Ministry of Corporate Affairs (MCA) had issued a notification on 06th February, 2020 amending Companies (Incorporation) Rules [Companies (Incorporation) Amendment Rule, 2020)]. The major changes as per the new rule which will be effective from 15th February, 2020 are as follows:

a) Reservation of Name/Change in name: Application for Reservation of name shall be made through the web service available at http://www.mca.gov.in by using web service SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus: INC-32). The existing e-form “RUN” in http://www.mca.gov.in web service can be used for change of name by existing companies. Now for the new company incorporation, reservation of name prior to incorporation of the company is not possible. In the new form, the proposed company can apply for two proposed names at the time of filing Incorporation form in Form SPICe+. The format of the new form is also given in the notification. Follow the link to see the notification http://www.mca.gov.in/Ministry/pdf/Rules4_07022020.pdf

b) Change in Form AGILE: The Form AGILE has been changed to Form AGILE-PRO. In the new form the facility for Professional Tax Registration and Opening of Bank account is also added. The facility for GST Registration, EPFO and ESIC will continue. The facility for opening bank account at the time of incorporation will be a great help for those incorporating Company as they will be relieved from the process of opening bank account and they’ll be able to file Form INC-20A for Commencement of Business in time.

As per the format of new form given in the notification, the proposed company can select the Bank for opening the bank account. The banks which will be available is not available at the moment.

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As per the Finance bill, 2020 presented in the Parliament today by the Honorable Finance Minister Mrs.Niramala Sitaraman, there is proposed amendment in Section 6 relating to residential status.

1. Change in No. of days

As per the existing provisions, Citizen of India or a POI, who is outside India, comes to a visit in India, one of the condition is that out of the four years preceding the previous year, he/she is been in India for 365 days or more and is in India for a period or periods amounting in all to 182 days or more in that year.

The 182 days was now substituted with 120 days in the Finance Bill, 2020.

Non-residents should plan accordingly, otherwise your global income will be taxable in India.

2. Citizen of India having residence/domicile in a country where his income is not liable to tax

The following amendment was proposed in the Finance Bill, 2020:

“(1A) Notwithstanding anything contained in clause (1), an individual, being a citizen of India, shall be deemed to be resident in India in any previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature.”

The crux of the amendment is if you are working and residing in a country where there is no Income Tax payable, then you are liable to pay tax on your global income.

At a press conference after the budget was presented, revenue secretary Ajay Bhushan clarified that only those NRIs will be taxed in India who are not residents of any country.

India have Double Taxation Avoidance Agreement with most of the countries where there is no personal taxation. The legal position is not clear in cases where the country of residence is in a country where there is no DTAA between India and such country.

3. Resident but not ordinarily resident

As per the current provisions, an Individual or Karta/Manager of HUF , has been a non-resident in India in 9 out of 10 previous years preceding that year or has or had during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.

As per the proposed amendment an Individual or Karta/Manager of HUF has been a non-resident in India in seven out of the ten previous years preceding that year.

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I-T Act will be amended where CBDT will be mandated the taxpayers charter

PAN will be instantly online on the basis of Aadhaar without filling any forms.

FM Nirmala Sitharaman says the concessional 5% withholding tax has been extended  to municipal bonds.

GST reforms will continue including a simplified return-filling form.

Refund has been simplified and has been fully automated

Customs Duty on Footwear and Furniture increased

Health Cess on import of medical equipments

Finance Minister Concluded the Budget Speech

Faceless Income Tax Appeal to be introduced

Scheme like Sabka Viswas Scheme to be introduced

Vivadh se Viswas scheme – only to pay disputed tax amount only before 31-03-2020. Interest and penalty need to be paid.

Scheme will be available till 30-06-2020. For payments after 31-3-20, some additional charges to be paid.

DOnations received by the charitable institutions should be uploaded by the Charitable Institutions.

Registration completely electronic

Provisional registration will be granted for 3 years

Tax audit limit increased to Rs.5 crore from Rs.2 crores, provided the cash receipts will be less than 5% of the total revenue.

Option to pay tax at 22% +10% surcharge + 4% cess with no exemption

AMT not applicable for those opting for above scheme

Dividend Distribution Tax abolished: Tax on Dividend will be paid by recepient at the tax rate applicable to him and not by Company

Concessional Corporate Tax Rate for Electricity generation Companies

100% tax exemptions for sovereign wealth funds in infrastructure and other notified sector with minimum lock-in of three years.

Revised expenditure estimate for FY20 at Rs 26.99 lakh crore, says FM. Revised receipts for FY21 at Rs 19.32 lakh crore. 

Estimated fiscal deficit on 3.8 percent of GDP in FY2019-20 and 3.5 percent for FY20-21

About 70 deductions and exemptions were removed in new regime