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Tag: Tax

  • What are the Common Myths About the Tax Benefits of NPS?

    What are the Common Myths About the Tax Benefits of NPS?

    The National Pension System (NPS) is a retirement savings instrument that offers attractive tax benefits to encourage people to save for their golden years. However, there are many myths surrounding the actual tax benefits you can avail of with NPS. This confuses and stops people from availing of a financially beneficial offering. In this article, we will bust some common myths about the tax perks of investing in NPS. Understanding the realities will help you make an informed decision about using NPS as a tax-saving tool.

    Myth 1: NPS Tax Benefits are Just Like Other Investments

    NPS offers additional, exclusive tax benefits that most other tax-saving investments do not. Under Section 80C, you can claim a deduction up to ₹1.5 lakhs for NPS contributions, just like other options such as PPF, ELSS, etc. However, NPS offers further deductions:

    ●    Section 80CCD(1B): An extra ₹50,000 deduction, over and above the 80C limit  
    ●    Section 80CCD(2): Up to 14% (new regime) is deductible from employer contributions

    This is a key difference from other tax-saving investments. Under 80CCD(2), employer NPS contributions up to 14% of basic pay become deductible from taxable salary. No other investment gives salaried individuals this triple tax benefit—80C, 80CCD(1B) and 80CCD(2).

    Myth 2: NPS Withdrawals are Fully Taxable

    At age 18, the child’s NPS account transitions to a standard NPS account. At exit (typically age 60), up to 60% of the corpus can be withdrawn tax-free as a lump sum, while at least 40% must be used to purchase an annuity, the income from which is taxable. If the corpus is below ₹2.5 lakh, it can be fully withdrawn tax-free.

    Compare this to PPF, EPF or VPF, where your accumulations and withdrawals are tax-free only until you retire. Post retirement, interest earnings exceeding ₹50,000 per annum are subject to tax. NPS scores over other retirement schemes here by making 60% of the corpus tax-free irrespective of the holding period or quantum withdrawn.

    Myth 3: You Lose Tax Benefits if You Exit Early

    This myth stems from partial knowledge. While an early NPS exit does limit the lump sum withdrawal percentage, it does not take back the tax benefits already availed on contributions. For instance, exiting before 60 years only allows withdrawals up to 20% of the corpus instead of 60%. However, all contributions for which you claimed tax deductions will not be added to your income in the year of withdrawal.

    The taxman may not ask you to return or nullify deductions enjoyed in previous years. The only impact is that your withdrawals get restricted if you exit before the maturity period of 60 years. So, while early exit impacts liquidity, it does not reverse previously claimed NPS tax benefits.

    Myth 4: NPS Benefits Only High-Income Groups

    NPS tax benefits are meant for all individuals who pay income tax, irrespective of their salary brackets. For instance, even fixed-income senior citizens can open an NPS account and reduce their tax outgo by ₹50,000 through section 80CCD(1B) deductions.

    Similarly, employees across MNCs and SMEs – from blue to white collar roles – can claim NPS tax benefits under 80CCD(2) on employer contributions. The only criterion is that you should have some tax liability to offset through these deductions. So while HNIs may gain more in absolute rupee terms, NPS tax advantages are very much relevant for middle-income groups too.

    Myth 5: Lock-in Defeats Flexibility for Tax Planning

    NPS indeed comes with longer lock-in requirements than ELSS, PPF, or ULIPs. However, one must evaluate this from a retirement planning perspective. NPS aims to create a pension corpus and hence, places withdrawal limits. However, this does not make it inflexible.

    NPS allows partial withdrawals of up to 25% of own contributions before maturity for specific expenses like children’s education/marriage, or buying residential property. You can plan your withdrawals for these crucial life goals. Additionally, you can withdraw the entire corpus if you are diagnosed with any specified critical illness.

    So, while NPS discourages random withdrawals, it does account for critical liquidity needs. Partial withdrawals can be used for tax planning while the rest of the corpus remains invested for retirement.

