• What is meant by Intellectual Property?

    Intellectual Property is the Property, which has been created by exercise of Intellectual Faculty. It is the result of persons Intellectual Activities. Thus Intellectual Property refers to creation of mind such as inventions, designs for industrial articles, literary, artistic work, symbols which are ultimately used in commerce. 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 Mark.
    4) Copyright.

    For further details please access following link.

  • What is copyright?(Under the Copyright Act 1957)

    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.
    Copyright ensures certain minimum safeguards of the rights of authors over their creations, thereby protecting and rewarding creativity. Creativity being the keystone of progress, no civilized society can afford to ignore the basic requirement of encouraging the same. Economic and social development of a society is dependent on creativity. The protection provided by copyright to the efforts of writers, artists, designers, dramatists, musicians, architects and producers of sound recordings, cinematograph films and computer software, creates an atmosphere conducive to creativity, which induces them to create more and motivates others to create.

    For further details please access following link.

  • 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 further details please access following link.

  • Does copyright apply to titles and names?(Under the Copyright Act 1957)

    Copyright does not ordinarily protect titles by themselves or names, short word combinations, slogans, short phrases, methods, plots or factual information. Copyright does not protect ideas or concepts. To get the protection of copyright a work must be original.

    For further details please access following link.

  • Is it necessary to register a work to claim copyright?(Under the Copyright Act 1957)

    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 further details please access following link.

  • Where I can file application for registration of copyright for a work?(Under the Copyright Act 1957)

    The Copyright Office has been set up to provide registration facilities to all types of works and is headed by a Registrar of Copyrights and is located at 4th Floor Jeevan Deep Building , New Delhi- 110 001. The applications for registration of works can be filled at the counter provided at the Copyright Office from 2.30 P.M. to 4.30. P.M. from Monday to Friday. The applications are also accepted by post. On-line registration through “E-filing facility “ has been provided from 14th February 2014, which facilitates the applicants to file applications at the time and place chosen by them.

    For further details please access following link.

  • What is the procedure for registration of a work under the Copyright Act, 1957?

    The procedure for registration is as follows: 
    a) Application for registration is to be made on Form IV ( Including Statement of Particulars and Statement of Further Particulars) as prescribed in the first schedule to the Rules.
    b) Separate applications should be made for registration of each work.
    c) Each application should be accompanied by the requisite fee prescribed in the second schedule to the Rules.
    d) The applications should be signed by the applicant or the advocate in whose favour a Vakalatnama or Power of Attorney has been executed. The Power of Attorney signed by the party and accepted by the advocate should also be enclosed.
    e) The fee is either in the form of Demand Draft, Indian Postal Order favouring ‘Registrar Of Copyright Payable At New Delhi’ or through Epayment
    Each and every column of the Statement of Particulars and Statement of Further Particulars should be replied specifically.

    For further details please access following link.

  • What is the fee for registration of a work under the Copyright Act, 1957?

    Please go to the link fee details on the Home Page for details. One can pay fee in favour of ‘Registrar of Copyrights’ payable at ‘New Delhi’. The fee 'Fee Details' is not reimbursable in case of rejection of the application.

    For further details please access following 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 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.

  • 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, but does not include any mode or principle or construction or anything which is in substance a mere mechanical device, and 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 further details please access following link.

  • What is meant by an article under the Designs Act, 2000?

    Under the Designs Act, 2000 the ‘article’ means any article of manufacture and any substance, artificial, or partly artificial and partly natural and includes any part of an article capable of being made and sold separately.

    For further details please access following link.

  • What is the object of registration of Designs?(Under The Design Act 2000)

    Object of the Designs Act is to protect new or original designs so created to be applied or applicable to particular article to be manufactured by Industrial Process or means. Sometimes purchase of articles for use is influenced not only by their practical efficiency but also by their appearance. The important purpose of design Registration is to see that the artisan, creator, originator of a design having aesthetic look is not deprived of his bonafide reward by others applying it to their goods.

    For further details please access following link.

  • Can stamps. Labels, tokens, cards be considered an article for the purpose of registration of Design?(Under The Design Act 2000)

    No, because once the alleged Design i.e., ornamentation is removed only a piece of paper, metal or like material remains and the article referred ceases to exist. Article must have its existence independent of the Designs applied to it. So, the Design as applied to an article should be integral with the article itself.

    For further details please access following link.

  • When does the Applicant for Registration of Design get the registration certificate?(Under The Design Act 2000)

    When an application for registration of a Design is in order, it is accepted and registered and then a certificate of registration is issued to the applicant. However, a separate request should be made to the Controller for obtaining a certified copy of the certificate for legal proceeding with requisite fee.

    For further details please access following link.

