Thursday, December 31, 2009

Private Trust

1. What is a Private Beneficiary Trust?
A Private Beneficiary Trust is a trust which is formed for the benefit of specified individuals, and not for the benefit of public at large. 
A Private Beneficiary Trust may be –
a. A Specific Trust
b. A Discretionary Trust

2. What is a Specific Trust?
i) Beneficiary / Beneficiaries are Specific
ii) Income pertaining to such Beneficiary / Beneficiaries is determinate
iii) Property pertaining to such Beneficiary / Beneficiaries is determinate.

Example of a Specific Trust:
a) Mr. X forms a trust for his grandson ‘Master A’ for his benefit. Here the beneficiary ‘Master A’ is Known or determinate, such trust is a Specific Trust.

3. What is a Discretionary Trust?
Where the income is not receivable or received by the Representative Assessee specifically on behalf of or for the benefit of a specific beneficiary or in case of more than one beneficiary, the individual shares of the
beneficiaries are Indeterminate or Unknown.

4. What is the Status of a Private Beneficiary Trust?
Individual or AOP

5. In PAN Application, what is the status to be mentioned?
Individual or AOP

6. While filing the Income Tax Return, whether the Status has to be mentioned as Trust, AOP or Individual? &
7. When can a Private Beneficiary Trust be taxed as an Individual?
In the case of a Private Specific Trust, the income prtaining to the trust is taxed as an “Individual’.

The Supreme Court in CIT V Indira Balkrishna (1960) 39 ITR 546 (SC)While considering what constitutes an AOP, held that the word Ässociation means “to join in an action”.

In the case of a trust, neither the trustees nor the beneficiaries can be considered as having come together wth common purpose of earning income.

Individual, because
a. The beneficiaries have not set up the trust.
b.The trustees derive their authority under the Terms of the deed. They are merely in receipt of Income.
c.The mere fact that the beneficiaries or the Trustees being representative assesses, are more than one, cannot lead to the conclusion that they constitute an ‘AOP’.

CIT Vs. Shri Krishna Bandar Trust (1993) 201 ITR 989 (CAL)
The Income of the trust is assessable in the hands of its trustees or upon the beneficiaries as Ïndividual

In CIT V SODRA DEVI (1957) 32 ITR 615 (SC)
Supreme Court has held that the word ïndividual does not mean only a Human Being, but is wide enough to include a group of Persons.

Income of a trust may however be taxed as an ‘AOP’ in certain cases and also taxed at ‘Maximum Marginal Rate’ (MMR) in certain cases.

8. When can a Private Beneficiary Trust be taxed as an A O P?
Income of a Discretionary trust shall be charged to tax as if it were the total income of an association of persons, in the following circumstances:

a) Where none of the beneficiaries have any other taxable income exceeding the basic exemption limit or is a
beneficiary under any other trust.

b) Income of a trust declared by any person under will, where such trust is the only trust declared by him.

c) Income of a non-testamentary trust (i.e. other than that created under will), created before 01.03.1970, bonafide exclusively for the benefit of the relatives of the settlor or of the members of a Joint Hindu Family where the trust is created by such family in circumstances where such relatives or members were mainly dependent on the settlor for their support or maintenance.

d) Income is receivable by the trustees on behalf of a provident fund, superannuation fund, gratuity fund, pension fund, or any other fund created bonafide by a businessman / professional exclusively for the benefit of his employees.

e) Income being profits and gains of a business receivable under a trust declared by any person by will exclusively for the benefit of any relative dependent on him for support and maintenance, where such trust is the only trust declared by him.

9. When can a Private Beneficiary Trust be taxed at Maximum Marginal Rate (MMR) ?
a) Incomes of a Discretionary trust shall be chargeable to tax at the ‘maximum marginal rate’.
b) Any income being profits and gains of business, arising to a private trust, unless such income is receivable under a trust declared by any person by will exclusively for the benefit of any relative dependent on him for support and maintenance, and such trust is the only trust so declared by him.

10. Filing Return of Income: Which form to be used? ITR – 2, 4, 5, 7
i) I T R - 2:  For Individual and HUF’s not having Income from a Business or Profession
ii) I T R - 4: For Individual and HUF’s having Income from a Proprietary Business or Profession
iii) I T R - 5: For Firms, AOPs and BOIs
iv) I T R - 7: For persons including companies required to furnish return under Section 139(4A) or Section 139(4B) or Section 139(4C) or Section 139(4D)
ITR 2,4,5 shall be applicable, based on the nature of the private trust.


11. Trust for Benefit of Spouse: Sec 64(1)(vii)
Income arising to a trust created for the immediate or deferred benefit of the spouse of an individual, from any asset transferred by such individual directly or indirectly, for inadequate consideration, shall be clubbed in the hands of that individual.

12. Trust for Benefit of Son’s Wife: Sec 64(1)(viii)
Income arising to a trust created for the immediate or deferred benefit of the son’s wife of an individual, from any asset transferred by such individual, directly or indirectly, for inadequate consideration, shall be clubbed in the hands of that individual.

13. Trust for Benefit of Minor Child: Sec 64(1A)
Any Income arising or accruing to a minor child, shall be clubbed in the total income of the parent whose total income is greater.

14. What is an Accumulation Trust?
An Accumulation Trust is one where the Income of the Trust is not transferred or given to the Beneficiary but is accumulated to a certain period.
In Addl. CIT V M.K.Doshi (1979) 9 CTR (GUJ) 123, the Gujurat High Court observed “That according to the clauses of the indenture, the income to be accumulated till the attainment of majority of each of the sons and the respective share of each of the sons is to be paid and handed over to him as and when he attains the majority.

The accumulated income, therefore, would be naturally, at the end of every year, capitalized and when available to the respective sharers would be more in the nature of capital and, therefore, a corpus and it, therefore, loses its characteristics of being an Income”

This decision of the Gujarat High Court has been affirmed by the Supreme Court in the case of CIT V M.R. DOSHI (1995) 211 ITR 1 (SC), holding that since the payment of income is to be made to the beneficiaries on attaining majority, no addition is to be made to the father’s income.

15. While filing the Income Tax Return, whether the Basic Exemption Limit is Available?
Yes. available

16. In case Basic Exemption is Available, whether it is dependent on the beneficiaries being Male or Female?
Yes, dependent on the beneficiaries being Male or Female.

