The weekly messenger | Edition 39.20
This newsletter is a weekly compilation of accounting, auditing and related regulatory news from different accounting and regulatory bodies in India and overseas.
AUDITING NEWS
Approach to Tax Audit under Section 44AB of the Income Tax Act, 1961 (Checklist) – 27 October 2020
In order to assist the members in effective performance of their duties, the Institute of Chartered Accountants of India (ICAI) has issued a publication namely ‘Approach to Tax Audit under Section 44AB of the Income Tax Act, 1961 (Checklist)’, which contains a detailed checklist on Tax Audit as well as listing of some commonly found errors / non-compliances in Tax Audits.
For more information, click here.
REGULATORY NEWS
Special Measures under the Companies Act, 2013 and Limited Liability Partnership Act, 2008 in view of COVID-19 outbreak – Extension – 20 October 2020
In March 2020, the Ministry of Corporate Affairs (MCA) had issued ‘Special Measures under Companies Act, 2013 and LLP Act, 2008 in view of COVID-19 outbreak’, wherein the MCA had clarified that non-compliance of Section 149 of the Companies Act, 2013 , which states that every company shall have at least one director who shall reside in India for at least 182 days, would not be treated as a violation for the Financial Year (FY) 2019-20.
Now, the MCA has again issued a Circular, thereby providing that the aforesaid relaxation would also be available for the FY 2020-21.
For more information, click here.
Contribution by Issuers of listed or proposed to be listed debt securities towards creation of “Recovery Expense Fund” – 22 October 2020
The Securities and Exchange Board of India (SEBI) has issued a Circular on ‘Contribution by Issuers of listed or proposed to be listed debt securities towards creation of Recovery Expense Fund’, as per which the issuer of listed or proposed to be listed debt securities would be required to deposit certain amount towards Recovery Expense Fund with the designated Stock Exchange. The purpose of this Fund would be to enable the Debenture Trustee(s) to take prompt action for enforcement of security in case of default in listed debt securities.
The Circular shall come into force w.e.f. 1 January 2021.
For more information, click here.
Regulatory measures to continue – 22 October 2020
In view of the uncertainty observed in the recent past due to concerns relating to COVID-19 pandemic and the resultant fear of economic slowdown, the SEBI vide its Press Release dated 20 March 2020 had introduced various regulatory measures for a period of one month w.e.f. 23 March 2020. This date later got extended till 29 October 2020 respectively.
Now, in order to ensure orderly trading and settlement, the effective risk management, price discovery and maintenance of market integrity, the SEBI has once again decided to further extend the validity of the aforesaid regulatory measures till 26 November 2020.
For more information, click here.
Securities and Exchange Board of India (Prohibition of Insider Trading) (Second Amendment) Regulations, 2020 – 29 October 2020
The SEBI has issued the SEBI (Prohibition of Insider Trading) (Second Amendment) Regulations, 2020, wherein the following changes have been made:
- In clause (h) of sub-regulation (1) of Regulation 7A, which provides the definition of ‘Original Information’, the following explanation has been inserted after sub-clause (iii): “Information shall be considered timely, only if as on the date of receipt of the duly completed Voluntary Information Disclosure Form by the Board, a period of not more than three years has elapsed since the date on which the first alleged trade constituting violation of insider trading laws was executed.”;
- In Schedule D ‘Form for Informant’s Voluntary Information Disclosure to be submitted to the Board’:
- In the note and in clause 1 of table in Part III, the words ‘securities laws’ have been substituted with the words ‘insider trading laws’;
- Clause 9, which provides the format for the submission of information considering the insider trading laws, has been substituted by following: “Please describe in detail how the information submitted by you constitutes a violation of insider trading laws. The details must include specific information with respect to:
- Details of the securities in which insider trading is alleged.
- The unpublished price sensitive information based on which insider trading is alleged.
- Date on which the unpublished price sensitive information was made public.
For more information, click here.
Extension of the Settlement Scheme 2020 – 31 October 2020
The SEBI vide its public notice dated 27 July 2020, had introduced the ‘Settlement Scheme’ which proposed to provide a onetime settlement opportunity to those entities that have executed trade reversals in the stock options segment of BSE during the period from 1 April 2014 to 30 September 2015 and against whom enforcement proceedings have been approved by the SEBI.
Earlier, the aforesaid Scheme was valid from 1 August 2020 till 31 October 2020. Now, due to large scale disruptions caused by COVID-19, the SEBI has decided to extend the abovementioned Scheme till 31 December 2020.
For more information, click here.
Extension of due date of furnishing of Income Tax Returns and Audit Reports – 24 October 2020
In June 2020, the Central Board of Direct Taxes (CBDT) had extended the due date w.r.t. Income Tax Returns (ITRs) for the FY 2019-20, which were required to be filed by 31 July 2020 and 31 October 2020 respectively to 30 November 2020. Consequently, the date of furnishing of tax audit report also got extended to 31 October 2020.
Now, in order to provide some more time to the taxpayers, the CBDT has once again extended the aforesaid due dates w.r.t. furnishing of ITRs and the Tax Audit Reports. The revised due dates are as follows:
Particulars | Revised Due date of furnishing of ITR | Revised Due date of furnishing of Tax Audit Reports and Form 3CEB (wherever applicable) |
For taxpayers who are required to get their accounts audited [for whom the due date (i.e. before the extension by the said notification) as per the Act is 31 October 2020] | 31 January 2021 | 31 December |
For taxpayers who are required to furnish report in respect of international/specified domestic transactions [for whom the due date (i.e. before the extension by the said notification) as per the Act is 30 November 2020] | 31 January 2021 | 31 December 2020 |
For other taxpayers [for whom the due date (i.e. before the extension by the said notification) as per the Act was 31 July 2020] | 31 December 2020 | - |
For more information, click here.
Employees' State Insurance (Central) Amendment Rules, 2020 – 27 October 2020
The Central Government has issued the Employees' State Insurance (Central) Amendment Rules, 2020, wherein the following changes have been made:
- Rule 51 B, which provides for lower rates of ESIC contribution by the employees as well as employers for a period of initial two years in the areas where the Act is implemented for the first time has been omitted;
For more information, click here.
- Further, in Rule 56-A, the reimbursement paid to an insured woman and an insured person in respect of his wife under the maternity benefits i.e. the confinement expenses have been increased from ₹ 5000 to ₹ 7500.