Formation of Private Limited Company :Practical Guide

Formation of Private Limited Company :Practical Guide

original post by Ayush Agrawal

1. Apply for DIN for 2 directors min.-Rs.100 chllan
2. Apply for dsc of atleast one director-Rs.2000-2500
3. Create company login on MCA portal.
4. Take down 6 names in order of preference and the brief about company business activity for the purpose of applying for name availability in form 1A-rs.500 challan
5. If the word”iindustrial” is there then the min.authorised capital should be Rs. 1 crore. Check that before applying in form 1A
6. Once d name approval letter comes, then start drafting MOA and AOA and get it verified and confirmed from the directors.
7. MOA and AOA copies for the similar companies can be downloaded thru MCA site after payment of Rs. 50.After the payment is made check the payment transaction status and then the MOA and AOA of other co.can be viewed by login in to MCA portal under “My documents” view document. Click on MOA and AOA and download the same. This facility is for Max.7 days and Max.3 hrs.
8. Once d MOA n AOA is okayed by the directors, take 4 copies each of subscriber’s page for MOA and AOA duly filled and signed in own handwriting by all d directors.
9. The stamping of the MOA N AOA should be done first and then it needs to be dated after the date of franking or stamping.
10. Alternatively the stamp duty for MOA n AOA can also be paid thru MCA portal at the time of filing  Form No.1 but then while attaching pdf file of MOA n AOA ensure that it is dated after the payment challan date .
11. If at the time of name availability the no.of directors are more than final MOA n AOA then for change in promoter status , NOC from the remaining director needs to be obtained.and attached pdf file to that effect in form 1
12. Fill up form 18 and form 32. For form 18 also take down the police station address from the directors for the police station under whose jurisdiction the proposed co.address falls .
13. Take POA signed by any one of the director in our favour for facilitating changes in MOA N AOA and for collection of ROC certificate.
14. The size of the form 1 , 18 n 32 should be less than 2.5 MB so scan the documents in pdf file in black n white colour instead of greyscale.
15. Fill up d form, prescrutinise and upload the form 1 first and then 18 or 32.
16. Pay the challan.
17. Make necessary changes as advised and resubmit the documents again.
18. For resubmission –login and under services-resubmission option needs to be selected.Put the SRN for the first submission.
19. The charges for Form 1,18,32 alosngwith stamp duty are 18,500 for paid up capital Rs. 1 lac and authorised capital Rs. 5 lacs.
20. Within a week or so the certificate of registration alongwith the stamp duty paid challan is received from MCA portal on the email ids mentioned at the time of initial registration.
21. Take the printout of the Certificate of registration and then make printed copies ready for use of MOA and AOA . 

Anna Hazare's anti-graft campaign is good for the country: N R Narayana Murthy

 

BANGALORE: Software icon and Infosys' founder N R Narayana Murthy today said he was hopeful that the draft of Lokpal bill, expected to be tabled in the Parliament in a day or two, would satisfy all well meaning citizens.

"Mr Anna Hazare, his team and the government have been in talks and they are discussing. I am positive that they will come out with something that will satisfy all the well meaning citizens of this country," the Chairman Emeritus of Infosys said here.

Speaking to reporters at the sidelines of a function where he was conferred the Mother Teresa Award by Indian Development Foundation, he remarked that the anti-graft campaign launched by Hazare was "good for the country and there is no doubt about that".

"All Indians want corruption to come down, whether it is in the government, opposition or in the corporate world and those belonging to civil society," Murthy said. "The Prime Minister has said yesterday that they are accelerating the progress on introducing this (Lokpal) bill in the Parliament, so I think it is good. We are all very happy."

At the function, Murthy said even the projected seven per cent GDP growth for the current fiscal, as revised by the government, is pretty good in the current circumstances. But the biggest challenge is how to bring the majority poor to the mainstream.

Quoting a study which said 350 million Indians live on Rs 36 a day, Murthy lamented: "With this kind of income you cannot keep our body and soul together".

He said there were two sections of society in India. The first one was "galloping" with good economic growth. Children in these families have reasonably good education and comfort in their lives, decent health-care and nutrition.

But a vast section is still struggling and suffering. The government is indeed making efforts to make their lives better. The government cannot do it on its own and it is the duty of civil society and corporates to become an "enthusiastic" partner to ensure better lives for the poor,he said.

 

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Source : Simpletaxindia.

Stock Market : If you dont knw anything abt it, Must Read it. (Basic Knowledge)

What are the Sensex & the Nifty?

The Sensex is an "index". What is an index? An index is basically an indicator. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down.

The Sensex is an indicator of all the major companies of the BSE.

The Nifty is an indicator of all the major companies of the NSE. 

If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down.

Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE.

Just in case you are confused, the BSE, is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE.Most of the stock trading in the country is done though the BSE & the NSE.

Besides Sensex and the Nifty there are many other indexes. There is an index that gives you an idea about whether the mid-cap stocks go up and down. This is called the “BSE Mid-cap Index”. There are many other types of indexes.

There is an index for the metal stocks. There is an index for the FMCG stocks. There is an index for the automobile stocks etc. If you are interested in knowing how the SENSEX is actually calculated...you must check-out our "How to calculate BSE SENSEX?" article!
But, before we go ahead and try to understand "How to make money in the stock market?"

