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September 30, 2013

Get Digital Signature Online

You may get Digital Signature through dealer for Rs 350 and buying direct from the authority may cost you Rs 1,350. But the extra 1000 is worth it as you get digital signature and password direct in your e-mail address unlike getting them both delivered to any third person/dealer from where they can be easily misused. 

Click on Generate Signing Certificate

E Mudhra
Click on Buy DSC Now

Following does not offer them to be made online
N Code

If you go thrrough any other online website, they will ask you to get the form filed/scanned and mailed to them so that they in turn can send the same to certificate issuing authority. The procedure would be same as you would have been made the signature from the dealer.

September 27, 2013

Audit and exemption of Trust

First of all we should understand what is charity?
‘Charitable Purpose’ includes relief of the poor, education, medical relief and the advancement of any object of general public utility. [Section 2(15)].
The Finance Act (No. 2), 2009 has added two more limbs to the definition with retrospective effect from Assessment Year 2009-10 i.e. "preservation of environment (including watersheds, forest and wildlife) and preservation of monuments or places or objects of artistic or historic interest", thus taking such activities outside the term "advancement of any other object of general public utility". 

What is not a Charity?
The Finance Act 2009, has amended the definition of ‘charitable purpose’ to provide that ‘advancement of any other object of general public utility’ will not be considered as ‘charitable purpose’ if it involves carrying on of any activity in the nature of trade, commerce, or business or any activity of rendering any service in relation to any trade, commerce or business for any fee, cess or other consideration irrespective of nature of use or application or retention of the income from such activity.
If the aggregate value of the receipts from such activities is not more than Rs. 25 lac (A.Y. 2012-13 i.e. w.e.f. 1st April, 2011). The effect of this amendment would therefore be that in a particular year, an object of the trust may be regarded as a charitable purpose, but in a subsequent year or an earlier year, it may not be so regarded depending upon the amount of receipts from such activity.

What is not included in income at all?
Where a trust receives voluntary contributions (Act 2(24 (iia)) made with a specific direction that they will form part of the corpus, such donation will not be included in the total income of the trust. [Section 11(1)(d)

What is exempt?
Income derived from property under trust subject to sections 60 to 63 wholly for charitable or religious purposes is exempt to the extent such income is applied on the objects of the trust in India, during the previous year. The trust must apply at least 85% of such income on the objects in such cases balance 15% will deemed to be accumulated for the purpose of charity and exempt.
[Section 11(2)]. If the amount applied by the trust is less than 85%, the shortfall in application is not taxable in the following cases —
1.    Income is accumulated up to 5 years and the purpose of accumulation is specified to the AO in Form No. 10. If accumulated amount could not be applied due to order/ injunction of the court, such period will be excluded.
The income accumulated must be applied for the specified purpose within the period of accumulation as per application in Form 10. Till the accumulated amount is applied, it must be invested as specified in Section 11(5). This requirement of Section 11(5) is applicable also to those trusts who are claiming exemption under clauses (iv), (v), (vi) and (via) of Section 10(23C).
If due to any other reason, income is not applied during the previous year, such income can be applied in the following previous year. However intimation in writing must be sent to AO before the expiry of time allowed  u/s. 139(1) for furnishing the return. If such income is not applied, it shall be deemed to be the income of previous year immediately following the year in which such income was derived [Explanation 2 to Section 11(1)].
Adjustment of expenses incurred by the trust for charitable purpose in the earlier years against the income earned by the trust in the subsequent year will have to regard as application of income of the trust in the subsequent year. Also depreciation debited in the books should be treated as expenditure for this purpose.
The repayment of loans originally taken to fulfil any of the objects of the trust is also considered as an application. The loan given by an educational trust is also an application for charitable purpose.

