards the right market, provided it has a stable tax ecosystem that allows businesses to focus on growth. hence, it is important for lawmakers to strike a balance between incentives and taxes, and between introducing innovative tax reforms and adapting to the existing set of tools to address the needs of the hour.

Foreign investment could aid in reversing the adverse impact of the pandemic on employment. Deduction for additional labour (section 80jjaa) is currently available only to the extent of taxable profits. Migrating this benefit to business deductions would help companies which are generating new employment during the set-up phase, when there is no tax profit. a tax benefit for employment generation would reduce the effective employee cost, thereby encouraging employment generation.

as the government aims to prioritise investment in the infrastructure sector, a lower tax rate benefit (17.16%) can be provided to the sector. Furthermore, the sunset period under the lower

CS parul Jain, [email protected]


artiCle


tax regime for commencing a business is only two years away (March 31, 2023). this needs to be extended to attract projects which require a longer duration for set-up.

a production-linked incentives (pli) scheme has been announced covering 10 champion sectors including automobile, pharma, electronic/technology products and manufacturing of advanced chemical cells battery (for electric vehicles). while the details are awaited, it is expected to attract significant investments, specifically from MnE groups.

Export incentives can induce MnEs to set up a manufacturing hub in india for their global operations, especially MnEs migrating their manufacturing operations. remission of duties or taxes on export product (roDtEp) is the proposed replacement of the existing incentive for goods export (MEiS) and is expected to result in higher benefits. while an official notification is awaited, it appears that EOus and SEZs may not be eligible for this benefit. Such exclusion could be reconsidered, as large-scale benefits should be made available to EOus and SEZs focused on exports.

in order to reassure existing investors, the government could identify stressed business segments which need support to recover, and provide a package of tax support. this package could include increasing the period of carry forward of losses, carry forward or backward of it/GSt refunds at the taxpayer’s choice to adjust tax liability, and relaxation of input tax credit provisions under GSt. Such benefits would highlight the government’s intention of sharing the burden of recovery with taxpayers and would make india a preferred jurisdiction for future expansion.

upfront certainty is one of the pillars of a stable tax ecosystem. the advance pricing agreement and it advance ruling mechanisms have not fully met the expectations of taxpayers from the timeline perspective. the longer waiting time has diluted the essence of the forum, which is to provide upfront certainty to taxpayers. a timebound approach would lead to more taxpayers opting for the forum.

Similarly, expedited disposal of tax litigation should also be a focus area, which would

greatly help in boosting investor confidence in the judicial system. with regard to GSt, while the advance ruling process has ensured speedy disposal, the rulings are often adverse and also diverge across states. Since both aspects directly impact taxpayer readiness to opt for the advance ruling mechanism, they need to be addressed soon.

the government is ironing out teething issues related to GSt. in doing so, to ensure the full benefits and truly make it a ‘Good and Simple tax’, frequent changes to legal provisions, procedures, rates and the it platform need to be avoided as they result in an enormous compliance burden and costs for taxpayers, diverting much-required attention from the business.

lastly, the simplification of laws is also an expectation from the government. For example, currently, corporates have three tax schemes, aggregating to four tax rates. individuals have two broad tax schemes with several slabs of taxation. Such unintended complexities may be simplified, ultimately leading to better compliance.

budget proposed: the overall budget of the Department of agriculture, Cooperation and Farmers saw a miniscule increase of five per cent from last year’s revised Estimates (rE) but was eight per cent below the 2020-21 budget Estimates (bE) announced in February 2020.

health and Sanitation: the world health Organisation has repeatedly stressed the importance of clean water, sanitation, and clean environment, as a prerequisite to

artiCle


achieving universal health, the budget has made a significant allocation to these sectors.

the health and wellbeing have found sharp focus and central positioning in the union budget 2021-22 presented in parliament. they form the basis of aatma nirbhar bharat. there is a steep increase of 137 per cent in the budget outlay for health and wellbeing. a new scheme, titled pM atma nirbhar

Swasthya bharat yojana, to be launched to develop primary, secondary and tertiary healthcare

Mission pOShan 2.0 to improve nutritional outcomes across 112 aspirational districts

Operationalisation of 17 new public health units at points of entry

Modernising of existing health units at 32 airports, 15 seaports and land ports

jal jeevan Mission urban aimed at better water supply nationwide

Strengthening of urban Swachh bharat Mission

education: Education is regarded as a key factor for a country’s development, yet the allocation for the sector witnessed a massive slump in the aftermath of the COViD-19 pandemic. the government slashed rs 6,088 crore from the education sector’s budgetary allocation. the cut in education spending, however, comes in the year the government begins to implement the national Education policy 2020.