  • What is a Register of Designs?(Under The Design Act 2000)

    The Register of Designs is a document maintained by The Patent Office, Kolkata as a statutory requirement. It contains the design number, class number, date of filing (in this country) and reciprocity date (if any), name and address of Proprietor and such other matters as would affect the validity of proprietorship of the design and it is open for public inspection on payment of prescribed fee & extract from register may also be obtained on request with the prescribed fee.

    For further details please access following link.

  • What is the effect of registration of design?(Under The Design Act 2000)

    The registration of a design confers upon the registered proprietor ‘Copyright’ in the design for the period of registration. ‘Copyright’ means the exclusive right to apply a design to the article belonging to the class in which it is registered.

    For further details please access following link.

  • What is the duration of the registration of a design? Can it be extended?(Under The Design Act 2000)

    The duration of the registration of a design is initially ten years from the date of registration but in cases where claim to priority has been allowed the duration is ten years from the priority date. This initial period of registration may be extended by further period of 5 years on an application made in Form-3 accompanied by prescribed fees to the Controller before the expiry of the said initial period of ten years. The proprietor of a design may make application for such extension even as soon as the design is registered.

    For further details please access following link.

  • What is the date of registration for a design?(Under The Design Act 2000)

    The date of registration except in case of priority is the actual date of filing of the application. In case of registration of design with priority, the date of registration is the date of making an application in the reciprocal country.

    For further details please access following link.

  • Is it possible to re-register a design in respect of which Copyright has expired?(Under The Design Act 2000)

    No, a registered design, the copyright of which has expired cannot be reregistered.

    For further details please access following link.

  • What is a trademark?(Under the Trade Marks Act 1999)

    A trademark (popularly known as brand name) in layman’s language 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.

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

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

    2) It should be capable of distinguishing the good or services of one undertaking from those of others.

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

    For further details please access following link.

  • What is the function of a trademark? (Under the Trade Marks Act 1999)

    Under modern business condition a trademark performs four functions: 

    1) It identifies a good/service and its origin.
    2) It guarantees its unchanged quality.
    3) It advertises the goods/services.
    4) It creates an image for good/services.

    For further details please access following link.

     

  • Who benefits from a trademark?(Under the Trade Marks Act 1999)

    The registered proprietor of a trademark can create, establish and protect the goodwill of his products or services, he can stop traders from unlawfully using his trademark, sue for damages and secure destruction of infringing goods or labels.
    The government earns revenue as a fee for registration and protection of registration of trademark.
    The legal professionals render services to the entrepreneurs regarding selection, registration and protection of trademarks and get remuneration for the same.
    The purchaser and ultimately consumers of goods and services get options to choose the best.

    For further details please access following link.

  • What are different types of trademark that may be registered in India?(Under the Trade Marks Act 1999)

    Any name (including personal or surname of the applicant or predecessor in business or the signature of the person), which is not unusual for trade to adopt as a mark:
    1) An invented word or any arbitrary dictionary word or words, not being directly descriptive of the character or quality of the goods/services.
    2) Letters or numerals or any combination thereof.
    3) The right to proprietorship to trademark may be acquired by either registration under the Act or by use in relation to particular goods or services.
    4) Devices, including fancy devices or symbols.
    5) Monograms.
    6) Combination of colors or even a single color in combination with a word or devise.
    7) Shape of goods or their packaging.
    8) Marks constituting a 3-dimensional sign.
    9) Sound marks when represented in conventional notation or described in words by being graphically represented.

    For further details please access following link.

  • 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 are the benefits of registering a trademark?(Under the Trade Marks Act 1999)

    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 ,ark is registered and to indicate so by using the symbol (R), and seek the relief of infringement in appropriate court 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 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 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.

  • 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.

  • 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.

  • What is a Patent? (Under The Patents Act 1970)

    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 purpose without his consent.

    For further details please access following link.

     

  • Does Indian Patent given protection worldwide? (Under The Patents Act 1970)

    Patent protection is territorial right and therefore it is effective only within the territory of India. However, filling an application in India enables the applicant to file a corresponding application for same invention in conventional countries, within or before expiry of twelve months from filling data in India. Therefore, separate patent should be obtained in each country where the applicant requires protection of his invention in those countries. There is no patent valid worldwide.

    For further details please access following link.

  • Is it possible to file international application under Patent Cooperation Treaty (PCT) in India? (Under The Patents Act 1970)

    It is possible to file an international application known as PCT application in India in the Patent Offices located at Kolkata, Chennai, Mumbai, and Delhi. All these offices act as Receiving Offices (RO) for International application.

    The address of these offices are available on the website of CGPDTM on the link. 

  • What can be patented? (Under The Patents Act 1970)

    An invention relating either to a product or process that is new, involving incentive step and capable of industrial application can be patented. However, it must not fall into the categories of incentives that are non-patentable under sections 3 and 4 of the Act.

    For further details please access following link.

