INDIA BUDGET 2014-FOREIGN DIRECT INVESTMENT HIGHLIGHTS

The Finance Minister Mr. Arun Jaitley, has set himself a daunting task to maintain the FY15 fiscal deficit target of 4.1 %, is trying to bring back the interest of foreign institutional investors by increasing the FDI limit in some sectors and abolishing the controversial retrospective tax.

•  FDI in defence sector: Finance Minister Arun Jaitley in his maiden Budget said that the government is looking at raising foreign direct investment (FDI) in the defence sector to 49 % from 26 %.  
•  FDI in insurance sector: The government has increased FDI in insurance up to 49 % from 26 % earlier. It would enable many promoters of Indian companies to sell their shares as well as infuse new capital in the firms. 
•  No retrospective tax: The government plans to do away with the retrospective tax. All cases of retro taxes after 2012 will be pushed to the higher panel. The minister said he hopes foreign companies will appreciate the move on retrospective tax. 
• FDI in ecommerce sector: Liberalisation of FDI in the ecommerce sector will provide much-needed certainty to foreign players and to a sector that has the promise to provide increased commerce and generate employment in the country. The move will also provide boost to the sector and create healthy competition so as to benefit all the constituents in the ecosystem - consumers, government, ecommerce players and retailers in general. 
•  FDI in health insurance sector: This budget provisions to enhance both financial and physical access of healthcare for the country.

Through broadband in rural area, telemedicine will increase the accessibility of qualified doctors and specialists into rural area and increased FDI in health insurance to 49 per cent will help increase the financial accessibility of population.

OTHER UNION BUDGET 2014 – HIGHLIGHTS

• Government will not bring any retrospective amendment which is unfair to the tax payers. 
•  Five more Indian Institute of Management (IIMs) to be set up. 
•  Four more Indian Institute of Technology (IITs) to be set up. 
•  Rs. 100 crores for Metro in Lucknow and Ahmedabad. 
•  Allocates Rs. 400 crores to incentivize the development of low cost housing. 
•  Rs 500 crores for solar power development project in Tamil Nadu and Rajasthan. 
•  Uniform Know Your Customer (KYC) norms for entire financial sector. 
•  Finance Minister Proposes liberalization of American Depository Receipt (ADR)/Global Depository Receipt (GDR) regime. 
•  Accounting Standards for Banks and Insurance sector would be notified separately.
• Taxation issues for foreign funds with Indian managers to be clarified. 
•  Finance Minister proposes one Demat account for all financial products. 
•  Special small saving scheme to be introduced for the education of girl child. 
•  Public Provident Fund (PPF) annual ceiling enhanced to 1.5 lacs. 
•  Maximum exemption limit raised to Rs. 2.5 lacs for an individual. 
•  Senior Citizen are not liable to pay tax on income upto Rs. 3,00,000. 
•  Investment limit under Section 80C increased to Rs. 1.5 Lacs. 
•  Deduction for Interest on Housing Loan increased to Rs. 2,00,000. 
•  No change in tax rates for corporate tax payers. 
•  Concessional rate of tax on dividend from foreign subsidiaries continues. 
•  No sunset date for concessional rates for foreign dividends. 
•  Concessional rate of 5% on interest extended to all types of bonds. 
•  Government shall consider public comments received on DTC. 
•  10 year tax holiday for power companies starting production and distribution on or before March 31, 2017. 
•  To boost manufacturing sectors - customs duty reduced on certain inputs such as fatty acids, etc. 
•  Import duty on steel increased from 5% to 7.5%. 
•  Government to provide investment allowance at 15% for 3 years to manufacturing company investing more than Rs. 25 crores. 
•  Portfolio income of Foreign Institutional Investor (FIIs) to be treated as capital gain. 
•  Imported electronics goods to cost more. A cess to be introduced. 
•  Income of funds from portfolio investments shall be deemed as capital gains. 
•  Controversy over categorization of income of foreign investor funds as capital gains or business income shall end with this proposal. 
•  Customs duty reduced on certain types of coals. 
•  Government reduces basic customs duty on LCD/LED televisions. 
•  Customs duty cut to nil on import of LCD, LED Panels below 19 inch. 
•  TV sets, Solar power units, computers, oil products, soaps becomes cheaper. 
•  Footwear to go cheaper - excise duty reduced from 12% to 6%. 
•  Sugary carbonated drinks to get dearer. 
•  Cigarettes, Cigars, Pan Masala, Gutka and other tobacco product to attract more excise duty. 
•  Basic rates of customs duty @ 10%, excise duty @ 12% and service tax @ 12% remains intact. 
•  Excise duty hiked on aerated waters with sugar content.

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How to Open MLM Company in India, Best MLM Business Plan

Who can start a multi-level marketing mlm company?

