General Data Protection Regulations or GDPR is the new Privacy Protection Regulation adopted on 27th April 2016 by the European Union in replacement of the earlier Data Protection Regime. The General Data Protection Regulation (GDPR) is a legal framework that sets guidelines for the collection and processing of personal information of individuals within the European Union (EU). The GDPR sets out the principles for data management and the rights of the individual, while also imposing fines that can be revenue-based. The new Data Protection Act 2018 replaces the 1998 Data Protection Act.

The nucleus of the GDPR is to protect the personal data and  privacy  of all citizens  in the EU. It makes companies accountable for the data it collect, store, analyse and use. The development will not only change the business landscape in the EU but also influence global markets and multinationals. 

These privacy regulations which come with restrictions on non-transferability of EU data to non-compliant countries make it highly relevant for countries outside EU also as it could make or mar the data processing industry.

What distinguishes GDPR from the earlier regulations is the high level of penalties envisaged under the regulation which may go upto Euro 20 million (approximately Rs 140 crores) or 4% of global turnover of a company and will be applicable even for Non EU based companies. 

Read more: General Data Protection Regulations

What is a Derivative? 

A Derivative is a (financial) security or instrument, the value of which depends on underlying asset or group of assets or a benchmark.   It is a contract between two or more parties, and its price is determined by fluctuations in the underlying asset.  Examples of underlying assets in case of derivatives are shares /stocks, bonds, indexes, currencies, interest rates and commodities. 

Derivatives are most commonly used to hedge the risk of abnormal fluctuations, be it price of share or interest rate or exchange rates of currencies. At the same time, derivatives are also used as a speculation tool where the speculators engage in trading them with an objective to gain (arbitrage) from such abnormal fluctuations.  Most commonly used derivative contracts as Forward Contracts, Exchange Traded Futures and Options (in stocks and currencies), Interest Rate Swaps, Currency Swaps, etc.

Read more: Derivatives Under Fema

In this edition, we bring to you certain important articles on various aspects.

We have summarised the proposals of paper released by CBDT on Rule 10 of Income Tax Rules which deals with attribution of profit to PE. This is a welcome paper by CBDT which would lead to tax certainty. We request all of you to kindly read the summary and share your comments to CBDT at the earliest.

The next article is on ‘Derivates under FEMA’. In this article, we bring to you the basic concepts of derivates and the FEMA regulations applicable to such derivatives. My team also wrote a piece on the global data protection regulations.

Read more: SBS Wiki E Journal May 2019

Key Topis:

AUDIT

• AUDIT CONSIDERATIONS FOR BANK GUARANTEE

INDIRECT TAX

• COMPOSITION SCHEME ON SERVICES

DIRECT TAX

• SECTION 79 OF INCOME TAX ACT, 1961

UPDATES

COMPANIES ACT, 2013

• RULES, CIRCULARS, NOTIFICATIONS AND ORDERS ISSUED DURING THE MONTH OF APRIL, 2019