What is not exempt?
Business Income
Section 11(4A) provides that tax exemption will not apply in relation to any income of a trust being profits and gains of the business unless the business is incidental to the attainment of the objectives of the trust and separate books of account are maintained by such trust in respect of such business. ICAI has expressed the view that running of hospital by a trust is a business activity. Therefore, if gross receipts from business exceed Rs. 1 cr, the accounts should be audited u/s 44AB.
If accumulated income is credited/ paid to any other trust registered u/s 12AA or referred to in sub-clause (iv), (v), (vi) or (via) of 10(23C), it shall not be treated as application of income. However if the contribution is made in that year itself (i.e not out of the accumulated income) then the same would be exempt.

Section 13(1)(a) — Trust for private religious purposes.
Section 13(1)(b) — Trust established for the benefit of any particular religious community or caste.
Section 13(1)(c) — Income of the trust is applied directly or indirectly for the benefit of persons referred to in sub-section (3).
Section 13(1)(d) — Funds are invested otherwise than in any form or modes specified in 11(5).
1.    If whole or part of the relevant income is not exempt u/s 11 or 12 by virtue of provisions contained in clauses 13(1)(c) and (d), the tax will be charged at maximum marginal rate. [Proviso to Section 164].
2.    New Section 115BBC — The anonymous donations as aforesaid will be taxed @ 30% (plus Surcharge and Education Cess), except in the following two situations:
a.    The trust or institution is established wholly for religious purposes; and
b.    If it is for both religious and charitable purposes, unless the donation is specifically for the educational or medical institution run by such trust.
Anonymous donation means any voluntary contribution where a person receiving such donation does not maintain record of identity indicating the name and address of person making such contribution.

Requirement of Audit
Where total income before the exemptions u/ss. 11 and 12 of the trust exceeds the maximum amount not chargeable to tax; i.e., Rs. 1,80,000 (A.Y. 2012-13) (w.e.f. 1/4/2011), in order to get exemption u/ss. 11 and 12, the accounts have to be audited by an accountant as defined in explanation below sub-section 2 of Section 288, who will give his report in Form 10B.
If the income of the trust/institution referred to in clause (iv), (v), (vi) or (via) of Sec.10(23C) without giving effect to the provisions of these clauses exceeds the maximum amount not chargeable to tax, such trusts will have to get their accounts audited by the accountant as defined in Explanation below sub-section (2) of Section 288. (As provided in the Taxation (Amendment) Act, 2006) in form 10BB.

Time limit to file a return?
As per sec 139(4A) if total income exceeds maximum amount not chargeable to tax return should be filled as if it was return u/s 139(1)

Penalty for non-filling
Penalty of Rs. 100/- per day for failure to furnish return under sub-sections 4A and 4C of Section 139 [Section 272A(2)]. Similarly penalty of Rs 100 per day can be levied for delay in submitting Audit Report in Form 10B/10BB (272A)(2)(g).

Deloitte withdraw its report

When did Deloitte submit its audit report?
On May 30, nearly two months before the NSEL crisis broke out.

What are the key statements made by Deloitte?
The Big 4 firm has issued a certificate of compliance of conditions of corporate governance, and independent auditor’s reports accompanied by an annexure on standalone and consolidated financial statements. It certified these statements presented “ a true and fair view” of the company’s affairs ( balance sheet), profit ( profit and loss account) and cash flow ( cash flow statement). 

Did Deloitte make any qualifications in its report?
No, there were no qualifications in the report on both stand- alone and consolidated statements. There were a couple of matters that were “emphasised”.

Who signed these reports?
Deloitte’s partner Rajesh K Hiranandani. A senior chartered accountant, Hiranandani has in the past audited several large companies such as M& M, Sun Pharma and India Infoline.

How much did Deloitte charge?
It charged 28 lakh for the statutory audit. However, it earned 23.9 lakh more from FTIL. It earned 8 lakh on taxation matters and 15.25 lakh “for other services”.

What did Deloitte do this week?
On September 23, Deloitte informed FTIL the audit report dated May 30 could not be relied on. The company in turn told exchanges it was deferring three key resolutions slotted for the annual general meeting on September 25.

