Tax information exchange and transfer pricing are two serious agendas of the Finance Minister in this year budget. He has therefore made every possible provision to tax and repatriate illicit money to the country whether held as unaccounted income or unaccounted wealth abroad. He has formed a dedicated cell for exchange of information to work upon this agenda.
A Big Flaw in the Finance Bill
The Finance Bills though seeks to bring a new section 94A with the heading ‘Special measures in respect of transactions with persons located in notified jurisdictional area’ the same is however made effective from 1st Day of2011. In my view this provision must strictly be made applicable w.r.e.f 1.4.1962 i.e. since the time the Act has come into force. Secondly there is no way to limit such taxation on transactions with a person located in such areas and in fact it should even cover repatriation or remittances or transfer per se from the notified jurisdictional areas by one and same person. Also there should be added tool in the tool box to so regard them as transactions falling u/s 94 notwithstanding transfer of funds through banking channels as the Courts often show relent on them.
NGO/Charitable entities other than ones providing education, medical, relief to the poor, preservation of environment/monuments would stand