Income-Tax Dept.-Mulling Tax On Carbon Credit Trade

The Income-Tax department is mulling tax on carbon credit trade, estimated to yield for the exchequer an estimated Rs 1,000 crore. The I-T department’s preliminary study has found that large companies listed on stock exchanges are not making tax provisions against the profits out of the sale of carbon credits and are putting the money thus earned in other businesses. India is the largest producer of carbon credits in the world. “The sale of carbon credits and the subse-quent payment of tax from the money earned is not strictly followed.
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"Round- Tripping" or "Treaty Shopping"

Demand on capital gains on Idea share sale by Mauritius subsidiary; Fema and telecom regulation violations also alleged. The income tax (I-T) department has sent a notice to Tata Industries, raising a demand of Rs 298 crore on capital gains on the sale of shares in Idea Cellular, held through a wholly-owned Mauritius-based subsidiary, Apex Investments, to Birla TMT Holdings in India. Although the amount is not large, the notice, which was sent last month, is significant because, I-T department sources said, it was the first discovered case of "round- tripping" or "treaty shopping" and has significance for Indian companies structuring offshore deals. The notice was sent under section 143(3) of Income tax Act , 1961, but the demand for capital gains has been made under section 93 (3) of the Income Tax Act.
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FOR DIAMOND INDUSTRIES

In an order that will have a bearing on hundreds of diamond cutting and polishing firms in the country, the Income-Tax Appellate Tribunal (ITAT) has held that tax is not payable in India for commissions paid abroad at the time of acquiring rough diamonds. In a recent case, Mumbai-based polished diamond exporter Kirtilal Kalidas had imported rough diamonds from UK-based Diamond Trading Company after availing the service of another UK-based entity Bonas & Co. Kirtilal Kalidas had paid Rs 1.47 crore to Bonas & Co as a commission. However, no tax was deducted while making this payment. The income-tax department had later held that tax should have been deducted from the commission paid to the non-resident.
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Say Good Bye To Storage Cost, Wealth Tax On Gold

With high volatility in the stock market, investors are looking for other options like debt and gold. However, when it comes to gold, most investors find it a difficult proposition because of the storage cost and wealth tax it entails. While the storage cost could be anywhere between Rs 500 and Rs 20,000 per year, depending on the institution, wealth tax would be 1 per cent of the gold value exceeding Rs 15 lakh. But now you can not only save these costs, but also earn interest on the gold you own. State Bank of India (SBI), the country’s largest bank, has launched a gold deposit scheme to address this issue.

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LOOSE OF GIFT TAX EXEMPTION BY NRI

NRIs should make their trips to the homeland shorter if they want to avail themselves of the gift tax exemptions, says a recent ruling by a tax tribunal. The gift tax exemptions will not be available to an NRI if he loses his special status on account of overstaying in India, the Income Tax Appellate Tribunal (ITAT) said. Giving a ruling in a case involving levy of tax on a gift made by an NRI from his non-resident (external) (NRE) account, the tribunal said, "He was in India for 182 days or more during the relevant previous year.... Thus, the assessee is clearly not entitled to exemption (on gift tax)."
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