If Parliament procedure is complete and it becomes a law, it will be implemented from 1 April 2011, revenue secretary Sunil Mitra said after releasing the revised DTC draft
The government today said that it will introduce a draft legislation on the Direct Taxes Code (DTC), which would replace half-a-century old Income Tax Act, in Parliament in the forthcoming monsoon session, reports PTI.
"If Parliament procedure is complete and it becomes a law, it will be implemented from April 1, 2011," revenue secretary Sunil Mitra told reporters after releasing the revised DTC draft.
On the proposed tax slabs, Mr Mitra said, they would be reflected in the draft legislation to be placed before Parliament.
He said the revised draft has sought to address major concerns of stakeholders. These include treatment of the Minimum Alternate Tax (MAT), taxation of long-term savings, capital gains and housing loans. MAT paid by eligible companies to be computed based on profits and not on assets and retirement funds to continue to be exempt from tax on withdrawal.
The government, Mr Mitra said, had received 1,600 comments on the first draft released last year.
The bill, overhauling India's direct tax laws, will be referred to the standing committee of Parliament after introduction.
The Parliament panel, he added, would again consult the stakeholders, Mr Mitra said.
Finance minister Pranab Mukherjee had promised in his Budget speech to implement the new direct tax laws from next fiscal.
The Intimation of Disapproval (IOD), occupation certificate and building completion certificate will have to mention the carpet area separately for getting a green signal from the municipal body
The Municipal Corporation of Greater Mumbai (MCGM) will soon implement a regulation according to which developers are supposed to mention the actual carpet area while approaching the authority for approvals of their project plans.
“Developers are supposed to mention the actual carpet area while getting all the three certificates—the IOD, occupation certificate and building completion certificate,” said Swadhin Kshatriya, commissioner, MCGM.
The authority will also scrutinise the actual sale agreements of the buyers (which have to mention the actual carpet area and super built-up area separately) before issuing occupation certificates to developers.
“The developers will only get the occupation certificate after the sale agreements are verified. The sale agreement has to mention the carpet area and super built-up area separately. The State government will pass the notification within one month on the same,” added Mr Kshatriya.
The Maharashtra Housing Department is also actively participating to curb the sale of properties mentioning the super built-up area. The department will standardise the definition of carpet area in the Maharashtra Ownership Flats Act (MOFA).
“There is no standard definition of carpet area. Every developmental control regulation has a different definition of carpet area. We are going to standardise the definition of carpet area by including it in the MOFA itself,” said Sitaram Kunte, secretary, housing department, government of Maharashtra.
Developers in Mumbai are vigorously using the super-built up area and misleading consumers. In November 2008, the Maharashtra government came up with a housing policy which stated that sales of all properties should be done on carpet-area basis. However, developers still do not sell the properties on carpet-area basis because they get a chance to play with the free Floor Space Index (FSI) by including it as part of the super built-up area and they charge the consumers for the same.
“The ministry should speed up the process of turning the regulation into law and implement it effectively. They have been talking about it since a long time,” said Vinod C Sampat, advocate and proprietor, Vinod C Sampat and Co.
The regulation was supposed to become a law within three months of the draft legislation. By March 2009, it should have been a law, but it is not being followed. The authorities are now speeding up the process to make the draft into a law and implement it immediately.
“Developers have drastically raised the super built-up area of new properties. From 50% super built-up area, it has almost reached 100%,” said Pankaj Kapoor, founder, Liases Foras.
However, with the increase in super-built up area, the cost of properties has also doubled over a period of time. Consumers are getting lesser space at a higher cost. For example, if an apartment of 1,000 sq ft carpet area had a saleable area of 1,400 sq ft in Kandivali (a Mumbai suburb) in 2005, at that time, the apartment was priced at Rs2,500 per sq ft. But now, an apartment of 1,000 sq ft is quoted as 2,000 sq ft saleable area. Taking the current cost into consideration, the same apartment is priced at around Rs8,000 per sq ft. The total cost of the apartment has jumped to Rs1.60 crore.
“Today developers are talking of flower beds, which are 12 feet wide—how can you call it a flower bed? Developers are bucking the system openly and blatantly and no one is telling them anything,” said Pranay Vakil, chairman, Knight Frank (India) Pvt Ltd.
TRF’s stock price has crashed by around 24% from Rs1,065.65 per share on 28 May 2010 to Rs807.15 per share today. Accounting errors disclosed in the company’s year-end result announcements on 31 May 2010 have triggered this fall
TRF Ltd’s stock price has fallen by around 19% following the company year-end results announcements. The stock price has fallen from a high of Rs1,065.65 on 28 May 2010 to Rs862 on 31 May 2010. Accounting issues raised due to certain reversals in revenue entries could have triggered the fall. The stock today closed at a further low of Rs807.15.
In the footnotes for its FY10 results, the company stated that certain contract costs, which were recorded incorrectly in the earlier years, were noted during the years ended 31 March 2010 and 31 March 2009.
Further, in a conference call held to discuss the company results, Ashim Roy, general manager, finance and accounts, TRF Ltd said, “You know sometime in financial year 2006-07 we have got a contract what we call ‘Navayuga’—the Krishnapatnam port contract. This is a contract with a division called port & yard equipment division, which operates from Kolkata. Sometime in the previous financial year (08-09) it was brought to light that there was some booking of turnover in 2007-08, which was not in line with the counting practice and we decided as a company that we must reverse those entries.”
For the total value of such entries reversed in 2008-09, the topline was affected by around Rs48 crore and the bottom-line was affected by around Rs13.37 crore.
Further, in the fourth quarter of 2009-10, while the final accounts were being prepared, the external auditors found another such entry.
“We believe that everything has been cleaned up and there is nothing like any more such entries lying anywhere. The 2008-09 year went by, 2009-10 whole year went by—quarter-to-quarter we had all technically audited accounts and so on. But by the time the year was ending and the final account was being prepared, one more such entry was noticed by our external auditors,” said Mr Roy.
The impact of this entry, reversed for 2009-10, has affected the company’s bottom-line by around Rs2.39 crore and the topline by around Rs11.5 crore. The company now plans to get an investigation done by a third-party agency. The deadline set for this third party to complete this investigation is one month.
Apart from announcing it briefly in the footnotes of the result announcements, the company has not disclosed to the Bombay Stock Exchange (BSE) these accounting irregularities. On being questioned whether any special communication has been made to the shareholders, Mr Roy told Moneylife, “We have already spoken about it in the conference call. We have disclosed it to the BSE in the results sheet. It has affected the company only by a few crores.” No written communication is being planned for the investors.
Commenting on the fall of stock prices after the result announcements, Mr Roy said, “The fall in stock prices should be short term. We have also conducted meetings with investors.”
TRF Ltd today closed at Rs 807.15 on the BSE, down by 3.73% from its previous close of Rs838.40 on Monday.
The mutual funds with major investments in TRF are Sundaram BNP Paribas Energy Opportunities (Rs24.21 crore), Sundaram BNP Paribas CAPEX Opp Reg-G (Rs9.10 crore), Sundaram BNP Paribas CAPEX Opp Reg-D (Rs10.36 crore), Franklin India Smaller Companies (Rs 14.44 crore), ICICI Prudential Emerging STAR Inst I (Rs19.7 crore), ICICI Prudential Emerging STAR (Rs19.17 crore), UTI Energy (Rs9.06 crore).
An email request sent to Sundaram BNP Paribas remained unanswered till the time of writing the story. Templeton Franklin refused to comment on individual companies in the fund’s portfolio. Officials from UTI Energy were unavailable for immediate comments.