Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 8 reasons why old tax regime is still attractive for many taxpayers in this income tax bracket
 March 31 deadline is getting near. How to save income tax with tax loss harvesting?
 45-day MSME payment rule: Impact and details of Section 43B(h) explained
 Small savings schemes that offer tax benefits of up to Rs 1.5 lakh under section 80C
 RE-OPENING OF CORRECTION WINDOW FOR MAY 2024 CA EXAMINATIONS
 Powerful Upgrades, Tally 12+1 months renewal Plan and Connected Services for your growing Business - March 2024
 How innovative solutions can help fix the Sec 43B conundrum for MSMEs
 Income Tax dept asks many individuals to explain high value transactions of FY20-21 as Updated ITR deadline nears
 Release Notes for TallyPrime and TallyPrime Edit Log Release 4.1 | What s New!
 Deadline to file updated ITR FY20-21 ends on March 31: Details on additional tax
 4 tax-planning mistakes to avoid this season

Govt likely to tax companies on forfeited share money
January, 28th 2008
India Inc may soon have to pay tax on capital income that arises for companies from money forfeited as part-payment for their shares.

At present, for subscribing to the share capital of a company, payments can be made in installments by an investor.

For instance, if investors apply for shares, they pay in part and are allotted the shares. But the investors have to pay the remaining amount by a stipulated date.

Any delay will mean forfeiting of the earlier installments by companies. The forfeited money remains with a company and is neither returned to shareholders nor to any government authority.

companies also do not pay tax on this money, claiming it to be a capital receipt. Tax authorities feel the money should now be taxed because it is not earned through productive activities of companies.

A proposal to this effect has been circulated by the income tax department and is likely to be taken up by Budget 2008-09. To make companies pay tax on forfeited money required an amendment to Section 2(22) of the Income Tax Act, 1961, which deals with dividend income of companies.

This Section can be amended to include the amount of share money forfeiture within the scope of income, a government official pointed out, adding that, in many countries, such capital income is already being taxed.

The proposal has been made at a time when more and more companies are gong in for listing shares on the domestic bourses and retail investments in the country are at an all-time high. The move would also go a long way towards filling the government coffers. Corporate tax rose 37.22% to Rs 1,32,948 crore until January 15.

It also comes at a time when tax concessions to the corporates are on the governments radar, especially in view of the sectors stellar performance.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting