• When are the taxpayers required to file accountant's report specified in Section 92E of the Income - tax Act, 1961?

    All the taxpayers are mandatorily required to file an accountant's report prepared by an independent professional through Form No. 3CEB for all international transactions irrespective of the value of international transactions and specified domestic transactions if the value exceeds INR 20 crore in a financial year.

  • When are the taxpayers required to prepare Transfer Pricing (TP) Documentation as per Rule 10D of the Income - tax Rules, 1962?

    Taxpayers indulging in any international or specified domestic transactions are required to maintain a set of documents specified in Rule 10D of the Income - tax Rules, 1962. The transfer pricing documentation shall be required if the value of international transactions exceeds INR 1 crore and specified domestic transactions exceed INR 20 crore in a financial year.

  • What are the different types of methods which can be applied for computing arm's length price?

    As per Section 92C of the Income - tax Act, 1961, the following methods can be used for computing arm's length price: 
    a) Comparable Uncontrolled Price (CUP) Method 
    b) Resale Price Method (RPM) 
    c) Cost Plus Method (CPM) 
    d) Profit Split Method (PSM) 
    e) Transactional Net Margin Method (TNMM) 
    f) Any Other Method

  • What are Associated Enterprises (AEs)?

    Section 92A of the Income - tax Act, 1961 specifies that two or more enterprises become associated enterprises when one of them participates, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise(s). 

    For further details, please access the following link.

  • What is the meaning of arm's length price?

    Arm's length price is the price which is applied or proposed to be applied to transactions between persons other than the Associated Enterprises in uncontrolled conditions.

  • What is transfer pricing and when was it introduced?

    In transfer pricing, we compute the arm's length price to determine whether the controlled transactions between associated enterprises have been undertaken at arm's length. It was introduced in the Income - tax Act, 1961 in the year 2001.

  • Is it necessary to register a work to claim copyright?

    No. Acquisition of copyright is automatic, and it does not require any formality. Copyright comes into existence as soon as a work is created, and no formality is required to be completed for acquiring copyright. However, certificate of registration of copyright and the entries made therein serve as prima facie evidence in a court of law with reference to dispute relating to ownership of copyright.

    For more information, click here.

  • What is the scope of protection in the Copyright Act, 1957?

    The Copyright Act, 1957 protects original literary, dramatic, musical and artistic works and cinematograph films and sound recordings from unauthorized uses. Unlike the case with patents, copyright protects the expressions and not the ideas. There is no copyright protection for ideas, procedures, methods of operation or mathematical concepts as such (Please see Article 9.2. of TRIPS).

    For more information, click here.

  • What is copyright?

    Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work. There could be slight variations in the composition of the rights depending on the work.

    For more information, click here.

  • How long will I have to wait to get my work registered by the Copyright office?(Under the Copyright Act 1957)

    After you file your application and receive diary number you have to wait for a mandatory period of thirty days so that no objection is filed in the Copyright office against your claim that particular work is created by you. If such objection is filed it may take another one month time to decide as to whether the work could be registered by the Registrar of Copyrights after giving an opportunity of hearing the matter from both the parties.

    If no objection is filed the application goes for scrutiny from the examiners. If any discrepancy is found the applicant is given thirty days time to remove the same. Therefore, it may take two to three months time for registration of any work in the normal course. The cooperation of the applicant in providing necessary information is the key for speedy disposal of the matter.

    For further details please access following link.

  • How can I get copyright registration for my Website?(Under the Copyright Act 1957)

    Website as a whole is not subject to copyright protection. Generally, non-copyrightable content particular to websites may include but are not limited to ideas or future plans of websites, functional elements of websites, unclaimable material, layout and format or ‘look and feel’ of a website or its webpage; or other common, unoriginal material such as names, icons or familiar symbols.

    For further details please access following link.

  • Whether computer Software or Computer Programme can be registered?(Under the Copyright Act 1957)

    Yes, Computer Software or programme can be registered as a ‘literary work’. As per Section 2 (o) of the Copyright Act, 1957 “literary work” includes computer programmes, tables and compilations, including computer databases. ‘Source Code’ has also to be supplied along with the application for registration of copyright for software products.

    For further details please access following link.

  • Whether unpublished works are registered?(Under the Copyright Act 1957)

    Yes. Both published and unpublished works can be registered. Copyright in works published before 21st January, 1958, i.e., before the Copyright Act, 1957 came in force, can also be registered, provided the works still enjoy copyright. Three copies of published work may be sent along with the application. If the work to be registered is unpublished, a copy of the manuscript has to be sent along with the application for affixing the stamp of the Copyright Office in proof of the work having been registered. In case two copies of the manuscript are sent, one copy of the same duly stamped will be returned, while the other will be retained, as far as possible, in the Copyright Office for record and will be kept confidential. It would also be open to the applicant to send only extracts from the unpublished work instead of the whole manuscript and ask for the return of the extracts after being stamped with the seal of the Copyright Office. When a work has been registered as unpublished and subsequently it is published, the applicant may apply for changes in particulars entered in the Register of Copyright in Form V with prescribed fee.The process of registration and fee for registration of copyright is same.