100 new Sainik Schools to be set up 750 Eklavya schools to be set up in tribal

areas

a Central university to come up in ladakh infrastructure: in the past, various government

instrumentalities have found financing large highly capital-intensive projects very difficult, resulting in delays and schedule disruption. this budget has highlighted the need to create a national infrastructure pipeline (nip) for monetisation of brownfield assets to create new infrastructure.

the move to set up invits to attract investment from global funds in the highway and power sector is a step in the right direction. invits in the highway sector have been a success and should be explored in other sectors as well.

✓ Vehicle scrapping policy to phase out old and unfit vehicles – all vehicles to undergo fitness test in automated fitness centres every

artiCle


20 years (personal vehicles), every 15 years (commercial vehicles) highway and road works announced in

Kerala, tamil nadu, west bengal and assam

national asset Monetising pipeline launched to monitor asset monetisation process

✓ national rail plan created to bring a future ready railway system by 2030

✓ 100% electrification of railways to be completed by 2023

✓ Metro services announced in 27 cities, plus additional allocations for Kochi Metro, Chennai Metro phase 2, bengaluru Metro phase 2a and b, nashik and nagpur Metros

✓ national hydrogen Mission to be launched to generate hydrogen from green power sources

✓ recycling capacity of ports to be doubled by 2024

✓ Gas pipeline project to be set up in jammu and Kashmir

✓ pradhan Mantri ujjwala yojana (lpG scheme) to be extended to cover 1 crore more beneficiaries

tax: in FM’s major announcements under taxation, Sitharaman said that the government proposes to make income tax appellate tribunals faceless. it will set up national income tax appellate tribunal centre. Meawhile, tax holiday for startups has been extended by 1 year while exemption on capital gains on investment in startups has also been extended by 1 year.

advance tax liability on dividend income

shall arise only after payment of dividend, the FM said. Exemption from tax audit limit doubled to rs 10 crore turnover for companies doing most of their business through digital modes.

no it filing for people above 75 years who get pension and earn interest from deposits

reopening window for it assessment cases reduced from 6 to 3 years. however, in case of serious tax evasion cases (rs. 50 lakh or more), it can go up to 10 years

affordable housing projects to get a tax holiday for one year

Compliance burden of small trusts whose annual receipts does not exceed rs. 5 crores to be eased

Duty of copper scrap reduced to 2.5% Custom duty on gold and silver to be

rationalised Duty on naphtha reduced to 2.5%. Duty on solar inverters raised from 5% to

20%, and on solar lanterns from 5% to 15%

all nylon products charged with 5% customs duty

Tunnel boring machines to attract customs duty of 7%

Customs duty on cotton raised from 0 to 10% economy and Finance: For the proposed

capital outlay, adequate measures to fund new projects have been highlighted. the creation of a professionally managed Development Financial institution (DFi) with an aim to promote private sector participation will act as a catalyst for infrastructure financing. the sectors in which greater private sector involvement is proposed are airports, ports, railways, power and warehousing assets.

artiCle


■ Fiscal deficit stands at 9.5% of the GDp;

estimated to be 6.8% in 2021-22 ■ proposal to allow States to raise borrowings

up to 4% of GSDp this year ■ a unified Securities Market Code to be

created, consolidating provisions of the Sebi act, Depositories act, and two other laws

■ proposal to increase FDi limit from 49% to 74%

■ an asset reconstruction company will be set up to take over stressed loans

■ Deposit insurance increased from rs 1 lakh to rs 5 lakh for bank depositors

■ proposal to decriminalise limited liability partnership act of 2008

■ two pSu bank and one general insurance firm to be disinvested this year

■ an ipO of liC to debut this fiscal ■ Strategic sale of bpCl, iDbi bank, air india

to be completed agriculture: the overall budget of the

Department of agriculture, Cooperation and Farmers saw a miniscule increase of five per cent from last year’s revised Estimates (rE) but was eight per cent below the 2020-21 budget Estimates (bE) announced in February 2020.