    Conclusion

    NPS is fundamentally meant for retirement planning, not just tax savings. The lock-in period and withdrawal rules promote disciplined long-term investing. At the same time, exclusive tax benefits make NPS very attractive. Instead of getting swayed by superficial myths, evaluate NPS objectively for its dual advantage – tax efficiency coupled with wealth creation for your golden years. Use it strategically along with other tax-saving options to maximise deductions and secure your financial future.

    FAQs

    1. Is it good to invest in NPS for tax benefits?  
    Yes, NPS is great for tax savings. Under Sections 80CCD(1) and 80CCD(1B), you can save up to ₹2 lakh, plus extra deductions for employer contributions under Section 80CCD(2).

    2. Is NPS 100% tax-free?  
    No, NPS is not fully tax-free. After age 60, 60% of your withdrawal is tax-free, but the remaining 40% used for annuity payments is taxed based on your income slab.

    3. Can I claim both 80C and 80CCD?  
    Yes, you can claim both. Section 80CCD(1) is part of the ₹1.5 lakh 80C limit, but Section 80CCD(1B) gives an extra ₹50,000 deduction, and 80CCD(2) covers employer contributions.

    4. Can I exit from NPS after 1 year?  
    Yes, you can exit early, but there are restrictions on how much you can withdraw. Staying longer helps your money grow and keeps your tax benefits intact.

    5. What happens to 40% of the NPS amount after death?  
    If you pass away, your nominee can withdraw the entire NPS corpus, including the 40% annuity portion, as a lump sum, tax-free, or use it to buy an annuity.  
     

  • Proposed 28% GST on online gaming could lead to decline in active users: ASSOCHAM & EY Report

    Proposed 28% GST on online gaming could lead to decline in active users: ASSOCHAM & EY Report

    MUMBAI: According to a joint report by Assocham and EY, titled ‘GST on Online Skill-Based Gaming’, GST Council’s Group of Ministers (GoMs) are examining the GST on online gaming. One of the considerations by GoM is recommending a levy of 28 percent Goods and Services Tax (GST) on the complete contest entry amount including the prize pool, which can have an adverse effect on the industry. Levy of GST on the contest entry amount would increase the tax burden on the nascent industry by 10 to 20 times. The industry currently pays GST at the rate of 18 percent on the platform fee or the Gross Gaming Revenue (GGR) earned directly by the gaming operators.

    The report estimates that the industry contributes more than Rs 2,200 crore of GST in 2022 and the winnings from online games are subject to income tax, which also contribute a significant amount to the exchequer.

    The report has also listed out the unique features that set online skill-based gaming apart from games of chance. It entails technology solutions that are provided by operators to enable user-interface as well as build a gaming ecosystem and act as facilitators. The fee charged is a fixed consideration and is not dependent on outcome. Its success is also dependent on the superior knowledge of the user and engagement with the game, making skill the predominant element.

    The report notes that the proposed levy of tax at 28 percent from 18 percent, along with 30 percent income tax on winnings, takes the rate of taxation on online gaming between 45-50 percent. With the GST tax proposal leading to higher taxation, it could lead to a decline in active users and discourage domestic gaming industries.

    According to recent industry estimates, there are 500 gaming companies in the country, which have provided employment to thousands of people and have also seen an inflow of Foreign Direct Investment (FDI) worth $2.7 billion. However, they are likely to be impacted by high taxations and would open doors for offshore operators. The report states: “This sector could also help in facilitating the government’s vision for the Animation, Visual Effects, Gaming and Comic (AVGC) sector and encourage the domestic players rather than driving users to foreign companies/ offshore platforms; thereby enhancing government’s revenue collection.”

    Assocham secretary general Deepak Sood said, “The Assocham-EY report on the impact of GST on online skill-based gaming is quite revelatory. The growth of the online gaming industry comes as no surprise as it’s largely youth-driven and has been fuelled by the increasing usage of internet and smartphones, especially during the pandemic. India is expected to become one of the world’s leading markets in the gaming industry, which also bodes well in terms of a robust digital economy GDP as well as an employment-generator. Therefore, any step that the government takes to strengthen the sector through an optimal tax structure is welcome.”