17. Whether Sec. 80C deduction is available for a Private Beneficiary Trust?
Yes, available.

18. Whether the benefit of Tax in case of LTCG and STCG is available in case of Beneficiary Trust?
Yes, available

ILLUSTRATION 1: (AY 2010-11)
Mr. A forms a trust for the benefit of Ms. P and Ms. Q the would-be wives of his sons. He Settles his residential house to the trust. The House is let out on rent at Rs. 47,500 p.m. Ms. P and Ms. Q are beneficiaries under another discretionary trust. House Tax Paid -Rs. 20,000/- Compute the tax liability of income of the trust.
i) If the Trust is Specific, with equal share of beneficiaries?
ii) If the trust is Discretionary?

Computation of Trust’s Income
Case (i): Specific Trust

Gross ALV of House                          Rs.5,70,000/-
Less: House Tax Paid                          (Rs. 20,000/-)
Net ALV                                            Rs.5,50,000/-
Less: 30% deductions for repairs etc. (Rs.1,65,000/)
Net Income from Property                  Rs. 3,85,000

In the hands of Ms. P & Ms. Q individually
Income from property under trust in the hands of each beneficiary  Rs.192,500/-
Total income of each beneficiary                                                    Rs.1,92,500/-
Tax payable of each beneficiary
Income tax                                                        Rs.250/-
Add: Education cess                                              Rs.5/-
Add: Secondary & Higher Education cess              Rs.3/-
Total Tax payable                                              Rs.258/-

Total Tax liability on Income of Trust(Rs. 258*2)= Rs. 516/- (in TOTAL)

Case (ii): Discretionary Trust
Though the beneficiaries P and Q have no other taxable income but since they are beneficiaries under another
trust, the case is not covered u/s 164(1) and the Income of the trust shall be taxed at Maximum Marginal
Rate (MMR).
Computation of Tax Liability
Net Income of the Trust                                              Rs. 3,85,000
Tax Payable at Maximum Marginal Rate at 30.9%       Rs. 1,18,965


ILLUSTRATION 2:
Mr. X forms a trust for the benefit of Y and Z his major resident children both dependent on him for support and maintenance. The trust was created by will and Mr. X has settled his proprietary business upon the trust. The net business income of the trust for A Y 2010-11 is Rs. 2,90,000.
Compute the Tax Liability of Income of the trust.

i) The trust is Specific, Y and Z sharing equally, and having other taxable income of Rs.30,000 and Rs.26,000 respectively.

ii) The trust is discretionary.

iii) No trust is created and Y and Z inherit X’s business and carry on under a partnership firm and the maximum permissible salary u/s. 40(b) is shared equally between them.

Case (i) Specific Trust:

Assessment of Y
Income derived from Trust     Rs. 1,45,000/-
Other Incomes                       Rs.    30,000/-
Taxable Income                     Rs. 1,75,000/-

Tax                                                              Rs. 1500/-
Add: Education cess                                     Rs.    30/-
Add: Secondary & Higher Education cess     Rs.    15/-
Total Tax liability                                           Rs. 1545/-

Assessment of Z
Income derived from Trust     Rs. 1,45,000/-
Other Incomes                       Rs.   26,000/-
Taxable Income                     Rs. 1,71,000/-

Tax                                                             Rs.     1,100/-
Add: Education cess                                    Rs.          22/-
Add: Secondary & Higher Education cess    Rs.          11/-
Total Tax liability                                          Rs.      1133/-

Case (ii) Discretionary Trust:

Income derived from the trust        Rs. 2,90,000/-
Tax Liability (At normal rates)  (a) Rs.    13,390/-
(Since the case is covered u/s 164(1))

Assessment of Y
Taxable Income   Rs. 30,000/-
Tax Liability (b)              NIL

Assessment of Z
Taxable Income Rs. 26,000/-
Tax Liability (c)            NIL

Case (iii) Partnership firm

Assessemnt of YZ Firm
Income from Business                                                   Rs. 2,90,000/-
Less: Partner's Salary - maximum permissible
u/Sec. 40(b)                                                                 (Rs. 2,61,000)
Taxable Income                                                                 Rs. 29000/-

Tax Liability @ 30%                                    Rs. 8700/-
Add: Education cess                                     Rs.  174/-
Add: Secondary & Higher Education cess     Rs.   87/-
Total Tax liability                                          Rs. 8961/-

Assessment of Y
Share Income is exempt U/Sec. 10(2A)
Salary from firm            Rs. 1,30,500/-
Other Income                Rs.   30,000/-
Taxable Income             Rs.1,60,500/-

Tax                                                          Rs. 50/-
Add: Education cess                                 Re. 1/-
Add: Secondary & Higher Education cess Re. 1/-
Total Tax liability                                     Rs. 52/-

Assessment of Z
Share Income is exempt U/Sec. 10(2A)

Salary from firm    Rs. 1,30,500/-
Other Income          Rs. 26,000/-
Taxable Income    Rs.1,56,500/-
Total Tax liability             NIL

Ref.: CPE meeting by CA Sunil Sethia of M/s. GLS & Associates 
at SIRC premises, Chennai on 30-Dec-09

ANNOUNCEMENT ON POSTAL BALLOTS – DECISION TAKEN (30-12-2009)

Elections – 2009 (30th December, 2009)

To:
1. All candidates and/or their authorized representatives present in the Counting Centre
2. To be hosted on Institute’s website.

This refers to the written objections received, amongst others, on need for verification of signatures and bulk posting allegedly made.

In the course of dealing with the above objections and disposing of the postal ballot papers received from the Central India Regional Constituency (both for the 21st Council and 20th Regional Council), the following decision, amongst others, has been taken under Rule 39 (reproduced below) for disregarding the postal envelopes received:

Ballot papers which are consecutively posted and for which clear cut evidence is available in the postal receipt/envelope itself are treated as bulk posting in the context of Clause (4) of Schedule 7 to the Chartered Accountants (Election to the Council) Rules, 2006 (reproduced hereunder), the objective of which is to prevent misuse of postal ballots by persons other than the bonafide voters and in the light of the election dispute case settled by the Election Tribunal in the past.

Clause 4, Schedule 7
“The Returning Officer shall disregard all covers containing the voting papers relating to two or more members and posted in one and the same envelope.”

