Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
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: list of goods taxed at 4% :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: cpt :: due date for vat payment :: VAT Audit :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd
News Headlines »
 7 Tax-saving investments for the risk averse
 5 Tax tasks you should complete before March 31
 March 31 deadline nears: Check out these last-minute tax-saving investment options
 How to file income tax returns online without having Form 16 in 10 simple steps
 Deadline For Filing Income Tax Return (ITR) Is Just 11 Days Away: 10 Latest Details To Know
  10 incomes you need not pay any tax on
 How To File Income Tax Returns In Three Steps By March 31, 2018
 10 things about income tax every taxpayer should know
 What to do if your TDS is not deposited with the government
 What if you forget to verify your Income Tax return?
 TDS on rent and other tax tasks to complete before March 31

Refund claims may rise on derivatives losses
April, 03rd 2008

Unexpected losses suffered by corporates, which were exposed to forex derivatives and lower profits for banks, could result in a rise in refund claims with the Income Tax Department.

Much after corporates paid out advance taxes for the year 2007-08, the Institute of Chartered Accountants of India (ICAI) revised accounting norms, forcing companies to make provisions for losses on derivative contracts. Also, banks and bond houses saw a major portion of their treasury profits vanish in the past two trading days of 2007-08. Government bond prices fell by over 50 paise in the past two days, after the government announced higher-than-expected inflation numbers.

According to reports, corporate losses on account of exposure to foreign exchange derivatives are expected to be over Rs 15,000 crore. Most of these losses have surfaced in the past two quarters. Also, most corporates had not factored in these losses while estimating their tax liabilities.

Sanjeev Shah, a Vadodara-based chartered accountant, said that since the ICAI guidelines came much later. Many companies, with derivatives exposures, have not factored in derivatives losses while calculating advance tax. He added that several small and medium enterprises have been sold these contracts. In some cases, the contracts are claimed to have been concluded over the phone. These businesses are now denying any liability.

According to Sudhir Kapadia, a Mumbai-based chartered accountant, there is nothing to support the view that there will be a general rise in advance tax claims. But he added that in specific cases where a company has suffered a derivatives loss, it can be assumed that one-thirds of the losses would be claimed as a refund.

Also, banks, which have sold derivatives contracts to corporates, stand to lose on many of these contracts since corporates are refusing to fulfil their contractual obligations. Banks are declaring these corporates as defaulters in order to drag them to the debt recovery tribunal for a speedy recovery. But the flip side of such a classification is that banks have to make provisions for non-performing loans. And it is not just the disputed derivatives contract that has to be classified as non-performing, the entire loan advanced to the corporate has to be treated as a bad loan and provided accordingly.

The extent of NPA provisioning will be known only after sometime since banking regulations require only those loans, which are overdue for three months, to be classified as NPAs.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

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