Author - Anurag Jain

LOWER INCOME TAX FOR DOMESTIC COMPANIES UNDER SECTION 115BAA

LOWER INCOME TAX FOR DOMESTIC COMPANIES UNDER SECTION 115BAA

Government of India has introduced the Taxation (Amendment) Ordinance 2019 on the 20th of September 2019 where Several amendments are made to the Income Tax Act,1961. Most important changes such as corporate tax rate cut for domestic companies and as well as for manufacturing companies was announced.  MAT rate also been reduced from the current 18.5% to 15%.

This new section for lower taxation will definitely provide benefit for newly registered companies and existing companies to pay lower tax and use money to grow their business..

We discuss the latest provision as below heading.

  1. New section inserted under which government reduced tax for domestic companies.
  2. Eligibility criteria of section 115BAA to avail lower tax rate.
  3. New effective rate applicable to domestic companies.
  4. Option for the company to opt out the section 115BAA.

1. SECTION INSERTED UNDER WHICH GOVERNMENT REDUCED TAX FOR DOMESTIC COMPANIES

New section 115BAA has been inserted in the Income Tax Act,1961 where domestic company have option to pay tax @ 22% subject to fulfil certain condition mentioned in the section and the same is applicable from the FY 2019-20 (AY 2020-21) onwards.

2. ELIGIBILITY CRITERIA OF SECTION 115BAA TO AVAIL LOWER TAX RATE UNDER SECTION 115BAA.

All domestic companies shall have an option u/s 15BAA to pay corporate income tax @ 22% (plus applicable surcharge and cess), subject to following conditions as below.

  1. Such companies should not avail any exemptions/incentives under different provisions of income tax. so the total income of such company shall be computed without:
    • Claiming any deduction especially available for units established in SEZ under section 10AA
    • Claiming additional depreciation under section 32 and investment allowance under section 32AD towards new plant and machinery made in notified backward areas in the states of Andhra Pradesh, Bihar, Telangana, and West Bengal.
    • Claiming deduction under section 33AB for tea, coffee and rubber manufacturing companies.
    • Claiming deduction towards deposits made towards site restoration fund under section 33ABA by companies engaged in extraction or production of petroleum or natural gas or both in India.
    • Claiming a deduction for expenditure made for scientific research under section 35.
    • Claiming a deduction for the capital expenditure incurred by any specified business under section 35AD.
    • Claiming a deduction for the expenditure incurred on an agriculture extension project under section 35CCC or on skill development project under section 35CCD.
    • Claiming deduction under chapter VI-A in respect to certain incomes, which are allowed under section 80IA, 80IAB, 80IAC, 80IB and so on, except deduction under section 80JJAA.
    • Claiming a set-off of any loss carried forward from earlier years, if such losses were incurred in respect of the aforementioned deductions.
  2. Such domestic companies will have to exercise this option to be lower taxed under the section 115BAA on or before the due date of filing income tax returns i.e normally 30th September of the assessment year and once the company opts for section 115BAA in a particular financial year, it cannot be withdrawn subsequently.

3. NEW EFFECTIVE RATE APPLICABLE TO DOMESTIC COMPANIES

The new effective tax rate, which will apply to domestic companies availing the benefit of section 115BAA is 25.168%. The calculation of effective tax rate is as below.

Base Tax Rate                        –   22%

Surcharge Applicable           –   2.20%

@10% on Base rate

Cess @ 4% on total tax   –        0.968%

Total Tax                                – 25.168%

Most importantly such companies will not be required to pay minimum alternate tax (MAT) under section 115JB of the act.

Domestic companies who opting for section 115BAA will not be able to claim MAT credits for taxes paid under MAT during the tax holiday period so companies would not be able to reduce their tax liabilities under section 115BAA by claiming MAT credits which they have paid earlier years. CBDT can issue a clarification on MAT credits in case of companies opting for tax under section 115BAA.

Further the domestic company opting for section 115BAA shall not be allowed to claim set-off of any brought forward depreciation (additional depreciation) for the assessment year in which the option has been exercised and future assessment years.