    For further details please access following link.

  • Is an opportunity for hearing given in all the cases pertaining to rejection of registration?(Under the Copyright Act 1957)

    Yes. As per the Principles of Natural Justice' (i.e. audi altram paltram) no one can be punished without being heard. As per the rule 27 of the Copyright Rules, 1958 no application is rejected without giving an opportunity to be heard. The applicant himself or his/her pleader may appear in the hearing.

    As per section 72 of the Copyright Act, 1957 any person aggrieved by the final decision or order of the Registrar of Copyrights may, within three months from the date of the order or decision, appeal to the IPAB – Intellectual Property Appellate Board.

    For further details please access following link.

  • What are the guidelines regarding registration of a work under the Copyright Act 1957?

    Chapter XIII of the Copyright Rules, 2013, as amended, sets out the procedure for the registration of a work. Copies of the Act and Rules can be obtained from the Manager of Publications, Publication Branch, Civil Lines, Delhi or his authorized dealers on payment or download from the Copyright Office web-site, link.

  • Can I myself file an application for registration of copyright of a work directly?(Under the Copyright Act 1957)

    Yes. Any individual who is an author or rights owner or assignee or legal heir can file application for copyright of a work either at the copyright office or by post or by e-filing facility from the copyright Office web-site, link.

  • What are Intellectual Property Rights (IPR)?

    Intellectual Property rights allow the creators or owners to have the benefits from their works when these are exploited commercially. These rights are statutory rights governed in accordance with the provisions of corresponding legislations. Intellectual Property rights reward creativity & human endeavour which fuel the progress of humankind.

    The intellectual property is classified into seven categories i.e.

    1.       Patent

    2.       Industrial Design

    3.       Trade Marks

    4.       Copyright

    5.       Geographical Indications

    6.       Lay out designs of integrated circuits

    7.       Protection of undisclosed information/Trade Secret according to TRIPs agreements.

    For more information, click here.

  • What is meant by ‘Design’ under the Designs Act, 2000?

    ‘Design’ means only the features of shape, configuration, pattern or ornament or composition of lines or colour or combination; thereof applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye. However, it does not include any mode or principle or construction or anything which is in substance a mere mechanical device. It also does not include any trade mark, as define in clause (v) of sub-section of Section 2 of the Trade and Merchandise Marks Act, 1958, property mark or artistic works as defined under Section 2(c) of the Copyright Act, 1957.

    For more information, click here.

  • What is meant by Intellectual Property?

    Intellectual Property is the Property, which has been created by exercise of Intellectual Faculty as a result of person’s Intellectual Activities. Thus, Intellectual Property refers to creation of mind-works such as inventions, designs for industrial articles, literary, artistic work, symbols which are ultimately used in commerce.

    For more information, click here.

  • What are the essential requirements for the registration of ‘design’ under the Designs Act, 2000?

    • The design should be new or original, not previously published or used in any country before the date of application for registration. The novelty may reside in the application of a known shape or pattern to the new subject matter. 
    • The design should relate to features of shape, configuration, pattern or ornamentation applied or applicable to an article. 
    • The design should be applied or applicable to any article by any industrial process. 
    • The features of the design in the finished article should appeal to and are judged solely by the eye. This implies that the design must appear and should be visible on the finished article, for which it is meant. 
    • Any mode or principle of construction or operation or anything which is in substance a mere mechanical device, would not be a registerable design. For instance, a key having its novelty only in the shape of its corrugation or bent at the portion intended to engage with levers inside the lock associated with, cannot be registered as a design under the Act. 
    • The design should not include any Trade Mark or property mark, or artistic works as defined under the Copyright Act, 1957.

    For more information, click here.

  • What is meant by Property mark as per the Indian Penal Code, Sec. 479? (Under The Designs Act 2000)

    A mark used for denoting that movable property belongs to a particular person is called a property mark. It means that marking any movable property or goods, or any case, package or receptacle containing goods; or using any case, package or receptacle, with any mark thereon.

    Practical example: The mark used by the Indian Railway on their goods may be termed as a Property Mark for the purpose of easy identification of the owner.

    For further details please access following link.

     

  • What is meant by classification of goods mentioned in the Third Schedule of a design?(Under The Design Act 2000)

    The applications for registration of Designs applied to articles are classified according to the Third Schedule of Designs Rules, 2001 for its classification. This is mainly based on the International Classification System for Industrial Designs known as Locarno Classification. Only one class number is to be mentioned in one particular application which is mandatory under the Rules. This classification has been made on the basis of Articles on which the design is applied.

    Practical Example: If the design is applied to a toothbrush it will be classified under class 04-02. Similarly if the design is applied to a calculator, it will be classified in class 18-01. Subsequent application by the same proprietor for registration of same or similar design applied to any article of the same class is possible, but period of registration will be valid only up to period of previous registration of same design.

    For further details please access following link.