  • Who can apply for a patent? (Under The Patents Act 1970)

    A patent application can be either filled by true and first inventor or his assignee, either alone or jointly with any other person. However, legal representative of any deceased person can also make an application for patent. 

    For further details please access following link.

  • How can I apply for a patent? (Under The Patents Act 1970)

    A patent application can be filled with Indian Patent Office either with complete specification or with provisional specification along with fee as prescribed in schedule I. In case the application is filled provisional specification, then one has to file complete specification within 12 months from the date of filling of the application. There is no extension of time to file complete specification after expiry of said period.

    For further details please access following link.

  • Is there provision for filling patent application electronically by online system? (Under The Patents Act 1970)

    From 20 July 2007, the Indian Patent Office has put in place an online filing system for patent application. More information for filling online application is available on the website of Patent  Office i.e. www.ipindia.nic.in . As per Patents (Amendment) Rules 2014, there is a fee concession for e- filling, as 10% higher  fee is charged  if the application is filed in hard copy format.

    For further details please access following link.

  • What are the criteria of patentability? (Under The Patents Act 1970)

    An invention can become patentable subject matter must meet the following criteria:-
    1) It should be novel.
    2) It should have inventive step or it must be non-obvious.
    3) It should be capable of industrial application.
    4) It should not fall within any of the provisions of sections 3 and 4 of the Patents Act 1970.

    For further details please access following link.

  • Should application for patent be filled before or after, publication of the detail of the invention for patents? (Under The Patents Act 1970)

    The application for patent should be filled before the publication of the invention and till then it should not be disclosed or published. Disclosure of invention by publication before filling of the patent application may be detrimental to novelty of the invention as it may no longer be considered novel due to such publication. However, under certain conditions, there is grace period of 12 months for filling application even after publication.

    For further details please access following link.

  • Can any invention be patented after publication or display in the public exhibition? (Under The Patents Act 1970)

    Generally, a patent application for the invention which has been either published or publicly displayed cannot be filed. However, the Patent Act provides a grace period of 12 months for filling of patent application from the date of its publication in a journal or its public display in an exhibition organized by the Government or disclosure before any learned society or published by applicant. The detail of conditions are provided under Chapter VI of the Act.

    For details on the Act, refer to link. 

  • I employed 20 Contract Labour only on one day, will my establishment be covered under Contract Labour (R & A) Act, 1970?

    Yes.

    For further details please access following link.

  • Is a subcontractor supposed to take License under the Contract Labour (R&A) Act, 1970?

    If principal employer endorses the name of sub-contractor in the agreement, after having Form V from principal employer, a subcontractor is requested to take license under the Contract Labour (R&A) Act, 1970.

    For further details please access following link.

  • What is the procedure for the issuance of a duplicate license under the Contract Labour (R&A) Act, 1970?

    A fee of  US$ 0.075 to be remitted along with a request under the Contract Labour (R&A) Act, 1970.


    For further details please access following link.

  • Earlier I employed 22 Labourers, now I have reduced to 18 workmen, whether my establishment has to continue with the Labour license or surrender under the Contract Labour (R&A) Act, 1970?

    Yes, your establishment will continue to be covered under the provisions of the Contract Labour (R&A) Act, 1970 for a period of one year from the day on which 20 or more workmen were lastly employed.


    For further details please access following link.

  • What should be done when employer pays less than the prescribed Minimum Wage?

    An aggrieved employee can file a claim application requesting relief before the Authority under the Minimum Wages Act, 1948.


    For further details please access following link.

  • Who can file Claim application under the Minimum Wages Act, 1948?

    An employee, any legal practitioner or any official of a registered trade union authorized in writing to act, any inspector under the Act or any person with permission of the authority can file claim under the Minimum Wages Act, 1948.


    For further details please access following link.

  • If an employer, who is not paying basic wages and cost of living allowance separately as fixed under the Act but who is paying wages more than prescribed minimum rates under the Act, committing any illegality?

    The minimum rate of wages fixed under the Act is remuneration payable to the worker as one package of fixed amount, neither the scheme of the Act nor any provision of the Act provides that the rate of minimum wages is to be split into basic wages and cost of living allowance. Therefore, where an employer is paying total sum which is higher than the minimum rate of wages fixed under the Act including cost of living allowance, the employer is not committing any illegality.


    For further details please access following link.

  • Can an employee getting wages higher than the minimum wages fixed under the Act claim overtime wages under Section 20(2) of the Act?

    Where an employee gets wages higher than the minimum wages fixed under the Act, he cannot claim any benefit under the Act.


    For further details please access following link.

  • Can an Industrial Tribunal adjudicate upon a dispute relating to the fixation of wages of employees covered under the Act?

    Section 24 of the Act does not bar the jurisdiction of an Industrial Tribunal to adjudicate upon a dispute relating to the fixation of wages of employees covered under the Act.