How to make money in the stock market?

Inroduction

This article is a COMPLETE guide to the basics of making money in the stock market! If you are considering investing in the stock market, you MUST read this article! We have explained all the concepts and talked about all the "myths" that people have about the stock market!

What are stocks? Definition:

Plain and simple, a “stock” is a share in the ownership of a company.

A stock represents a claim on the company's assets and earnings. As you acquire more stocks, your ownership stake in the company becomes greater.

Note: Some times different words like shares, equity, stocks etc. are used. All these words mean the same thing.

So what does ownership of a company give you?

Holding a company's stock means that you are one of the many owners (shareholders) of a company and, as such, you have a claim to everything the company owns.

This means that technically you own a tiny little piece of all the furniture, every trademark, and every contract of the company. As an owner, you are entitled to your share of the company's earnings as well.

These earnings will be given to you. These earnings are called “dividends” and are given to the shareholders from time to time. 

A stock is represented by a "stock certificate". This is a piece of paper that is proof of your ownership. However, now-a-days you could also have a “demat” account. This means that there will be no “stock certificates”. Everything will be done though the computer electronically. Selling and buying stocks can be done just by a few clicks.    

Being a shareholder of a public company does not mean you have a say in the day-to-day running of the business. Instead, “one vote per share” to elect the board of directors of the company at annual meetings is all you can do. For instance, being a Microsoft shareholder doesn't mean you can call up Bill Gates and tell him how you think the company should be run.

The management of the company is supposed to increase the value of the firm for shareholders. If this doesn't happen, the shareholders can vote to have the management removed. In reality, individual investors like you and I don't own enough shares to have a material influence on the company. It's really the big boys like large institutional investors and billionaire entrepreneurs who make the decisions.

For ordinary shareholders, not being able to manage the company isn't such a big deal. After all, the idea is that you don't want to have to work to make money, right? The importance of being a shareholder is that you are entitled to a portion of the company’s profits and have a claim on assets.

Profits are sometimes paid out in the form of dividends as mentioned earlier. The more shares you own, the larger the portion of the profits you get. Your claim on assets is only relevant if a company goes bankrupt. In case of liquidation, you'll receive what's left after all the creditors have been paid.

Another extremely important feature of stock is "limited liability", which means that, as an owner of a stock, you are "not personally liable" if the company is not able to pay its debts.

In other legal structures such as partnerships, if the partnership firm goes bankrupt the creditors can come after the partners “personally” and sell off their house, car, furniture, etc. To understand all this in more detail you could read our “How to incorporate?” article.

Owning stock means that, no matter what happens to the company, the maximum value you can lose is the value of your stocks. Even if a company of which you are a shareholder goes bankrupt, you can never lose your personal assets.

How to calculate BSE SENSEX?

Requested by: Lt Col Ashis Kumar Mishra

This article explains how the value of the “BSE Sensex” or “sensitive index” is calculated. If you are not sure what we mean by the Sensex or what the Sensex is all about, you can find this out by reading our “How to make money in the stock market?” article.

The Sensex has a very important function. The Sensex is supposed to be an indicator of the stocks in the BSE. It is supposed to show whether the stocks are generally going up, or generally going down.

To show this accurately, the Sensex is calculated taking into consideration stock prices of 30 different BSE listed companies. It is calculated using the “free-float market capitalization” method. This is a world wide accepted method as one of the best methods for calculating a stock market index.

Please note: The method used for calculating the Sensex and the 30 companies that are taken into consideration are changed from time to time. This is done to make the Sensex an accurate index and so that it represents the BSE stocks properly.

To really understand how the Sensex is calculated, you simply need to understand what the term “free-float market capitalization” means. (As we said earlier, the Sensex is calculated on basis of the “free-float market capitalization” method) But, before we understand what “free-float market capitalization” means, you first need to understand what “market capitalization” means.

What is "market capitalization"?

You probably think that you have never heard of the term “market capitalization” before. You have! When you are talking about “mid-cap”, “small-cap” and “large-cap” stocks, you are talking about market capitalization!

Market cap or market capitalization is simply the worth of a company in terms of it’s shares! To put it in a simple way, if you were to buy all the shares of a particular company, what is the amount you would have to pay? That amount is called the “market capitalization”!

To calculate the market cap of a particular company, simply multiply the “current share price” by the “number of shares issued by the company”! Just to give you an idea, ONGC, has a market cap of “Rs.170,705.21 Cr” (when this article was written)

Depending on the value of the market cap, the company will either be a “mid-cap” or “large-cap” or “small-cap” company! Now the question is, how do YOU calculate the market cap of a particular company? You don’t! Just go to a website like MoneyControl.com and look up the company whose market cap you are interested in finding out! The figure in front of “Mkt. Cap” will be the market cap value.

Having seen what market cap is and how to find out the market cap of a particular company, let us try to understand the concept of “free-float market cap”

What is "free-float market capitalization"?

Many different types of investors hold the shares of a company! The Govt. may hold some of the shares. Some of the shares may be held by the “founders” or “directors” of the company. Some of the shares may be held by the FDI’s etc. etc!

