Current Affairs Analysis

4th May 2016 Current Affairs Analysis

By IT's Current Affairs Analysis Team
May 04, 2016


Polity & Governance

  • Lok Sabha passes CAF Bill

Social Issues

  • Transgenders get space in birth and death certificates


  • Tips are not salary income, still taxable: SC
  • Wipro, partners to set up all-women business park in Saudi Arabia


Polity & Governance

Lok Sabha passes CAF Bill

Lok Sabha has passed the much talked about Compensatory Afforestation Fund bill, 2015.

Key features of the bill:

  • The Bill seeks to establish setting up of a National Compensatory Afforestation Fund under the Public Account of India, and also a State Compensatory Afforestation Fund under the Public Account of each state.
  • The Bill aims to ensure expeditious utilization of accumulated unspent amounts to the tune of around Rs 40,000 crore for increasing forest cover in India. The amount has been lying idle with an ad-hoc central body for over 10 years.
  • These Funds will receive payments for:
  1. Compensatory afforestation,
  2. Net present value of forest (NPV), and
  3. Other project specific payments.
  •  The National Fund will receive 10% of these funds, and the State Funds will receive the remaining 90%.
  • These Funds will be primarily spent on afforestation to compensate for loss of forest cover, regeneration of forest ecosystem, wildlife protection and infrastructure development.
  • The Bill also establishes the National and State Compensatory Afforestation Fund Management and Planning Authorities to manage the National and State Funds.
[Ref: Hindu]


Social Issues

Transgenders get space in birth and death certificates

 After the landmark Supreme Court judgment in April 2014 recognising transgender as third gender, the Delhi government has now decided to introduce the ‘transgender’ category in forms for registration of birth and death certificates.

  • In the first move perhaps to recognise the third gender on official papers, the Delhi government has issued a notification asking all Registrar offices to duly make the changes in the forms.
  • Sources in the government said that registration of death and births certificates from the transgender community was very less and even those who came forward, would mostly end up registering as females.
[Ref: Hindu]



Tips are not salary income, still taxable: SC

In a major relief to the hospitality industry, the Supreme Court has held that tips paid by customers to staff for availing services in restaurants do not constitute salary.

SC’s observations:

  • According to the court, the employer is not liable to deduct tax at source on such payments under income-tax laws.
  • However, the court observed that such tips at the hands of employees would be chargeable as “income from other sources”.
  • According to the court, the employer merely acts in a fiduciary capacity as a trustee for payments that are received from customers, which they disburse to their employees for services rendered to the customer. The employer, therefore, has no obligation to withhold tax on such payments made to employees, regardless of whether the tips are received directly in cash, or collected through credit card by employer, and subsequently disbursed to employees.


With this, the Supreme Court has set aside the Delhi High Court’s May 2011 judgment, which held that the receipt of such tips constitutes income at the hands of the recipient and is chargeable to income tax under the head “salary” under Section 15 of the Income-Tax Act.

  • The Delhi High Court in 2011 had ruled that when a tip is paid by way of a credit card by a customer—since such a tip goes into the account of the employer, after which it is distributed to employees—the receipt of such money from the employer would amount to “salary” within the extended definition contained in Section 17 of the Act. However, the High Court had also held that when tips are received by employees directly in cash, the employer has no role to play and would therefore be outside the purview of Section 192 of the Act.
  • Challenging the High Court judgment before the Supreme Court, ITC and others had argued that tips by customers are paid out of their own volition and discretion, and are in the nature of gratuitous payment made directly to the waiters/staff as a reward in appreciation of services rendered to them. ITC further added that employees cannot claim any vested right thereto, since the employer neither pays nor is bound to pay any amount to the employee as a tip.
[Ref: Hindu]

Wipro, partners to set up all-women business park in Saudi Arabia

Indian IT major Wipro has signed a tripartite deal to set up Saudi Arabia’s first all-women business and technology park in collaboration with Saudi Aramco and Princess Nourah University.

Key facts:

  • The Women’s Business Park (WBP) is a result of a joint venture between Princess Nourah University (PNU), the largest women’s university in the world and Wipro Arabia Ltd.
  • The project is expected to create nearly 21,000 jobs by 2025.
  • Saudi national oil company Aramco is the strategic advisor and anchor of the initiative.
  • Dedicated to working women, this business park is a first of its kind project aimed at providing knowledge-based employment for women in the Kingdom of Saudi Arabia.

India’s Tata Consultancy Services (TCS) had set up its first all-women Business Process Services (BPS) centre in Riyadh in 2013, where 1,000 women work, 85 percent of whom are Saudi nationals. Prime Minister Narendra Modi visited the centre last month during his official trip to the kingdom.

[Ref: BS]


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