The Union Finance Minister has presented the budget for 2011-12 in the backdrop of growth of GDP @ 8.6% in 2010-11, contributed by a growth of 5.4% in agriculture, 8.1% in industry and 9.6% in services. The Minister shared that the economy has shown remarkable resilience to both external and domestic shocks.
Budget to help broad based rebound in agriculture and continued momentum in Manufacturing Sector. CS Anil Murarka, President, ICSI. Budget reflects financial translation of the policy initiatives of the government towards inclusive growth. CS N K Jain, Secretary & CEO, ICSI
In accordance with the decision of the Council and the suggestions of NACAS, the Indian Accounting Standard on Agriculture is being redrafted. We decided to make amendment in existing AS 11 on the lines of Indian Accounting Standard (Ind AS 21), ‘The Effects of Changes in Foreign Exchange Rates’ to provide an option to defer the exchange differences arising on translation of long-term foreign currency items and recognise the same in profit or loss over the life of such items instead of its immediate recognition, to be followed by the companies after paragraph 46 of AS 11 ceases to be effective, i.e., from 1st April, 2011. It is a matter of immense satisfaction to share that we have completed the task of formulating Indian Accounting Standards converged with IFRS which were submitted and cleared by National Advisory Committee on Accounting Standards (NACAS) for recommendation thereof to the Ministry of Corporate Affairs (MCA) for the purpose of their notification. We have been able to fulfil the commitment that we had made to the Ministry and have been able to adhere to the stipulated timeline.
As a measure of rationalization of duty structure the rates of 2% and 3% are being unified with the median rate of 2.5%. Accordingly basic customs duty on all goods currently attracting 2% has been increased to 2.5% and basic customs duty on those goods attracting 3% has been decreased to 2.5%.(S. No. 1 & 2 of Notification No. 21/2011-Cus dated the 1st March 2011 refers)
Under the existing provisions of section 35AD of the Income-tax Act, investment-linked tax incentive is provided by way of allowing hundred per cent. deduction in respect of any expenditure of capital nature (other than on land, goodwill and financial instrument) incurred wholly and exclusively, for the purposes of the “specified business”. Currently, the following specified businesses are eligible for availing investment-linked deduction under section 35AD(8)(c):-
Under the existing provisions of section 131(1) of the Income-tax Act, certain income-tax authorities have been conferred the same powers as are available to a Civil Court while trying a suit in respect of discovery and inspection, enforcing the attendance of any person, including any officer of a banking company and examining him on oath, compelling production of books of account and other documents and issuing commissions.
Under the existing provisions of the Income-tax Act, dividend received from foreign companies is taxable in the hands of the resident shareholder at his applicable marginal rate of tax. Therefore, in case of Indian companies which receive foreign dividend, such dividend is taxable at the rate of thirty per cent. plus applicable surcharge and cess.
In order to discourage transactions by a resident assessee with persons located in any country or jurisdiction which does not effectively exchange information with India, anti-avoidance measures have been proposed in the Income-tax Act.
A. Section 92C of the Income-tax Act provides the procedure for computation of the Arm’s Length Price (ALP). The section provides the methods of computing the ALP and mandates that the most appropriate method should be chosen to compute ALP. It is also provided that if more than one price is determined by the chosen method, theALP shall be taken to be the arithmetical mean of such prices. The second proviso to section 92C(2) provides that if the variation between the actual price of the transaction and the ALP, as determined above, does not exceed 5% of the actual price, then, no adjustment will be made and the actual price shall be treated as the ALP.
Under the existing provisions of section 80-IB(9) of the Income-tax Act, a seven-year profit-linked deduction of hundred per cent. is available to an undertaking, if it fulfils any of the following, namely:-(i) is located in North-Eastern Region and has begun or begins commercial production of mineral oil before 15t April, 1997;(ii) is located in any part of India and has begun or begins commercial production of mineral oil on or after 1st April, 1997;