Now, only the “open market” shares that are free for trading by anyone, are called the “free-float” shares. When we are calculating the Sensex, we are interested in these “free-float” shares!

A particular company, may have certain shares in the open market and certain shares that are not available for trading in the open market.

According the BSE, any shares that DO NOT fall under the following criteria, can be considered to be open market shares:

• Holdings by founders/directors/ acquirers which has control element
• Holdings by persons/ bodies with "controlling interest"
• Government holding as promoter/acquirer
• Holdings through the FDI Route
• Strategic stakes by private corporate bodies/ individuals
• Equity held by associate/group companies (cross-holdings)
• Equity held by employee welfare trusts
• Locked-in shares and shares which would not be sold in the open market in normal course.

A company has to submit a complete report about “who has how many of the company’s shares” to the BSE. On the basis of this, the BSE will decide the “free-float factor” of the company. The “free-float factor” is a very valuable number! If you multiply the "free-float factor" with the “market cap” of that company, you will get the “free-float market cap” which is the value of the shares of the company in the open market!
A simple way to understand the “free-float market cap” would be, the total cost of buying all the shares in the open market!

So, having understood what the “free float market cap” is, now what? How do you find out the value of the Sensex at a particular point? Well, it’s pretty simple….

First: Find out the “free-float market cap” of all the 30 companies that make up the Sensex!

Second: Add all the “free-float market cap’s” of all the 30 companies!

Third: Make all this relative to the Sensex base. The value you get is the Sensex value!

The “third” step probably confused you. To understand it, you will need to understand “ratios and proportions” from 5th standard mathematics. Think of it this way:

Suppose, for a “free-float market cap” of Rs.100,000 Cr... the Sensex value is 4000…

Then, for a “free-float market cap” of Rs.150,000 Cr... the Sensex value will be..

So, the Sensex value will be 6000 if the “free-float market cap” comes to Rs.150,000 Cr!

Please Note: Every time one of the 30 companies has a “stock split” or a "bonus" etc. appropriate changes are made in the “market cap” calculations.

Now, there is only one question left to be answered, which 30 companies, why those 30 companies, why no other companies?

The 30 companies that make up the Sensex are selected and reviewed from time to time by an “index committee”. This “index committee” is made up of academicians, mutual fund managers, finance journalists, independent governing board members and other participants in the financial markets.

The main criteria for selecting the 30 stocks is as follows:

Market capitalization: The company should have a market capitalization in the Top 100 market capitalization’s of the BSE. Also the market capitalization of each company should be more than 0.5% of the total market capitalization of the Index.

Trading frequency: The company to be included should have been traded on each and every trading day for the last one year. Exceptions can be made for extreme reasons like share suspension etc.

Number of trades: The scrip should be among the top 150 companies listed by average number of trades per day for the last one year.

Industry representation: The companies should be leaders in their industry group.

Listed history: The companies should have a listing history of at least one year on BSE.

Track record: In the opinion of the index committee, the company should have an acceptable track record.

Having understood all this, you now know how the Sensex is calculated.

Jai Hind.

Source: Indiahowto.com

Lessons from metro chief E Sreedharan's life for CEOs, managers & policymakers

It took them 190 km and 14 years to muster the courage to let him go. And yet, two weeks before E Sreedharan quits as managing director, Delhi Metro Rail Corporation (DMRC), their trepidation is palpable. The question is not whether Phase III of the Delhi Metro will be completed by its deadline - 2016. The question is whether it will be done the Sreedharan way. Will his legacy continue after he is no longer at the steering wheel?

The man himself is unruffled. Sreedharan has full faith in his team to carry forward Delhi Metro's sterling tradition. After all, the credit for the project's success must go to the 7,000 employees who work hard everyday, he says.

This is Sreedharan the leader, who has evolved a system that he believes, can do without him. This is Sreedharan the man, who is self-effacing in his humility and can't be bothered with glory.

Yet, in the past decade fame chased him. As the Delhi Metro rolled out track after track with speed, precision and transparency, the 'Metroman' became the icon for many Indians.

Along the way, there were several attempts to deconstruct his success. Every little idiosyncrasy was analysed, each quote repeated several times over. Fans tried to build his work philosophy with scraps of information about how he ran the Delhi Metro. But very few succeeded in inculcating a bit of the Sreedharan style in their lives.

So as Sreedharan prepares for his time off, ET on Sunday decided to revisit the decade and a half that made him an icon. Only this time, we have culled the learnings and formatted them to fit into your role in life. This is the list of lessons with tips from the legend, customised for YOU.

IF YOU ARE A POLICY MAKER

Redefine the Context

Benchmark yourself against the prevalent system and you'll land with moderate success. It will not measure up to the grandeur of a Delhi Metro. Such things demand a vision not limited by convention or expectations. People would have been happy if the first phase of the metro was completed by the deadline - 2005. But Sreedharan raised the bar. He told his team, Delhites couldn't wait for 10 years for a Metro. The deadline was shortened by three years and met.

