Newsletter - May 2022
India has been victorious and can count itself as one among 6 countries that have ever won the Thomas Cup! Indonesia has been a champion in this Badminton team tournament over the years with 14 victories and followed by China and Malaysia at 10 and 5 victories respectively. Denmark, Japan and now India have had one victory each.
Generally, a society that operates at a good economic level, is where people can afford to be involved in sports. This is indicative of the way our economy and society are evolving and growing.
While societies evolve - some things remain stuck in history and become political issues. The US Constitution's 2nd amendment in 1791 ensured the people had a constitutional right to carry and use firearms and ammunition. This right has become a political tool today and has led to countless lives being lost to mindless shooting incidents - the last one in Texas at school children being a particularly saddening example of the same.
Supply chain constraints and global liquidity situation, exacerbated by availability of some commodities due to the still ongoing Ukraine - Russia war has resulted in uncomfortable inflation across the world. While some companies are facing margin pressures, for the consumers, this has meant that after meeting healthcare bills during the pandemic, there is increasing cost of everything - right from basic necessities like food.
The central banks in most countries (other than China) have attempted to quell this inflation through increasing interest rates and hoping that it reduces demand - a collateral impact of this has been in markets globally.
We hope the new monkeypox virus scare doesn't lead to more human impact. The world needs a period to heal and get back to normalcy - including the lack of war, mindless shooting of people or inability to afford food. We hope those times come soon.
FOREIGN RETIREMENT BENEFIT ACCOUNT
Recently, the Government has notified Rule to address the mismatch in taxation faced by individuals who have foreign retirement benefit accounts by providing an option to individuals to tax such income on withdrawal/ redemption basis instead of accrual basis.
The Article features the details of the option available to address such tax mismatch and reporting compliance along with key actionables for residents or individuals planning to return to India, who hold IRA(s) in foreign country.
UPDATED RETURN OF INCOME
As a step forward to promote voluntary tax compliance and to reduce litigation, Government of India vide Finance Act, 2022 has introduced the concept of updated return. With effect from 01/04/2022 certain assessee’s can file updated return of income by paying additional tax on additional income within a period of 24 months from end of relevant assessment year.
INDIRECT TAX (GST)
CASE LAW ANALYSIS ON GUJARAT HC VERDICT ON VALUATION OF LAND ON CONSTRUCTION OF FLAT OR UNIT
In case of Purchase of under-construction flat/units GST is leviable on the entire agreement or contract value minus the value of land. However, there is a mandatory deeming fiction presuming 1/3rd of the total amount charged as attributable towards sale of land, irrespective of the actual value of land. Recently, The Hon'ble Gujarat High Court (HC) has occasion to deal with the constitutional validity of this mandatory deeming fiction. The Hon'ble Gujarat HC has held that the mandatory fixed rate of deduction of 1/3rd of total consideration towards value of land ultra-vires the Provisions of GST Act. The Hon'ble Gujarat HC has directed refund to be granted of excess GST to the affected taxpayer. The brief analysis of said case law is enclosed herewith.