     

  • Can an Industrial Tribunal fix wages at rates higher than the rates of minimum wages fixed under the Minimum Wages Act?

    An Industrial Tribunal adjudicating a dispute relating to wages is not bound by the minimum rates of wages fixed under the Minimum Wages Act and it is open to it to fix wages at rates higher than the rates of minimum wages fixed under the Minimum Wages Act, 1948.

  • What are the applicable competition laws/rules/regulations in respect of merger, amalgamations and acquisition transactions?

    Following statutory provisions apply to mergers, amalgamations and acquisitions from competition law perspective:
    1) Competition Act, 2002.
    2) The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011.
    3) The Competition Commission of India (General) Regulations, 2009:
    i) Notification No. S.O. 93(E) dated January 8, 2013
    ii) Notification No. S.O. 673(E) dated March 4, 2016
    iii) Notification No. S.O. 674(E) dated March 4, 2016
    iv) Notification No. S.O. 675(E) dated March 4, 2016
    v) Notification No. S.O. 988(E) dated March 29, 2017
    vi) Notification No. S.O. 2039(E) dated June 29, 2017
    For further details please access following link.

  • I am planning to acquire less than 25% of equity shares of a listed company from secondary market. Do I need to notify this combination to CCI?

    The acquisition of up to 25% shares where the acquirer does not acquire control and the acquisition is solely as an investment or in ordinary course of business, need not normally be notified to the CCI for prior approval. The acquisition of less than 10% of the total shares or voting rights of an enterprise shall be treated as solely as an investment. Provided that in relation to the said acquisition-
    1) The Acquirer has ability to exercise only such rights that are exercisable by the ordinary shareholders of the target enterprise the extent of their respective shareholding.
    2) The Acquirer is not a member of the board of directors of the target enterprise and does not have a right or intention to nominate a director on the board of directors of such enterprise and does not intend to participate in the affairs or management of such an enterprise.

     

    For further details please access following link.

  • What is combination?

    Any acquisition, merger or amalgamation that meets the following jurisdictional thresholds, as provided in Section 5 of the Competition Act, 2002 (‘Act’), is a ‘combination’ for the purpose of the Act. The thresholds relate to the assets and turnover of the parties to the combination, i.e., target enterprise and acquirer (or acquirer group)/merging parties (or the group to which merged entity would belong). At present, thresholds prescribed under the Act (as enhanced by the Central Government vide its Notification No. S.O. 675(E) dated March 4, 2016) as either of the following:

    1. Enterprise Level 

    • India : > US$ 308 mn (Assets)  & > US$ 923 mn (Turnover)
    • Worldwide (with India component) : > US$ 1 bn with at least US$ 154 mn in India (Assets) & > US$ 3 bn with at least US$ 462 mn in India

    2. Group Level

    • India : > US$ 923 mn (Assets)  & > US$ 3.69 bn (Turnover)
    • Worldwide (with India component) : > US$ 4 bn with at least US$ 154 mn in India (Assets) & > US$ 12 bn with at least US$ 462 mn in India

    For further details please access following link.

  • When should I notify a combination to CCI?

    In case of mergers or amalgamations, a notice under Section 6(2) of the Act is required to be filed with the CCI prior to the same coming into effect subject to the provisions of sub-section (2A) of section 6 and section 43A of the said Act. (See Section 6(2A) of the Act, GoI notification S.O. 2039(E) published on 29th June, 2017)
    Parties are required to inform CCI of any change in the information provided in the notice to CCI, at the earliest, during the CCI’s assessment of the combination. If the change in the information provided in the notice is likely to significantly affect the factors for the determination of AAEC or the CCI’s assessment of the combination, the CCI may treat the notice filed as not valid, after providing parties an opportunity of being heard. 


    For further details please access following link.

  • What is the meaning of control as per CCI?

    The Act provides for an inclusive definition of “control”, as including “controlling the affairs or management” of a target enterprise or group.
    For further details please access following link.

  • What is meant by Takeovers & substantial acquisition of shares?

    When an ‘acquirer’ takes over the control of the ‘Target Company’, it is termed as a Takeover. When an acquirer acquires ‘substantial quantity of shares or voting rights’ of the Target Company, it results into substantial acquisition of shares. 
    For further details please access following link.

  • Who is an ‘Acquirer’?

    Acquirer means any person who, whether by himself, or through, or with persons acting in concert with him, directly or indirectly, acquires or agrees to acquire shares or voting rights in, or control over a target company. An acquirer can be a natural person, a corporate entity or any other legal entity. 
     

    For further details please access following link.

  • What is a ‘Target Company’?

    The company/body corporate or corporation whose equity shares are listed in a stock exchange and in which a change of shareholding or control is proposed by an acquirer, is referred to as the ‘Target Company’.
     

    For further details please access following link.