Focus on Goals Not Politics

Shore up your perseverance and prepare for maximum resistance, especially by political expediencies. "I don't know why some bureaucrats are not able to function. They should have the courage to stand up to their convictions and take decisions and not leave everything to the politicians," says Sreedharan. He followed this principle throughout his career.

One such occasion was as the head of the Konkan Railway project in the 1990s. They were years of flux as Goa saw chief ministers change four times between 1993 and 1994. Every change brought a fresh group of lobbyists into the spotlight. "Sreedharan was a rock who was determined to get the project completed," recalls PV Jayakrishnan who at the time worked as the chief secretary, Goa.

Sreedharan shares another anecdote. In the early years of his DMRC stint, he was to appoint international consultant for the project. His team chose the Japanese on the basis of their bids. But the then railway minister insisted on the Germans as they had lobbied hard for the position.

"I refused to give in. And refused to even give him any explanation," says the Metroman. He was confident he had chosen the best and followed all the required procedures. Finally, Sreedharan's choice was accepted. "That one incident [withstanding political pressures] increased the confidence of my team enormously," he explains.

Source: Economic times

TDS Rates for AY 12-13

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Weekly Report: Sensex, Nifty hit 2-yr lows on growth woes Tulemino Antao / Mumbai December 17, 2011, 9:50 IST

In the week to December 16, benchmark share indices ended at their two-year lows weighed by dismal October IIP data, weakening rupee, high headline inflation and growth concerns.

In the week ended December 16, the Sensex ended at 15491 down 722 points or 4.4% and the Nifty ended at 4,652 down 215 points or 4.4%.

Key share indices extended losses for the third straight day Monday on the back of disappointing Index of Industrial Production data for October. India’s October IIP contracted by 5.1% from a year earlier after a revised 2% in September, the Central Statistical Office said. The de-growth in industrial production is the most since March 2009 when it contracted 5.2%. The IIP data for October 2010 was 11.4 per cent. Manufacturing output, which constitutes about 76 per cent of the industrial production, fell by an annual 6 per cent, the Statistical Office said. The Sensex and the Nifty both ended down 2.1% each.

Stocks snapped a three-day losing streak, amid a volatile trading session Tuesday, on account of short-covering in index heavyweights Reliance Industries and Infosys. The Sensex ended above 16,000 at  16,003, up 132 points and the 50-share Nifty ended above 4,800 at 4,801, up 36  points.  The Sensex and the Nifty had both lost over 6% in the last three trading sessions.

Benchmark share indices ended lower, amid a volatile trading session Wednesday, as higher-than-expected November inflation stoked fears of rate hike by the central bank. Weakness in European shares also hurt sentiment. The Sensex and the Nifty both ended down 0.8% each.
The WPI inflation for the month of November came in at 9.11 per cent compared to 9.73 per cent in October. The market was looking at an inflation of below 9 per cent for November. Inflation for November 2010 stood at 8.2%.

Stocks recouped most of the day’s losses to end marginally lower Thursday, led by Reliance Industries, after food inflation for the week ended December 3 eased to a 4-year low of 4.35%. India's food inflation eased to 4.35% in the year to December 3 -- its lowest reading since late February 2008 -- from an annual 6.60% rise in the previous week, government data showed today. Further, On Thursday, the Indian rupee touched a record low of 54.30 to the US dollar on the back of sustained foreign fund capital outflows in view of the fall in the equity markets, coupled with a stronger dollar in global markets.

Friday,  key share indices ended near their 2-year lows amid a volatile trading session after the Reserve Bank of India, in its monetary policy review, highlighted growth concerns.
"While inflation remains on its projected trajectory, downside risks to growth have clearly increased. Further rates hike may not be warranted," the Reserve Bank of India (RBI) said in it its mid-quarter review of monetary policy.  The 30-share Sensex ended at 15,491, down 345 points and the 50-share Nifty ended down 95 points, at 4,652, its newest low in 2011. On November 3, 2009 the Sensex had ended at 15,404.94 and the Nifty had ended at 4,563.90.

The weakness was led by capital goods shares on the back of slowdown in order inflows and increasing competition from overseas. The BSE Capital Goods Index was the top loser during the week under review down 10.3%. Engineering major L&T was the top Sensex loser down 12.3% while BHEL ended 9% down.

The BSE Bankex lost 7.2% during the week. SBI was the top loser down 9.8% followed by ICICI Bank at 7.6% and HDFC Bank ended 6.5% lower.

Metal shares were also beaten down during the week and the BSE Metal Index lost 7.1% with Tata Steel losing 8.4% and Sterlite Industries ended 11.8% down.

Among the index heavyweights Reliance Industries lost 4.3% while Infosys closed 0.4% higher.

The broader market also showed signs of extreme weakness with the BSE Mid-cap and Small-cap indices both losing over 6% each.

In the mid-cap segment, Sintex Industries was the top loser down 32.2% along with Areva T&D which lost 28.6%. Wockhardt, VIP Industries, Essar Ports, Pantaloon Retail and Jain Irrigation lost over 15% each.

Source: Business Standard

Navin Agicha.

Bhagvad Gita, one of the most sacred Hindu religious texts, is facing a legal ban and the prospect of being branded as "an extremist" literature across Russia.