    The report asserts that the right tax structure can have a positive impact on the industry and drive tax revenues. “The crystallisation of the GST valuation mechanism could be a catalyst in enabling ease of doing business and spur growth of this rising sector,” it concludes.

  • Lower deferred tax asset & demonetisation lower Dish TV numbers

    BENGALURU: The largest DTH operator in India in terms of subscriber numbers – Dish TV Limited (Dish TV) reported less than one-sixth profit after tax (PAT) for the year ended 31 March 2017 (FY-17, current year) as compared to the previous year. The company reported PAT of Rs 1,092.8 million for FY-17 as compared to PAT of Rs 6,924.2 million in fiscal 2016. Dish TV has shown deferred tax asset for FY-17 at Rs 740.3 million as compared to Rs 4,360 million in FY-17. The company’s assets and liabilities statement for FY-17 shows deferred tax asset of Rs 5,100.3 million – the sum of the deferred tax asset for both years.

    In its earnings release, Dish TV says that demonetisation outdid a good monsoon as well as thriving economic conditions of the last year. Consumer spending remained a challenge from the latter half to the fourth quarter. The initial growth momentum that could have catapulted the DTH industry to the next level in terms of subscriber additions, took a temporary but prolonged hit. The DTH industry slightly de-grew in terms of new acquisitions during the fiscal despite coming closer to the implementation of digitisation. Dish TV saw subscribers conserving cash for bigger necessities right from the time demonetisation was announced in November up to the end of the fiscal.

    Dish TV managing director Jawahar Goel said, “Fiscal 2017 threw up unprecedented challenges but the Dish TV team took things in its stride. We minimized the impact of demonetisation while focusing on a long-term advantage in the form of recharges through online modes. Despite the odds, Dish TV managed to increase its reach and subscriber base.”

    The company reported 1,029 thousand net subscriber additions during the year to take its subscriber base to 15.5 million.

    Dish TV reported operating revenues of Rs. 30,144 million in FY-17, up 4.2 percent as compared to Rs 28,941 million in the previous year. Subscription revenues of Rs. 27,696 million in the current year were 4.1 per higher than the Rs 26,617 million in the previous year.

    Dish TV EBITDA declined 5.1 percent in the current year to Rs. 9,728 million (margin at 32.3 percent) from Rs 10,249 million (38.5 percent margin) in FY-16.

    Dish TV’s total expenditure in FY-17 increased 9.2 percent to Rs 20,415 million from Rs  18,692 million in the previous year. Cost of goods and services in fiscal 2017 increased 9.5 percent to Rs 14,371 million from Rs `13,122 million in FY-16. Employee Benefit Expense in FY-17 increased 9.5 percent to Rs 1,465 million from Rs 1,229 million. Sales & Distribution Expenses increased 9.6 percent in FY-17 to Rs 3,108 million from Rs 2,836 million in the previous year. Other expenses declined 2.3 percent to Rs 1,470 million from Rs 1,505 million. Finance costs increased 7.3 percent in FY-17 to Rs 2,239 million from Rs 2,087 million.

    Company speak:

    Goel, said, “Revenue growth in the current fiscal is largely going to be a function of subscriber additions and Phase 4 of digitisation should have a material role to play in that. The proposed amalgamation (with Videocon d2h) will further help create scale in the highly-fragmented TV distribution landscape in India while creating significant synergies through the combination.”

    On technological developments, Goel, revealed, “We understand that digital will be an important part of our growth in the future and we are excited about our portfolio of products lined up for launch in the coming quarters. Dish TV’s new HTML 5 based middleware with a card less box and a new chip set is already in advanced stages of testing and would hit the market soon.”

    DTH services will be subject to 18 percent GST rate as soon as the new indirect tax regime is implemented in the country. On the new GST regime, Goel said, “What should be significant in addition to our ability to pass on the uniform tax to subscribers would be the ease of doing day-to-day business and the associated savings in administration, litigation as well as compliance costs that should result from a simpler tax regime. Unlike the current Entertainment Tax and VAT regime, where different rules are used to determine tax in different regions, GST would be a single tax that should be practical and convenient to pass-on to the consumer.”