  • What is an open offer under the SAST Regulations, 2011, Under which situations is an open offer required to be made by an acquirer?

    An open offer is an offer made by the acquirer to the shareholders of the target company inviting them to tender their shares in the target company at a particular price. The primary purpose of an open offer is to provide an exit option to the shareholders of the target company on account of the change in control or Substantial acquisition of shares, occurring in the target company.
    If an acquirer has agreed to acquire or acquired control over a target company or shares or voting rights in a target company which would be in excess of the threshold limits, then the acquirer is required to make an open offer to shareholders of the target company.

    For further details please access following link.

  • What are the threshold limits for acquisition of shares/voting rights, beyond which an obligation to make an open offer is triggered?

    1) Acquisition of 25% or more shares or voting rights: An acquirer, who (along with PACs, if any) holds less than 25% shares or voting rights in a target company and agrees to acquire shares or acquires shares which along with his/ PAC’s existing shareholding would entitle him to exercise 25% or more shares or voting rights in a target company, will need to make an open offer before acquiring such additional shares.

    2) Acquisition of more than 5% shares or voting rights in a financial year: An acquirer who (along with PACs, if any) holds 25% or more but less than the maximum permissible non-public shareholding in a target company, can acquire additional shares in the target company as would entitle him to exercise more than 5% of the voting rights in any financial year ending March 31, only after making an open offer. 

  • How tax residence of an individual is determined under Indian tax laws? In case he/she qualifies as a tax resident of his/her home country as well as that of India, how is such conflict resolved?

    In accordance with Indian tax laws, in any tax year (i.e. 1st April – 31st March), an individual qualifies as a ‘Resident’ in India if either of the following criteria are satisfied:
    1) Such individual was present in India for a period of 182 days or more in that tax year.
    2) Such individual was present in India for 60 days or more during that tax year and for 365 days or more in 4 preceding tax years.
    Further, once an individual becomes a ‘Resident’, the next step is to determine whether the individual is a ‘Resident and Ordinarily Resident’ (ROR) or ’Resident but Not Ordinarily Resident’ (RNOR) in India.

    An individual would be qualified as RNOR, if either of the following conditions are satisfied:
    a) Such individual was a non-resident in India, in 9 years out of 10 preceding tax years.
    b) Such individual was present in India for a 729 days or less, in 7 preceding tax years.

    An individual who qualifies as a tax resident of both countries i.e., his/her home country as well as that of India is known as Dual Resident. India has entered into Double Taxation Avoidance Agreements (‘DTAA’ or ‘treaties’) with several countries which provide specific relief to persons subject to taxation in more than one country. Most of the treaties have stipulated ’tie-breaker’ rules for resolving the conflict of dual residency. These rules are applied in the same sequence in which they appear in the treaty for determining residency. The tie-breaker rules in most treaties provides the following:
    a) Location of permanent home: An individual shall be deemed to be a resident of the country in which a permanent home is available to such individual.
    b) Centre of vital interests: If such individual has a permanent home available in both India as well as in home country of such individual, then such person should be deemed to be a resident of the country where such individual has center of vital interests i.e. close personal and economic relations.
    c) Habitual abode: If the country in which such individual has center of vital interests cannot be determined or if such person does not have a permanent home available in either of the countries, he/she should be deemed to be a resident of the country in which he/she has a habitual abode.
    d) Nationality: If such individual has habitual abode in both countries or in neither of them, he/she should be deemed to be a resident of the country of which he/she is a national and if e) is satisfied.
    e) Mutual agreement: If such individual is a national of both countries or of neither of them, the competent authorities of the countries should settle the question by mutual agreement.

    For further details please access following link : Section 6 (Income tax Act 1961). 
     

  • How many heads, income of a tax payer is recognised?

    Section 14 of the Income Tax Act has classified the income of a taxpayer under five different heads of income, viz.:
    1) Salaries.
    2) Income from house property.
    3) Profits and gains of business or profession.
    4) Capital gains.
    5) Income from other sources.

    For further details please access following link : Sec 14.

  • How to determine residential status of a company?

    With effect from Assessment Year 2017-18, a company is said to be resident in India in any previous year, if:
    i) It is an Indian company.
    ii) Its place of effective management, at any time in that year, is in India.

    For this purpose, the ‘place of effective management’ means a place where key management and commercial decisions that are necessary for the conducting the business of an entity as a whole are in substance made.
    The concept of POEM is effective from Assessment Year 2017-18. 
    The final guidelines on POEM has been issued, containing some unique features. One of the unique features is test of Active Business Outside India (ABOI). The guidelines prescribe that a company shall be said to engaged in 'active business outside India' if passive income is not more than 50% of its total income. Further, there are certain additional cumulative conditions to be satisfied regarding location of total assets, employees and payroll expenses.
    In cases of companies other than those that are engaged in active business outside India, the determination of POEM would be a two stage process, namely:
    1) First stage would be identification or ascertaining the person or persons who actually make the key management and commercial decision for conduct of the company's business as a whole.
    2) Second stage would be determination of place where these decisions are in fact being made.

