news Saturday, May 16, 2015 - 05:30
By Devanik Saha With today, a particularly long Budget Session of the Parliament drew to a close. With the first phase of the session held from February 23-March 20, and the second phase held from April 20-May 13 – quite a few bills were passed during the session. We bring to you some of the most important ones: The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015: The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 will apply to Indian citizens and seeks to replace the Income Tax (IT) Act, 1961 for the taxation of foreign incomeA flat rate of 30 per cent tax would apply to undisclosed foreign income or assets of the previous assessment year. No exemption, deduction or set off of any carried forward losses (as provided under the IT Act) would apply. This would apply from April 1, 2016 onwards The total undisclosed foreign income and asset of an individual would include: (i) income, from a source located outside India, which has not been disclosed in the tax returns filed; (ii) income, from a source outside India, for which no tax returns have been filed; and (iii) value of an undisclosed asset, located outside India A one-time compliance opportunity to persons who have any undisclosed foreign assets (for all previous assessment years) will be provided for a limited period. Such persons would be permitted to file a declaration before a tax authority, and pay a penalty at the rate of 100% Land Boundary Agreement, The Constitution (119th Amendment) Bill, 2013: The India-Bangladesh Agreement was signed in 1974, but was not ratified as it involved transfer of territory which required a Constitutional Amendment. Hence, the Bill has been introduced.The Bill amends the First Schedule of the Constitution to give effect to an agreement entered into by India and Bangladesh on the acquiring and transfer of territories between the two countries on May 16, 1974 The Bill refers to demarcated land boundaries in accordance with the India-Bangladesh agreement signed on May 16, 1974. This agreement underwent further modification through letters exchanged thereafter and a protocol on September 6, 2011 The Bill amends paragraphs relating to the territories of Assam, West Bengal, Meghalaya, and Tripura in the First Schedule of the Constitution The Warehousing Corporations (Amendment) Bill, 2015:  The Bill seeks to amend the Warehousing Corporations Act, 1962 which established central and state warehousing corporations for the purpose of warehousing agricultural produce and other commodities. The Bill’s Statement of Objects and Reasons states that the Central Warehousing Corporation has been awarded a Mini-Ratna Public Sector Enterprise status by the Department of Public Enterprises. One of the criteria to be a Mini-Ratna enterprise is that there should be no financial support from the government to the enterprise, and that it must be independent of any budgetary support or guarantee by the government Currently, a section in the Act requires that the Central Government guarantee the repayment of the principal and annual minimum dividend payments on shares to the central warehousing corporation. The Bill aims to remove the clause in which the Central Government’s has the responsibility of being a financial guarantor to the central warehousing corporation. Additionally, certain sections relating to the government’s responsibility of being a guarantor to the central warehousing corporation are proposed to be omitted The Citizenship (Amendment) Bill 2015: The Bill amends the Citizenship Act, 1955 which regulates the acquisition and determination of citizenship after commencement of the Constitution.A person may apply for a certificate of naturalisation if they have resided in India or have served a government in India for a period of 12 months immediately preceding the date of application. The Bill allows the central government to relax the requirement of 12 months stay or service if special circumstances exist. Relaxation up to 30 days may be permitted The bill provides certain additional grounds for registering for an Overseas Citizen of India card. These are: (i) a minor child whose parent(s) are Indian citizens; or (ii) spouse of foreign origin of an Indian citizen or spouse of foreign origin of an Overseas Citizen of India cardholder subject to certain conditions; or (iii) great-grandchild of a person who is a citizen of another country, but who meets one of several conditions (for example, the great grandparent must be a citizen of India at the time of commencement of the Constitution or any time afterwards) The current Act provides that any person who is/has been a citizen of Pakistan or Bangladesh or any other country which is notified by the central government will be ineligible to apply for Overseas Citizenship of India. The Bill extends this provision to cover persons whose parents/grandparents/ great-grandparents were citizens of any of the above countries The current Act provides that where a person renounces their overseas citizenship, their minor child shall also cease to be an Overseas Citizen of India, whereas the Bill extends this provision to cover spouses of Overseas Citizen of India cardholders The Andhra Pradesh Reorganisation (Amendment) Bill, 2015: The Bill seeks to amend the Andhra Pradesh Reorganisation Act, 2014The 2014 Act specifies the number of members elected/nominated from each category with the total number of members in the Andhra Pradesh Legislative Council as 50. The new Bill seeks to increase the strength of the Legislative Council to 58 The Bill seeks to increase the members elected by members of municipalities, district boards and other local authorities from 17 to 20 The Bill seeks to increase the members elected by members of the state Legislative Assembly from 17 to 20 The Act provides that 6 members shall be nominated by the Governor. The Bill changes this to 8 The Mines and Minerals Amendment Bill, 2015: The Mines and Minerals (Development and Regulation) Amendment Bill, amends the Mines and Minerals (Development and Regulation) Act, 1957Under the Act, a person could acquire one mining lease for a maximum area of 10 sq km. However, for the development of any mineral, the central government could permit the person to acquire one or more licenses or leases covering additional area. The Bill amends this provision to allow the central government to increase the area limits for mining, instead of providing additional leases The current Act mentions that a mining lease can be granted for a maximum of 30 years and a minimum of 20 years and could be renewed for a period not exceeding 20 years. The bill proposed that for all minerals other than coal, lignite and atomic minerals, mining leases shall be granted for a period of 50 years. The Bill proposed the creation of a District Mineral Foundation (DMF) and a National Mineral Exploration Trust (NMET). The DMF is to be established by the state government for the benefit of persons in districts affected by mining related operations Regional Rural Banks (Amendment) Bill, 2014: The Regional Rural Banks (Amendment) Bill, 2014 seeks to amend the Regional Rural Banks Act, 1976.The current Act provides for regional rural banks (RRB) to be sponsored by banks. These sponsor banks are required to (i) subscribe to the share capital of RRBs, (ii) train their personnel, and (iii) provide managerial and financial assistance for the first five years. The Bill removes the five year limit, thus allowing such assistance to continue beyond this duration The current Act provides for the authorised capital of each RRB to be Rs five crore. It does not permit the authorised capital to be reduced below Rs 25 lakh. The Bill proposed to raise the amount of authorised capital to Rs 2,000 crore and states that it cannot be reduced below Rs 1 crore As per the current Act, the books of a RRB should be closed and balanced as on December 31 every year. The Bill changes this date to March 31 to bring the Act in uniformity with the financial year Insurance Laws (Amendment) Bill, 2015: The bill paves the way for major reform related amendments in the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority (IRDA) Act, 1999The amended law enables foreign reinsurers to set up branches in India and defines ‘re-insurance’ to mean “the insurance of part of one insurer’s risk by another insurer who accepts the risk for a mutually acceptable premium”, and thereby excludes the possibility of 100% ceding of risk to a re-insurer, which could lead to companies acting as front companies for other insurers. It also provides for enhancement of the foreign investment cap in an Indian Insurance Company from 26% to an explicitly composite limit of 49% with the safeguard of Indian ownership and control The amendments to the laws will enable the interests of consumers to be better served through provisions like those enabling penalties on intermediaries/insurance companies for misconduct and disallowing multilevel marketing of insurance products in order to curtail the practice of scrupulous selling Sources: Lok Sabha website, Press Information Bureau, PRS Legislative Research
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