Rule 39
“Returning Officer to decide on certain matters. – If any question pertaining to or incidental to the procedure for conduct of elections including matters not specifically covered by these rules, arises, it shall be decided by the Returning Officer or the officer authorized by him under these rules.

Explanation: For the purpose of this rule , the conduct of election shall also include the process of counting of votes and declaration of results.”

( T. KARTHIKEYAN )
Returning Officer and Secretary

Link: http://www.icai.org/resource_file/17745announ301209.pdf

Wednesday, December 30, 2009

Private Trust

1. What is a Private Beneficiary Trust?

2. What is a Specific Trust?

3. What is a Discretionary Trust?

4. What is the Status of a Private Beneficiary Trust?

5. In PAN Application, what is the status to be mentioned?

6. While filing the Income Tax Return, whether the Status has to be mentioned as Trust, AOP or Individual?

7. When can a Private Beneficiary Trust be taxed as an Individual?

8. When can a Private Beneficiary Trust be taxed as an A O P?

9. When can a Private Beneficiary Trust be taxed at Maximum Marginal Rate (MMR) ?

10. Filing Return of Income: Which form to be used?
ITR – 2, 4, 5, 7
i) I T R - 2: For Individual and HUF’s not having Income from a Business or Profession
ii) I T R - 4: For Individual and HUF’s having Income from a Proprietary Business or Profession
iii) I T R - 5: For Firms, AOPs and BOIs
iv) I T R - 7: For persons including companies required to furnish return under Section 139(4A) or Section 139(4B) or Section 139(4C) or Section 139(4D)

11. Trust for Benefit of Spouse: Sec 64(1)(vii)

12. Trust for Benefit of Son’s Wife: Sec 64(1)(viii)

13. What is an Accumulation Trust?

14. In case of accumulation trust, What is the treatment for Amount utilized towards Education, Medical and Other Expenses for the beneficiary?

15. While filing the Income Tax Return, whether the Basic Exemption Limit is Available?

16. In case Basic Exemption is Available, whether it is dependent on the Beneficiaries being Male or Female?

17. Whether Sec. 80C deduction is available for a Private Beneficiary Trust?

18. Whether the benefit of Tax in case of LTCG and STCG is available in case of Beneficiary Trust?

Ref.: CPE meeting by CA Sunil Sethia at SIRC premises, Chennai on 30-Dec-09

Monday, December 28, 2009

Regional Election - SIRC - TEAM 2010-12

Final List (In Alphabetic Order)
1 CA. Aruloli P.R. Chennai
2 CA. Babu Abraham Kochi
3 CA. Gopal Krishna Raju Chennai
4 CA. Jose V X Kochi
5 CA. Murali S. Coimbatore
6 CA. Naresh Chandra Gelli V. Hyderabad
7 CA. Phalguna Kumar E. Tirupati
8 CA. Prasanna Kumar D. Visakhapatnam
9 CA. Rajarajeswaran P.V. Madurai
10 CA. Satyanarayana GVV Vijayawada
11 CA. Shanmukha Sundaram K. Coimbatore
12 CA. Srinivas C.S. Bangalore
13 CA. Sumermal D. Ostawal Hubli
14 CA. Suresh P.R. Bangalore
15 CA. Viswanath K. Bangalore

Regional Council - SIRC Elections 2009 - after 19th round of Elimination

1 CA. Babu Abraham Kochi 969
2 CA. Prasanna Kumar D. Visakhapatnam 969
3 CA. Suresh P.R. Chennai 969
4 CA. Phalguna Kumar E. Tirupati 969
5 CA. Murali S. Coimbatore 969
6 CA. Naresh Chandra Gelli V. Hyderabad 969
7 CA. Viswanath K. Bangalore 965
8 CA. Gopal Krishna Raju Chennai 945
9 CA. Aruloli P.R. Chennai 939
10 CA. Sumermal D. Ostawal Hubli 822
11 CA. Jose V X Kochi 818
12 CA. Srinivas C.S. Bangalore 797
13 CA. Shanmukha Sundaram K. Coimbatore 795
14 CA. Satyanarayana GVV Vijayawada 789
15 CA. Rajarajeswaran P.V. Madurai 782
16 CA. Rajgopal A. Bangalore 770 (Eliminated)

Sunday, December 27, 2009

Regional Council - SIRC Elections 2009 - after 18th round of Elimination

1 CA. Babu Abraham 969 (Elected)
2 CA. Phalguna Kumar E. 969 (Elected)
3 CA. Prasanna Kumar D. 969 (Elected)
4 CA. Suresh P.R. 969 (Elected)
5 CA. Murali S. 969 (Elected)
6 CA. Naresh Chandra Gelli V. 938
7 CA. Aruloli P.R. 927
8 CA. Gopal Krishna Raju 919
9 CA. Viswanath K. 891
10 CA. Jose V X 810
11 CA. Srinivas C.S. 793
12 CA. Shanmukha Sundaram K. 784
13 CA. Sumermal D. Ostawal 779
14 CA. Rajarajeswaran P.V. 772
15 CA. Rajgopal A. 763
16 CA. Satyanarayana GVV 663
17 CA. Pankaj Kumar Trivedi 639 (elimination in progress)

18 CA. Alagappan V.
17 CA. Gopalakrishnan T.R.
16 CA. Sivakumar R.
15 CA. Amrit Kumar K.
14 CA. Tony M P
13 CA. Ramamoorthy V.
12 CA. Tara Chand Mehta
11 CA. Muralidharan K.P.
10 CA. Sunil Kumar Jain P.
9 CA. Chakra Pani B
8 CA. Ranjit Karthikeyan M R
7 CA. Shenbagamoorthy C.
6 CA. Venkatesu Reddy T.
5 CA. Umamaheswara Rao O.K.
4 CA. Suresh Kumar N.
3 CA. Mohamed Shafi M.A.
2 CA. Thomachen T.A.
1 CA. Nagaraja Gupta P.V.