• agriculture infrastructure fund to be made available for apMCs for augmenting their infrastructure

• 1,000 more Mandis to be integrated into the E-naM market place

• Five major fishing hubs, including Chennai,

Kochi and paradip, to be developed • a multipurpose seaweed park to be

established in tamil nadu• agriculture infrastructure and

development cess proposed on certain items including urea, apples, crude soyabean and sunflower oil, crude palm oil, kabuli chana and peas

employment: union Finance Minister announced a slew of measures all aimed at spurring the job creation in the country ranging from the creation of 7 textile parks to the proposal of setting up of a seaweed park in tamil nadu to the announcement of rs.18,000 crore scheme for increased transport in urban areas.

a portal to be launched to maintain information on gig workers and construction workers

Social security to be extended to gig and platform workers

Margin capital required for loans via Stand-up india scheme reduced from 25% to 15% for SCs, Sts and women

the FM also offered some relaxation to home buyers by announcing extention for Rs 1.5 lakh deduction on payment of interest for affordable housing by 1 year.

the pandemic struck at a time when the economy was already caught in the grip of a growth slowdown. GDp growth touched an 11-year low of 4 per cent in 2019-20. also, since last budget, the size of the economy has reduced from rs 2.24 lakh crore nominal GDp considered in the Fy21 budget to rs 1.94 lakh crore. there

artiCle


has been lower-than-budgeted revenue growth and higher expenditure to offset the adverse impact of the pandemic.

among the most-watched figures in the budget was on the expenditure on vaccination in Financial year 22 which could be shared among the central government, state governments and households. FM Sitharaman has announced rs 35,000 crore towards COViD-19 vaccination in 2021-22 fiscal.

ConclusionOverall, through the budget, the FM has put

forward the short-term road map to accelerate recovery from the COViD-19 pandemic, through significantly higher capital expenditure as

compared to past budgetary allocations for various infrastructure sectors. this will have a multiplier effect on other sectors and create direct and indirect employment opportunities, enabling the government to revitalise the economy and ensure balanced regional development.

union budget 2021–22 is expected to be a comprehensive response from the government to stimulate a strong recovery from the pandemic. tax proposals have a critical role to play in these efforts. while there are considerable expectations from taxpayers, whether the government has the headroom to cater to all of them remains an open question.

artiCle



the Finance Minister’s budget 2021-22 clearly advocated digital india, being the first paperless budget. the 2021 union budget proposes to allow transfers of dividends to real Estate investment trusts (“rEits”) or infrastructure investment trust (“invit”) tDS-exempted. advance tax obligation on dividend income is also given to occur only after the declaration/payment of the dividend. this is due to the fact that shareholders cannot accurately predict the sum of dividend income in order to pay advance tax. a tax exclusion on dividend profits at a lower treaty rate can now be used by foreign portfolio investors.

Dividend is a distribution of portion of the profits / earnings by a company (domestic or foreign) to its shareholders based on the company’s future strategic plans and prospects. portions of profits that have not been distributed is re-invested back in the business. the debate on whether to tax dividends in the hands of the shareholder or the company is an age-old controversy. in this article, we have analysed and explained the Dividend Distribution tax (“DDt”) schemes prevalent in india over a course of time. Further, DDt is the tax imposed by the indian Government on indian companies according to the dividend paid to a company’s shareholders

history and background of Dividend taxation in india

a. ClaSSiCal /proGreSSiVe SYStemthe indian Government conceptualised the

tax legislature in india i.e. from the year 1961, with the motive that discouraged distribution of dividends in order to incentivise firms to invest their profits towards their own future investments in order to propel growth of economy as a whole up to the year 1997, every domestic company was required to withhold tax on payment of

dividend in excess of inr 2,500 at the specified rate and issue a tax Deducted at Source (“tDS”) certificate to the shareholder. the shareholders were liable to pay tax on such dividend at the specified rate and had to enclose the withholding tax certificates along with the return of income and claim credit for the tax deducted at source. in most of the situations, the tax deducted by the companies or a part there of were to be refunded to the taxpayer which caused a lot of administrative struggles back then. in summary, the classical system mandates that the company distributing the dividend is not required to discharge the DDt liability, instead dividend would now be taxed in the hands of the recipients at rates applicable to them.