A company or manufacturer or a trading company who has some exclusive and unique products or services to market and wants to tap worldwide customers without setting up expensive shops and showrooms with little efforts and patience can start MLM Company.

What is the law for setting up Multi Level Marketing Company India?

There is no separate law for setting up a Multi Level Network Marketing MLM Company in India till now it was proposed in Indian Parliament 2005 but yet not became a law however there are certain acts of India constitutions which we need to consider before setting up Multi Level Marketing Company:

1. It should not be a only head count commission modal which falls in Pyramid Scheme which is banned in India, covers MRTP Act alias Money Rotation Trade Practice Banning ACT 1969.
2. It should not be only money involved investment return format which falls in PCMC Act alias Prize Chit and Money Circulation banning Act 1978.
3. It should be feasible Product selling Business Modal.

What is the best practice to setup a Multi Level Marketing Company?

Firstly we recommend you to setup a Private Limited or Limited Company to setup a Multi Level Marketing Company in India which involved limited risk for directors who are setting up a Multi Level Marketing Company Business.

Apply for IDSA (Indian Direct Selling Association) Member Ship. It’s not a government body but it’s a private body setup by Amway India who is trying to govern the whole Direct Selling Companies in India with their problem and to stop unethical and illegal MLM companies and Multi Level Network marketing Business practice to operate and destroy the MLM Business route.

Apply for Vat/Service Tax/ Tan No and all necessary license and registration required for manufacture and selling your product.

Appoint a Legal Advisor and a Chartered Account to create rules and regulation forms, printing materials, other company related legal documents and stationary materials. Please does not cut copy paste other company’s print materials as it may not be applied on your product or MLM Business modal? It is also advisable to develop exclusive website content and information related to company written by legal advisor of the company to counter legal laws of the Land.

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TAX AUDIT U/S 44AB UNDER INCOMR TAX ACT

Tax Audit u/s 44AB- An Assessee is liable to get his Tax Audit done by a Chartered Accountant mandatorily, if in the previous year,

1.      The Person is carrying on business and his Total Sales/Turnover exceeds Rs. 1 Crore (Limit increased wef 1^st April 2012) or

2.      The Person is carrying on Profession, and his Gross Receipts* exceed Rs. 25 Lakhs (Limit increased wef 1st April 2012) or

3.      The Person is carrying on business or profession and is covered under the provisions ofsection 44AD, 44AE, 44AF, 44BB or 44BBB and claims that his income from the said business is lower than the deemed profits and gains computed under the relevant section.

*ICAI has further clarified that the amount received from the following items shall not be included while computing the Total Sales/Total Turnover/ Gross Receipts:-

§  Sale Proceeds of Fixed Assets

§  Sale Proceeds of Assets held as Investments

§  Rental Income

§  Income by way of Interest unless assessable as Business Income

§  Any expense which is reimbursable to the Agent by the Client

Form required in compliance of Sec.44AB-

1.      Form 3CA & Form 3CD- These Forms are used in case where the Accounts of the business or profession of a person have already been audited under any other Law. (Download excel utility for efiling tax audit report in Form 3CA & Form 3CD)

2.      Form 3CB & Form 3CD– These Forms are used in case where the Accounts of the business or profession have not been audited earlier.

Due Date of filing Tax Audit Report- The Due Date of filing the Tax Audit Report under Section 44AB is 30^th September of the Assessment Year. However, for AY 2014-15 the due date for filing Tax Audit Report has been extended from 30th Sept 2014 to 30th Nov 2014 (Notification No. 133/24/2014).

Penalty for Non-compliance of Sec.44AB- Non Compliance of the provisions of this act shall attract Penalty under section 271B of the Income Tax Act. If any person required to get his audit done under section 44AB fails to do so before the specified date shall be liable for penalty of ½% of the turnover/gross receipts subject to a maximum penalty of Rs. 1,50,000.

However, Section 273B states that no penalty shall be levied under section 271B if there is a reasonable cause for such failure. Some instances which have been accepted by the Tribunals/Courts as “Reasonable Cause” are:-

1.      Resignation of the Tax Auditor and Consequent Delay

2.      Death or physical inability of the partner in charge of the Accounts

3.      Labour Problems such as strikes, lock-outs for a long period

4.      Loss of Accounts because of Fire/Theft etc. beyond the control of the Assessee

5.      Natural Calamities

Revision of Tax Audit Report- Tax Audit Report efiled cannot be revised under normal circumstances. However, in case the Accounts are revised in the following circumstances, the Audit Report efiled can also be revised:-

1.      Revision of Accounts of a Company after its adoption in the Annual General Meeting

2.      Change in Law with Retrospective effect

3.      Change in Interpretation of Law (e.g.: CBDT Circular, Notifications, Judgements etc.)

In case the Tax Audit report efiled is revised, the Auditor shall state that it’s a Revised Report and shall also state the reasons for the same.

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