  • ET Now decodes the most awaited #Budget2014

    ET Now decodes the most awaited #Budget2014

    MUMBAI: As The Modi Government gears up to present its first Union Budget, India’s No.1 Business News Channel ET NOW is set to launch a power packed line up of shows. ET NOW will be kicking off its special two-week long comprehensive programming from June 30, 7:30 pm. Over 10 special shows will be aired in the run up to the Big Budget that will cover not just key sectoral expectations but also the economic imperatives of this Make-or-Break exercise. Given the significance of this budget, ET NOW has aptly used the tagline ‘The Big Reset’ for its entire budget programming.

     

    MK Anand, Managing Director and CEO, Times Television Network said, “This is the new government’s maiden budget and ET NOW will bring together leading experts across different fields in India, think-tanks, global investors and the country’s best editorial minds to decipher and analyse the Union Budget 2014. Through our shows, we aim to reach out to every Indian from industrialists to the common man by providing a detailed coverage on the run up to the Budget and the Budget Day.”

     

    R.Sridharan, Managing Editor, ET NOW said “We have the most powerful line up of seasoned experts in the business. ET NOW will also have the most viewer-friendly screen and the fastest flashes. Our programming line-up caters every key stakeholder in the economy ranging from the CEO to the retail investor.  The viewers’ overwhelming response to our Budget 2013 programming is a vindication of the tremendous value that our content delivers.”

     

    Jatin Bhatt, CMO – TIMES NOW, ET NOW &ZoOm, said, “With all eyes on the much-anticipated Budget from the Modi Government, ET NOW has put together an extensive programming line-up that will give audiences a holistic view on the Indian economy and the impact it will have after the Union Budget 2014 is announced.  For a channel like ours, Union Budget is an opportunity to present the most engaging and eclectic content that builds credibility among our existing viewers and helps generating new audiences.

     

    ET NOW’s Budget programming will be led by India’s most respected economist- SwaminathanAiyar, who is also the channel’s Consulting Editor. Apart from SwaminathanAiyar, other prominent economists like BibekDebroy and MythiliBhusnurmath will be commenting exclusively on ET NOW.

     

    The key shows are as follows:

     

    Budget 2014:The Politics of Budget

     

    Budget 2014 will be the budget presented by the new government in power. ET NOW’s Policy Editor SupriyaShrinate to quiz the biggest political commentators on the politics that will be at play for Budget 2014

    Date:  30th June, 7.30 pm

     

    Budget 2014:Cracking the Tax Code

     

    Panel Discussion will focus on  the key taxation issues in the run up to Budget 2014. Some of the biggest tax experts and lawyers will be analysing the likely tax reforms and their impact on corporate India and the taxpayer.

    Date: 1st July, 7:30 pm

     

    Budget 2014: The Global View

     

    The show to decode the game changing reforms that could change market sentiment and attract foreign money, the expectations of the investors. Catch top Global Fund Managers and Market experts share their budget expectations exclusively on ET NOW.

    Date: 2nd July, 7:30 pm

     

    Budget 2014: The Market Makers Budget Special

     

    Stocks Editor Nikunj Dalmia to interview big market voices on market expectations from Budget and stocks and sectors to watch out for.

    Date: 3rd July, 7:30 pm

     

    Budget 2014: Macroscope

     

    A discussion programme anchored by MythiliBhusnurmath that gives a view of the macroeconomic imperatives faced by the  government, and how the Budget is likely to address them.