  • What are the important criteria for determining a 'set of article'?(Under The Design Act 2000)

    If a group of articles meets the following requirements then that group of articles may be regarded as a set of articles under the Designs Act, 2000:
    1) Ordinarily on sale or intended to be used together.
    2) All having common design even though articles are different (same class).
    3) Same general character.

    For further details please access following link.

  • How does a registration of design stop other people from exploiting?(Under The Design Act 2000)

    1) Once a design is registered, it gives the legal right to bring an action against those persons (natural/legal entity) who infringe the design right, in the Court not lower than District Court in order to stop such exploitation and to claim any damage to which the registered proprietor is legally entitled. However, it may please be noted that if the design is not registered under the Designs Act, 2000 there will be no legal right to take any action against the infringer under the provisions of the Designs Act, 2000.

    2) The Patent Office does not become involved with any issue relating to enforcement of right accrued by registration. Similarly The Patent Office does not involve itself with any issue relating to exploitation or commercialization of the registered design.

    For further details please access following link.

  • Can the application for registration of design be filed by the applicant themself only or through a professional person?(Under The Design Act 2000)

    The application for registration of design can be filed by the applicant himself or through a professional person (i.e. patent agent, legal practitioner). However, for the applicants not resident of India an agent residing in India has to be employed.

    For further details please access following link.

  • Can the same applicant make an application for the same design again, if the prior application has been abandoned?(Under The Design Act 2000)

    Yes, the same applicant can apply again since no publication of the abandoned application is made by the Patent Office, provided the applicant does not publish the said design in the meanwhile.

    For further details please access following link.

  • How do I file a trademark application for my brand?

    The Controller General of Patents, Designs and Trademarks has information regarding trademark form and fees and can be accessed from this link.

  • What are the legal requirements to register a trademark in India?

    The legal requirements to register a trademark under the Act are:

    The selected mark should be capable of being represented graphically (that is in the paper form).

    • It should be capable of distinguishing the goods or services of one undertaking from those of others.

    • It should be used or proposed to be used mark in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services and some person have the right to use the mark with or without identity of that person.

    For more information, click here

  • What is a trademark?

    A trademark (popularly known as brand name) is a visual symbol which may be a word signature, name, device, label, numerals or combination of colours used by one undertaking on goods or services or other articles of commerce to distinguish it from other similar goods or services originating from a different undertaking.

    For more information, click here.

  • Does the Trade Marks Registry help to select a trademark agent to prepare and prosecute trademarks application?(Under the Trade Marks Act 1999)

    Yes, Trade Marks Registry is publishing the list of facilitators who are willing to play a role in filing trademark applications for start-ups and act as a trademark agent on their behalf. Their fees for this purpose have also been notified. The list of facilitators is available in IPO website link and has also been uploaded in the Start-up Hub in DPIIT website. 

     

  • Can a registered trademark be removed from the register?(Under the Trade Marks Act 1999)

    Yes, it can be removed on application to the Registrar on prescribed form on the ground that the mark is wrongly remaining on the register. The registrar also can suo moto notice for removal of a registered trademark.

     For further details please access following link.

  • Can any correction be made in the application or register?(Under the Trade Marks Act 1999)

    Yes. But the basic principle is that the trademark applied for should not be substantially altered affecting its identity. Subject to this changes are permissible according to rules detailed in the subordinate legislation.

    For further details please access following link.

  • What does the Register of trademark contain?(Under the Trade Marks Act 1999)

    The register of trademark currently maintained in electronic form contains inter alia the trademark the class and goods/services in respect of which it is registered including particulars affecting the scope of registration of rights conferred, the address of the proprietors; particulars of trade or other description of the proprietor; the convention date (if applicable); where a trademark has been registered with the consent of the proprietor of an earlier mark or earlier rights, that fact.

    For further details please access following link.

  • What are the sources of trademark laws?(Under the Trade Marks Act 1999)

    The national statues i.e., The Trade Marks Act, 1999 and rules made there under:
    1) International multilateral convention.
    2) National bilateral treaty.
    3) Regional treaty.
    4) Decision of the courts.
    5) Office practice reduced in Manuals and guidelines and rulings of the Courts.
    6) Decision of Intellectual Appellate Board.
    7) Text books written by academician ad professional experts.

    For further details please access following link.

  • What are the benefits of registering a trademark?

    The registration of a trademark confers upon the owner the exclusive right to the use the trademark in relation to the goods or services in respect of which the mark is registered and to indicate so by using the symbol (R) and seek the relief of infringement in appropriate courts in the country. The exclusive right is however subject to any conditions entered on the register such as limitation of area of use etc. Also, where two or more persons have registered identical or nearly similar marks due to special circumstances, such exclusive right does not operate against each other.

    For more information, click here.