the budget 2020 proposes to abolish the current DDt regime and re-adopt the classical system of dividend taxation. Given the re-introduction of the classical system of taxing dividends coupled with reduced corporate tax regimes introduced in 2019, india certainly has emerged as an attractive destination for foreign investors. this should augur well in attracting companies seeking to diversify their global supply chains due to COViD-19.

b. SimpliStiC/DDt reGimethe classical system of dividend distribution led

to administrative complexities and inconvenience on taxation of dividend. in pursuant to make the collection of tax on dividend administratively easier, the Government vide Finance act, 1997 inserted section 115-O of the income-tax act, 1961 (“act”) which provided for DDt. the DDt was inserted to impose additional income tax on the company itself and consequently such dividend income was exempt in the hands of shareholders under section 10(34).

under Section 115-O of the it act, distribution

CS Sumit Kochar & CS Shivam Gera, [email protected]

[email protected]


artiCle


of dividends by a domestic company was subject to an additional income tax, called DDt at an effective rate of 20.56% (inclusive of the applicable surcharge and cess) payable by the company distributing the dividend. the DDt, thus paid by the indian company, was the final tax on dividends and the dividends were exempt from any further incidence of tax in india in the hands of the shareholders.

the newly introduced DDt was considered inequitable and regressive and thereby the Finance act of 2002 abolished DDt regime to revert to the classical system. it was a measure to address the inequity caused by uniform treatment of dividends earned by corporates, high net worth individuals (“hnis”) and small retail shareholders. however, this brought with it all the above-mentioned compliance related issues, and the government reintroduced DDt the very next year, in Finance act of 2003 since it was easier to collect tax at a single point and the new system was leading to increase in compliance burden. however, with the advent of technology and easy tracking system available, the justification for current system of taxation of dividend has outlived its reasoning.

Changes in DDt over a period of timeOver a period of time, the DDt regime

was subject to various alterations to keep it pragmatic and efficient. the changes brought forth were as follows -

• the Finance act, 2014 provided for grossing up of DDt rate in order to ensure that DDt is levied on a proper base.

• the Finance act, 2017 inserted section 115bbDa to provide for additional rate of tax at the rate of 10% in the hands of shareholders in excess of receipt of rs. 1,000,000 of dividend and corresponding amendment was made under section 10(34) of the act. this was aimed at bringing certain high dividend taxpayers under the tax ambit.

abolishment of DDt in the budget 2020the Finance Minister expressed in budget

speech that, “Further, non-availability of credit of DDt to most of the foreign investors in their home country results in reduction of rate of return on equity capital for them”. the budget

2020 has proposed to abolish the DDt and adopt the classical system of dividend taxation as discussed above.

the Finance act, 2020 provides that DDt will not be payable in respect of dividends declared, distributed or paid by a domestic company after March 31, 2020, and accordingly, such dividends would not be exempt from tax in the hands of the shareholders – resident as well as non-resident.

the Finance act has also amended all the corresponding sections with regard to declaration of dividend:

Section 194 of the act to impose a withholding tax at the rate of 10% on all dividends paid by an indian company, by any mode whatsoever, to a resident shareholder if the aggregate amount of dividends distributed exceeds inr 5,000 in the particular financial year (april to March).

