SUBMITTED BY:NAVNEET KAUR MALHI

MBA 2A

It does away with a provision that allowed individuals to escape tax in any country citing double tax avoidance.

An individual shall be resident in India in any financial year if he is in the country for more than 59 days in that year and has been in India for more 365 days in the four preceding financial years.

NRIs who have spent 365 days in the last four years, which is permissible under the current income tax law, are at the risk of becoming a resident and facing tax on their global income.

According to the government data, the economy grew by 8.8 per cent in the April-June quarter based on actual expansion without accounting for taxes - a methodology known as factor cost.

At the same time, the data released by the Ministry of Statistics and Programme Implementation (Mospi) showed growth at market price, which reflects the value of the production or services that includes indirect taxes, at just 3.65 per cent.

The wide difference in GDP growth numbers under the two methodologies created confusion among economists.

Experts said GDP at market price should not have been so low, since indirect taxes--excise duty--rose by two per cent this fiscal, after the government partially withdrew stimulus measures.

The mistake was in calculating a price deflator, which is used for converting nominal GDP into real GDP, explained the official.

India attracted $891 million (Rs 4,023 crore) foreign direct investment in the telecommunications segment in the first two months of the current fiscal, the highest among all sectors.

The highest FDI of $1.29 billion came from Mauritius followed by Singapore ($854 million), Japan ($369 million) and the Netherlands ($298 million) in April-May 2010-11

The government had floated discussion papers for public comments to liberalise FDI in multi-brand retail and defence sector.

The FDI for 2009-10 at $25.88 billion was lower by five per cent from $27.33 billion in the previous fiscal

A whopping $65 billion is lost every year on account of the inefficient supply-chain system in India and this despite the Indian retail sector being in the high-growth mode.

The industry is expected to touch $879 billion by 2018, but if the present challenges in its supply-chain system are not addressed, then the sector's growth could get hampered.

Supply-chain costs in India are about 12-13 per cent of the GDP as compared to 7-8 per cent in developed countries.

India will not be able to get its hands on inoperative Swiss accounts that may have been used to stash away black money as the tax treaty worked out with the country will only cover active accounts.

The new provision will be applicable only for prospective information and not for past information.

A limitation of benefit clause has also been brought into the tax treaty to prevent misuse of the treaty benefits. This clause provides that the treaty benefits could be availed only on fulfilment of certain conditions.

Black money has become a major political issue in India in the last election with the then government promising to take every possible step to bring back this unaccounted or criminal money.