    Date: 4th July, 7:30 pm

     

    Budget 2014: What Markets Want

     

    Nikunj Dalmia to interview (3-person panel) with three of the biggest market voices analysing the market expectations from Budget 2014

    Date: 7th July, 7:30 pm

     

    Budget 2014: Rail Budget

     

    The NarendraModi-led NDA government will announce its maiden Railway Budget in Parliament. Just as the General Budget, the Rail Bugdet is also keenly watched by experts and the country as a whole. Watch the extensive coverage of the Budget only on ET Now with eminent experts from various fields

    Date: 8th July, 11:00 am

     

    Budget 2014: Budget & India Inc

     

    A panel discussion anchored by ET NOW’s National Editor Sandeep Gurumurthi. It will bring together the top names from corporate India to talk about how the Budget can spur growth, and give an impetus to the reform process. India Inc’s biggest CEOs  will share their wishlist.

    Time: 7:30 pm

     

    Budget 2014: Eco Survey 2014

     

    A detailed coverage of annual document of the Ministry of Finance, In the Economic Survey programming ET NOW will speak to experts about the developments in the Indian economy over the previous 12 months and will also analyse the reforms roadmap of the govt.

    Date: 9th July; 11:00 am

     

    Budget 2014: An Agenda for the FM

     

    The biggest Macro-minds and economists come together to present an Agenda for the FM. Catch ET NOW’s Budget Think Tank:  SwaminathanAiyar, BibekDebroyand  Punita Kumar Sinha present an Agenda for the FM.This show will be anchored by ET NOW’s Policy Editor SupriyaShrinate.

    Time: 6:30 pm

     

    Budget Day programming

     

    The Budget Day will have budget special programming all through the day with ET NOW’s best line of experts comprising CEO’s, Economists, Market Experts and Foreign investors.

     

    Stay Tuned to ET NOW all this Budget season for the most credible and accurate analysis of Budget 2014.

  • IBN7 presents ‘Ache Din Aayenge Kya?’

    IBN7 presents ‘Ache Din Aayenge Kya?’

    MUMBAI: After a successful Election campaign, the new government now faces the enormous task of delivering on its promise of ‘acche din aane wale hain’. As the nation prepares for the Modi government’s first Budget, IBN7 presents ‘Ache Din Ayenge kya?’ an exhaustive line up of special programming on Budget 2014 – to analyse and understand if better times truly lie ahead!

    ‘Ache Din Ayenge kya?’ will bring to the viewers a sharp and precise overview of numerous issues facing the Indian economy. The channel’s experienced team of reporters and anchors along with noted panelists will try to examine options available to the government for driving economic reforms, boosting growth and controlling deficits. From discussions on what the budget 2014 is likely to hold, to opinions from the common people–IBN7 will have it all.

    This series that has already gone live on IBN7 will have 12 half hour special episodes, addressing the issues of Inflation, Tax, Education, Housing, Water & sanitation, Power, Women special, Railway special, Business Environment, Growth, Price Rise, Local Urban travel especially the Mumbai Locals.

    Additionally, IBN7 will also feature 3 special Budget related segments:

    YUVA – will aim to evaluate if the new government is aligned to the needs and expectations of the youth of the nation.  Through video bytes, they will be given a chance of voicing their concerns and getting the government to address the same.

    AGAR MAIN FM HOTA – will be a compilation of the common man’s suggestions to the Finance Minister on possible steps that he could take to push the economy. In line with IBN7’s consistent effort to give a voice to the nation, Agar Main FM Hota will serve as a platform for people across various strata of society to voice their opinions and expectations from this budget.

    BUDGET YATRA – will take the viewers through a journey from the first ever Union Budget in 1952 to the last union budget in 2013. This special segment will present glimpses of all the budgets presented till date, as a build up to Budget 2014.
    Don’t miss the special pre-budget programming, “Ache Din Ayenge Kya” from Monday-Friday @ 8.30 PM, only on IBN7.

     

  • Radio One reports improved operating results, lower loss for HY1-2014

    Radio One reports improved operating results, lower loss for HY1-2014

    BENGALURU: Next Mediaworks Limited and BBC worldwide joint venture Radio One (Radio One) reported a growth in revenue of 19 per cent for HY1-2014 to Rs 28.07 crore as compared to the Rs 23.57 crore for the corresponding period of last year. The company was previously known as Mid-Day Multimedia Limited.