Section 195 to delete exemption provided to dividend referred to in section 115-O thereby non-residents to be taxed at rates in force.

to prevent the cascading impact of taxation, it was also proposed to re-introduce section 80M to allow deduction to a domestic company in respect of dividend received by it from any other domestic company to the extent of dividend declared / distributed to its shareholders, till one month prior to the due date of filing return of income. unlike erstwhile provisions, allowing set-off only for dividend received from a subsidiary company, section 80M allows deduction in respect of dividends received from any domestic company regardless of the percentage of the shareholding.

the distributing companies should benefit in the simplistic regime which will also induce higher dividend pay-outs from such companies, from a cash flow perspective. in the erstwhile classical regime, DDt was a separate cash outflow for the distributing company over and above the actual dividend distributed. now, in the simplistic regime, the obligation to withhold tDS will be from the amount of dividend to be distributed therefore no separate cash flow for the distributing company. the abolition of the DDt regime and re-introduction of the classical system marks a paradigm shift in the taxation of dividends in india. Further, the benefits granted by several of the tax treaties in terms of lower

artiCle


withholding tax (wht) rate would assume significant importance and can go a long way in reducing the cost of doing business in india.

amendments introduced vide Finance act, 2021

investments made in real Estate investment trusts (“rEits”) and infrastructure investment trusts (“inVits”) have been made more lucrative, alongside broadening avenues for raising capital. the trusts can now raise debt capital at competitive rates, while dividend payment to rEits and inVits have been exempt from tDS.

What is reit?a real estate investment trust (“rEit”) is

a company that owns, operates or finances income-producing real estate. rEits provide all investors the chance to own valuable real estate, present the opportunity to access dividend-based income and total returns, and help communities grow, thrive, and revitalize. rEits allow anyone to invest in portfolios of real estate assets the same way they invest in other industries – through the purchase of individual company stock or through a mutual fund or exchange traded fund (EtF).

What is invit?an infrastructure investment trust (“invits”)

is Collective investment Scheme which enables direct investment of money from individual and institutional investors in infrastructure projects to earn a small portion of the income as return.

“rEits”, together with “invits”, referred to as “business trusts” in this article.

as per erstwhile Section 115-O of the act, in case a business trust held entire share capital in their Special purpose Vehicle (“SpV”), it was exempted from DDt. the unitholders who in turn received dividend, distributed by the business trusts, was without any further levy of tax.

the Finance act 2020 abolished the DDt regime and returned to classical system of incidence of taxation of dividend on the shareholder or unitholders. accordingly, as per the amended provisions, (i) dividend income would be subject to tax at the applicable slab rate in the hands of the shareholders; and (ii) the

SpV would be required to withhold tax on the same. however, the business trust will continue to be exempt from tax on dividend income from an SpV. there is no guidelines provided for an SpV to not withhold tax from dividends, when distributing to business trust. in this scenario, the business trust is to provide a nil withholding tax certificate to the SpV to ensure that no tax is withheld by the SpV while distributing dividend to the business trust.

Further, the business trust is required to withhold tax on the distribution where the income distributed is in the nature of dividend income received from the SpV, as discussed below:

a. taxation of dividends at the business trust level:

the erstwhile Section 10(23FC) of the act exempted certain income of business trust being, “(i) interest income received from an SpV, where the business trust held controlling interest and such percentage holding prescribed under the invit regulations or rEit regulations; and (ii) dividend income from an SpV in which the business trust held the entire share capital other than as required to be held by the Government or any regulatory authority.”

the Finance act 2020 made no changes in respect of the taxation of interest income of a business trust. however, the government proposed to exempt the dividend income from an SpV received by a business trust, in which the business trust held controlling interest or such percentage holding under the invit regulations or rEit regulations as prescribed. this amendment was effective from april 1, 2020.

the applicable capital gains tax will continue to be imposed, the total income of a business trust (except interest and dividend) will continue to be charged tax at the maximum marginal rate of 42.7%.

b. taxation of dividends at the unitholder level:Erstwhile Section 10(23FD) of the act

“provided that any distributed income, received by a unitholder from the business trust, other than interest income or rental income (i.e. rental income earned directly by a rEit) would be exempt from the total income of the unitholder.” vide the Finance act 2020, the government had proposed that dividend income distributed by

artiCle


the business trust to the unitholders, “in addition to interest income and rental income” would also be subject to taxation in the hands of the unitholders with effect from new financial year. accordingly, interest and dividend income distributed to unitholders were proposed to be taxed at the tax rates applicable to each of the unitholders.