    However, it has been provided that the POEM guidelines shall not apply to a company having turnover or gross receipts of INR 50 crores or less in a financial year vide CIRCULAR NO.8, DATED 23-2-2017.
    For more information, visit link.

  • What incomes are charged to tax in the hands of taxpayer?

    Taxed for ROR, RNOR and NR :
    1) Income which accrues or arises in India.
    2) Income which is deemed to accrue or arise in India.
    3) Income which is received in India.
    4) Income which is deemed to be received in India.

    Taxed for ROR, RNOR but not NR:
    1) Income accruing outside India from a business controlled from India or from a profession set up in India.
    2) Taxed for ROR but not RNOR, NR.
    3) Income other than above (i.e., income which has no relation with India).

    For further details please access following link.

  • What is tax audit?

    Section 44AB gives the provisions relating to the class of taxpayers who are required to get their accounts audited from a chartered accountant. The audit under section 44AB aims to ascertain the compliance of various provisions of the Income Tax Law and the fulfilment of other requirements of the Income Tax Law. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB is called tax audit.
    The chartered accountant conducting the tax audit is required to give his findings, observation, etc., in the form of audit report. The report of tax audit is to be given by the chartered accountant in Form Nos. 3CA/3CB and 3CD. 
    As per section 44AB, following persons are compulsorily required to get their accounts audited :
    1) A person carrying on business, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds US$ 145,050. This provision is not applicable to the person, who opts for presumptive taxation scheme under section 44AD and his total sales or turnover does not exceed US$ 290,100.
    2) A person carrying on profession, if his gross receipts in profession for the year exceed US$ 72,525. 
    3) A person who is eligible to opt for the presumptive taxation scheme of section 44AD  but claims the profits or gains for such business to be lower than the profits and gains computed as per the presumptive taxation scheme of section 44AD and his income exceeds the amount which is not chargeable to tax.
    4) If an eligible assesse opts out of the presumptive taxation scheme, after specified period, he cannot choose to revert back to the presumptive taxation scheme for a period of five assessment years thereafter.
    5) A person who is eligible to opt for the presumptive taxation scheme of section 44ADA but he claims the profits or gains for such profession to be lower than the profit and gains computed as per the presumptive taxation scheme and his income exceeds the amount which is not chargeable to tax.
    6) This provision is not applicable to the person, who opts for presumptive taxation scheme under section 44AD and his total sales or turnover does not exceed US$ 290,100.
    7) A person who is eligible to opt for the presumptive taxation scheme of sections 44AE but he claims the profits or gains for such business to be lower than the profits and gains computed as per the presumptive taxation scheme of sections 44AE.
    8) A person who is eligible to opt for the taxation scheme prescribed under section 44BB or section 44BBB but he claims the profits or gains for such business to be lower than the profits and gains computed as per the taxation scheme of these sections.
     
    Section 44BB is applicable to non-resident taxpayers engaged in the business of providing services or facilities in connection with or supplying plant and machinery on hire basis to be used in exploration of mineral oils. Section 44BBB is applicable to foreign companies engaged in the business of civil construction, erection of plant or machinery, or testing or commissioning thereof, in connection with a turnkey power project. 

    For detailed provision of 44AD, 44AE, 44ADA, 44BB and 44BBE, refer Sec 44 AB on the link.
     

     

  • What are the incentives available under the Income tax Act, to business units established in Special Economic Zone?

    A tax holiday for 15 years is granted to units located in a Special Economic Zones (SEZ) that are engaged in export of goods and services. This tax holiday is computed with reference to profits from such exports and is allowed as under.
    1) 100% IncomeTax exemption on export income for first 5 tax years.
    2) 50% for next five tax years thereafter
    3) 50% of the export profit for next five tax years provided an equal amount of profit is retained or transferred to a special reserve in the books of accounts.
    Only units which become operational on or before 31 March 2020 can claim this tax holiday.

    For further details please access following link. 

  • What is PAN and who has to apply for it?

    PAN stands for Permanent Account Number and is a ten-digit unique alphanumeric number issued by the Income Tax Department.
    PAN is to be obtained by following persons:
    1) Every person if his total income or the total income of any other person in respect of which he is assessable during the previous year exceeds the maximum amount which is not chargeable to tax.
    2) A charitable trust who is required to furnish return under Section 139(4A).
    3) Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed US$ 7,252 in any previous year.
    4) Every importer/exporter who is required to obtain Import Export code.
    5) Every person who is entitled to receive any sum/income after deduction of tax at source.
    6) Any person who is liable to pay excise duty or a producer or manufacturer of excisable goods or a registered person of a private warehouse in which excisable goods are stored and an authorized agent of such person.
    7) Persons who issue invoices under Rule 57AE requiring registration under Central Excise Rules, 1944.
    8) A person who is liable to pay the service tax and his agent
    Persons registered under the Central Sales Tax Act or the general sales tax law of the relevant state or union territory
    Every person who intends to enter into specified financial transactions in which quoting of PAN is mandatory
    A person not covered in any of the above can voluntarily apply for PAN. 