     

     The company reported a 340 per cent jump in PBIT for H1-2014 to Rs 3.17 crore from Rs 0.72 crore during the corresponding period last year.

     

    Overall, the company reported about one third (33.8 per cent) loss of Rs (-1.22) crore for H1-2014 as compared to the Rs (-3.61) crore for H1-2013.

     

    Let us look at the figures reported for Q2-2014 by Radio One

     

     Radio One reported revenue of Rs14.14 crore for Q2-2014 which was about 1.5 per cent higher than the Rs 13.93 crore for Q2-2013 and about 12.6 per cent more than the Rs12.56 crore for Q1-2014.

     

    Expenditure at Rs12.83 crore for Q2-2014 was about 4.1 per cent lower than the Rs13.38 crore y-o-y and about 1 per cent higher than the Rs12.71crore q-o-q.

    The company paid 1.43 per cent lower license and royalty fees for Q2-2014 at Rs 1.38 crore as compared to the Rs1.4 crore for Q2-2013 and about 0.7 per cent higher than the Rs1.37 crore for Q1-2014.

     

    Radio One paid finance cost of Rs1.25 crore which was 3.8 per cent lower than the Rs1.30 crore for Q2-2013, but 15.7 per cent more than the Rs1.08 crore for the immediate trailing quarter.

     

    It spent 28 per cent less towards advertising and marketing costs for Q2-2014 at Rs 0.34 crore as compared to the Rs 0.5 crore for Q2-2013 and less than half (42 per cent) of the Rs 0.81 crore for Q1-2014.

     

    Deferred tax for the current period (Q2-2014) of Rs (-0.63) crore resulted in a loss of Rs (-0.57) crore from ordinary activities and minority interest added another Rs (-0.11) crore to bring the net loss for the period to Rs 0.68 crore.

     

    Q2-2014 loss at Rs (-0.68) crore was 13.6 times the Rs (-0.05) loss for Q2-2013 and 28.3 per cent higher than the Rs 0.53 crore for Q1-2014.

     

    Next Radio managing director and CEO Vineet Singh Hukmani said, “It feels wonderful to be part of a team that has met huge challenges and come out on top. Despite a slowdown in the economy, we continue to outgrow the market on profit margins due to our consistent differentiation strategy across all our seven markets. We have doubled the cash generated by the business this H1 as compared to last year and with our debt retirement being on track, this opens doors for us to continue investing into our largest assets, our people, our product and future digital engagement strategies.

  • Sri Adhikari Brothers PAT q-o-q jumps 25 per cent in Q2-2014

    Sri Adhikari Brothers PAT q-o-q jumps 25 per cent in Q2-2014

    BENGALURU:  Sri Adhikari Brothers Television Network Limited (Sri Adhikari Brothers) reported a PAT of Rs 2.28 crore for Q2-2013, 24.6 per cent higher than the q-o-q PAT of Rs1.83 crore for Q1-2014.But Q2-2014 PAT dropped by 13 per cent as compared to the y-o-y PAT of Rs 2.62 crore for the corresponding quarter of last year (Q2-2013). The content provider had reported a loss of Rs 3.02 crore for Q4-2013.

     

     Net Sales/Income from operations for Q2-2014 at Rs 18.13 crore was 3.5 per cent higher than the Rs 17.52 crore for the trailing quarter (Q1-2014) and 29 per cent higher than the Rs 14.05 crore for Q2-2013.

     

    Let us look at the other results reported by Sri Adhikari Brothers for Q2-2014.

     

    Earnings before interest, depreciation and taxes (EBIDT) for Q2-2014 at Rs 5.04 crore was 10.7 per cent more than the Rs 4.56 crore for Q1-2014, but 15.8 per cent less than the EBIDT of Rs 5.99 crore for the corresponding quarter of last year.

     

    Sri Adhikari Brothers’ total expenditure for Q2-2014 at Rs 15.42 crore was about 0.9 per cent more than the Rs15.28 crore for Q1-2014 and 38.4 per cent more than the Rs 11.14 crore for Q2-2013.