the Finance act 2020 laid out that dividend income received by resident and non-resident unitholders would be subject to withholding tax at the rate of 10%. however, in case of non-residents, if he meets the eligibility criteria for availing the benefits under Double tax avoidance agreement (“Dtaa”) provisions, any lower rate will be levied as provided in the Dtaa between india and the country of residence of the non-resident unitholder.

this tax on dividend in hands of unitholders is seen to be as a less favorable tax treatment under the new tax regime for dividend, as compared to the DDt regime. however, the Finance act has provided some concessions. the amended act provide that SpV distributing the dividend should not have exercised the option to pay 22% corporate tax under the corporate tax regime benefit and should comply section 115baa of act to exempt tax in the hands of unitholder. the corresponding withholding tax provisions have also been amended. the relaxation on tax compliance for rEit and invit investors is aimed to boost the market for such products. presenting the union budget Fy2021-22, Finance Minister nirmala Sitharaman emphasized that the move is sure to ease compliance procedures for investors.

artiCle



Since our country gained independence, we have been making great strides towards achieving economic autonomy through its planning and policies. Over the course of more than 72 years, the country has left its colonial past to create a new identity of being an economic powerhouse.

One of the chief architects behind this inspiring story of progress is the union budgets, which provide the required framework for the government to introduce policies and reforms for the betterment of the common taxpayers.

this year’s budget was presented in an incomparable challenging period, when the whole world is recovering from the impact of the Covid-19 pandemic. Considering the COViD pandemic, this budget has ensured the right balance of ensuring the recovery, growth, social equity and long-term competitiveness of the economy.

union Finance Minister Smt. nirmala Sitharaman,the Finance Minister identified main focus areas of the budget and mentioned them assix main pillars of the budget 2021, namely- health & well-being physical & financial capital & infrastructure inclusive development for aspirational

india reinvigorating human capital innovation & r&D

Minimum Government & Maximum Governance

For health & Well-beinGKeeping in view the health of citizens and

quality of air, new vehicle scrapping policyhas been announced. this step will also provide a boost to the automobile industry.the policy focuses to phase out old and unfit vehicles, encouraging fuel efficient, environment friendly vehicles, thereby reducing vehicular pollution and oil import bill.

FinanCial Capitalas a reform in capital market, FM proposed

to consolidate the provisions of SEbi act, 1992, Depositories act, 1996, Securities Contracts (regulation) act, 1956 and Government Securities act, 2007 into a rationalized single Securities Markets Code.

to enhance conf idenceamongst the par t ic ipantsand l iqu id i ty, i t has been proposed to create a permanent ins t i tu t ional f ramework . the proposed body wi l l be purc has ing inves tment grade debt secur i t ies he lp ing the development of the bond market .

inFraStruCture FinanCinG - DeVelopment FinanCial inStitution (DFi)

as an enabler and catalyst for infrastructure financing, professionally managed “Development Financial institution (DFi)” is necessary. accordingly, Finance Minister proposed to

ms. urvashi Verma & ms. namita [email protected]


“A budget is more than just a series of numbers on a page; it is an embodiment of our values.”

Barack Obama

artiCle


introduce a bill to set up a DFi. in the budget, Finance Minister opened the

doors of debt financing for invits and rEits by Foreign portfolio investors by making suitable amendments in the relevant legislations.in addition, dividend payment to rEit/ invit proposed to be exempt from tDS.

poWer inFraStruCtureto end the monopolies of distribution

companies and providing consumer with alternatives, Finance Minister proposed to put in place a framework for having more than one Distribution Company increasing competition.

proposal to launch a hydrogen Energy Mission in 2021-22 for generating hydrogen from green power sourceshad been presented.

StreSSeD aSSet reSolution bY SettinG up a neW StruCture

an asset reconstruction Company limited and asset Management Company will be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to alternate investment Funds and other potential investors for eventual value realization. this will help banks in clearing their bank books and mobilization of funds.

CompanY matterSin relation to corporates, following proposal

has been made:• For providing ease of doing business,

proposal for decriminalization of the limited liability partnership (llp) act, 2008 has been put forth.

• Definitionfor Small Companies has been revised, increasing the thresholds for paid up capital from “not exceeding `rs. 50 lakh” to “not exceeding `rs. 2 Crore” and turnover from “not exceeding `rs. 2 Crore” to “not exceeding `rs. 20 Crore”.