We should keep in mind that there is no timeline for the domestic companies to choose a lower tax rate under section 115BAA. So such companies can avail the benefit of section 115BAA after claiming the brought forward loss on account of additional depreciation and also utilising the MAT credit against the regular tax payable if any.

4. OPTION FOR THE COMPANY TO OPT OUT THE SECTION 115BAA

Option u/s 115BAA for lower taxation if company OPT cannot be withdrawn subsequently so it is advisable for domestic companies to before avail lower tax rate mentioned in section, such companies should avail all their tax holiday period or exemptions/incentives as mentioned above because no time has been defined ij the section to OPT the option so in nay financial year companies can avail this option.

Contribution or Donation to Political Parties

We Discussed Here.

1. What is the Political Party?

2. What is the Electoral Trust?

3. Eligible Person, Who can donate to Political Party?

4. Eligibility Criteria for Individual u/s 80GGC

5. Eligibility Criteria for Corporate and Enterprises u/s 80GGB

What is the Political Party?

Political party means a group of persons organized to acquire and exercise political power. In our country, there are several political parties that stand for the election. The presence of the political party is actually a healthy situation for the nation. It gives people a choice to make a more evolved and effective decision.

What is the Electoral Trust?

Electoral Trust is a non-profit organization formed in India for orderly receiving contributions from any person. Electoral Trusts part of the ever-growing electoral restructurings in the country. Electoral Trusts are designed to bring in more transparency in the funds provided by corporate entities to the political parties for their election-related expenses. However, the objective of an electoral trust is not to receive any profit or pass any direct or indirect advantage to its members or contributors. 

Who eligible to contribute or donate the Electoral Trust or Political Parties?

Electoral Trust can receive contributions from various sectors. Like

  • Indian citizens.
  • Domestic companies which are registered in India.
  • Firm or Hindu Undivided Family.
  • Group of persons or individuals, who reside in India.

An electoral trust can’t accept contributions And Donations from

  • Any person who is not an Indian Citizen.
  • Foreign Entity.
  • Any other electoral trust.

What is the Donation to Political Parties?

Political Parties receive huge sums of money in the form of donations and contributions from corporate, trusts and individuals. Section 29C of the Representation of People Act, 1951 says that political parties are required to submit contribution details received in excess of Rs.20,000/- from any person or a company.

Which Sections deals in Donation or Contribution to Political Parties for exemption of tax purpose?

Section 80GGC for individuals and 80GGB for company’s deals in Donation or Contribution to Political Parties for taxation purposes.

What is Section 80GGC of Income Tax Act, 1961?

Section 80GGC under the Income Tax Act, 1961 provides income tax deduction benefits on donations made by any individual to political parties subject to certain conditions. It should be noted that there is no upper limit specified under section 80GGC, which means any amount contributed to a political party can be claimed as a tax deduction.

What is the Eligibility Criteria for Claiming Tax Benefits under Section 80GGC?

  • Under section 80GGC, only individual taxpayers are allowed to claim tax benefits.
  • To claim tax benefits, donations should not be made in cash. All other modes of donations are eligible for claiming an income tax deduction.
  • Donations must be made to a registered political party under section 29A of Representation of People Act (RPA), 1951. Donations made to electoral trust also will be eligible for claiming tax deduction under section 80GGC.

Deduction Limit under Section 80GGC

The Donation made u/s 80GGC are 100% tax-deductible.

What is Section 80GGB of Income Tax Act, 1961?

Section 80GGB of the Income Tax Act, 1961, deals in any Indian company or enterprise that donates to a political party or an electoral trust registered in India can claim a deduction for the amount contributed.

What is the Eligibility Criteria for Claiming Tax Benefits under Section 80GGB?

  • Cash contributions are not allowed under Section 80GGB. Therefore, the respective contributions to political parties must be made through other modes of payments such as Cheque, Demand Draft or Electronic Transfer.
  • There is no maximum applicable limit on the contributions made to political parties, under Section 80 GGB of the Income Tax Act. But as per the Companies Act 2013, companies can contribute up to 7.5% of their annual net profit (three years average). It is necessary for the companies to disclose the amount contributed and the name of the political party in its Profit and Loss account for the said financial year.