     

    Production/direct expenditure for Q2-2014 at Rs 11.07 crore was 3.7 per cent more than the Rs 10.68 crore for Q1-2014 and 48.8 per cent more than the Rs 7.44 crore for Q2-2013.

     

     Other expenditure at Rs 1.67 crore for Q2-2014 was 13.4 per cent lower than the Rs 1.93 crore for Q1-2014 and 40.4 per cent more than the Rs 1.19 crore for the corresponding quarter of last year.

     

    Depreciation was almost flat for the three quarters – Rs 2.32 crore for Q2-2014, Rs 2.30 crore for Q1-2014 and Rs 2.36 crore for Q2-2013.

     

    Interest and finance charge for Q2-2014 at Rs 0.4437 crore was 4.6 per cent higher than the Rs 0.4241 crore for Q1-2014 and less than half (41.4 per cent) of the Rs 1.0223 crore q-o-q.

     

    Notes:  (1) In the AGM held on 27 September 2013, the company declared and paid final dividend at the rate of Rs 0.60 per equity share of Rs 10 each aggregating to Rs 1.4967 crore

     

    (2) Provision for tax and deferred tax as applicable will be considered by the company at the end of the financial year

  • Comedy man Kapil now gets tax notice

    Comedy man Kapil now gets tax notice

    MUMBAI: Bad news continues to dog India’s funny man Kapil Sharma. The set of his show Comedy Nights with Kapil got burnt to nothing on 25 September, with losses being estimated at between Rs 1 crore to 8 crore.

    Now the standup comic who has put Colors on the comedy show map has been slapped with a service tax evasion notice of Rs 65 lakh by the service tax department.

    Kapil is the creative producer of the show that bears his name along with the Zodiak Entertainment group company SOL Productions and the service tax department says that his production house has collected the tax but not deposited it with the authorities.

    Sharma is reported to have said that he will make good the payments at the earliest after a five hour grilling at the service tax office in Mumbai.

  • PAT returns to Sri Adhikari Brothers in Q1-2014 after a hiatus in Q4-2013

    PAT returns to Sri Adhikari Brothers in Q1-2014 after a hiatus in Q4-2013

    BENGALURU: Sri Adhikari Brothers Television Network Limited (Sri Adhikari Brothers) reported a PAT of Rs 1.83 crore for Q1-2014 as compared to a loss of Rs 3.02 crore in the preceding quarter (Q4-2013). The content provider had reported a lower PAT of Rs 1.69 crore for the corresponding quarter last year Q1-2013.

     

    Let us take a look at the other results of Sri Adhikari Brothers for Q1-2014

     

    A note by the company’s chartered accountants says – The company has not recognised Current Tax and Deferred Tax as per requirements of Accounting Satndard 22 – ‘Accounting of Taxes on Income’. Pending details of the measurement of above it’s impact on the Profit and Loss for the quarter ended June 30, 2013 cannot be ascertainable.

     

    Sri Adhikari Brothers had a net sales/income from operations for Q1-2014 of Rs 17.52 crore, 39.3 per cent higher than the Rs 12.58 crore for Q1-2013 and 7.9 per cent higher than the Rs 16.24 crore in Q4-2013.

     

    Sri Adhikari Brothers’ total expenditure for Q1-2014 at Rs 15.28 crore was 55 per cent more than the Rs 9.86 crore for Q1-2013, but 19 per cent lower than the Rs 18.85 crore in Q4-2013.

     

    Production expenditure for Q1-2014 at Rs 10.68 crore was more than double (2.15 times more) than the Rs 4.96 crore for Q1-2013, but 70 per cent of the Rs 15.14 crore in Q4-2013.

     

    Other expenditure at Rs 1.93 crore for Q1-2014 was 12.4 per cent lower than the Rs 2.20 crore for Q1-2013, but 43 per cent higher than the Rs 13.49 crore for Q4-2013.