  • What are the formalities and the government fees for major trademark transactions?(Under the Trade Marks Act 1999)

    1) For filling new applications there are prescribed forms depending on the nature of application such as Form TM-1, TM-2, TM-3, TM-8, TM-51 etc.  Fees: US$ 62
    2) To file a Notice of Opposition to oppose an application published in the Trade Marks Journal (Form TM-5). Fees: US$ 38 for each class covered.
    3) For renewal of a Regd. Trademark (Form TM-12). Fees: US$ 78 Surcharge for belated renewal (Form TM-10). Fees: US$ 46
    4) Restoration of removed mark (Form TM-13). Fees: US$ 78
    5) Application for rectification of a registered trademark (Form TM-26). Fees: US$ 46
    6) Legal certificate (Form TM-46) (Providing details of entries in the Register). Fees: US$ 8
    7) Preliminary advice of the Registrar as to the registrability of a mark (Form TM-55). Fees: US$ 8
    8) Copyright search request and issuance of the certificate (Form TM-60). Fees: US$ 78

    For further details please access following link.

  • What is the term of a patent in the Indian system?

    The term of every patent granted is 20 years from the date of filing of application. However, for application filed under national phase under Patent Cooperation Treaty(PCT), the term of patent will be 20 years from the international filing date accorded under PCT.

    For more information, click here.

  • Does Indian Patent give protection worldwide?

    No. Patent protection is a territorial right and therefore, it is effective only within the territory of India. There is no concept of global patent. However, filing an application in India enables the applicant to file a corresponding application for same invention in convention countries or under PCT, within or before expiry of twelve months from the filing date in India. Patents should be obtained in each country where the applicant requires protection of his invention.

    For more information, click here.

  • What is a Patent?

    A Patent is a statutory right for an invention granted for a limited period of time to the patentee by the Government, in exchange of full disclosure of his invention for excluding others, from making, using, selling, importing the patented product or process for producing that product for those purposes without his consent.

    For more information, click here.

  • Does the Patent Office help to select a patent attorney or agent to make patent search or to prepare and prosecute patent application? (Under The Patents Act 1970)

    Yes, Patent Office is publishing the list of facilitators who are willing to play a role in filing patent applications for start-ups and act as a patent agent on their behalf. Their fees for this purpose have also been notified. The list of facilitators is available in IPO website www.ipindia.nic.in and has also been uploaded in the Start-up Hub in DPIIT website.

    For further details please access following link.

  • What are obligations of the patentee after grant of patent? (Under The Patents Act 1970)

    After grant of patent, every patentee has to maintain the patent by paying renewal fee every year as prescribed in the schedule I. For first two years, there is no renewal fee. The renewal fee is payable from 3rd year onwards. In case the renewal fee is not paid, that patent will be ceased.

    For further details please access following link.

  • Is there any difference in the amount of fees to be paid by an individual or a legal entity for filing a patent application? (Under The Patents Act 1970)

    Yes, the application filing fees for an individual person (natural person) is US$ 25 and for small entity the fee is US$ 62. For a legal entity, other than individual and small entity, the fee is US$ 124, upto 10 claims and 30 pages. However in case the number of pages exceed beyond 30, the natural person has to pay US$ 2.5 and small entity $ 6 for each extra page, whereas a legal entity, other than individual and small entity, has to pay US$ 12 per extra page.

    Similarly, if the number of claims exceed beyond 10, then natural person has to pay US$ 5 and small entity US$ 12, for each additional claim. A legal person other than small entity/natural person has to pay US$ 25 for each additional claim. 

    For further details please access following link.

  • What is the term of patent? (Under The Patents Act 1970)

    Term of every patent in India is 20 years from the date of filing of patent application, irrespective of whether it is filed with provisional or complete specification. However, in case of applications filed under PCT, the term of 20 years begins from International filing date.

    For further details please access following link.

  • How can one find out that an invention is already patented? (Under The Patents Act 1970)

    The person concerned can perform a preliminary search on Patent Office website in the Indian Patent database of granted patent or Patent Office journal published every week. The public can conduct search free of charge on the website of Patent Office. The person concerned can also make a request for such information under section 153 of the Act.

    For further details please access following link.

  • Does patent office help in finding users for patent? (Under The Patents Act 1970)

    The Patent Office has no role in the commercialization of patent. However, the information relating to patents is published in the e-journal of the Patent Office in the official website which is freely accessible to the public worldwide. This certainly helps the applicant to attract potential user or licensee. The Patent office also compiles a list of patents which have not been commercially worked in India.

    For further details please access following link.

  • Where could one find a copy of the Patent Office Journal without purchasing the publication? (Under The Patents Act 1970)

    The Patent Office e-journal is freely available on patent office site, link.

  • After what age can a person start working in India?

    In India, child below 14 years cannot be employed. However, there are following exceptions which include non - hazardous family enterprises and child working as an artist in the audio - visual entertainment industry. 
    Additionally, a child above 14 years but below 15 years of age can be employed only for 4.5 hours a day and cannot work during the night. 

    For more information, click here.

  • Is there anything that I need to adhere to, before recruiting women for my company?

    The following need to be adhered to for recruiting women in a company:

    • Every employer employing more than 10 workers shall constitute an “Internal Complaints Committee” (ICC) to address any complaints of the women employee related to sexual harassment. 
    • Women employees are entitled to 12-26 weeks of maternity leave.  
    • Moreover, women are not to be allowed to work in a factory between 10:00 pm to 5:00 am. 