Hence, you are free to make donations to political parties as per your preference and claim deductions in your income tax for the same and you can concern the income tax consultant for this. It is essential that you keep a proper record of the amount being paid and comply with all the regulations specified in the Income Tax Act 1961 and Companies Act, 2013. If you do not follow the set procedure, your claim for deduction might be rejected by the competent authorities.

LTCG on sale of residential property and other than residential property

LTCG on sale of residential property and other than residential property

Here we discuss….

Short term capital gain

Long term capital gain

Tax aspects of the sale to residential house property U/S 54

Tax aspects of sale to other than residential house property U/S 54F

Introduction

Now, we explain which part of the income is taxable on the sale of the residential property or other than residential property. Is it the entire amount received on the sale of the property? The answer is NO. In simple words, it is only the profit earned by the individual on sale of the property that is taxable.

As per the income tax act, for the purpose of capital gains, assets are classified as follows,

1. Short-term capital asset

2. Long-term capital asset

What is short -term capital asset?

An asset held for a period of 36 months or less is a short-term capital asset. The criteria of 36 months have been reduced to 24 months for immovable properties such as land, building and house property.

What is Long–term capital asset?

An asset that is held for more than 36 months is a long-term capital asset. The reduced period of the aforementioned 24 months is not applicable to the movable property such as jewelry, debt-oriented mutual funds, etc. They will be classified as a long-term capital asset if held for more than 36 months as earlier.

Some assets are considered short-term capital assets when these are held for 12 months or less. This rule is applicable if the date of transfer is after 10th July 2014 (irrespective of the date of purchase).

The assets are:

  1. Equity or preference shares in a company listed on a recognized stock exchange in India.
  2. Securities (like debentures, bonds, govt securities, etc.) listed on a recognized stock exchange in India.
  3. Units of UTI
  4. Units of equity-oriented mutual fund
  5. Zero Coupon Bond

When the above-listed assets are held for a period of more than 12 months, they are considered as a long-term capital asset.

Capital Gain on sale of Residential House Property u/s 54 of Income Tax Act, 1961

As per section 54 of the Income Tax Act, 1961 the owner of a residential property with relaxation from the capital gains tax, if the gain from the sale is used to acquire another residential property. Owners of residential property in many cases sell their property only to purchase another property due to different reasons like moving from jobs, retirement, etc.

In such a case, a property is sold by a taxpayer not for gains from the earning, but for other reasons. Hence, when a taxpayer sales a residential property and purchases another property, he or she is exempt from capital gains under Section 54 of the Income Tax Act.

While claiming benefit under Section 54 has to concern with the income tax consultant. The home purchased or constructed must be in India only means a property cannot purchase abroad.

Eligibility under Section 54 of the Income Tax Act

The following conditions satisfied by the taxpayer to claim benefits under Section 54 of the Income Tax Act:

  1. The taxpayer is an individual or HUF. Exemption under Section 54 is not available for companies or LLP register companies.
  2. The asset transferred should be a long-term capital asset, being a residential house property as defined under the act.
  3. Within a period of 1 year before or 2 years after the date of transfer of the old house, the taxpayer should acquire another residential house or should construct a residential house within a period of 3 years from the date of transfer of the old house. In the case of compulsory acquisition, the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional).

A taxpayer can claim benefit under Section 54 of the Income Tax Act for one residential house property purchased or constructed in India only. If a taxpayer is involved in more than 1 such transaction during his/her purchased or constructed must be in India only.

Budget 2019 announcement!

Amendments to Section 54 – Capital Gains Exemption

Assessees can get an exemption by investing long term capital gains from the sale of house property in up to two house properties against the earlier provision of investment in one house property with the same conditions. However, the capital gains on the sale of house property must not exceed Rs.2 crores.