     

    Profit from operations before other income, finance cost, exceptional items and tax for Q1-2014 at Rs 2.24 crore was 17.7 per cent lower than the Rs 2.24 crore for Q1-2013. Sri Adhikari Brothers reported a loss from operations before other income, finance cost, exceptional items and tax for Q4-2013 of Rs 2.62 crore.

  • Supreme court gives entertainment tax relief to DTH operators

    Supreme court gives entertainment tax relief to DTH operators

    NEW DELHI: In a major relief to direct-to-home operators in the state, the Supreme Court last week held that the Madhya Pradesh government cannot demand entertainment tax on DTH services under the Madhya Pradesh Entertainment Duty and Advertisements Tax Act, 1936.

    Justice Aftab Alam and Justice R M Lodha said in a judgment that Act ‘cannot be extended to cover DTH operations.’

    Accepting appeals by Tata Sky against a judgment of the Madhya Pradesh High Court of August 2010, the apex court said: ‘Neither the provision of section 4(1) nor any of the modes provided under section 4(2) of the Act can be made applicable for collection of duty on DTH operations. Further, it is noted above that section 8 provides rule making powers. In exercise of the powers under that provision, the Madhya Pradesh Entertainment Duty and Advertisement Tax Rules 1942 were framed. A perusal of the Rules makes it absolutely clear that the collection mechanism under the 1936 Act is based on revenue stamps stuck to the tickets issued by the proprietor for entry to the specified place where entertainment is held.’

    The Court added: ‘Under section 3 read with section 2(d) and section 2(a), the charge or levy of tax is attracted only if an entertainment takes place in a specified place or locations and persons are admitted to the place on payment of a charge to the proprietor providing the entertainment. In the present case, as DTH operation is not a place-related entertainment, it is not covered by the charging section 3 read with section 2(a) and 2(b) of the 1936 Act. Consequently, the question of going to section 2(d)(iv) does not arise.’

    The revenue department had demanded 20 per cent entertainment duty on subscription payment from the DTH operator, which had commenced services in August 2006 all over the country including Madhya Pradesh.

    Tata Sky in their appeals had contended that DTH broadcast is a notified service under the Finance Act and it is chargeable to service tax. For the purpose of levy of service tax, “broadcasting” has been defined specifically under section 65(15) of the Finance Act. The broadcasting services were brought within the purview of the service tax under section 65(105)(zk) of the Finance Act 1994 as amended with effect from 16 July 2001. Later on, DTH service was brought within the purview of the service tax with effect from 16 June 2006.

    Tata Sky contended that it does not use any infrastructure from the State for its DTH broadcasts.

    On 5 May 2008, the State Government issued a gazette notification fixing 20 per cent entertainment duty in respect of every payment made for admission to an entertainment other than cinemas, videos cassette recorders and cable service.

    The State on 1 August 2009 passed the Madhya Pradesh Entertainment Duty and Advertisements Tax (Amendment) Act, 2009. By the Amendment Act, the failure to produce accounts and documents as required by the Excise Commissioner or any officer authorized by the State Government was made a penal offence.

    However, the apex court noted that this amendment ‘did not introduce any provision in the Parent Act with respect to levy of entertainment duty on DTH broadcasting.’

    Referring to the notification of 5 May 2008, the apex court said ‘it is elementary that a notification issued in exercise of powers under the Act cannot amend the Act. Moreover, the notification merely prescribes the rate of entertainment duty at 20 per cent in respect of every payment for admission to an entertainment other than cinema, video cassette recorder and cable service. The notification cannot enlarge either the charging section or amend the provision of collection under section 4 of the Act read with the 1942 Rules. It is therefore clear that the notification in no way improves the case of the State.’

    The Court also said that the controversy in all the three appeals relates to the demand and realization of entertainment tax under the 1936 Act, which means for the period between the commencement of operation by the appellant in the year 2006 and 31 March 2011, the day prior to the coming into force of the new Act, called the Madhya Pradesh Vilasita, Manoranjan, Amod Evam Vigyapan Kar Adiniyam 2011.