Regional Council - SIRC Elections 2009 - after 17th round of Elimination

1 CA. Babu Abraham 969 (Elected)
2 CA. Phalguna Kumar E. 969 (Elected)
3 CA. Prasanna Kumar D. 969 (Elected)
4 CA. Suresh P.R. 969 (Elected)
5 CA. Murali S. 969 (Elected)
6 CA. Naresh Chandra Gelli V. 914
7 CA. Viswanath K. 883
8 CA. Gopal Krishna Raju 880
9 CA. Aruloli P.R. 806
10 CA. Jose V X 790
11 CA. Srinivas C.S. 780
12 CA. Sumermal D. Ostawal 778
13 CA. Rajgopal A. 746
14 CA. Shanmukha Sundaram K. 724
15 CA. Rajarajeswaran P.V. 685
16 CA. Satyanarayana GVV 653
17 CA. Pankaj Kumar Trivedi 635
18 CA. Alagappan V. 615 (Elimination in progress)

ELIMINATED
17 CA. Gopalakrishnan T.R.
16 CA. Sivakumar R.
15 CA. Amrit Kumar K.
14 CA. Tony M P
13 CA. Ramamoorthy V.
12 CA. Tara Chand Mehta
11 CA. Muralidharan K.P.
10 CA. Sunil Kumar Jain P.
9 CA. Chakra Pani B
8 CA. Ranjit Karthikeyan M R
7 CA. Shenbagamoorthy C.
6 CA. Venkatesu Reddy T.
5 CA. Umamaheswara Rao O.K.
4 CA. Suresh Kumar N.
3 CA. Mohamed Shafi M.A.
2 CA. Thomachen T.A.
1 CA. Nagaraja Gupta P.V.

Regional Council - SIRC Elections 2009 - after 16th round of Elimination

1 CA. Babu Abraham 969 (Elected)
2 CA. Prasanna Kumar D. 969 (Elected)
3 CA. Suresh P.R. 969 (Elected)
4 CA. Phalguna Kumar E. 969 (Elected)
5 CA. Murali S. 929
6 CA. Naresh Chandra Gelli V. 889
7 CA. Viswanath K. 853
8 CA. Gopal Krishna Raju 802
9 CA. Jose V X 773
10 CA. Sumermal D. Ostawal 773
11 CA. Srinivas C.S. 759
12 CA. Aruloli P.R. 744
13 CA. Rajgopal A. 721
14 CA. Shanmukha Sundaram K. 707
15 CA. Rajarajeswaran P.V. 675
16 CA. Satyanarayana GVV 635
17 CA. Pankaj Kumar Trivedi 626
18 CA. Alagappan V. 588
19 CA. Gopalakrishnan T.R. 560

16 CA. Sivakumar R.
15 CA. Amrit Kumar K.
14 CA. Tony M P
13 CA. Ramamoorthy V.
12 CA. Tara Chand Mehta
11 CA. Muralidharan K.P.
10 CA. Sunil Kumar Jain P.
9 CA. Chakra Pani B
8 CA. Ranjit Karthikeyan M R
7 CA. Shenbagamoorthy C.
6 CA. Venkatesu Reddy T.
5 CA. Umamaheswara Rao O.K.
4 CA. Suresh Kumar N.
3 CA. Mohamed Shafi M.A.
2 CA. Thomachen T.A.
1 CA. Nagaraja Gupta P.V.

Regional Council - SIRC Elections 2009 - after 15th round of Elimination

1 CA. Babu Abraham (Elected)
2 CA. Prasanna Kumar D.  (Elected)
3 CA. Suresh P.R.  (Elected)
4 CA. Phalguna Kumar E.
5 CA. Murali S.
6 CA. Naresh Chandra Gelli V.
7 CA. Viswanath K.
8 CA. Sumermal D. Ostawal
9 CA. Jose V X
10 CA. Gopal Krishna Raju
11 CA. Srinivas C.S.
12 CA. Rajgopal A.
13 CA. Shanmukha Sundaram K.
14 CA. Aruloli P.R.
15 CA. Rajarajeswaran P.V.
16 CA. Pankaj Kumar Trivedi
17 CA. Satyanarayana GVV
18 CA. Alagappan V.
19 CA. Gopalakrishnan T.R.
20 CA. Sivakumar R.

15 CA. Amrit Kumar K.
14 CA. Tony M P
13 CA. Ramamoorthy V.
12 CA. Tara Chand Mehta
11 CA. Muralidharan K.P.
10 CA. Sunil Kumar Jain P.
9 CA. Chakra Pani B
8 CA. Ranjit Karthikeyan M R
7 CA. Shenbagamoorthy C.
6 CA. Venkatesu Reddy T.
5 CA. Umamaheswara Rao O.K.
4 CA. Suresh Kumar N.
3 CA. Mohamed Shafi M.A.
2 CA. Thomachen T.A.
1 CA. Nagaraja Gupta P.V.

Regional Council - SIRC Elections 2009 - after 14th round of Elimination

1 CA. Babu Abraham (Elected)
2 CA. Prasanna Kumar D. (Elected)
3 CA. Suresh P.R. (Elected)
4 CA. Phalguna Kumar E.
5 CA. Murali S.
6 CA. Viswanath K.
7 CA. Sumermal D. Ostawal
8 CA. Jose V X
9 CA. Srinivas C.S.
10 CA. Gopal Krishna Raju
11 CA. Rajgopal A.
12 CA. Shanmukha Sundaram K.
13 CA. Naresh Chandra Gelli V.
14 CA. Aruloli P.R.
15 CA. Rajarajeswaran P.V.
16 CA. Pankaj Kumar Trivedi
17 CA. Alagappan V.
18 CA. Satyanarayana GVV
19 CA. Gopalakrishnan T.R.
20 CA. Sivakumar R.
21 CA. Amrit Kumar K.

14 CA. Tony M P
13 CA. Ramamoorthy V.
12 CA. Tara Chand Mehta
11 CA. Muralidharan K.P.
10 CA. Sunil Kumar Jain P.
9 CA. Chakra Pani B
8 CA. Ranjit Karthikeyan M R
7 CA. Shenbagamoorthy C.
6 CA. Venkatesu Reddy T.
5 CA. Umamaheswara Rao O.K.
4 CA. Suresh Kumar N.
3 CA. Mohamed Shafi M.A.
2 CA. Thomachen T.A.
1 CA. Nagaraja Gupta P.V.