    For more information, click here.

  • What are the privileges in terms of pay that laid-off labourers can avail?

    Workers who have completed one year of services are eligible for compensation equal to 50% of total Basic wages and Dearness Allowance.

  • What are the notices to be displayed under the Act and list of actions that are considered as misconduct at workplace?

    An abstract of  Section 3 and 14 of the Act in Local Language and English.
    List of actions are:

    •Willful insubordination or disobedience, whether or not in combination with another, of any lawful and reasonable order of a superior.
    •Going on illegal strike or abetting, inciting, instigating or acting in furtherance thereof;
    •Willful slowing down in performance of work, or abetment or instigation thereof;
    •Theft, fraud or dishonesty in connection with the employers’ business or property or the theft or property of another workman within the premises of the establishment;
    •Taking or giving bribes or any illegal gratification;
    •Habitual absence without leave, or absence without leave for more than ten consecutive days or overstaying the sanctioned leave without sufficient grounds or proper or satisfactory explanation;
    •Habitual breach of any Standing Order or any law applicable to the establishment or ant rules made there under;
    •Collection without the permission of the Manager of any money within the premises of the establishment except as sanctioned by any law for the time being in force;
    •Engaging in trade within the premises of the establishment;
    •drunkenness, riotous, disorderly or indecent behavior on the premises of the establishment;
    •Commission of any act subversive of discipline or good behavior on the premises of the establishment;
    •Habitual neglect of work, or gross or habitual negligence;
    •Habitual breach of ant rules or instruction for the maintenance and running of any department, or the maintenance of the cleanliness of any portion of the establishment;
    •Habitual commission of any act or commission for which a fine may be imposed under the Payment of Wages Act, 1936.
    •Canvassing for union membership, or the collection of union dues within the premises of the establishment except in accordance with any law or with the permission of the Manager
    •Willful damage to work in process or to any property of the establishment;
    •holding meeting inside the premises of the establishment without the previous permission of the Manager or except in accordance with the provisions of any la for the time being in force;
    •Disclosing to any unauthorised person any information in regard to the processes of the establishment which may come into the possession of the workman in the course of his work;
    •Gambling within the premises of the establishment;
    •Smoking or spitting on the premises of the establishment where it is prohibited by the employer;
    •Failure to observe safety instructions notified b the employer or interference with any safety device or equipment installed within the establishment;
    •Distributing or exhibiting within the premises of the establishment hand-bills, pamphlets, posters, and such other things or causing to be displayed  by means of signs or writing or other visible representation on any matter without previous sanction of the Manager;
    •Refusal to accept a charge-sheet, order or other communication served I accordance with these Standing Orders;
    •Unauthorised possession of any lethal weapon in the establishment.

  • What are the registers to be maintained under Act?

    Register showing the name of date of birth of every child so employed or permitted to work, hours and periods of work of any such child and intervals of rest, the nature of work of any such child.

  • What are the occupations where employment of Child is prohibited?

    No child shall be employed or permitted to work in any of the occupations set forth in Part A of the Schedule or in any workshop wherein any of the processes set forth in Part B of the Schedule is carried on.

  • Who is a Child under The Child Labour (Prohibition and Regulation) Act, 1986?

    Child means a person who has not completed 14 years of age.

  • What are the welfare provisions that need to be made for the workers under the Indian labour laws?

    As per the Indian labour laws, employers need to ensure that following amenities are available to their employees:

    • Canteen (if 250 or more Contract Labour were/are working)
    • Restroom /Shelters/Lunch Rooms (If 150 or more Contract Labour were/are working)
    • Drinking Water
    • Toilets/ Urinal/ Washroom
    • First Aid Facility
    • Creche (if 50 or more women workers are ordinarily employed)
    • Washing facilities

    For more information, click here.

  • What are the notices/abstracts to be displayed at work spot?

    The notices/abstracts to be shown at work are:
    1) Abstract of Act.
    2) Notice showing rates of wage.
    3) Wage period.
    4) Date of payment of wages.
    5) Hours of work. 
    6) Name and Address of Inspectors.
    7) Place & Time of disbursement of Wages. 
    8) Copy of Certificate of registration. 
    9) Copy of Health of Safety Policy (of application).

  • What are the documents to be attached along with the application for registration under The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996?

    The following documents need to be attached:
    1) Form I.
    2) Proof of status of Contractor’s firm.
    3) Demand Draft

  • What is NCLT?

    The National Court of Law Tribunal has been formed under the Companies Act, 2013 setup as a quasi-judicial body for corporate law purposes. NCLT is one of the recent reforms undertaken by the government in corporate law.

    Please visit the following link.

  • What are the key laws and regulations associated with M&A in India?

    The key laws governing M&A in India are:
    1) Companies Act, 1956 and 2013.
    2) Income Tax Act, 1961.
    3) Competition Act, 2002.
    4) Foreign Exchange Management Act.