Bhagvad Gita, one of the most sacred Hindu religious texts, is facing a legal ban and the prospect of being branded as "an extremist" literature across Russia.

MOSCOW: Bhagvad Gita, one of the most sacred Hindu religious texts, is facing a legal ban and the prospect of being branded as "an extremist" literature across Russia, with a court in Siberia's Tomsk city all set to deliver its final verdict on Monday in a case filed by state prosecutors.

The final pronouncement in the case will come just two days after Indian Prime Minister Manmohan Singh was here for a bilateral summit meeting with Russian President Dmitry Medvedev from Dec 15 to 17.

The case, which has been going on in Tomsk court since June this year, seeks to get a Russian translation of 'Bhagvad Gita As It Is' written by A.C. Bhaktivedanta Swami Prabhupada, the founder of the International Society for Krishna Consciousness (ISKCON), on the Hindu religious text banned in Russia and declaring it as a literature spreading "social discord", apart from rendering its distribution on Russian soil illegal.

In view of the case, Indians settled in Moscow, numbering about 15,000, and followers of the ISKCON religious movement here have appealed to Manmohan Singh and his government to intervene diplomatically to resolve the issue in favour of the Hindu religious text, an important part of Indian epic 'Mahabharat' written by Sage Ved Vyasa.

The ISKCON followers of Russia have also written a letter to the Indian Prime Minister's Office in New Delhi seeking immediate intervention, lest the religious freedom of Hindus living here be compromised.

"The case is coming up for a final verdict on Monday in Tomsk court. We want all efforts from Indian government to protect the religious right of Hindus in Russia," Sadhu Priya Das of ISKCON and a devotee of a 40-year-old Krishna temple in central Moscow, told IANS.

The court, which took up the case filed by the state prosecutors, had referred the book to the Tomsk State University for "an expert" examination Oct 25 this year. But Hindu groups in Russia, particular followers of the ISKCON, say the university was not qualified, as it lacked Indologists.

The Hindus had pleaded with the court that the case was inspired by religious bias and intolerance`from a majority religious group in Russia, and have sought that their rights to practice their religious beliefs be upheld. The prosecutor's case also seeks to ban the pr ing of Prabhupada and ISKCON's religious beliefs, claiming these were "extremist" in nature and pr ed "hatred" of other religious beliefs.

"They have not just tried to get the Bhagvad Gita banned, but also brand our religious beliefs and pr ings as extremist," Das said.

In fact, the ISKCON devotees have taken up the matter with the Indian embassy in Moscow too, apart from writing to the Prime Minister's Office in New Delhi, for an early diplomatic intervention, before things get worse and the court passes an adverse verdict banning the 'Bhagvad Gita' and Krishna consciousness t ings.

In the Nov 1 letter, addressed to Principal Secretary to the Prime Minister Pulok Chatterji, ISKCON's New Delhi branch Governing Body Commissioner Gopal Krishna Goswami, said the prosecutor's affidavit claims Lord Krishna "is evil and not conforming to Christian religious view".

Goswami also urged Singh to accord priority to the matter during his Moscow stay and to take it up with the Russian authorities.

Indian diplomatic corps officials at the embassy here, who were unwilling to be named, told IANS that they have been following up the case since the time it was brought to their notice earlier this year and that they had also taken up the matter at the appropriate levels in the Russian government to get the case either withdrawn or get the defence to fight the case to obtain a favourable verdict.

Officials at the Indian Prime Minister's office, who are part of the Indian delegation accompanying Singh, confirmed the case and the letter they received from ISKCON in this regard to IANS.

"This matter is receiving the highest attention and the Indian embassy officials in Moscow have been instructed to follow up the case with the Russian authorities," they said.

Source : Economic times.

 

Navin Agicha.

Latest Amentments for IPCC

Tax: may 2012

In effect, “advancement of any other object of general public utility” would continue to be a “charitable purpose”, if the total receipts from 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 does not exceed Rs.25 lakhs in the relevant previous year.

The limit of Rs.10 lakhs has now been increased to Rs.25 lakhs by the Finance Act, 2011 with effect from A.Y.2012-13.

Tax: may 2012


Increase in percentage of weighted deduction under section 35(2AA)
(i) Section 35(2AA) provides for a weighted deduction of 175% in respect of amount paid to National Laboratory, or a University or an IIT or specified person with a specific direction that such sum shall be used for the purpose of an approved scientific research programme.
(ii) The Finance Act, 2011 has increased the percentage of weighted deduction from 175% to 200% with effect from A.Y.2012-13.
(Effective from A.Y.2012-13)

Tax: may 2012

Extension of due date for filing return of income of corporate assessees undertaking international transactions [Section 139(1)]
(i) The due date for filing of return of income of corporate assessees who have undertaken international transactions during the relevant previous year has been extended from 30th September to 30th November of the assessment year, on account of the practical difficulties in accessing contemporary comparable data before 30th September.
(ii) Consequently, the due date within which the sums referred to in section 43B have to be actually paid to escape disallowance under that section would be 30th November of the assessment year in case of such companies.
(iii) Similarly, the tax deducted at source at any time during the year by such companies can be deposited on or before the extended due date of 30th November of the assessment year, to avoid disallowance under section 40(a)(ia).
(iv) The extension of due date for filing of return would, however, not be applicable to non-corporate assessees who have undertaken international transactions during the relevant previous year.