Transfer of Property after claiming benefit under section 54

If a taxpayer claims benefit under Section 54 of the Income Tax Act and purchases or constructs a new house, he/she must hold that property for a minimum period of three years. If the taxpayer sells the property before the end of 3 years, then the benefit granted under Section 54 will be withdrawn and the taxpayer would have to pay the capital gains due to the previous transaction.

Amount of Exemption

The amount of capital gains exemption under Section 54 of the Income Tax Act will be the least of the following…

  1. Amount of capital gains on transfer of residential house property.
  2. Investments made in the purchase or construction of a new residential house property.

Home Loan for Purchase of House Property.

The tribunal has ruled that the tax deduction cannot be denied on the basis that the taxpayer has taken a home loan to make the purchase.

Capital Gains Deposit Account Scheme

Under Section 54 of the Income Tax Act, a taxpayer having long-term capital gains from the sale of a residential property can avoid the same by purchasing or constructing a residential property 1 year before or 2 years after (in case of purchase of property) or after 3 years (in case of construction of property).

In some cases, the proceeds from the sale of the residential property would not have been invested by the taxpayer at the time of filing of income tax return (Due date of Income-tax filing as per section 139(1). In such cases, the capital gains benefit under Section 54 can be availed by depositing the unutilized amount in Capital Gains Deposit Account Scheme in any branch of public sector bank. The new house can later be purchased or constructed by withdrawing the deposits from the account within a time frame of 2-3 years. If the deposits are not utilized within the stipulated period for the purpose of purchase or construction, the amount deposited will be taxable in the hands of the assessee.

Section 54F of Income Tax Act

The CA in Mumbai explains this As per provisions of section 54F of the Income Tax Act, 1961, exemption of capital gain is available in case of transfer of long term capital assets against investment in residential houses. The features for availing exemption under section 54F are detailed hereunder –

  1. The exemption under section 54F is available only to individual and HUF;
  • Capital gain has arisen on account of transfer of any long term capital assets other than a residential house;
  • Net consideration arisen on account of transfer of long term capital assets has been invested as follows –

Net consideration has been re-invested in purchase of one residential house within a period of 1 year before the date of transfer or within a period of 2 years after the date of transfer; or Net consideration has been re-invested in construction of one residential house in India within a period of 3 years from the date of transfer.

Meaning Of ‘Net Consideration’

Net consideration of the transfer of capital assets means the full value of consideration received on account of transfer of the capital assets as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.

Net consideration = Full value of consideration (-) expenditure

Section 54F also applicable to on sale of Land or Commercial Property

The following conditions need to be satisfied in case of sale land and are planning to buy a residential home.

  • Use the entire sale proceeds (received by selling a plot/land) to buy a new house or to build a new residential house.
  • If using a part of the money, the deduction will be the proportion of the invested amount to the sale price.
  • The time-frame for investment is the same as that for capital gains from residential property.
  • You should not own more than one residential house prior to this investment.
  • The deducted capital gain (from the sale of land) becomes taxable if you buy another house within two years of the transfer of the original asset or construct a new one within three years.
  • If the new house is sold within three years, the deduction claimed will become taxable as a long-term gain.
  • This new house purchased or constructed must be situated in India.
  • The proceeds should not be invested in a commercial property or in another vacant plot.

Circumstances Under Which Exemption under Section 54F Not Available

Following are the circumstances under which exemption is not available under section 54F of the Income Tax Act, 1961 –

  1. The assessee owns more than 1 residential house property as on the date of transfer of the original assets. However, the residential house property bought for claiming an exemption under section 54F is exempted from the same.
  2. The assessee purchases additional residential house within a period of 1 year from the date of transfer of original asset. The new asset purchased for claiming an exemption under section 54F is exempted from the same.
  3. The assessee constructs additional residential houses within a period of 3 years from the date of transfer of original asset. The new asset constructed for claiming an exemption under section 54F is exempted from the same.