    The key regulations governing M&A in India are:
    1) Securities and Exchange Board of India (SEBI).
    2) Takeover code of SEBI.
    3) Reserve Bank of India.
    4) Competition Commission of India.

  • What are the guidelines for transfer of existing shares from non-residents to residents or residents to non-residents?

    The term ‘transfer’ is defined under FEMA, 1999 as ‘sale, purchase, acquisition, mortgage, pledge, gift, loan or any other form of transfer of right, possession or lien’(Section 2 (ze) of FEMA, 1999). The following share transfers are allowed without the prior approval of the Reserve Bank of India subject to the conditions laid down in FEMA 20: 
    1) Transfer by way of sale or gift between a person resident outside India (not being a NRI or an OCB) and any person resident outside India; Prior Government approval shall be obtained for any transfer in case the company is engaged in a sector which requires Government approval.
    2) Transfer of shares by way of sale or gift by a NRI to any NRI. Prior Government approval shall be obtained for any transfer in case the company is engaged in a sector which requires Government approval Transfer by way of gift by a person resident outside India to a resident.
    3) Transfer by way of sale on a recognized stock exchange by a person resident outside India. Transfer by way of sale or gift by a resident to a person outside India subject to conditions prescribed in Regulation 10 of FEMA 20.

    For further details please access following link.

  • What are the modes of payment allowed for receiving Foreign Direct Investment in an Indian company?

    An Indian company issuing shares/convertible debentures to a person resident outside India shall receive the amount of consideration by: 
    1) Inward remittance through normal banking channels.
    2) Debit to NRE/ FCNR (B) account of a person concerned maintained with an AD Category I bank.
    3) Debit to non-interest bearing Escrow account in Indian Rupees in India which is opened with the approval from AD Category – I bank and is maintained with the AD Category I bank on behalf of residents and non-residents towards payment of share purchase consideration.
    4) Conversion of royalty/ lump sum/ technical know-how fee due for payment or conversion of ECB. Conversion of pre-incorporation/ pre-operative expenses incurred by the a non-resident entity up to a limit of five percent of its capital or US$ 500,000 whichever is less.
    5) Conversion of import payables/pre incorporation expenses/can be treated as consideration for issue of shares with the approval of FIPB,against any other funds payable to a person resident outside India, the remittance of which does not require the prior approval of the Reserve Bank or the Government of India and swap of capital instruments, provided where the Indian investee company is engaged in a Government route sector, prior Government approval shall be required.If the shares or convertible debentures are not issued within 180 days from the date of receipt of the inward remittance or date of debit to NRE/FCNR (B)/Escrow account, the amount shall be refunded. Further, Reserve Bank may on an application made to it and for sufficient reasons permit an Indian Company to refund/allot shares for the amount of consideration received towards issue of security if such amount is outstanding beyond the period of 180 days from the date of receipt.

  • Whether hostile offers/bids are permitted under the new regulations?

    There is no such term as hostile bid in the regulations. The hostile bid is generally understood to be an unsolicited bid by a person, without any arrangement or MOU with persons currently in control. Any person with or without holding any shares in a target company, can make an offer to acquire shares of a listed company subject to minimum offer size of 26%.  


    For further details please access following link.

  • What is the stipulated size of an open offer?

    An open offer, other than a voluntary open offer under Regulation 6, must be made for a minimum of 26% of the target company’s share capital. The size of voluntary open offer under Regulation 6 must be for at least 10% of the target company’s share capital. Further the offer size percentage is calculated on the fully diluted share capital of the target company taking into account potential increase in the number of outstanding shares as on 10th working day from the closure of the open offer.


    For further details please access following link.

  • What is meant by the term ‘minimum level of acceptance’?

    ‘Minimum level of acceptance’ implies minimum number of shares which the acquirer desires under the said conditional offer. If the number of shares validly tendered in the conditional offer are less than the minimum level of acceptance stipulated by the acquirer, then the acquirer is not bound to accept any shares under the offer.
     

    For further details please access following link.

  • For how many days is an open offer required to be kept offer?

    10 days.
    For further details please access following link.

  • Do all acquisitions of shares in excess of the prescribed limits and/or control lead to an open offer?

    No, in respect of certain acquisitions, SAST Regulations, 2011 provide exemption from the requirements of making an open offer, subject to certain conditions being fulfilled. For example, acquisition pursuant to inter- se transfer of shares between certain categories of shareholders, acquisition in the ordinary course of business by entities like underwriter registered with SEBI, stock brokers, merchant bankers acting as stabilizing agent, Scheduled Commercial Bank (SCB), acting as an escrow agent, etc.

    For further details please access following link. 

  • What is a voluntary open offer?

    A voluntary open offer under Regulation 6, is an offer made by a person who himself or through persons acting in concert ,if any, holds 25% or more shares or voting rights in the target company but less than the maximum permissible non-public shareholding limit. 
     

    For further details please access following link.

  • What is exempt income and taxable income?