Why did Deloitte make this statement?
Two events preceded the move. One is described in FTIL’s statement to exchanges as “ communication of management of NSEL and statutory auditors of NSEL on the financial statements of NSEL”. Some reports have interpreted this as withdrawal of the audit report by the NSEL auditor as well. Secondly, the move came a day after the Mayaram panel submitted its report. Something adverse in this report could also have triggered the Deloitte move.

Did Deloitte withdraw its audit report?
No. Under the guidance note published by the ICAI, an auditor cannot withdraw a report once published. However, he can revise it. 

What is the procedure for preventing reliance on the audit report already issued?
The auditor can take steps to prevent reliance when the management neither agrees to a revision of financial statements nor extends cooperation.
The auditor would notify those persons ultimately responsible for the overall direction of the entity that action will be taken to prevent future reliance on the report. The steps that can appropriately be taken will depend upon the degree of certainty of the auditors knowledge. 

What steps should the auditor take according to the ICAI?
a) Notify the client that the audit report must no longer be associated with the financial statements; ( b) Notify regulatory agencies having jurisdiction over the client that the audit report should not longer be relied on; ( c) Making an appropriate statement at the annual general meeting, if requested by the chairman.
Deloitte complied with clause ( a). It did not do so for (c).
Did it notified regulatory agencies as given in clause ( b), it does not wish to say.
Source: FTIL annual report, www. icai. org, exchange statements
On September 24, a day before its annual general meeting, Financial Technologies ( FTIL) told exchanges that key resolutions were deferred. One reason given was that Deloitte Haskins & Sells had some reservations about its audit following the crisis at NSEL, an FTIL subsidiary. Business Standard answers some key questions.

September 26, 2013

Import in India Airport

New Delhi, the   10th September, 2013
G.S.R. – In the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 90/2013 – Customs (N.T.), dated the 29th August, 2013, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 584 (E) dated the 30th August, 2013,


Items prohibited for import include:
1. Maps and literature where Indian external boundaries have been shown incorrectly.
2. Narcotic Drugs and Psychotropic Substances.
3. Goods violating any of the legally enforceable intellectual property rights.
4. Wild life products.
5. Counterfeit Currency notes/coin or fake Currency notes.
6. Specified Live Birds and animals.

Customs Duty Free Allowance
Eligible Passenger
Origin Country
Duty Free Allowance
Passengers of Indian origin and foreigners of over 10 years of age residing in India
Rs. 6,000
Passengers of Indian origin and foreigners of over 10 years of age residing in India
Other than Nepal,
Rs. 35,000
Tourists of foreign origin
Gifts and souvenirs worth Rs. 8,000
Indian passenger who has been residing abroad for over one year
Gold jewellery:
Gentleman – Rs. 50,000
Lady – Rs. 1,00,000
All passengers
Alcohol liquor or wine: 2 litres
Cigarettes: 200 numbers or Cigars upto 50 or Tobacco 250 grams
Passenger of 18 years and above
One laptop computer (note book computer)

Customs duty is leviable @ 36.05% (Basic Customs duty @ 35% + Education Cess @3%) on the value of dutiable goods that is in excess of the Duty Free Allowance.
Indian Customs is responsible for protecting the nation against the illegal import of prohibited items. Indian Customs officers have the authority to question you and to examine you and your personal property. If you are one of the passengers selected for questioning / examination, you will be treated in a courteous, professional and dignified manner.
If your baggage is mishandled / lost on arrival, please obtain endorsement of free allowance, if any, from Customs Officer at Mishandled Baggage Counter.
For updated information on items prohibited/restricted for import or in case of any difficulty or complaint, please contact the Customs PRO.
(i)         in Form I, for
“Please report to Customs Officer at the Red Channel counter in case answer to any of the above question is ‘Yes’.
Signature   of Passenger …………………………”
“Please report to Customs Officer at the Red Channel counter in case answer to any of the above question is ‘Yes’.
Signature   of Passenger …………………………

[F. No. 520/13/2013-Cus.VI]
Under Secretary to the Government of India