    For further details please access following link : Sec 10AA (income tax act 1961).
     

  • What are ‘Investment Linked Incentives’ under the Indian Tax Act, and which businesses are eligible for such incentives?

    With the objective of creating infrastructure and environment friendly alternative means for transportation of bulk goods, Investment linked incentives have been introduced in Indian tax laws for certain specified businesses.
    Under these incentives, any capital expenditure incurred for specified businesses is allowed as a deduction in the year in which it is incurred (instead of amortizing the same over several years).

    Following are the specified businesses, eligible for this incentive:
    1) Setting up and operating a semi-conductor water fabrication manufacturing unit.
    2) Laying and operating a slurry pipeline for the transportation of iron ore.
    3) Production of fertilizers.
    4) Building and operating a hotel of two star or above category, anywhere in India.
    5) Developing and/or operating and maintaining a new infrastructure being a road, bridge, rail system, highway project, water supply project, water treatment system, irrigation project, a port, airport, inland waterway, inland port or navigational channel in the sea, etc.
    6) Building and operating a hospital with atleast 100 beds for patients, anywhere in India.
    7) Developing and building a housing project under specified schemes.
    8) Setting up and operating an inland Container Depot or a container freight station.
    9) Setting up and operating cold chain facilities/warehousing facilities.
    10) Laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution including storage facilities being an integral part of such network.

    For further details please access following link for Sec 35AD (income tax act 1961). 

  • What are the elements of employment compensation, that enjoy exemption from tax?

    Generally, subject to certain conditions, following items of compensation are not taxable in the hands of employees:
    1) House Rent Allowance (HRA): HRA is an allowance granted to meet housing costs of employees. This exemption is not available if the employee resides in his own house, or in a house for which he does not incur any rent.
    2) Certain travel/tour allowances: Allowances granted to meet the cost of travel for official purposes are exempt (on actual basis).
    3) Reimbursement of medical expenses up to specified limits: Reimbursement of medical expenses actually incurred by an employee for self or any member of his/her family is exempt up to US$ 217.50 per tax year.
    4) Leave travel concession (LTC): LTC granted to an employee for vacation at any place in India is exempt for upto two journeys in a block of four calendar years, subject to certain conditions.
    5) Tax borne by an employer on non-monetary perquisites: 
    Tax borne by an employer on non-monetary perquisites provided to its employee, is exempt from tax, provided the employer does not claim it as a deduction against its taxable income.
    6) Gratuity: Gratuity received by an employee on retirement/termination of employment or by family on the death of employee tax-payer is exempt from tax subject to specified limit (presently US$ 14,505).
    7) Leave encashment: Leave encashment received by an employee on retirement is exempt from tax subject to specified limit (presently INR 300,000).
    8) Employer Provident Fund contribution:Employer’s contribution towards Provident Fund is exempt from tax subject to fulfilment of certain conditions.
    Apart from above, there are other allowances such as Children’s allowance, hostel allowance, etc., which form part of salary and are exempt from tax but subject to certain conditions and/or monetary limits.

    For further details please access following link.

  • When is a company required to undertake compliances under Indian transfer pricing regulations, and what are these compliances?