Regional Council -SIRC Elections 2009 - Status after 12th elimination

1 CA. Babu Abraham (Elected)
2 CA. Prasanna Kumar D.  (Elected)
3 CA. Suresh P.R.  (Elected)
4 CA. Phalguna Kumar E.
5 CA. Murali S.
6 CA. Viswanath K.
7 CA. Sumermal D. Ostawal
8 CA. Srinivas C.S.
9 CA. Rajgopal A.
10 CA. Shanmukha Sundaram K.
11 CA. Naresh Chandra Gelli V.
12 CA. Gopal Krishna Raju
13 CA. Rajarajeswaran P.V.
14 CA. Aruloli P.R.
15 CA. Jose V X
16 CA. Pankaj Kumar Trivedi
17 CA. Alagappan V.
18 CA. Satyanarayana GVV
19 CA. Amrit Kumar K.
20 CA. Gopalakrishnan T.R.
21 CA. Sivakumar R.
22 CA. Tony M P
23 CA. Ramamoorthy V.

12 CA. Tara Chand Mehta
11 CA. Muralidharan K.P.
10 CA. Sunil Kumar Jain P.
9 CA. Chakra Pani B
8 CA. Ranjit Karthikeyan M R
7 CA. Shenbagamoorthy C.
6 CA. Venkatesu Reddy T.
5 CA. Umamaheswara Rao O.K.
4 CA. Suresh Kumar N.
3 CA. Mohamed Shafi M.A.
2 CA. Thomachen T.A.
1 CA. Nagaraja Gupta P.V.

Regional Council -SIRC Elections 2009 - Status after 8th elimination (27-Dec-09)

1 CA. Babu Abraham (Elected)
2 CA. Prasanna Kumar D. (Elected)
3 CA. Suresh P.R.
4 CA. Phalguna Kumar E.
5 CA. Viswanath K.
6 CA. Murali S.
7 CA. Shanmukha Sundaram K.
8 CA. Srinivas C.S.
9 CA. Rajarajeswaran P.V.
10 CA. Rajgopal. A.
11 CA. Sumermal D. Ostawal
12 CA. Gopal Krishna Raju
13 CA. Aruloli P.R.
14 CA. Naresh Chandra Gelli V.
15 CA. Jose V.X.
16 CA. Pankaj Kumar Trivedi
17 CA. Alagappan V.
18 CA. Satyanarayana G.V.V.
19 CA. Sivakumar R.
20 CA. Amrit Kumar K.
21 CA. Gopalakrishnan T.R.
22 CA. Tony M. P.
23 CA. Ramamoorthy V.
24 CA. Tara Chand Mehta
25 CA. Muralidharan K.P.
26 CA. Sunil Kumar Jain P.
27 CA. Chakra Pani B.

Eliminated List (in the order of elimination)
1 CA. Nagaraja Gupta P.V.
2 CA. Thomachen T.A.
3 CA. Mohamed Shafi M.A.
4 CA. Suresh Kumar N.
5 CA. Umamaheswara Rao O.K.
6 CA. Venkatesu Reddy T.
7 CA. Shenbagamoorthy C.
8 CA. Ranjit Karthikeyan M. R.

Saturday, December 26, 2009

Regional Council - SIRC Elections 2009 - Status as on 26-Dec-09 end

1 CA. Babu Abraham 969 (Elected)
2 CA. Prasanna Kumar D. 969 (Elected)
3 CA. Suresh P.R. 932
4 CA. Phalguna Kumar E. 852
5 CA. Viswanath K. 763
6 CA. Murali S. 751
7 CA. Shanmukha Sundaram K. 674
8 CA. Srinivas C.S. 668
9 CA. Rajarajeswaran P.V. 634
10 CA. Rajgopal. A. 632
11 CA. Sumermal D. Ostawal 620
12 CA. Gopal Krishna Raju 590
13 CA. Aruloli P.R. 567
14 CA. Naresh Chandra Gelli V. 561
15 CA. Pankaj Kumar Trivedi 544
16 CA. Alagappan V. 518
17 CA. Satyanarayana G.V.V. 504
18 CA. Jose V.X. 461
19 CA. Sivakumar R. 424
20 CA. Amrit Kumar K. 420
21 CA. Gopalakrishnan T.R. 395
22 CA. Tony M. P. 348
23 CA. Ramamoorthy V. 307
24 CA. Tara Chand Mehta 297
25 CA. Muralidharan K.P. 273
26 CA. Sunil Kumar Jain P. 257
27 CA. Chakra Pani B. 236
28 CA. Ranjit Karthikeyan M. R. 230

Eliminated List (in the order of elimination)
1 CA. Nagaraja Gupta P.V.
2 CA. Thomachen T.A.
3 CA. Mohamed Shafi M.A.
4 CA. Suresh Kumar N.
5 CA. Umamaheswara Rao O.K.
6 CA. Venkatesu Reddy T.
7 CA. Shenbagamoorthy C.

Regional Council - SIRC Elections 2009

Counting for Regional Council to resume tomorrow.
Further updates, tomorrow (27-Dec-09)...

Regional Council - SIRC Elections 2009

1 CA. Babu Abraham (Elected)
2 CA. Prasanna Kumar D.
3 CA. Suresh P.R.
4 CA. Phalguna Kumar E.
5 CA. Viswanath K.
6 CA. Murali S.
7 CA. Shanmukha Sundaram K.
8 CA. Srinivas C.S.
9 CA. Rajarajeswaran P.V.
10 CA. Rajgopal. A.
11 CA. Sumermal D. Ostawal
12 CA. Gopal Krishna Raju
13 CA. Aruloli P.R.
14 CA. Naresh Chandra Gelli V.
15 CA. Pankaj Kumar Trivedi
16 CA. Alagappan V.
17 CA. Satyanarayana G.V.V.
18 CA. Jose V.X.
19 CA. Sivakumar R.
20 CA. Amrit Kumar K.
21 CA. Gopalakrishnan T.R.
22 CA. Tony M. P.
23 CA. Ramamoorthy V.
24 CA. Tara Chand Mehta
25 CA. Muralidharan K.P.
26 CA. Sunil Kumar Jain P.
27 CA. Chakra Pani B.
28 CA. Ranjit Karthikeyan M. R.

Eliminated:
1 CA. Nagaraja Gupta P.V.
2 CA. Thomachen T.A.
3 CA. Umamaheswara Rao O.K.
4 CA. Mohamed Shafi M.A.
5 CA. Shenbagamoorthy C.
6 CA. Suresh Kumar N.
7 CA. Venkatesu Reddy T.