    An exempt income is not charged to tax, i.e., Income-tax Law specifically grants exemption from tax to such income. Incomes which are chargeable to tax are called as taxable incomes.

  • Is tax applicable to stock-based income?

    Yes, tax is applicable on stock-based income. A two-step taxation procedure is applicable in this case:

    1. At the time of allotment of shares, as compensation income
    2. At the time of sale, as capital gains. Certain exemptions and/or concessional tax rates are available on the sale of shares listed on a recognized stock exchange in India, depending on the period of holding.
  • What is tax on regular assessment and how is it paid?

    Under the Income-tax Act, every person has the responsibility to correctly compute and pay his due taxes. Where the Department finds that there has been understatement of income and resultant tax due, it takes measures to compute the actual tax amount that ought to have been paid. This demand raised on the person is called as Tax on regular assessment. The tax on regular assessment-400 has to be paid within 30 days of receipt of the notice of demand.

  • How to file the return of income electronically?

    Section 10 provides list of incomes which are exempt from tax Amongst these the major exemptions relating to capital gains are listed below:

    Section 10(33) : Long-term or short-term capital gain arising on transfer of units of Unit Scheme, 1964 (US 64) (transferred on or after 1-4-2002).

    Section 10(37) : An individual or Hindu Undivided Family (HUF) can claim exemption in respect of capital gain arising on transfer of agricultural land situated in an urban  area by way of compulsory acquisition. This exemption is available if the land was used by the taxpayer (or by his parents in the case of an individual) for agricultural purpose for a period of 2 years immediately preceding the date of its transfer .

    Section 10(37A) : An individual or Hindu Undivided Family (HUF) can claim exemption in respect of capital gain arising on transfer of land or building or both under Land Pooling Scheme under the Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015. This exemption is available if individual or HUF was owner of such land as on 02-06-2014. [Inserted by the Finance Act 2017 w.e.f. 01-04-2015].

    Section 10(38) : Long-term capital gain arising on transfer of equity shares or units of equity oriented mutual fund (*) or a unit of a business trust other than a unit allotted by the trust in exchange of shares of a special purpose vehicle as referred to in section 47(xvii), will be exempt from tax, if the following conditions are satisfied:

    The asset transferred should be equity shares of a company or units of an equity oriented mutual fund or a unit of a business trust other than a unit allotted by the trust in exchange of shares of a special purpose vehicle as referred to in section 47​.
    The transaction should be liable to securities transaction tax (STT) at the time of transfer.
    Such asset should be a long-term capital asset.
    Transfer should take place on or after October 1, 2004.​
    Note 1 : Any long-term capital gain arising from a transaction undertaken in recognized stock exchange located in an International Financial Service Center shall be exempt from tax. Such exemption is available if such transaction is undertaken in foreign current and even if no STT is paid on such transaction.

    Long term capital gain exemption on transfer of equity share acquired or on after 01-10-2004 shall be available only if the acquisition of share is chargeable to STT. However, the exemption shall continue in genuine cases where the STT could not have been paid like acquisition of share in IPO, FPO, bonus or right issue by a listed company, acquisition by non-resident in accordance with FDI policy, etc. [Inserted by Finance Act 2017]

    (*) Equity oriented mutual fund means a mutual fund specified under section 10(23D) and 65% of its investible funds, out of total proceeds of such fund are invested in equity shares of domestic companies.​

    Exemption for long-term capital gains arising from transfer of listed securities as referred to in Section 10(38) has been withdrawn by the Finance Act, 2018 w.e.f. Assessment Year 2019-20 and a new section 112A is introduced in the Income-tax Act.

    As per Section 112A, long-term capital gains arising from transfer of an equity share, or a unit of an equity oriented fund or a unit of a business trust shall be taxed at 10% (without indexation) of such capital gains. The tax on capital gains shall be levied in excess of INR 1 lakh.

  • From where can I take the help of any expert on Income-tax related matters?

    You can take the help of tax professionals or the help of Public Relations Officer [PRO] in the local office of the Income-tax Department. You may also take assistance from Tax Return Preparers [TRPs]. You can locate your nearest TRP at link.

  • What is the meaning of presumptive taxation scheme?

    As per sections 44AA of the Income-tax Act, 1961, a person engaged in business is required to maintain regular books of account under certain circumstances. To give relief to small taxpayers from this tedious work, the Income-tax Act has framed the presumptive taxation scheme under sections 44AD, sections 44ADA and sections 44AE.

    A person adopting the presumptive taxation scheme can declare income at a prescribed rate and, in turn, is relieved from tedious job of maintenance of books of account.

  • How will I know how much Income-tax I have to pay?

    ​​​The rates of Income-tax and corporate taxes are available in the Finance Act passed by the Parliament every year. You can also check your tax liability by using the free online tax calculator available at link.

  • What is tax deducted at source?

    For quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. This system is called as “Tax Deducted at Source”, commonly known as TDS. Under this system tax is deducted at the origin of the income. Tax is deducted by the payer and is remitted to the Government by the payer on behalf of the payee. 
    The provisions of deduction of tax at source are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. In respect of payments to which the TDS provisions apply, the payer has to deduct tax at source on the payments made by him and he has to deposit the tax deducted by him to the credit of the Government.

