Regulations
Dr Swamy questions SEBI's role in SpiceJet deal
How could SEBI suo Motu inform the Ministry of Civil Aviation that SpiceJet share sale need not first be offered to existing shareholders and that Ajai Singh could acquire 58% or more of the total equity of SpiceJet at an undisclosed price, Dr Swamy said
 
Dr Subramanian Swamy, the leader from Bharatiya Janata Party (BJP), has again requested Prime Minister Narendra Modi to urgently conduct an enquiry by the Prime Minister's Office (PMO) in the SpiceJet Airlines deal with inputs from Enforcement Directorate (ED), Intelligence Bureau (IB) and Research and Analysis Wing (RAW).
 
Based on fresh information, Dr Swamy, in a letter, said, " On what authority did the SEBI suo Motu inform the Ministry of Civil Aviation that the sale of shares of SpiceJet need not first be offered to existing shareholders and that Mr Ajai Singh could acquire 58% or more of the total equity of SpiceJet at an undisclosed price."
 
“What were the considerations, if any, whereby the Ministry of Civil Aviation (MCA) remained mute when Mr Ajai Singh inducted about Rs1,300 crore or there about into the running of the said Airline (in view of his existing financial difficulty). Did the Ministry under-write this loan by any of the financial institutions. If so, why?" he asked.
 
Dr Swamy further asked, "How Goldman Sachs could be asked to evaluate the net worth of SpiceJet Airlines when many of the Indian agencies with no foreign connection are able to do as professional an analysis. And on what basis did Goldman Sachs declared that the share price of SpiceJet were near zero i.e. that these were dud shares? In fact, the valuation of a public limited company like SpiceJet ought to have been made public under the provisions of Company Law."
 
"In my view, the PMO should therefore immediately constitute a comprehensive enquiry before the SpiceJet sale snowballs into a major controversy. Needless to add that the Government of India has always had the option to nationalise the SpiceJet in the event of concern is for the passenger traffic and the employment of the staff in failing SpiceJet," Dr Swamy had said in the letter.
 
Earlier this year, Singh and others bought about 59% stake in SpiceJet from the Maran brothers. 
 

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COMMENTS

Mahesh Bhat

2 years ago

It was political deal between DMK & BJP than between Ajay Sing & Maran brothers. BJP Govt bailed out Spicejet. Dr Swamy knows exactly what happened, hence he is asking for nationalizing Spicejet!

integrity

2 years ago

Great. Swamy has always been impressive. It would have been very interesting if he had decided to focus on lingering Sahara case and its implications

Nifty, Sensex to rally higher; Bank Nifty struggling – Monday closing report
Nifty is headed for few more days of gains
 
We had mentioned in last week report that Nifty is under pressure and it may rally if it manages to lose above 8,300. The index opened higher and immediately hit the day’s low. Each time during the session today the index hit a higher low and finally closed in the green after hitting the day’s high.
 
Sensex opened at 27,205, while Nifty opened at 8,230. Sensex moved from the low of 27,159 to the high of 27,538 and closed at 27,491 (up 479 points or 1.77%) while Nifty reached up to 8,346 after hitting a low of 8,220 and closed at 8,332 (up 150 points or 1.84%). Bank Nifty moved in range for most of the session except for the major dip that happened at around 2.22 pm. Bank Nifty opened at 18,418 and moved from the high of 18,586 to the low of 18,351 and closed at 18,501 (up 163 points or 0.89%). NSE recorded a volume of 67.91 crore shares. India VIX rose 0.48% to close at 17.3075.
 
The finance minister Arun Jaitley on Thursday moved amendments to Finance Bill 2015 in Lok Sabha to exempt foreign investors' capital gains from the sale of securities, interest income, royalty and fees for technical services from applicability of minimum alternate tax (MAT).
 
Data released by the government after trading hours on Thursday showed the Eight Core Industries carrying nearly 38% weight in the Index of Industrial Production (IIP) have recorded 0.1% drop in March 2015 over March 2014.
 
Finance Minister Arun Jaitley clarified that gains and losses arising out of exchange of shares with the units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have been exempted from applicability of MAT.
 
The headline HSBC India Purchasing Managers' Index (PMI) declined to 51.3 in April from 52.1 in March. Manufacturing output, total new orders and buying levels expanded at slower rates in April 2015.
 
Gold imports surged 19.5% to reach USD 34.32 billion in 2014-15 due to declining prices and easing of restrictions by the Reserve Bank. Imports of the metal were USD 28.7 billion the previous fiscal, 2013-14.
 