Regional Council - SIRC Elections 2009

Counting for Regional Council is ON...
Four rounds of elimination over.
-26 December 2009, 20:32 IST

Central Council SIRC - FINAL LIST

1 CA. Raghu K
2 CA. Murali V
3 CA. Venkateswarlu J
4 CA. Santhana Krishnan S
5 CA. Ramaswamy G
6 CA. Rajendra Kumar P
7 CA. Madhukar Narayan Hiregange
8 CA. Devaraja Reddy M

Final vote count will be published as soon as received.

Central Council - SIRC Elections 2009

1 CA. Raghu K. (1907)  Elected -1
2 CA. Venkateswarulu J. (1731)
3 CA. Santhana Krishnan S. (1657)
4 CA. Ramaswamy G. (1587)
5 CA. Murali V. (1649)
6 CA. James V. C. (1321)
7 CA. Rajendra Kumar (1127)
8 CA. Madhukar N Hiregange (1087)
9 CA. Balasubramaniam G. (1021)
10 CA. Devaraja Reddy M. (1010)
11 CA. Daga Shanti Lal (843)
12 CA. Madhava Murthy K. S. (714)
13 CA. Madhubala Nahar Ms.
14 CA. Ambika S. (Ms.)
15 CA. Raghunathan S.  Eliminated - 2
16 CA. Suneel Kumar Appaji Eliminated - 1

Regional Council - SIRC Elections 2009

Tentative status (first round ;25-Dec-2009)
1 CA. Babu Abraham Kochi 953
2 CA. Prasanna Kumar D. Visakhapatnam 940
3 CA. Suresh P.R. Bangalore 882
4 CA. Phalguna Kumar E. Tirupati 786
5 CA. Viswanath K. Bangalore 729
6 CA. Murali S. Coimbatore 695
7 CA. Shanmukha Sundaram K. Coimbatore 657
8 CA. Srinivas C.S. Bangalore 646
9 CA. Sumermal D. Ostawal Hubli 611
10 CA. Rajgopal A. Bangalore 607
11 CA. Rajarajeswaran P.V. Madurai 564
12 CA. Gopal Krishna Raju Chennai 540
13 CA. Naresh Chandra Gelli V. 531
14 CA. Pankaj Kumar Trivedi Hyderabad 520
15 CA. Aruloli P.R. Chennai 499
16 CA. Alagappan V. Tiruchirapalli 490
17 CA. Satyanarayana GVV Vijayawada 470
18 CA. Jose V X Kochi 429
19 CA. Amrit Kumar K. Hyderabad 402
20 CA. Gopalakrishnan T.R. Chennai 386
21 CA. Sivakumar R. Chennai 383
22 CA. Tony M P Thrissur 299
23 CA. Tara Chand Mehta Bangalore 287
24 CA. Ramamoorthy V. Chennai 282
25 CA. Muralidharan K.P. Chennai 251
26 CA. Sunil Kumar Jain P. Chennai 247
27 CA. Chakra Pani B Hyderabad 217
28 CA. Ranjit Karthikeyan M R Thiruvananthapuram 211
29 CA. Shenbagamoorthy C. Sivakasi 198
30 CA. Venkatesu Reddy T. Tirupati 170
31 CA. Umamaheswara Rao O.K. Chennai 158
32 CA. Suresh Kumar N. Kollam 146
33 CA. Mohamed Shafi M.A. Chennai 119
34 CA. Thomachen T.A. Thrissur 104
35 CA. Nagaraja Gupta P.V. Bangalore 91

Friday, December 25, 2009

Central Council - SIRC Elections 2009

Tentative status (first round ;25-Dec-2009)

1 CA. Raghu K 1907
2 CA. Venkateswarlu J 1630
3 CA. Santhana Krishnan S 1547
4 CA. Ramaswamy G 1518
5 CA. Murali V 1450
6 CA. James V.C 1260
7 CA. Rajendra Kumar P 1034
8 CA. Madhukar Narayan Hiregange 968
9 CA. Balasubramaniam G 894
10 CA. Devaraja Reddy M 890
11 CA. Daga Shanti Lal 740
12 CA. Madhava Murthy K.S 610
13 CA. Madhubala Nahar (Ms.) 417
14 CA. Ambika S. (Ms.) 368
15 CA. Raghunathan S 178
16 CA. Suneel Kumar Appaji 170

SIRC Elections 2009 - Quota

Quota to win SIRC Elections (1st pref. votes)
Central Council - 1731votes
Regional Council - 969 votes

SIRC Elections 2009 - Votes Polled; Summary

Andhrapradesh 3460 votes polled out of 6757 votes rep. 51%
Karnataka 3702 votes polled out of 8976 votes rep. 41%
Kerala 1529 votes polled out of 3704 votes rep. 41%
Pondicherry 68 votes polled out of 146 votes rep. 47%
Tamilnadu 5963 votes polled out of 14101 votes rep. 42%
Postal 1280 votes polled out of 1498 votes rep. 85%

Total 16002 votes polled out of 35182 votes rep. 45%

ACCOUNTING TECHNICIAN CERTIFICATE (24-12-2009)

In terms of Regulation 37C(3) of the Chartered Accountants Regulations, 1988, a student who has passed Intermediate or Professional Education-II Examination or Professional Competence Examination and also completed the prescribed period of articled training is eligible for grant of Accounting Technician Certificate. Such a student would continue to be eligible to appear in the Final Examination.

We have in last month issued letters to such eligible students inviting them to opt for grant of such a Certificate. However, to our utter dismay, it has been noted that such letters have also been inadvertently issued to our esteemed members, perhaps due to incomplete/mix up of data base.

We sincerely regret the mistake and convey our apologies for the inconvenience caused. We request that our letter, in question, may kindly be treated as cancelled and withdrawn.

Joint Secretary (MSS)
23rd December 2009

Link: http://www.icai.org/post.html?post_id=5297&c_id=219

Executive Committee Decision on Election of Chairman and other Office bearers of all Branches of Regional Councils - (24-12-2009)

The Executive Committee deliberated the matter regarding holding the office of Chairman of Branches of Regional Councils contesting for other posts in the subsequent year(s) by the members.

Accordingly, the Committee decided as under:
The Chairman of a Branch, after demitting office, should not seek re-election for or hold the said or any other post at Branch level in subsequent years. The Committee also decided that no member should hold two posts simultaneously and that in case, as a result, any difficulty was faced, the matter may be brought before the Institute for its consideration.