• as a further measure which directly benefits Start-ups and innovators, proposal to incentivize the incorporation of One person Companies (OpCs) by allowing OpCs to grow without any restrictions on paid up capital and turnover, allowing their conversion into any other type of company at any time, reducing the residency limit for an

indian citizen to set up an OpC from 182 days to 120 days and also allow non-resident indians (nris) to incorporate OpCs in india.

• For faster resolution of cases, NClT framework will be strengthened, e-Courts system shall be implemented and alternate methods of debt resolution and special framework for MSMEs shall be introduced.

• During the coming fiscal 2021-22, data analytics, artificial intelligence, machine learning driven MCa21 Version 3.0 will be launched.

• in 2021-22, as a policy of strategic disinvestment, the ipO of liC is proposed. also, the policy provides a clear roadmap for disinvestment in all nonstrategic and strategic sectors. it has beenestimated to produce rs. 1,75,000 crores as receipts from disinvestment.

• an addition to the list of number of steps to support the MSME sector, in this budget, it has been proposed to provide rs15,700 crores to this sector.

• a well-planned framework for inviting foreign investment while keeping the control, increase in permissible FDi limit from 49% to 74% in insurance Companies and allowing foreign ownership and control with safeguards has been proposed. under the new structure, the majority of Directors on the board and key management persons would be resident indians, with at least 50% of Directors being independent Directors.

other maJor hiGhliGhtS• with the intent of strengthening the

manufacturing sector, production linked incentive schemes have been announced for 13 sectors. For this, the government has committed nearly 1.97 lakh crores rupees over 5 years starting Fy 2021-22.

• to further consolidate the financial capacity of pSbs, further recapitalization of rs 20,000 crores is proposed in Fy 2021-22.

• For making the textile industry globally

artiCle


competitive, attracting huge investments and boost employment generation, a scheme of Mega investment textiles parks (Mitra) will be launched in addition to the pli scheme.

• to have ease of doing business for those who deal with Government or CpSEs, and carry out contracts,a Conciliation Mechanism and mandate its use for quick resolution of contractual disputes to instill confidence in private investors and contractors.

DireCt taX propoSalS• under Direct taxation, senior citizens

who only have pension and interest income are exempted from filing their income tax returns.

• also, time period for re-opening of assessment has been reduced to 3 years (previously 6 years) and in serious tax evasion cases, assessment can be re-opened up to 10 yearsonly where there is evidence of concealment of income of rs50 lakh or more in a year, with prior approval of the principal Chief Commissioner.

• relaxation to nris has been provided

by removing their hardship of double taxation.new rules to be notified.

• to incentivise digital transactions and reduce compliance burden, proposal to increase the limit for tax audit from rs. 5 crore to rs. 10 crore has been made.

• in order to allow funding of infrastructure by issue of Zero-Coupon bonds, notified infrastructure Debt Funds has been proposed to be eligible to raise funds by issuing tax efficient Zero-Coupon bonds.

• importantly, to incentivise start-ups in the country, proposal to extend the eligibility for claiming tax holiday for start-ups by one more year has been made. Further, proposal to extend the capital gains exemption for investment in start-ups by one more year has been put forth.

this budget is very promising for various industries including textile, banking sector. not announcing new tax and infusing new confidence of development, this budget has instilled investor’s confidence and same can be perceived by rise in the benchmark indices. Opening new avenues for infusion of funds, the budget reveals government efforts of taking nation a step closer towards the success of “Make in india” vision.

artiCle


COVId-19 pANdemIC mANAGemeNt At pGImeR ChANdIGARh

the pGiMEr, Chandigarh is a 1948 bedded tertiary care hospital and teaching institute which caters to a huge catchment area comprising of 5 to 6 states of north india. the patient load handled by pGiMEr is explained by these figures: -OpD year 2018 year 2019