Where Part of the Amount of Net Consideration Is Invested

  1. In the case where only part of the net consideration is invested in the purchase / construction of a residential house, then, an only proportionate amount of long term capital gain would be exempted under section 54F. A proportionate amount of exemption can be calculated on the basis of the following formula.
  2. Exemption under section 54F = Long term capital gain x Amount re-invested / Net consideration.
  3. In case the full amount of net consideration is invested in the purchase / construction of the residential houses, then, the full amount of long term capital gain would be exempted under section 54F.

Capital Gain Deposit Account Scheme

In case the net consideration is not re-invested within the last date of filing a return of income tax under section 139, then, the amount should be deposited in the capital gain deposit account scheme. The amount so deposited in the capital gain deposit account scheme should be used for the purchase / construction of the residential house within the specified period.

In case the amount as deposited in capital gain deposit account scheme is not utilized for wholly or partly within the specified period for purchase or construction, as the case may be, then, in such case on expiry of the period, the unutilized amount shall be treated as a capital gain

Consequence on Transfer of New Asset

In case there is a transfer of new purchased residential house or constructed residential house before expiry of a period of 3 years of its purchase or construction, as the case may be, then, the capital gain exempted under section 54F shall be taxable as long term capital gain of the previous year in which the new asset is transferred.

GST applicability on maintenance to Cooperative housing society

GST APPLICABILITY ON HOUSING SOCIETY

GST APPLICABILITY ON MONTHLY MAINTENANCE CHARGED BY COOPRTATIVE HOUSING SOCIETY IF MAINTENANCE ABOVE 7500/- PER MONTH.

Flat owners will have to pay GST at @18 percent if their monthly contribution to resident welfare association (RWA) exceeds Rs.7500/-. Resident Welfare Associations are required to collect GST on monthly subscription/contribution charged from its members if such payment is more than RS.7500/- per month per member. And only in the case of the annual turnover of the RWA (resident welfare association) by way of supply of goods & services exceeds Rs.20 lakh.

In a circular issued to clarify the applicability of GST on building maintenance charges, the ministry said that in case the charges exceed Rs.7500/- a month per member, the entire amount is subject to 18% GST, not just the amount in excess of Rs.7500/- the Finance Ministry said the exemption from GST on maintenance charges charged by an RWA from residents is available only if such charges do not exceed Rs.7500/- per month per member. Earlier, the maintenance charges in excess of ₹5,000 attracted GST and the limit was revised in excess of ₹7,500.

However a resident must pay GST on the value over and above ₹7,500 or on the entire amount. For example, if the maintenance charge is ₹8,000 for an individual resident, does GST liability arise on the value over and above ₹7,500 (on ₹500) or on the entire amount of ₹8,000? The GST is applicable on the entire amount i.e. on Rs.8000/-

 On how the tax liability would be calculated for a person who owns two or more flats in the housing society or residential complex, the Ministry said in such cases the ceiling of Rs.7500/- per month per member shall be applied separately for each residential apartment owned by him.

“For example, if a person owns two residential apartments in a residential complex and pays Rs.15000/-per month as maintenance charges towards the maintenance of each apartment to the RWA (Rs.7500/- per month in respect of each residential apartment), the exemption from GST filing shall be available to each apartment”.

And also RWAs are entitled to take input tax credit (ITC) of Goods and Services Tax (GST) paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services such as repair and maintenance services.