In other words, commencing from the year 2010, a member who had held in the past/ is holding the post of Chairman for the year 2009-10, can remain as a member of a Managing Committee only.

The above decision would be applicable to members of the Managing Committee of Branches from the Council year 2010 –2011. The same has already been communicated to Chairman of all branches of Regional Councils vide office letter dated 18th December 2009.

Link: http://www.icai.org/post.html?post_id=5297&c_id=219

Sunday, December 20, 2009

Taxability of Perquisites: Notification No. 94/2009/F.NO. 142/25/2009-SO (TPL), dated 18-12-2009

Perquisite is defined as any casual emolument or benefit attached to an office or position in addition to salary or wages. “Perquisite” includes:

In terms Notification No. 94/2009/ F.No.142/25/2009-S O (TPL), dated 18-12-2009, for the purpose of computing the income chargeable under the head Salaries with effect from 1st April 2009, the value of perquisites provided by the employer directly or indirectly to the assessee (hereinafter referred to as employee) or to any member of his household by reason of his employment shall be determined....

Link1:
http://multiutils.com/itax/itinfo3.htm
Link2:
http://law.incometaxindia.gov.in/TaxmannDit/DispCitation/ShowCit.aspx?fn=http://law.incometaxindia.gov.in/DitTaxmann/Notifications/IncomeTaxAct/2009/Not94_2009.htm
Direct Download of Circular:
http://multiutils.com/itax/perquisite.doc

ICAI: Structural reform?

On CNBC-TV18’s show, The Firm, to give some answers and some solutions on structural reform on ICAI are MM Chitale, Former President of ICAI; YM Kale, Former President of ICAI and Group President of Hinduja Group (India); and TV Mohandas Pai, Director & Head - HR at Infosys.

Published on Sat, Dec 19, 2009 at 15:38
Source : CNBC-TV18

Excerpts from the discussion:
Q: Last week when we debated this issue another well-known CFO DD Rathi termed the state of affairs ICAI as a continuous lowering of standards at the institute. Would you agree with that assessment? Do you think there is need for change?

Pai: The institute reflects the state of society today; today we have society where intellectual thought and intellectual leadership is not given the same kind of respect as earlier. But we need to understand the context in which the institute has been set up.

Q: What are the seeds of the slide, according to you?

Kale: I will tell you but before that please understand that the nature of the Chartered Accountants Act is very different from the Advocates Act or other acts. The Chartered Accountants Act keeps CAs from doing anything except what is prescribed whereas other acts keep others from doing what is prescribed for their profession.

In other words, the CA Act shackles CAs whereas other acts shackle competition. Starting with this inherent disadvantage, let us examine, in the light of what I just told you, where the seeds of the slide came?

The seeds of the slide are: first, the sacrifice of language skills; and in that I do not blame the present council. If you want to blame someone, blame me. Blame my generation, which did not foresee that the entrance examination, the papers, the quality — if you do not insist on a grammatically simple correct communication and if that does not become the prerequisite of the qualification, then we are merely amassing a lot of regulatory framework and accountancy.

Q: That is not where the change needs to stop, do you believe that is where the change needs to stop. What more do we need to do?

Pai: I think the change needs to start at the organization level. We have a president and vice president appointed for a year – that is too short a time for them to make an impact and very president wants to start new programmes and make an impact rightly so because they have been elected for a year. I think we need to have a permanent structure with possibly a president, a president being appointed for five years, not by the membership but by the council and then the chairman of the council being appointed by an election every year maybe there is a better solution or maybe the chairman is appointed for every two years that will give enough time to really do some work. This idea of having one year creates a different kind of pressure.

The second thing we need to do very clearly is to make enforcement mechanism for discipline is taken considerably. Because like you said about Satyam the fact that it took seven months for any action to be taken sends a wrong message. I am not saying that the institute is wrong. They probably had their reasons but public perceptions is important like Kale said in the profession confidence of the public in the profession is the most important asset and for that you need to act and you need to act decisively to show people that you are acting like the government did for Satyam. The government acted within three months, they didn’t take seven months so the institute has to act.

Lastly, setting standards for the entire country in terms of accounting standards and auditing standards. There too I think there is a slight conflict of interest. The world has moved away from that so I think the whole matrix of how the institute runs, how the act is conceptualized needs a further debate as an issue because the world has moved on. Society has moved on and we have a structure of the 1940s and 1950s.

Kale: Your India Inc — as you often call it on your shows — is so obsessed with the producing of bankable balance sheets to please investors and analysts alike, that today the book keeping rectitude has come very low on their priorities. I am sorry to say that these incorrect priorities receive cordial ascent from large sections of society, which should know better. Therefore a part of this blame must rest upon a much wider section than you imagine.

Q: We cannot blame everything on socio-cultural changes in society. At the end of the day, we cannot say that the quality of the regulator depends on the quality of people in the society?

Kale: Independence is an in-eradicable human instinct, which even antidotes our social instinct. That is ultimately a state of mind.

Q: Fabulous articulation is not going to help the ICAI from the situation it is in.

Pai: Let me put it in perspective. You are more than 150,000 members; you have maybe 500,000 students who are getting trained and a large number getting article, you have a standard setting process which is becoming extremely complex because of globalisation, you have a disciplinary process which requires much more investment to be done. To me it’s a management challenge; the management challenge is enormous, it’s not what it was in 1950 or 1960 but instead of smaller and India is growing at 9%. Do we have this structure and institute to take care of India’s requirement for the next five-ten years? I would say no. If we are out of step with what India needs and I would not say that the institute exist only for its members even though there is a purpose. I would say the institute exist for a public purpose and the public purpose is to ensure that its credibility to financial statement and the regulation of a profession to serve public interest.

So public interest to me predominate the profession and professional needs. So I would say the complexity of management itself makes its incumbent that the whole gamut of activities that the institute does at this point of time requires a re-look. I am only asking for a debate. I am a member of the institute; I am a very proud member. I am extremely proud of the institute; I stand up for institute at all point of time but it will put public interest first before the institute and public interest to my mind demands that we re-look, we debate, we come out with an appropriate structure for the next 10-20 years.

