Legal and Regulatory

New PAN Forms for India’s Non-Residents

Nov. 2 – India’s Income Tax Department has initiated a separate permanent account number (PAN) application form for non-residents in which NRIs, PIOs and organizations wanting to set up an entity in India will have to provide additional information to the Central Board of Direct Taxes.

The new form – 49A – will assist the department in collecting information on non-Indian entities and individuals, like persons of Indian origin (PIOs), politically exposed persons (PEPs), persons linked to PEPs, and those involved in activities like gambling, gaming and lottery. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Tagged India Form 49A, India Forms, India KYC, India Non-Residents, India NRIs, India PAN, India SEBI, India Tax, Securities and Exchange Board of India | Leave a comment

Hike in India PayPal Payments Ceiling to US$3,000 per Transaction

Oct. 20 – Users of online payment web site PayPal in India can now accept up to US$3,000 per export-related transaction in their accounts, with the RBI raising this limit from US$500 per transaction earlier.

The payment has to be withdrawn within seven days irrespective of the currency risk. Also, RBI has barred purchases abroad with PayPal balance. This causes losses to the buyers as it adds to exchange conversion losses, tax and other charges. Users also feel that PayPal exchange rates are far below the current rates. Continue reading →

Posted in Finance, Tax and Accounting, Legal and Regulatory | Tagged India Finance, PAN, PayPal, RBI, SME | Leave a comment

India Announces Special Incentives for Exporters

Oct. 19 – The government of India announced a Rs. 900-crore package for exporters to assist them to fight with the slowdown in developed markets and rising input costs. The Reserve Bank of India has already declared an interest subsidy of 2 percent on rupee export credit for handicrafts, handlooms, carpets and small and medium exporters. Along with the interest financial support, the total relief package for exporters stands at nearly Rs. 1,700 crore. Continue reading →

Posted in FDI and Foreign Trade, Finance, Tax and Accounting, Legal and Regulatory | Tagged Commerce Ministry, Foreign Direct Investment, India Exports, India FDI, India Incentives, India Regulations, India Regulatory, India Tax | Leave a comment

India Grants Approval to Buy Assets Overseas for Public Sector Units

Oct. 14 – The government of India has permitted a policy to facilitate profit-making state-run firms to obtain assets overseas. The new policy also seeks to augment the power of Maharatna and Navratna companies and provide greater autonomy for acquiring raw material assets abroad.

The government will also mull over setting up a dedicated Sovereign Wealth Fund to obtain assets overseas. The guidelines for acquisition of raw material assets abroad by public sector enterprises is likely to appreciably improve the capabilities of such entities to acquire such assets and protect the country’s long term economic interests. Continue reading →

Posted in Finance, Tax and Accounting, Legal and Regulatory | Tagged India Regulatory, Maharatna, Navratna, Public Sector Units, Sovereign Wealth Fund | Leave a comment

Highlights of the Drafted Telecom Policy

Oct. 13 – The Communication Ministry of India unveiled the new Telecom Policy which contains new rules for the industry. The revised rules, which will substitute the existing framework that has been in place since 1999, aims to have broadband on demand for all citizens.

According to the new policy, revenue generation will play an inferior role and the major objective is to increase rural teledensity to 100 percent by 2020. The new policy will de-link licenses from spectrum and the term of mobile permits would be divided to 10 years when they come up for renewal. The policy aims to make 300 MHz of spectrum available by 2017 and another 200 MHz by 2020. Continue reading →

Posted in Business, IT & Telecom, Legal and Regulatory | Tagged India Policy, India Telecom, Ministry of Communications | Leave a comment

100% FDI in Pharmaceutical Sector to Continue

Oct. 12 – An inter-ministerial group presided over by the prime minister has decided to maintain the 100 percent foreign direct investment regime in the pharmaceuticals sector, overruling concerns raised by the health and industry ministries about rising medicine costs due to acquisitions of Indian drug companies by multinationals. The panel advocated that the FDI cap for brownfield pharmaceutical projects, which would include expansion and M&As, be cut to 49 percent, while the ceiling for greenfield ventures be retained at 100 percent. Continue reading →

Posted in Business, FDI and Foreign Trade, Legal and Regulatory | Tagged Competition Commission of India, India Brownfield, India FDI, India Greenfield, India M&A, India Pharmaceutical, India Regulatory | Leave a comment

Taxability of Leave Travel Allowance

Oct. 3 – Leave travel allowance (LTA) is the one of the most common cases of reimbursement adopted by employers to compensate employees due to the tax benefits attached to it. Section 10(5) of the Income Tax Act (1961) read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt.

Who is covered by the benefits?
LTA exemptions can be maintained where the employer provides LTA to a member of staff for leave to any place in India taken by the employee and their family. Such freedom is limited to the extent of actual travel costs incurred by the employee. Travel has to be undertaken within India and overseas destinations are not covered for exemption. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Markets | 1 Comment

External Commercial Borrowings in Chinese Renminbi

Sept. 29 – Taking into consideration the particular needs of the infrastructure sector, the existing external commercial borrowing (ECB) policy has been reviewed in discussions with the Government of India and it has been decided to permit Indian companies which are in the infrastructure sector – where “infrastructure” is defined under the existing guidelines on ECB – to avail of ECBs in Chinese renminbi (RMB), under the approval route, subject to a yearly cap of US$1 billion until further review. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Markets | Leave a comment