Key Highlights Of The Union Budget For Fy 2019-20

DIRECT TAX

* Increasing surcharge on income over 2 Crore rupees/year

* Faceless tax scrutiny case selection to be on random basis

* Propose 2% TDS on 1 Crore rupee/yr cash withdrawal from banks

* Propose to take slew of measures to boost digital payments

* Launching automated, faceless assessment of tax

* To make pre-filled tax return forms available

* To make Aadhaar, PAN interchangeable to file tax returns

* Tax proposals aim to stimulate growth, housing

* Direct tax mop up 11.37 Lacs Crore rupees FY19 vs 6.38 lacs Crore FY14

* Seeing double-digit growth in direct tax revenue annually

* Corporate tax now 25% for cos with 400 Crore rupees/yr revenue

* Corporate tax cut to cover 99.3% of all cos

INDIRECT TAX

* To raise road, infra cess on petrol, diesel by 1 rupee/ltr

* To up special additional excise on diesel by 1 rupee/ltr

* To up special additional excise on petrol by 1 rupee/ltr

* Proposing certain amendments to Customs Act

* Raising customs duty on precious metals to 12.5%

* Raising customs duty on gold

* Customs duty being exempted on some parts of e-vehicles

* 5% customs duty being imposed on imported books

* To implement fully-automated GST refund module

* GST led to lower rates on almost all commodities

* Tax deduction of 150,000 rupees on e-vehicle loan interest

* Extra 150,000-rupee tax deduction on some small home loans

* RBI, banks to absorb merchant discount rate at small shops

* No merchant discount rate on e-transaction at small shops

10 POINTS OF VISION

* Building social infrastructure among 10 points of vision

* Building pollution-free environment among 10 points of vision

* Digital India in every sector among 10 points of vision

* Make in India with stress on MSME in 10 points of vision

* Water management, clean rivers among 10 points of vision

* Export of food grain in 10 points of vision

* Ayushman Bharat, clean India among 10 points of vision

* Space programmes, safety of citizen in 10 points of vision

GROWTH, INFLATION

* Well within capacity to reach $5-trln economy in few years

* India to become $3-trln economy in FY20

* India now 6th largest economy vs 11th five years ago

REFORMS

* Need to continue undertaking structural reforms

* Need to continue structural reforms to reach $5-trln aim

* Need to invest in job creation in MSMEs

* Need to invest heavily in digital India, job creation

* $5-trln economy target is imminently achievable

* “Gone are the days of policy paralysis”

* Wish to propose many initiatives to kick-start growth

* Reforms needed in power tariffs

* To soon announce policy package for power tariffs

* Model tenancy law to soon be finalised

* Propose several reform measures for rental housing

* PPP to fast develop track, rolling stock, freight svcs

* To have blueprint for water grids, gas grids, airways

* Examining performance of UDAY scheme

* One nation, one grid to ensure power connectivity

* 2 more terminals at Sahibganj, Haldia to be functional soon

* Movement of cargo in river Ganga to rise 4 times in 4 yrs

FINANCIAL SECTOR, MARKETS

* STT to be limited to gap between settlement, strike price

* Propose some leeway in Securities Transactions Tax

* Propose to implement steps to make tax compliance easier

* Bad loan tax norms for most NBFCs at par with banks

* Need for greater parity in tax treatment of NBFCs vs banks

* CBDT to make provisions for pending assessment of start-ups

* Start-ups not to face scrutiny in terms of share premium if they do all required compliances.

* Taking steps to resolve angel tax issue for start-ups

* To start scheme for foreign company in advanced technology sector.

* To start scheme to invite foreign company in sunrise sectors

 To give PSU banks 700 bln rupees capital

* Banks’ NPAs reduced by more than 1 trln rupees last year

* Domestic credit growth risen to 13.8%

* To let all NBFC to participate in trade receivable platform

* Propose to return regulation over housing fin company to RBI

* Propose more power to RBI over NBFCs in Finance Bill

* One-time, six-month guarantee to PSU banks to buy some NBFC loans

* Fundamentally sound NBFCs should get funding from banks, MFs

* To undertake steps to improve governance in PSU banks

* Provision coverage ratio of banks highest in 7 years

* Six PSU banks enabled to come out of prompt corrective action.

* To start raising part of borrowing from external market in FX.

* To boost retail participation in CPSE ETFs.

* India’s sovereign external debt to GDP ratio less than 5%.

* To offer ETF participation via ELSS-like system.

* Setting divestment target of 1.05 trln rupees for FY20.