Q: You can keep rolling the ball back in the India Inc’s court, so to speak, that is a different problem but the fact is that if the change does not come from within it has to come from outside – from outside the only person who can do that is the government that is why I think this ICAI mentioned that?

Kale: Public interest is paramount and for that, a service providing profession must not be allowed to turn into a survival business. Today there are two kinds of chartered accountancy profession developing. One are doing are eking out their living, reducing themselves to meaner and meaner lower rungs of representational ladder and there is another where these are basically marketing organizations who happen to perform in the domain of accounting and auditing.

Pai: Mr Kale has put it in his inimitable style and great language that there is a need for change. I have got a proposal. I think we should have a group set up by the institute itself to do a social audit, consisting of past presidents possibly Chitale and Kale, two eminent jurists, two businessmen and two young members of not more than 10 years in profession because whatever changes is going to come is going to impact them.

They must sit down, introspect, look into the future, talk to a lot of people and look at what is happening and come out of a model for the next 10-20 years. Unless we do that constantly how will the public believe us because the public only sees the bad things, they do not see the good things. Look we ensure the financial integrity of this country.

Let me clear we are the professionals which will ensure the financial integrity of this country. The balance sheets and everything that we sign that is function make sure the financial system is stable and runs. We have a great genesis for finance and accounting. We perform extremely important role to keep this country going. But we must introspect, we must come out of the view and tell the government this is the change we want instead of letting many other things come into the middle and go on hitting us and demeaning us and telling us we are bad. We are not bad we are good people. We have a noble profession. Yes, 4-5% something’s go wrong it could happen anywhere but we have to introspect, we have got to talk of about it otherwise we are going to have the outside world overwhelmed like Kale said we will not be able to counter.

Q: You do not want the government to step in but if the institute itself does not do anything from within then the government and other agencies will be forced to step in. We are not trying to find solutions on a 20-minute television show. Is your assessment that the council today is actually even willing to introspect?

Chitale: Everybody who thinks seriously about the matter must be willing to introspect and a programme like this is quite useful in the sense that if somebody is not willing to introspect at least this will force them to do that. So to that extent the debate is most welcome. I agree that there is a need for a change but the change does not mean taking a complete 360-degree upturn.

Q: What do we do?

Kale: Those who merely report upon deeds performed by others can hardly be equal to those who perform the deeds worthy of being reported. Therefore we must teach this profession to aspire but and not to grovel.

Q: What you have told me in many words is that you are hopeful for change. Do you believe that considering how politicizes the process has got in today, I mean, last week we were discussing, it may be one of but we were discussing an instance of booth capturing in council elections — this is absurd. Do you believe that the system today, which is so politicized is even willing to introspect?

Kale: I should hope so.


For full text, follow the link:
http://www.moneycontrol.com/news/management/icai-structural-reform_431746.html

For Video, follow the link:
http://www.moneycontrol.com/video/management/icai-structural-reform_431746.html

Extension of date for completion of CPE Hours for the calendar year 2009

Announcement regarding extension of date for completion of the mandated CPE hours requirements for the calendar year 2009 in respect of structured learning, for members holding certificate of practice:


It is hereby announced that the date for completion of the mandated CPE hours requirements for the calendar year 2009 in respect of structured learning, for members holding of certificate of practice is hereby extended from 31st December 2009 to 31st January 2010.


B. Muralidharan
Secretray CPEC

Source link:
http://www.icai.org/post.html?post_id=5258&c_id=219

STATE OF ICAI discussed

DD Rathi, Group Executive President, Aditya Birla Management Corporation and Sunil Talati, Former President of ICAI - year 2007 & 2008 and Senior Partner at Talati & Talati, discuss the issue at Tv show "The Firm" on CNBC-TV18
Published on Sat, Dec 12, 2009 at 13:16
Source : CNBC-TV18

Excerpts:
Q: It has been a really difficult year for the ICAI. What is going on?
Rathi: I take Satyam and Booth capturing as one-off incidence. I am not worried that Satyam happened because not a matter of merely the institute. It is a question of very well organised fraud.

Q: Are you saying it’s a crisis of leadership in this specific instance and not a systemic issue?

Talati: I would say this is a joint responsibility of the entire council.

Q: You brought up quality of the professional. CB Bhave, M Damodaran, look at the Insurance Regulatory and Development Authority (IRDA) regulators, they all have long track records of public service, government service all of that. What is the track record of any kind of regulatory service that any of these ICAI Presidents have? They are just practising chartered accountants. In fact the term of one year Vice President and one year is President means that they all very know before they become Vice President and President that they have only two years in a regulatory position, post which they are going to go back to private practise. I am told by many council members included that much of their time is spend furthering their own private interest because they are going to go back to private practise?

Talati: I would just not tolerate this remark. Let me clarify very clearly most of the council member elected are sacrificing their family life, they are sacrificing their professional practise. I am the sufferer; I know how much I have suffered. You are sighting exceptions as a set standard. Let me tell you in journalism – we have yellow journalism, all TV or all media are not bad. So, one particular person or group of people doing something not to the satisfaction of many cannot be blamed on the institution as a whole.


Q: How are we concerned with the quality of regulation 15 years ago?
Talati: There is no question of conflict of interest. Chartered accountants are the best people to govern this and the time has proved; the regulators, the challenges have proved.

Q: Do we have quality members according to you right now? What do we need to do to ensure we have quality members?

Rathi: We could make the judgement but let me tell you how we can improve the process. Secondly, let us not spare the Electoral College itself. I cited to you one famous quote that “Citizens of the country get the type of government they deserve”. Similarly, the CA members will get the type of council members they deserve.

Q: I am not, I am asking you, do you agree or believe that it has to change- Mr Talati is saying very clearly that nothing needs to change except the attitude.

Rathi: Not attitude. The whole process has to be reformed. I am always against reservation but look at the participation of members in industry. I blame myself partly for that is zero.


Rathi: I think the process is the regulations, the rules all that are time tested. The problem has been with implementation and modifying them in line with the changing times. I think council has to rise to the occasion, rise above their own personal interest, if any I do not want to go into debate that they have or they do not have and look towards development of the professional, look towards bringing back the profile the professional had few years back and enrich it.

For full text, follow the Link:
http://www.moneycontrol.com/news/management/the-statethe-icai_430509.html

Video Link:
http://www.moneycontrol.com/video/management/the-statethe-icai_430509.html