2869150 2914343ipD 98180 100009

the year 2020 saw the spread of COViD 19 in india. pGiMEr took the lead in this fight against the pandemic in this region by setting up a dedicated 200 bedded COViD hospital in March 2020. Facilities like intensive Care unit beds and Ot services were made available in this facility. Staff and resources from different areas of the hospital were mobilized and trained to provide the best possible healthcare services of COViD 19 patients. all facilities and services were ramped up at this facility in line with the surge in the pandemic. as the number of cases started rising, pGiMEr stood up to the challenge and increased the bed capacity to 300 beds to cater to patients of COViD 19 with serious complications. all the beds in this facility are with central oxygen supply. there are 50 intensive Care unit beds and almost 4 to 5 emergency surgeries of COViD 19 patients are performed daily in this facility. Dialysis facility has also been made available in this setup and almost 6-7 Dialysis are given every day to COViD 19 patients in this facility. to cater to further surge in COViD 19 infection rates, another 100 beds from in existing hospital block were earmarked for COViD 19 patients on 11th September 2020, thus increasing the total number of beds for COViD 19 to 400 at pGiMEr. about 1750 COViD 19 patients have been admitted at pGiMEr, Chandigarh as of October 2020.

pGiMEr, being the referral centre for a huge catchment area, almost had 100% bed occupancy prior to COViD-19 pandemic.

the emergency and critical care services including Emergency Ot services are being

(Stellar Role played by CS.Kumar Gaurav Dhawan, IRS)

provided by pGiMEr 24X7 as in the pre COViD times .the occupancy/intake of patients in emergency in pGiMEr is more than 200% at any time. a new initiative of teleconsultation services has been stated at pGiMEr to provide outpatient services to around 1500-2000 patients on a daily basis during this COViD 19 pandemic.

the Department of Virology of the pGiMEr has mentored 51 number of labs for testing COViD facility besides having a COViD 19 reagent Depot for distributing kits/reagents to the states of punjab, haryana, himachal pradesh, uttarakhand, j & K and leh. During the period March to Sept. 15, 2020, the pGi has conducted 62155 no. of tests.

as Deputy Director (administration), pGiMEr, Chandigarh, CS.Kumar Gaurav Dhawan, irS headed the administration in providing administrative and logistic support in ensuring availability of manpower, infrastructure and requisite approvals from various authorities. he has been a member of the COViD-19 Management Committee and instrumental in making various management guidelines and policies for testing, quarantine and treatment of patients. he ensured transport and accommodation facilities for the various employees of the institute.

he is also a member of the Committee headed by Director, pGiMEr, Chandigarh which liaises with Chandigarh administration to guide them in management of the situation in Chandigarh and neighbouring states.

he also provided effective coordination with the union Ministry of health & Family welfare, State Governments and ut administration and administrative support to Faculty in dealing with the COViD 19 pandemic.

REGION LM NO. NAME MEMB NUMBER CITY

1 14752 MR. SUMIT ACS - 35274 NEW DELHI

2 14753 MR. AJAY KUMAR CHHABRA ACS - 43650 JALANDHAR

3 14754 MS. ANAMIKA PALIWAL ACS - 53518 BULANDSHAHR

4 14759 MR. PANKAJ SARDA ACS - 34567 BHILWARA

5 14762 MS. GARIMA VERMA ACS - 44161 NEW DELHI

6 14764 MS. NIHARIKA GOYAL ACS - 61428 MEERUT

7 14765 MR. SIDHARTH YADAV ACS - 35095 GURGAON

8 14766 MS. PUJA SHREE AGARWAL ACS - 56253 GHAZIABAD

9 14767 MS RISHU CHATLEY ACS - 19932 CHANDIGARH

10 14769 MR. RAVIKANT ACS - 37975 GURGAON

11 14776 MR. GOURAV AHUJA ACS - 53647 PANIPAT

12 14779 MR. ABHINAV AGARWAL ACS - 46266 GURGAON

13 14780 MR ASHOK KUMAR ACS - 63274 CHURU

memBeRS eNROLLed tO CSBF FROm NIRC dURING the peRIOd FROm 01.01.2021 tO 31.01.2021

ICSI-NIRC Newsletter | June 2020 | 59ICSI Motto: lR;a on /keZa pjA speak the truth abide by the law ICSI Missin: "To develop high calibre professionals facilitating good corporate governance

Documents

ICSI-NIRCMonthly l XXXVIX l