* Government  to reinitiate process of Air India divestment

* Onshore insurers’ net owned funds need cut to 10 bln rupees

* Strategic divestment of PSUs to remain a priority

* Mulling below 51% stake in PSUs on case-to-case basis

* To raise cap on foreign shareholding in some PSUs

* Steps to separate NPS Trust from PFRDA

* Financial gains from cleaning banking sector now visible

* FDI inflows remain robust despite global headwinds

* Important to increase retail invest in T-bills

* Propose to create platform for listing social enterprises.

* To work with regulators for AA bonds as collateral for repo.

* Asked SEBI to mull hiking minimum public shareholding to 35% from current holding of 25%.

* Propose to rationalise existing KYC norms for FPIs

* India needs 20-trln-rupee estimated investment every year

* To put in place action plan to deepen long-term bond mkt

* Action plan to deepen market for long-term bonds

* Invest driven growth requires access to low-cost capital

* To create payment platform for MSMEs

* Large infrastructure can be built on land owned by CPSEs

* To allow FPIs to subscribe to listed debt papers of REITs

* Propose to merge NRI, FPI investment scheme routes

* To mull hiking FDI limit in media, insurance, animation company.

* Contemplating an annual global investors meet in India

* Propose 100% FDI in insurance intermediaries

* To examine suggestions to further open up FDI in aviation

* FDI flows rose 6% to $64.37 bln in FY19

* Propose to make India a more attractive FDI destination

* To take steps for RBI, SEBI depositories’ inter-operability

* To allow FPIs to subscribe to listed debt papers of REITs

* Propose to merge NRI, FPI investment scheme routes

* To mull hiking FDI limit in media, insurance, animation cos

* Contemplating an annual global investors meet in India

* Propose 100% FDI in insurance intermediaries

* To examine suggestions to further open up FDI in aviation

* FDI flows rose 6% to $64.37 bln in FY19

* Propose to make India a more attractive FDI destination

* To take steps for RBI, SEBI depositories’ inter-operability

* To allow FPI invest in listed debt securities of InvITs

* Will take steps to meet 25% public holding in listed PSUs

* Need to encourage continued growth of start-ups

INFRASTRUCTURE, INDUSTRY

* To invest 1 lacs crore rupees in infrastructure over next 5 years

* To set up panel on long-term funding for infrastructure

 Need to invest heavily in infrastructure

* Rail infra may need investment of 50 trln rupees 2018-2030

* 2nd stage of Bharatmala to help develop state roads

* To incentivise advanced vehicle battery manufacturing

* Need to develop inland waterways for cargo movement

* To comprehensively restructure national highway programme

* To comprehensively restructure national highway programme

* 210 km of new metro lines operationalized in 2019

* Launching national common mobility card

* To leverage engineering skill for project maintenance work

* Public infra, affordable housing to be taken up in FY20

* To aid cluster-based development of traditional industries

* To use more PPP mode for metro rail network

* Railways to be encouraged to use SPVs for suburban projects

* To use USOF, PPP mode for speeding up BharatNet

* To deal with tax issues of start-ups later in speech

* To start TV programme exclusively for start-ups

FARM SECTOR

* Every rural family to have gas, power connectivity by 2022

* All rural families to have electricity connection by 2022

* Govt keeps Antyodaya at core of all its policies

* Villages, poor, farmers at centre of every govt plan

* Gaon, garib, kisan at centre of every govt plan

* To invest widely in agriculture infrastructure

* Bamboo, khadi, honey to be focus for cluster development

* To invest 802.5 bln rupees to upgrade rural roads in 5 years

* To upgrade 125,000 km of rural roads in 5 years

* 30,000 km roads under PM Sadak Yojana built with green technology

* All-weather roads provided to 97% of habitation

* To have robust framework for fisheries mgmt network

* 19.5 mln homes to be given till 2022 in PM rural house plan

* 15 mln homes completed under PM rural house plan

* APMCs shouldn’t hamper farmers from getting fair price

* Zero-budget farming to be promoted

* Hope to form 10,000 farmer producer organisations

* Aiming oilseed self-sufficiency, to help cut import bill

* Ease of doing business, living should apply to farmers too

* To create infrastructure for cattle feed manufacturing

* Will support private companies to add value for farm producers

* Zero-budget farming can help double farmers’ income

SOCIAL SECTOR, EDUCATION

* See rapid urbanisation as an opportunity, not challenge

