Lok Sabha passes Finance Bill 2015

The Lok Sabha recently passed the Finance Bill 2015 through voice vote.

The Bill contains the government’s tax proposals for the fiscal FY16.

• The Bill was passed after the Finance Minister moved as many as 41 official amendments.
• The amendments include slew of tax concessions to foreign companies on the Minimum Alternate Tax (MAT) front, exempting the sponsors/promoters of real estate investment trusts from MAT on the notional gains arising from shares of a special purpose vehicle to a business trust in exchange of units allotted by that trust.
• The biggest relief to foreign companies is that they will not henceforth be subjected to MAT on any interest, royalty or fees for technical services.
• This would mean that incomes earned by foreign companies (including foreign institutional investors) on investments in Government and other fixed income securities will not be covered under MAT provisions.

What is Finance Bill?

• The Finance Bill which deals with the taxation measures proposed by Government is introduced immediately after the presentation of Budget.
• It is accompanied by a memorandum explaining the provisions of the Bill and their effect on the finances of the country.
• The government proposals for the levy of new taxes, alterations in the present tax structure or continuance of the current tax structure beyond the period approved by Parliament, are laid down before Parliament in this bill.
• The Parliament approves the Finance Bill for a period of one year at a time, which becomes the Finance Act.
• Finance Bill is taken up for consideration and passing after the Appropriation Bill is passed.
• Parliament has to pass the Finance Bill within 75 days of its introduction.
• As the Finance Bill contains taxation proposals, it is considered and passed by the Lok Sabha only after the Demands for Grants have been voted and the total expenditure is known.
• The procedure in respect of Finance Bill is the same as in the case of other Money Bills.

Sources: The Hindu, rajyasabha.nic.in.

City rly. station to be renamed after Sangolli Rayanna

Bangalore City Railway Station has been renamed as “Krantivira Sangolli Rayanna” Railway Station.

Sangolli Rayanna (15 August 1798 – 26 January 1831) was a prominent warrior from Karnataka, India.

• Rayanna was born on 15 August 1798.
• He was the army chief of the Kingdom of Kittur ruled at the time by Rani Chennamma and fought the British East India Company till his death.
• Sangolli Rayanna also participated in the 1824 rebellion and was arrested by the British, who released him later.
• He continued to fight the British and wanted to install adopted son Shivalingappa as the ruler of Kittur.
• He mobilised local people and started a guerilla type war against the British.
• He and his “army” moved from place to place, burnt government offices, waylaid British troops and plundered treasuries. Most of his land was confiscated and what remained of it was heavily taxed.
• He taxed the landlords and built up an army from the masses.
• The British troops could not defeat him in open battle. Hence, by treachery, he was caught in April 1831 and tried by the British; and sentenced to death.
• Shivalingappa, the boy who was supposed to be the new ruler, was also arrested by the British.
• Rayanna was executed by hanging to death from a Banyan tree about 4 kilometers from Nandagad in Belgaum district on 26 January 1832.
• Rayanna was helped by Gajaveera, a Siddi warrior, in his revolt against the British in 1829-30

Sources: The Hindu, WIkipedia

Finance minister offers breather to FIIs on minimum alternate tax

Finance minister recently clarified that minimum alternate tax (MAT) would not be applicable on foreign companies’

• earning from capital gains on
  • Securities,
  • Royalty,
  • Fee on technical services
  • Interest,

providing a huge breather to foreign investors.

• The exemption would apply prospectively only in those cases where the normal tax rate is below the MAT rate of 18.5%.
• The minister also clarified that the MAT would not be applicable on sale of units of real estate investment trusts (REITs).
• Relief granted for
  • overseas government funds,
  • sovereign wealth funds,
  • pension funds for special tax regime.

What is MAT?

• The concept of Minimum Alternate Tax (MAT) was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were
  • not contributing to the government by way of corporate tax,
  • by taking advantage of the various incentives and exemptions provided in the Income-tax Act,
  • pay a fixed percentage of book profit as minimum alternate tax.
• The objective of introduction of MAT is to bring into the tax net “zero tax companies” which in spite of having earned substantial book profits and having paid handsome dividends, do not pay any tax due to various tax concessions and incentives provided under the Income-tax Law

Sources: The Hindu, Wiki.

‘Mumbai could see spurt in diarrhoea, malaria cases’

Praja Foundation, a Mumbai-based NGO, has predicted a substantial rise in diarrhoeal deaths due to water complaints in the next three years in certain areas of suburban Mumbai.

• In a report, it suggested that due to poor pest control, deaths due to malaria and dengue will rise in the surrounding areas by 2017.
• The annual report on Working of Ward Committees in the city of Mumbai was based on complaints and civic problems registered by citizens.
• In the last three years, complaints on roads have consistently been the highest, followed by drainage problems.
• Pointing out a slow grievance addressable mechanism, the report, which analyses the time taken by municipal Councillors to attend to the registered complaints, said in 2014, Municipal Corporation of Greater Mumbai (MCGM) took an average of 17 days to resolve a complaint.

Sources: The Hindu.

Changes in Act will make graft ‘heinous crime’

The Union Cabinet has approved amendments to the Prevention of Corruption Act, 1988, that provide for classifying corruption as a heinous crime and longer prison terms for both bribe-giver and bribe- taker.

• The proposed amendment will also ensure a speedy trial, within two years, for corruption cases.
• The proposed amendments would fill in perceived gaps in the domestic anti-corruption law and also help in meeting the country’s obligations under the United Nations Convention Against Corruption more effectively.

Proposed amendments to the Act:

• The amendments to the Prevention of Corruption Act, 1988, approved by the Union Cabinet include enhancing punishment from the minimum 6 months to 3 years and from the maximum five years to seven years.
• The ambit of the existing Act will be enhanced to make commercial entities liable for inducement of public servants.
• Under the present law, only individuals are liable. The proposed amendment bill also provides for issue of guidelines to commercial organizations to prevent persons associated with them from bribing a public servant.
• Non-monetary gratification will also be covered within the definition of the word gratification (समाधान) in the existing Act.
• The amendments approved by the government are in line with recommendations of the Law Commission to the proposed amendments to the Prevention of Corruption (Amendment) Bill, 2013.

Sources: The Hindu, PIB.