According to a report mutual funds have brought in over Rs7,600 crore in equity markets in April, making it their highest net inflow in more than seven years.
 
The government recently increased the import duty on natural rubber to 25% which according to them has led to worsening of inverted duty structure since tyres and other finished rubber goods can be imported at 10% and even lower rate of duty.
 
Aditya Birla Nuvo rose 12.59% to close at 1,768.00 on the BSE. It was the top gainer in ‘A’ group after Madura Garments and Pantaloons Fashion got merged.
 
Shriram Transport Finance fell 14.93% to close at Rs828.20 on the BSE. It was the top loser in the ‘A’ group on the BSE, following poor March quarter results.
 
The government announced a steep hike in petrol and diesel prices after market hours on Thursday. As a result ONGC rose 7.57% to close at Rs327.65 on the BSE. It was the top gainer in the Sensex 30 pack.
 
ICICI Bank fell 0.63% to close at Rs329.15 on the BSE. The stock was the top loser in the Sensex 30 stock.
 
On Friday, US indices rebounded sharply after falling on Thursday. US Federal Reserve has left open the chance of an interest-rate hike as early as June in a statement following a two-day monetary policy meeting.
 
Among economic data in US, construction spending fell in March to a six-month low, while ISM data showed manufacturing growth held at its slowest in almost two years in April. A jump in consumer sentiment in April, however, and stronger-than-expected vehicle sales for the month suggested the economy was finding some footing.
 
Asian indices which were trading today showed mixed performance. Jakarta Composite (1.08%) was the top gainer while NZSE 50 (0.52%) was the top loser.
 
China's manufacturing sector in April turned in its weakest performance in a year, according to a private gauge of the country's factory activity, suggesting that Beijing may need to speed up its efforts to boost the economy. The private-sector HSBC manufacturing Purchasing Managers Index fell to a final reading of 48.9 in April from 49.6 in March, HSBC Holdings PLC said today, 4 May 2015. It was the lowest level since April 2014 when the reading came in at 48.1--well below the 50 level that separates expansion from contraction.
 
European indices were trading higher. US Futures too were trading in the green. Markit Economics said growth of the eurozone manufacturing sector was maintained in April, with the rate of expansion easing only slightly from March's ten-month high. Eurozone Manufacturing PMI came in a tick higher than its earlier flash estimate of 51.9. The PMI has remained in expansionary territory for 22 months.
 
Markit Economics said today, 4 May 2015, the seasonally adjusted final Markit/BME Germany Manufacturing Purchasing Managers' Index (PMI)–a single-figure snapshot of the performance of the manufacturing economy-fell from March's 11-month high of 52.8 to 52.1 in April
 
The headline Markit France Manufacturing Purchasing Managers' Index (PMI)–a seasonally adjusted index designed to measure the performance of the manufacturing economy–posted 48. Down from 48.8 in March, the latest reading pointed to an acceleration in the rate of deterioration.
 

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Economy & Nation Exclusive
Dispense with TDS certificates and save tax payers from harassment!
The tax authorities can suitably modify the rules to obviate the need for issuing TDS certificates, which will be a great service to the taxpayers in general and tax deductors in particular
 
The harassment caused to the tax deductors by the Income-Tax (I-T) Department preventing them from issuing tax deducted at source (TDS) certificates unless past demands, whether valid or not are paid is explained in the article titled - “Taxtortion: No TDS certificate unless short payment defaults are paid” published in Moneylife.
 
However, the harassment caused to the taxpayers by the system of TDS is so acute that it is a perennial pain in the neck. Though present guidelines stipulate that TDS certificates are required to be issued to the bank depositors every quarter, not a single public sector bank (PSB) complies with this requirement. And the worst part is even at the end of the year, you may have to visit the bank’s branch at least three to four times to get your TDS certificates. And many times, they are either incomplete or do not match with the tax deducted, so much so, many depositors are virtually driven to the wall with no help to solve the problem. 
 
Why TDS certificates are required at all?
 
So my basic question is why do we need TDS certificates at all? As per the present rules, when tax is deducted at source, the deductor is required to issue TDS certificate in a specified format with all sorts of serial numbers and details, which are required to be filled up in the tax returns. But these TDS certificates have neither any sanctity nor any utility for the following reasons. 
 
