Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: articles on VAT and GST in India :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: cpt :: list of goods taxed at 4% :: form 3cd :: TDS :: ACCOUNTING STANDARDS :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment
 
 
« General »
 Confusion over GST persists: Wholesale grain market affected, sales fall by 40 percent in Pune
 Slow tax growth reflects companies' GST troubles
 What is PAN card? Why is it important?
 Govt to cut down executive discretion on tax laws
 Businesses can start filing July returns on GSTN from August 5
 Are you earning abroad? Know the tax rules
 Attention last minute tax filers! Know about key changes made by govt this year
 Accounting relief for IndAS companies
 How you can reduce your tax to zero if you have income within Rs 10 lakh
 NRIs’ overseas bank info needed only for tax refund
 Non-performance: I-T dept transfers 245 commissioners

MAT relief in new tax code
January, 14th 2010

The government is likely to relax the proposed norms on minimum alternate tax (MAT) for insurance companies. The finance ministry is expected to accede to the insurance industrys demand and treat insurance companies at par with banks under the new Direct Tax Code.

The draft code proposed a two per cent MAT based on the gross asset value on all non-banking companies and 0.25 per cent for banks. The value of gross assets is the sum of the value of the property a company owns, including aggregate value of fixed assets, capital works in progress and the book value of other assets.

Sources close to the discussions on the Direct Tax Code told Business Standard there was a presentation made by the insurance industry, by both the life and non-life segments, against the proposal, and the finance ministry has assured that the demand would be considered.

However, out of the 800 amendments being sought by the entire industry in the draft document, the finance ministry has shortlisted only eight items on which amendments are expected when the Direct Tax Code is finalised. The ministry is looking at these eight demands, which included MAT on insurance companies.

MAT will have an adverse impact on the insurance industry. Pure term plans will become more costly, while endowment plans will see reduction in returns at the time of maturity. Insurance companies with large Ulip (unit linked insurance plans) books will see a significant reduction, as mutual funds do not pay anything, said Hiresh Wadhwani, Partner, tax and regulatory services, Ernst & Young.

At present, under the Income Tax Act, an insurance company is required to pay regular income tax on the actuarial surplus. The code proposes the exempt-exempt-tax (EET) principle on all insurance products, which would mean the policyholders funds would be taxed at maturity and therefore, income tax will now be applied on shareholders income.

Since no private life insurance company is profitable, none of them pays tax. Insurance companies will have to pay MAT or 0.25 per cent of the gross assets if this exceeds the regular income tax on the shareholders income.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Customer relationship management software CRM software Operational CRM Collaborative CRM

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions