Recent Updates on Income Tax, GST & Corporate Law: 28 January 2025
Income Tax
Update 1: SBI Research Suggests for Flat 15% Tax on FD Interest & Delinking it from Highest Income Slab
SBI Research says tax on fixed deposits may be delinked from the highest income bucket. Further, the tax treatment of FD income should be similar to other asset classes by clubbing it in other income and taxing only at the time of redemption and not on accrual basis. the interest income from FDs in a year is taxed at the highest tax slab applicable to a depositor. However, this is not the case with other asset classes like mutual funds and direct stocks.
Update 2: Proceedings against deceased person cannot continue against legal representative: Karnataka HC
In case of ITO vs Smt. Preethi V [W.P.A No.1407 of 2024 (T-IT)], the Karnataka High Court held that the Assessment Order and other proceedings taken up against the deceased are all null & void. The proceedings initiated against the Assessee by issuing notice after his demise cannot be continued against his/her legal representative. Had the proceedings been initiated against the Assessee during his lifetime, they could be continued against the legal representatives of the deceased Assessee. However, that is not the factual position here.
Goods & Services Tax
Update 1: Advisory 576 – Introduction of E-Way Bill (EWB) for Gold in Kerala State
The GSTN, vide its Advisory No. 576 dated 27 January 2025, informed that a new option for generating E-Way Bills (EWB) for gold has been introduced in the EWB system, effective from January 20, 2025. This feature has been made available to facilitate taxpayers in Kerala State to generate EWB for goods classified under Chapter 71, excluding Imitation Jewellery, for intrastate movement, in compliance with the notification issued by the Government of Kerala.
Update 2: Advisory 578 – Postponement of Introducing restriction on editing of auto-populated liability in GSTR-3B
As per a recent update by the GSTN, vide its Advisory Dated 17 October 2024 had informed for restricting the editing of auto-populated liability in GSTR-3B from the January 2025 tax period. However, due to various requests received from the trade seeking time for the same, the decision of making non-editable of auto-populated liability in GSTR-3B is currently not being implemented from January tax period, on the GST Portal. But, the functionality will be introduced soon and trade will be informed accordingly.
Corporate Law
Update 1: Considering Scheme of Arrangement u/s. 230 not permitted after process of e-auction sale of Corporate Debtor – NCLT Chennai
In case of Narottamka Trade & Vyapaar Pvt. Ltd. Vs SPP Insolvency Professionals LLP, the NCLT held that the e-auction sale of the Corporate Debtor as a going concern under Regulation 32(e), cannot be said to be in violation of any of the provisions contained under the I & B Code, 2016, and that, in that eventuality, after the finalization of the process of e-auction, it cannot be permitted to be argued that the process of Section 230 for a Scheme of Arrangement submitted by the Scheme Proponent, in relation to the Corporate Debtor should have been considered first, before deciding the aspect of selling the Corporate Debtor as a going concern.
The said interpretation of Section 230 of the Companies Act as being attempted by the Appellant is not acceptable by this Tribunal.
Update 2: Creation of charge by companies
A charge created by a company is required to be registered with the Registrar within thirty days of its creation in such form and on payment of such fees as may be prescribed. According to Companies (Registration of Charges) Rules, 2014 e-forms prescribed for the purpose of creating or modifying the charge is Form No.CHG-1 (for other than Debentures) or Form No.CHG-9 (for debentures including rectification).
Condonation of delay by Registrar: The Registrar may on an application by the company allow registration of charge within three hundred days of creation or modification of charge on payment of additional fee. The Registrar may, on being satisfied that the company had sufficient cause for not filing the particulars and instrument of charge, if any, within a period of thirty days of the date of creation of the charge, allow the registration of the same after thirty days but within a period of three hundred days of the date of such creation of charge or modification of charge on payment of additional fee.
The application for delay shall be made in Form No.CHG-10 and supported by a declaration from the company signed by its secretary or director that such belated filing shall not adversely affect rights of any other intervening creditors of the company.
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