Even after deducting tax at source, there is no guarantee that such tax deducted has been remitted to the government, as it has happened in the case of some big corporates and the employees have suffered for no fault of theirs. And there are many instances, when the tax deducted does not go into your account simply because the permanent account number (PAN) mentioned while filing the TDS return is wrong due to which it goes to the credit of somebody else. Unless the tax deducted is remitted into government coffers and correctly credited under your PAN, the taxpayer does not get credit for the tax paid and the I-T department simply goes by what is shown in Annual Tax Statement (Form 26AS) available in their website. And the I-T department wants every tax payer to go through the Form 26AS and ensure that the tax paid by them including the TDS matches with what is mentioned therein, as the tax payer can claim credit only for what is shown therein. So what purpose is served by issuing TDS certificate, if the tax deducted is not remitted to the government by the deductor or not correctly credited into your PAN account?  
 
Besides, the TDS certificates have no utility as no attachments are now required to be submitted along with tax returns and hence no useful purpose is served by issuing TDS certificates to the taxpayers. The tax authorities can suitably modify the rules to obviate the need for issuing TDS certificates which will be a great service to the tax payers in general and tax deductors in particular. 
 
However, for the benefit of the taxpayers, banks can be asked to furnish compulsorily in their statement of accounts issued or passbooks written up in the first week of April every year, the details of interest paid and TDS deducted thereon, if any, during the previous financial year by making changes in their computer systems to make it automatic without any manual intervention. This system is followed by some foreign banks and it serves needs of depositors very well and keep the depositors informed about the quantum of interest paid and tax deducted in their account to file their tax returns.  
 
As for the employees of all organizations, it is sufficient if the employer mentions the tax deducted at source during the month and the cumulative total till that month in every pay slip, which itself serves as a record for the employee to file their tax returns. Issuing of TDS certificates is a huge paperwork for large organisations like banks and many information technology (IT) companies, which is very redundant and can be easily dispensed with, without any loss of revenue to the government. 
 
The government should, however, tighten the screw against those who deduct tax at source and fail to remit the amount to the exchequer. If any tax payer finds that the tax deducted is not remitted to the government or not credited to his PAN account correctly, he or she should be encouraged to report to a specialised cell in I-T department, who should take the matter with the concerned deductor with the seriousness it deserves. 
 
I-T dept should facilitate filing of tax returns right from April every year: 
 
There is another distinct advantage for the tax payer if TDS certificates are totally dispensed with. Today you cannot file your return of income unless and until you get the TDS certificates from your bank or your employer,  as you are required to fill up the unique serial number of the TDS certificate in the tax return. Without this the tax return is incomplete and does not get accepted by the computer while filing returns on-line. And banks and companies do not issue these TDS certificates till the last week of May or first week of June, as they can issue these certificates only after they file their quarterly TDS returns with the Income-tax dept., which they can do till 15th of May every year. So a taxpayer cannot file his tax return in April or May, though he is ready to file his return and get rid of his statutory obligation as early as possible, particularly, when he has to receive a refund from the I-T department, as the earlier you file the return, better the chances of getting the refund early. 
 
So dispensing with TDS certificates will be the best thing to do in the interest of tax payers.  Besides, to file your tax returns in April-May every year, it is necessary that the I-T department should notify the tax returns applicable for that year by the end of the previous financial year. It should ensure that all tax deductors file their annual TDS returns with the I-T department by the 15th of April every year, so that the completed Form 26AS is ready in their website by the middle of April to facilitate viewing by taxpayers. 
 
For the financial year ended 31 March 2015 (AY 2015-2016), the I-T department has just a few days back notified an elaborate return, which is held in abeyance as of now at the instance of the Finance Minister, and a revised format is expected to be notified shortly. But the department should ensure that the requirement to fill in the unique numbers of TDS certificates in the I-T return should be suitably deleted if the authorities agree to this suggestion to abolish the present system of issuing of TDS certificates altogether.  If only the income tax department provides the return forms early in April itself, it would hasten the process of filing tax returns well before the due date  and avoid last minute rush as well. Besides this will help taxpayers, especially senior citizens, who wish to complete the work of filing tax returns early in April itself, so that they can leave on long summer vacation to be with their children who may be away in India or abroad.
 
A little bit of empathy and understanding would go a long way in making life easy for the tax payers, who are, in fact, partners in the nation building activity of the government. 
 
(The author is a financial analyst and writes for Moneylife under a pen name ‘Gurpur’.)
 