    Transfer Pricing Regulations (TPR) are applicable to entities that enter into an International Transaction with an Associated Enterprise (AE). The aim is to arrive at the comparable price as available to any unrelated party in open market conditions and is known as ALP. In terms of compliances, the taxpayers are required to maintain, on an annual basis, extensive information and documents relating to such international transactions such as:
    a) A description of the ownership structure of the assessee enterprise with details of shares or other ownership interest held therein by other enterprises.
    b) A profile of the multinational group of which the assessee enterprise is a part along with the name, address, legal status and country of tax residence of each of the enterprises comprised in the group with whom international transactions 56b[or specified domestic transactions, as the case may be,] have been entered into by the assessee, and ownership linkages among them.
    c) A broad description of the business of the assessee and the industry in which the assessee operates, and of the business of the associated enterprises with whom the assessee has transacted.
    d) The nature and terms (including prices) of international transactions 56b[or specified domestic transactions] entered into with each associated enterprise, details of property transferred or services provided and the quantum and the value of each such transaction or class of such transaction.
    e) A description of the functions performed, risks assumed and assets employed or to be employed by the assessee and by the associated enterprises involved in the international transaction 56b[or the specified domestic transaction].
    f) A record of the economic and market analyses, forecasts, budgets or any other financial estimates prepared by the assessee for the business as a whole and for each division or product separately, which may have a bearing on the international transactions 56b[or the specified domestic transactions] entered into by the assesse.
    g) A record of uncontrolled transactions taken into account for analysing their comparability with the international transactions 56b[or the specified domestic transactions] entered into, including a record of the nature, terms and conditions relating to any uncontrolled transaction with third parties which may be of relevance to the pricing of the international transactions 56b[or specified domestic transactions, as the case may be].
    h) A record of the analysis performed to evaluate comparability of uncontrolled transactions with the relevant international transaction 56b[or specified domestic transaction].
    i) A description of the methods considered for determining the arm's length price in relation to each international transaction 56b[or specified domestic transaction] or class of transaction, the method selected as the most appropriate method along with explanations as to why such method was so selected, and how such method was applied in each case.
    j) A record of the actual working carried out for determining the arm's length price, including details of the comparable data and financial information used in applying the most appropriate method, and adjustments, if any, which were made to account for differences between the international transaction 56c[or the specified domestic transaction] and the comparable uncontrolled transactions, or between the enterprises entering into such transactions.
    k) The assumptions, policies and price negotiations, if any, which have critically affected the determination of the arm's length price.
    l) Details of the adjustments, if any, made to transfer prices to align them with arm's length prices determined under these rules and consequent adjustment made to the total income for tax purposes.
    m) Any other information, data or document, including information or data relating to the associated enterprise, which may be relevant for determination of the arm's length price.
    above shall not apply in a case where the aggregate value, as recorded in the books of account, of international transactions entered into by the assessee does not exceed $ 153,846.

    For further details please access following link : Sec 92A, 92B, 92D of Income tax act 1961.
     

  • What is IEC?

    IEC Stands for Importer Exporter Code.

  • Who requires an Importer Exporter Code?

    Any bona fide person/ company starting a venture for International trade of Export and Import. If any foreign transfers on account of business, IEC number is mandatory.

  • Can Export /Import be made without Importer Exporter Code?

    “No person shall make any import or export except under an Importer-exporter Code Number granted by the Director General or the officer authorised by the Director General in this behalf, in accordance with the procedure specified in this behalf by the Director General.” No. IEC forms a primary document for recognition by Govt. of India as Exporter / Importer.  However, if value of goods is very law, the concerned customs officer may permit first export (only one time)   by imposing penal charges.

  • Which categories are exempted from IEC?

    Few categories are exempted from IEC,  such as Ministries / Departments of Central or State Government, persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture etc.  Exempt categories and corresponding permanent IEC numbers are given in Para 2.07 of Handbook of Procedures. Please visit the URL for details : Link.

  • Can I obtain multiple IEC against one Permanent Account Number (PAN)?

    No, only one IEC is permitted against on Permanent Account Number (PAN). If any PAN card holder has more than one IEC, the extra IECs shall be disabled.

  • Where to obtain an IEC ?

    IEC number is issued by Directory General of Foreign Trade at each regional offices where the exporter/importer is situated. DGFT has recently introduced the facility of issuing Importer Exporter Code in electronic form (e-IEC). For issuance of e-IEC an application can be submitted online on DGFT website: Link. Applicants can upload the documents and pay the required fee through Net banking.

  • How to apply for an Importer Exporter Code?

    The necessary application for Import Export Code number can be downloaded from DGFT website through the Link

  • What are the documents needed for an Importer Exporter Code application?

    The following documents to be submitted/ uploaded along with the application for IEC:

    A.  Entity seeking the IEC: 

    (1) PAN of the business entity in whose name import/export would be done (Applicant individual in case of Proprietorship firms). 

    (2) Address proof of the applicant entity. 

    (3) LLPIN /CIN/ Registration Certification Number (whichever is applicable). 

    (4) Bank account details of the entity. Cancelled cheque bearing entity’s pre-printed name or Bank certificate in prescribed format ANF2A(I).

    B. Proprietor/ Partners/ Directors/ Secretary or Chief Executive of the Society/ Managing Trustee of the entity:

    (1) PAN (for all categories)

    (2) DIN/DPIN (in case of Company /LLP firm)

    C. Individual/ signatory applicant:

    (1) Identity proof

    (2) PAN

    (3) Photograph

    More details on documents can be obtained from the following Link

    C. Individual/ signatory applicant:

    (1) Identity proof

    (2) PAN

    (3) Photograph

    More details on documents can be obtained from the following Link

  • Is PAN Number / PAN card essential for IEC? What are the alternatives?

    After introduction of GST, PAN is the IEC. 

  • What is the duration to get an IEC after filing application for Import Export Code number?

    Normally IEC number is issued within two to three days, if all documents are in order.