(Effective from A.Y. 2011-12)

(These 2 Services are not applicable for May 2012 Exam)

New Services for may12 Exam:

1. 2 new services brought under the service tax net - Section 65
(a) Restaurant service [Section 65(105)(zzzzv)]
1. Service provider: A restaurant having:-
· the facility of air-conditioning in any part of the establishment, at any time during the financial year, and
· licence to serve alcoholic beverages
2. Service receiver: Any person
3. Date from which such service is taxable: 1st May, 2011
4. Scope of taxable service: Any service provided or to be provided to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises.
5. Departmental Clarification: DOF No. 334/3/2011-TRU dated 28.02.2011 clarifies as follows:-
· The new levy is directed at services provided by high-end restaurants that are air-conditioned and have license to serve liquor. If the air-conditioning facility is available at any time during the financial year, the conditions for the levy shall be met.
· Such restaurants provide conditions and ambience in a manner that service provided may assume predominance over the food in many situations.
· It should not be confused with mere sale of food at any eating house, where such services are materially absent or so minimal that it will be difficult to establish that any service in any meaningful way is being provided.
· The levy is intended to be confined to the value of services contained in the composite contract and shall not cover either the meal portion in the composite contract or mere sale of food by way of pick-up or home delivery, as also goods sold at MRP.
6. Abatement of 70% of the gross amount charged: With effect from 01.05.2011, Notification No. 1/2006 ST dated 01.03.2006 has been amended to grant abatement of 70% of the gross amount charged in respect of restaurant services.
[Notification No. 34/2011 ST dated 25.04.2011]
29
Conditions to be satisfied for claiming the exemption under Notification No. 1/2006 ST dated 01.03.2006:-
(i) CENVAT credit of duty paid on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has not been taken under the provisions of Cenvat Credit Rules, 2004; and
(ii) Service provider has not availed the benefit under the Notification No. 12/2003 ST, dated 20.06.2003.


(b) Short-term accommodation services [Section 65(105)(zzzzw)]
1. Service provider: A hotel, inn, guest house, club or camps, by whatever name called.
2. Service receiver: Any person
3. Date from which such service is taxable: 1st May, 2011
4. Scope of taxable service: Any service provided or to be provided to any person by a hotel, inn, guest house, club or camps, by whatever name called, for providing of accommodation for a continuous period of less than three months.
5. Abatement of 50% of the gross amount charged: With effect from 01.05.2011, Notification No. 1/2006 ST dated 01.03.2006 has been amended to grant abatement of 50% of the gross amount charged in respect of short-term accommodation services.
[Notification No. 34/2011 ST dated 25.04.2011]
Conditions to be satisfied for claiming the exemption under Notification No. 1/2006 ST dated 01.03.2006:-
(i) CENVAT credit of duty paid on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has not been taken under the provisions of Cenvat Credit Rules, 2004; and
(ii) Service provider has not availed the benefit under the Notification No. 12/2003 ST, dated 20.06.2003.

LAW: may 2012

 

I/PCC LAW Amendments for May 2012 exam.

LATEST NOTIFICATIONS – RELEVANT FOR CA IPCC

Area Notification Reference / Effect
Voluntary Name Change
– Sec. 21
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.8.2 / Q.No.5
CG power delegated to ROC.

Incorporation of Non
Profit Organization – Sec.
25
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.6.16 / Q.No.19
CG power delegated to ROC.

Conversion of Public to
Private Company – Sec.
31(1)
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.6.21 / Q.No.26
CG power delegated to ROC.

Extension of Time Limit
for filing of Instrument of
Transfer – Sec. 108(1D)
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.12.9 / Q.No.14
CG power delegated to ROC.
ROC: ROC of the State in which the registered office of the
Company is situated, or by the ROC of the State in which the
transferee ordinarily resides.

Compulsory Name
Change – Sec. 22
Notfn. No. GSR. 223(E)
dated 17–3–2011.
P.No.8.2 / Q.No.5
CG power delegated to Regional Director.

Companies (Passing of
the Resolution by Postal
Ballot) Rules, 2011
F.NO. 2/4/2011-CL.V],
Dated 30-5-2011
P.No.13.27 / Q.No.31
Postal Ballot voting can be made through electronic system.
The following definitions are amended: –
a) "Postal Ballot" includes voting by Shareholders by
postal or electronic mode instead of voting personally by
presenting for transacting businesses in a general meeting
of the Company.
b) "Voting by electronic mode" means a process for
recording votes by the members using a Computer based
machine to display an electronic ballot and to record the
vote and also the number of votes polled in favour or
against such that the entire voting gets registered and
counted in a electronic registry in a centralised server.

LATEST CIRCULARS – RELEVANT FOR CA IPCC

Area Circular Reference / Effect
Service of Documents
– Sec. 53
17/2011 dated –
21.04.2011
P.No.15.6 / Q.No.10
Green Initiative in the Corporate Governance: A
Company would have complied with Section 53 of the
Companies Act, if the service of document has been made
through electronic mode provided the Company has
obtained e-mail addresses of its members for sending the
notice/documents through e-mail by giving an advance
opportunity to every shareholders to register their e-mail
address and changes therein from time to time with the
Company.
In cases where any member has not registered his e-mail
address with the Company, the service of document etc. will
be effected by other modes of service as provided under
Section 53 of the Companies Act, 1956.