  • How does the Government collect Income-tax?

    Taxes are collected by the Government through three means: a) voluntary payment by taxpayers into various designated Banks. For example, Advance Tax and Self Assessment Tax paid by the taxpayers, b) Taxes deducted at source [TDS] from the income of the receiver, and c) Taxes collected at source [TCS]. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly.​

  • What is Form 26AS?

    A taxpayer may pay tax in any of the following forms:
    (1) Tax Deducted at Source (TDS)
    (2) Tax Collected at Source (TCS)
    (3) Advance tax or Self-assessment Tax or Payment of tax on regular assessment.
    The Income-tax Department maintains the database of the total tax paid by the taxpayer (i.e., tax credit in the account of a taxpayer).  Form 26AS is an annual statement maintained under Rule 31AB​ of the Incom​e-tax Rules disclosing the details of tax credit in his account as per the database of Income-tax Department. In other words, Form 26AS will reflect the details of tax credit appearing in the Permanent Account Number of the taxpayer as per the database of the Income-tax Department. The tax credit will cover TDS, TCS and tax paid by the taxpayer in other forms like advance tax, Self-Assessment tax, etc.
    Income-tax Department will generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS.

  • Does my product fall under the restricted list of export or import regulations?

    The Directorate General of Foreign Trade publishes a general list of restricted imports that can be accessed from this link.

  • Does the RBI provide refinance to banks on providing export?

    As announced in the Sixth Bi-Monthly Monetary Policy Statement, 2014-15 dated February 3, 2015, it has been decided to merge the Export Credit Refinance (ECR) facility with the system level liquidity provision with effect from the fortnight beginning on February 7, 2015. Accordingly, no new refinancing under the ECR will be available after February 6, 2015 and the refinancing availed up to February 6, 2015 may continue till its maturity.

  • What is the new policy for import of gold by the banks?

    The new policy for import of gold is yet to be notified by RBI post scrapping of 20: 80 scheme on 28th November 2014 and it is anticipated that this would also be accompanied by some change in duty structure.

  • Can we offset the payment receivable from importer towards consultancy to be paid to him?

    You are permitted to capitalise the payments due from the foreign entity towards exports, fees, royalties or any other dues from the foreign entity for supply of technical know-how, consultancy, managerial and other services within the ceilings applicable. Capitalisation of export proceeds remaining unrealised beyond the prescribed period of realisation will require prior approval of the Reserve Bank of India.

  • We have exported in a foreign currency which does not appear in the list of customs. How can we calculate the foreign exchange received for discharging our export obligation?

    In such cases, total realised value in rupee as mentioned by bank in the eBRC should be converted into $ by using the $ or INR exchange rate prevailing on the date of realisation as published by customs through notification.

  • What is the procedure for import under Government to Government agreement?

    Import of goods under Government to Government agreement may be allowed without an Authorisation or CCP on production of necessary evidence to satisfaction of Custom Authorities.

  • Can we avail benefit of basic customs duty under post Exports EPCG if I am not availing CENVAT. How will the export obligation under EPCG would be fixed under post export EPCG Scheme?

    Duty credit scrips issued under Post Export EPCG Scheme will be issued only in respect of basic customs duty, even when you are not availing CENVAT.  Since the concession under post exports EPCG is confined to basic customs duty, the Export Obligation shall be fixed with reference to the basic customs duty paid by you. However, you will be required to furnish a certificate from Central Excise regarding non-availment of CENVAT credit. Such certificate from central excise regarding non-availing of CENVAT credit will not be required where the unit is not registered with central excise.

  • What is export obligation under post export EPCG Scheme and how the same is fixed?

    The export obligation under post export EPCG Scheme is equivalent to eighty five percent. (85%) of six times the amount which is the sum of applicable Basic duty of customs, additional duty of customs, Education Cess and Secondary and Higher Education Cess paid on goods imported under the said authorisation, on FOB basis, which is to be fulfilled within an export obligation period of six years from the date of issue of the said authorization. However, additional duty of customs shall not be taken for computation for the purpose of fixation of export obligation when the Cenvat Credit in respect of additional duty of customs has not been taken.

  • Can we discharge export obligation under EPCG by selling ITA 1 products in the domestic market?

    Supply of ITA-1 items to Domestic Tariff Area, provided realization is in free foreign exchange, is considered for meeting the export obligation under EPCG Scheme and thus you can do it.

  • Can we get refund of Service Tax on payments made for Certificates of Origin (COO) to FIEO or other Chambers of Commerce?

    FIEO  or EPC or Trade Association which issues COO Certificate  acts as a technical inspection and certification agency, and issuance of COO attracts service tax under ‘technical inspection and certification agency’ service. Service tax paid on ‘technical inspection and certification’ of export goods is eligible for refund under Notification 17/2009-ST dated 7th July, 2009.