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COMMENTS

KAIALSH SINGHAL

2 years ago

banks like bank of baroda , silvassa branch says to give letter for interest certificate , bob , sarafa bazar branch did not up loaded tds in 26as after 30 .09.2013 what a funny reason --- pan number was not with them -- then how they make fdr
regards
kc singhal silvassa

Ajay Kumar De

2 years ago

TDS deducted is required to be deposited in account of central government within time provided by law. What happens if any deducts TDS and does not deposit in time ? AS26 is the strongest proof whether deductor deposited or not.
Further, when a senior citizen is exempted from depositing advance tax why banks cann't be restrained from deducting TDS periodically ?
In any case, declaring income or tax evation is assessee's liability for any consequence.

Suketu Shah

2 years ago

One of the best articles you wl read if you are a return filer and tax paer in India.100% correct.

krishna

2 years ago

Nice Expectation. Good suggestions. Will fall on deaf ears.

May not happen practically. TDS is a potent tool for Tax Inspectors , Businesses & CA's. Complexity is necessary for them to prosper.

Why will they let go that ? There is no merit in simplifying tax laws for the administration though it is a strong political tool for capturing votes.

Dr Swamy is one of the many who provided a simple solution of abolishing Personal IT itself. He continues to get good audience but no administrative acceptance or political support.

Honest Tax payers should get practical and work out their own solution than expecting simple things to happen

REPLY

Janakiraman Rajalakshmi

In Reply to krishna 2 years ago

Totally agree with your comments.

Mahesh kumar Aneja

2 years ago

The govt will do a lot of service to tax deducters if TDS issuance certificate obtained from Online system is dispensed with atleast. It is too encumbersome . Billions of people will be benefitted without any loss of revenue
Mahesh aneja

Davidson D

2 years ago

Have a single rate of tax without any exemptions or deductions and deposit tax with uniform rate of say 5% thereby obviating the need of not only TDS certificates, filing of returns and processing of refunds. Huge savings for the govt.

Davidson D

2 years ago

Have a single rate of tax without any exemptions or deductions and deposit tax with uniform rate of say 5% thereby obviating the need of not only TDS certificates, filing of returns and processing of refunds. Huge savings for the govt.

Davidson D

2 years ago

Have a single rate of tax without any exemptions or deductions and deposit tax with uniform rate of say 5% thereby obviating the need of not only TDS certificates, filing of returns and processing of refunds. Huge savings for the govt.

Hemant Kulkarni

2 years ago

Agree with the writer's comments & points. The assumption that every tax payer or assessable individual is a thief leads to "taxtortion". Sadly, an individual who unknowingly or out to lack of knowledge, short pays tds then he's greeted with a penalty notice & dire consequences therefrom. No leniency or sympathy shown towards an individual who has little or no knowledge on tds, which after long being a corporate or finance professionals routine exercise, is now a common man's responsibility too. No auto calculating forms, no ease of interpretation, poor web portals which are down often or inaccessible to nris or simply freeze on the use after he's painstakingly filled out a form such as 26QB. This area of taxation desperately needs to be reformed.

Rajesh Kothari

2 years ago

I've long held that TDS system has become too complicated to of practical use.

Best IAS and IT brains should be involved to replace or abolish it together.

frkhodaiji

2 years ago

Agree with the TDS article.
You may like to consider the flwg.
When a cheque for interest is paid, the TDS certificate should be sent along with the cheque/advice as an attachment.
That may obviate the problem.
Tks for the good work u are doing.
Farrokh Khodaiji.

Mahesh S Bhatt

2 years ago

Sucheta/Debashis I was that there are 84 types of taxes pl check & validate on central/state/municipal taxes.Lesser tax lesser black money.But BJP is spineless its following Congress/US policices & be ready for larger than 2008 financial meltdown.

When million $$ question Mahesh

Anand Vaidya

2 years ago

I think TDS and advance tax itself is highway robbery, especially for ordinary citizens. We are asked to pay tax EVEN BEFORE the income is in our pockets.

But then we are talking about India Gov and ITD. They are worse than robber barons. Modi govt was expected to bring relief but seems useless so far.

TIHARwale

2 years ago

Rules are for donkeys. Vijay Mallya cheated Govt by not remitting TDS by KFA running over Rs 200 crores did he go to jail for cheating and misappropriation NO rather he used the money to own RCB in IPL. So honest travellers who paid service tax for using KFA are bunch of fools and Vijay Mallya was a former M.P. so thatshows the integrity of our M.P.

Shahid Khan

2 years ago

Yes abolish TDS. The Government merely collects 240000 crore through it. Big deal

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