Restriction on
Transfer of Shares
(Sec. 108A – 108I)
30/21011 dated
23.05.2011
P.No.15.6 / Q.No.24 to Q.No.29:
Sections 108A to 108-I of the Companies Act, 1956 were
become redundant and will have no legal force after the MRTP
Act, 1969 stands repealed.

Criteria for granting
recognition as Public
Financial Institution
u/s 4A (Sec. 4A)
P.No.6.12 / Q.No.13:
a) A Company or Corporation should be established under a
special Act or the Companies Act being Central Act;
b) Main business of the company should be industrial/
infrastructural financing;
c) The Company must be in existence for at least 3 years
and their financial statement should show that their
income from industrial/infrastructural financing exceeds
50% of their income;
d) The net-worth of the company should be Rs.1,000
Crores;
e) Company is registered as Infrastructure Finance Company
(IFC) with RBI or as an Housing Finance Company (HFC)
with National Housing Bank;
f) In the case of CPSUs/SPSUs, no restriction shall apply
with respect to financing specific sector(s) and net-worth.

Participation by
Shareholder in
General Meeting
through Electronic
Mode
27/2011 dated
20.05.2011
Guideline issued for Participation by Shareholder in General
Meeting through Electronic Mode. (See Below for Summary of
the procedure)

Participation by Shareholders in Meetings under The Companies Act, 1956
through Electronic Mode
1. Electronic mode means video conference facility i.e., audio-visual electronic communication facility employed
which enables all persons participating in that meeting to communicate concurrently with other without an
intermediary, and to participate effectively in the meeting.
2. The notice of the meeting must inform Shareholders regarding availability of participation through video
conference, and provide necessary information to enable shareholders to access the available facility of video
conferencing.
3. The Chairman of the meeting and Secretary shall assume the following responsibilities –
a) To safeguard the integrity of the meeting via video conferencing.
b) To ensure proper video conference equipment/facilities.
c) To prepare the minutes of the meeting.
d) To ensure that no one other than the concerned shareholder or proxy to the shareholder is attending the
meeting through electronic mode.
4. If a statement of a participant in the meeting via video conferencing is interrupted or garbled, the Chairman of
the meeting or Secretary shall request for a repeat or reiteration, and if need be, the Chairman or Secretary shall
repeat what he heard the participant was saying for confirmation or correction.
5. A Company is required to have its Annual General Meeting either at the registered office of the company or at
place within the city, town or the village in which registered office of the company is situated. (Sec. 166)
6. At least 5 members in case of public company and 2 members in case of other company have to be personally
present and shall be the quorum for the general meeting (Sec. 174). In a general meeting, where shareholders
are allowed to participate through electronic mode, the quorum as required u/s 174 as well as chairman of the
meeting shall have to be physically present at the place of the meeting.
7. To provide larger participation and for curbing the cost borne by the Shareholders to attend general meetings,
listed companies may provide video conferencing connectivity during such meetings at least 5 places in India. It
is recommended that these places would be situated all over India in such a way that it covers top 5 States/UTs
based on maximum number of members or at least 1000 members, whichever is more, residing as per the
address registered with the depositories.

List of Institute's Publications: The following List of Institute's Publications is relevant for May/Nov,2012 Exams.

UPDATES & AMMENDMENTS FOR 2012 MAY/NOVEMBER EXAMINATIONS

List of Institute's Publications: The following List of Institute's Publications is relevant for May/Nov,2012 Exams. Students may kindly take it into consideration while preparing for the examination. TAXATION