* Constructed 96 mln toilets since Oct 2, 2014

* To expand Swachh Bharat plan to undertake solid waste mgmt

* India to be open-defecation-free by Oct 2

* Over 95% cities have become open-defecation free

 Identified 1,592 blocks for Jal Shakti Abhiyan

* To use CAMPA funds for Jal Shakti plan

* Aim water connection to every household by 2024

* To set up national research foundation to assimilate all grants

* To bring new national education policy

* Will bring in new national educational policy

* 3 mln workers joined govt pension plan so far

* Banks to provide assistance under Stand-Up India scheme

* Stand-Up India scheme to continue till 2025

* Expect less labour disputes as laws get streamlined

* Propose to develop 17 iconic tourism sites

* Propose digital repository for tribal heritage

* Propose to revamp India Development Assistance Scheme

* Opened 5 new embassies in Africa FY19, to open 4 more

* Propose to launch mission to integrate traditional artisans

MISCELLANEOUS

* Election 2019 mandate was full of hope for new India

* Voters stamped their approval on a performing government

* People of India voted for national security, economic growth

* Have set the ball rolling for new India

* Govt provided fiscal discipline during 2014-2019

* Average food security amount almost doubled during 2014-19

* Our last-mile delivery stood out, reached everywhere

* Will further simplify procedure, reduce red tape

* Mega programmes initiated in 1st term will continue

* We don’t look down upon legitimate profit-earning

* To take step for virtuous cycle of domestic, foreign investment

* Time right for India to enter aircraft financing, leasing

* Launched co to tap ISRO’s capabilities commercially

www.makemyfiling.com

Insolvency Resolution Process

Insolvency Resolution Professional (IRP) is appointed to conduct the insolvency resolution process in accordance with the procedure laid down in the Code. He is a professional with specialized knowledge, training and recognized by Insolvency Professional Agency and Insolvency and Bankruptcy Board of India for undertaking insolvency proceedings. The IRP is registered and regulated by the Board. They have a critical role in transactions under the Code. Insolvency Process under the Code starts with a Financial Creditor, an operational creditor or corporate applicant as the case may be who makes an application to the Adjudicating Authority about the debt default by the Corporate together with the name of IP who has consented to act as an interim IP. If no reference is made to the Board about the name of IP, the Adjudicating Authority makes reference to the Board. A financial creditor is a person to whom a financial debt is owed and the loan is disbursed against the consideration for the value of money borrowed etc. Operational debtor refers to an operational debt in respect of the provision of goods and services including employment, repayment of dues to the Govt. authorities or any local authority.
Duties and functions of Insolvency Professionals:
The Make My Filing Insolvency process under the code should be completed in 180 days from the date of application by the applicant with a one-time extension of 90 days. The duties of an Insolvency professional are quite onerous having regard to role and responsibility cast on the IP. The duties of IP are:

  • To do a public announcement of the insolvency process in English language newspaper and regional language newspaper circulating at the location of corporate registered office and the principal office etc.
  • To manage the affairs of the debtor as a going concern;
  • To collect information relating to the assets, finances, and operations of the corporate debtor for determining the financial position;
  • To collect all claims received from creditors;
  • To constitute a committee of creditors.

The code also specifies functions and obligations to be observed by the Insolvency Professionals. Where any insolvency resolution, fresh start, liquidation or bankruptcy process has been initiated, it shall be the function of Insolvency Professionals to take such actions as may be necessary for the manner provided in the Code.

Conclusion:
The Insolvency services professional occupies a strategic position and acts as an intermediary between the debtor/creditors on the one hand and the Adjudicating Authority on the other hand and functions under the watchful eyes of the Agency and the Board. The major benefit is that the process is strictly in time bound manner and there are no intervene by other legal authority so the bank can recover their money timely and on the other side operational creditor who’s money is due but not paid by debtors can be recovered through this legal process.