Applicability of taxable services for May 2012 and November 2012 examinations:- PCC-Professional Competence Examination It is clarified that in Part –II : Service tax and VAT of Paper 5 : Taxation, students will not be tested on specific questions covering individual taxable services. IPCC Integrated Professional Competence Examination It is clarified that in Part –II : Service tax and VAT of Paper 4 : Taxation, students will be examined only in respect of the following taxable services: 1. Practising Chartered Accountant's services 2. Mandap keeper's services 3. Commercial training or coaching services 4. Information technology software services 5. Consulting engineer's services 6. Business exhibition services 7. Scientific and technical consultancy services 8. Technical testing and analysis services AUDITING LIST OF APPLICABLE STANDARDS: I. Statements 1. Statement on Reporting under Section 227 (1A) of the Companies Act, 1956 http://220.227.161.86/18799announ10264b.pdf 2. Statement on the Companies (Auditor’s Report) Ord er, 2003 (2005 Edition) http://220.227.161.86/18798announ10264a.pdf II. Standards on Auditing (SAs) 1. Basic Principles Governing an Audit (SA 200) http://220.227.161.86/17614Link_2_200SA-AAS01.pdf 2. Objectives and Scope of the Audit of Financial Statements (SA 200A) http://220.227.161.86/17615Link_3_200A_SA_ -AAS2.pdf 3. Agreeing the Terms of Audit Engagements (SA 210) (Revised) http://220.227.161.86/16837sa210revised.pdf 4. Quality Control for Audit Work (SA 220) – http://220.227.161.86/17616Link_5_220SA-AAS17.pdf 5. Audit Documentation (SA 230) (Revised) – http://220.227.161.86/15372Link7_SA230 -standard.pdf 6. The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements (SA 240) (Revised) http://220.227.161.86/15374Link9_240SA_REVISED.pdf 7. Consideration of Laws and Regulations in an Audit of Fin ancial Statements (SA 250) (Revised) http://220.227.161.86/15376Link11_SA250 -text.pdf 8. Communication with Those Charged with Governance (SA 260) (Revised) http://220.227.161.86/15378Link13_SA 260 -text.pdf 9. Communicating Deficiencies in Internal Control to Those Charged With Governance and Management (SA 265) http://220.227.161.86/16838sa265.pdf 10. Responsibility of Joint Auditors (SA 299) http://220.227.161.86/15379Link14_299SA-AAS12.pdf 11. Planning an Audit of Financial Statements (SA 300) (Revised) http://220.227.161.86/15381Link16_300SA_REVISED.pdf 12. Identifying and Assessing the Risk of Material Misstatement through Understanding the Entity and its Environment (SA 315) http://220.227.161.86/15382Link17_315SA.pdf 13. Materiality in Planning and Performing an Audit (SA 320) (Revised) http://220.227.161.86/16839sa320revised.pdf 14. The Auditor’s Responses to Assessed Risks (SA 330) http://220.227.161.86/15384Link19_330SA.pdf 15. Audit Considerations Relating to an Entity Using Service a Organisations (SA 402) (Revised) http://220.227.161.86/16840sa402revised.pdf 16. Evaluation of Misstatements identified During the Audit (SA 450) http://220.227.161.86/16841sa450revised.pdf 17. Audit Evidence (SA 500) (Revised) http://icai.org/resource_file/15576sa500revised.pdf 18. Audit Evidence – Additional Considerations for Specific items (SA 501) http://220.227.161.86/17625Link_22_501SA-AAS34.pdf 19. External Confirmations (SA 505) http://220.227.161.86/17626Link_23_505SA-AAS30.pdf 20. Initial Audit Engagements – Opening Balances (SA 510) (Revised) http://220.227.161.86/15390Link25_510text.pdf 21. Analytical Procedures (SA 520) http://220.227.161.86/17627Link_26_520SA-AAS14.pdf 22. Audit Sampling (SA 530) (Revised) http://220.227.161.86/15393Link28_530text.pdf 23. Auditing Accounting Estimates, Including Fair Val ue Accounting Estimates and Related Disclosures (SA 540) (Revised) http://220.227.161.86/15395Link30_540text.pdf 24. Related Parties (SA 550) (Revised) http://220.227.161.86/15397Link32_550text.pdf 25. Subsequent Events (SA 560) (Revised) http://220.227.161.86/15399Link34_SA 560_Standard_OKOK.pdf 26. Going Concern (SA 570) (Revised) http://220.227.161.86/15401Link36_SA570 -final_standard.pdf 27. Written Representations (SA 580) (Revised) http://220.227.161.86/15403Link38_sa580.pdf 28. Using the Work of another Auditor (SA 600) http://220.227.161.86/18836sa600_aas.pdf 29. Using the Work of Internal Auditor (SA 610) (Revised) http://220.227.161.86/16842sa610revised.pdf 30. Using the Work of an Expert (SA 620) http://220.227.161.86/17634Link_41_620SA-AAS9.pdf 31. The Auditor’s Report on Financial Statements (SA 700) http://220.227.161.86/17635Link_42_700SA-AAS28.pdf 32. Comparatives (SA 710) http://220.227.161.86/17636Link_43_710SA-AAS25.pdf 33. The Auditor’s Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements (SA 720) http://220.227.161.86/15578sa720ann.pdf 34. Engagements to Compile Financial Information (SRS 4410) http://220.227.161.86/15412Link47_4410SRS -AAS31.pdf 35. Engagements to Perform Agreed - upon Procedures Regardi ng Financial Information (SRS 4400) http://220.227.161.86/15411Link46_4400SRS -AAS32.pdf 36. Engagements to Review Financial Statements (SRE 2400) 37. The Examination of Prospective Fina ncial Information (SAE 3400) http://220.227.161.86/15410Link45_3400SAE -AAS35.pdf III.Guidance Notes on Auditing Aspects : 1. Guidance Note on Audit of Fixed Assets. 2. Guidance Note on Audit of Inventories. 3. Guidance Note on Audit of Debtors, Loans and Advances. 4. Guidance Note on Audit of Investments. 5. Guidance Note on Audit of Miscellaneous Expenditure. 6. Guidance Note on Audit of Cash and Bank Balances. 7. Guidance Note on Audit of Liabilities. 8. Guidance Note on Audit of Revenue. 9. Guidance Note on Audit of Expenses. 10. Guidance Note on Provision for Proposed Dividend ** Guidance notes may be downloaded from below mentioned link : http://icai.org/post.html?post_id=6192