by Rajput Jain & Associates

Key feature of Foreign Contribution (Regulation) Amendment Bill 2020

Key Highlights Foreign Contribution (Regulation) Amendment Bill 2020

www.carajput.com; Foregin contribution (regulation) amendment bill, 2013

www.carajput.com; Foreign contribution (regulation) amendment bill, 2013

Admin expenditure cap: presently, organizations are permitted to spend up to 50% of the foreign funds earned during the fiscal year on admin spend. The Bill now aims to limit it to twenty percent of the cost of paying wages, professional fees, energy costs, travel, and other expenditures.
Suspension in the event of a violation: Ministry of Home Affairs MHA will have the power to suspend the FCRA bank account in the event of any violation of the FCRA rule.

Aadhaar of members of the board & passport copy and OCI Card: Organizations submitting for registration, prior authorization or renewal of FCRA registration shall be allowed to include, as an identity document, the Aadhaar number of all of their officeholders or directors or other main officials, by whatever name they call, provided under Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, or a copy of the Passport or Overseas Citizen of India Card, in case of a foreigner.
No-Sub-Granting: no entity that is registered and has received a certificate or has acquired prior authorization under FCRA and receives any foreign contribution shall pass such foreign contribution to any other organization. This change would be a major blow to NGOs working collaboratively on projects and initiatives, which could also put ‘foreign funding agencies’ or ‘foreign grant-making organizations’ listed under the FCRA in difficulty.
FCRA Bank Account with SBI: The bill now recommends that organizations which have been granted registration or prior authorization under FCRA shall receive a foreign contribution only in an account designated as “FCRA Account” by the bank, which shall be opened by the bank for the purpose of remittance of a foreign contribution to that branch of the SBI in New Delhi, as stated by the Central Government.
The rationale for amendment: The rationale of the Indian Government for these drastic and tedious amendments can be found in the Declaration of Items and Reasons. Statement to the contrary:

The cumulative inflow of foreign contributions almost doubled between 2010 and 2019, but many beneficiaries of foreign contributions did not make use of the same for the purposes for which they were registered or given prior authorization under the stated Act.
Most of them have also been found lacking to ensure simple regulatory compliance, such as the filing of annual reports and the management of correct accounts.
Criminal investigations have also had to be launched against hundreds of such non-governmental organizations that have allowed foreign donations to be totally misappropriated or misused.
It is therefore important to streamline the provisions of the said Act by strengthening the enforcement process, increasing accountability and transparency in the receipt and use of thousands of crores of ropes each year, and by promoting genuine non-governmental organizations or associations working for the welfare of the people.

Voluntary withdrawal of the registration of FCRA – Boon or Bane? : MHA may authorize any organization to surrendered the certificate granted under this Act if, after carrying out such an investigation as it deems necessary, MHA is comfortable that that organization has not contravened any of the provisions of FCRA, and the management of foreign contribution and properties, if any, resulting from such contribution has been entrusted to the competent authority as provided for in Section 15(1).
Although this amendment may appear to be a benefit for entities that are no more interested in obtaining foreign funds, it will be a ban on organizations that may have produced assets ( e.g. colleges, hospitals, vocational training centers) from foreign funds. Upon surrender of the FCRA registration, resources obtained from foreign donations may also have to be transferred to the competent government author.

Investigation prior to the renewal of FCRA: it is now proposed that MHA, prior to the renewal of the certificate, make such an inquiry as it deems necessary in order to satisfy itself that such organization has fulfilled all the requirements set out in Section 12(4) of FCRA 2010, i.e. the filing of annual returns on-line Form FC-4, quarterly intimation, etc.

Rajput Jain & Associates

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

by Rajput Jain & Associates

Key Highlights of RACP Bill, 2020 and Companies (Amendment) Bill,2020

Direct Tax

Highlights of Redevelopment Assistance Capital Program (RACP) Bill, 2020

www.carajput.com; RACP Bill, 2020

1) New requirements for reregistration of charitable trusts etc. Approval under section 10(23)(C).

It is suggested that Re-registration u / s 12A/12AA and 80 G come into force from 1st April 2021 from the earlier extended date of 1st Oct 2020.

2) Extension of the time period to 31^st march 2021 from 30^th Nov for ITR Filing for the Assessment Year 2020-21.

3) Extension for furnishing a Certificate u / s 192 from 15 August to 31-3-2021.

4) As per section 54 to 54 GB

The Extension of the time period to 31^st Dec 2021 from 29^th Sept for compliance or completion.
The Extension of the time period to 31^st march 2021 from 30^th Sept for completion or compliance.

5) Chapter-VI A pursuant to heading B-

The Extension of the time period to 31^st Dec 2020 from 30^th July for the compliance or completion.
The Extension of the time period to 31^st March 2021 from 31^st July for the compliance or completion.

6) As per Vivad ke vishvas Act-20

Extension of Time Period to 31^st Dec 2020.
Extension of Time Period to 31^st march 2021 from 31^st Dec 2020 for completion or compliance.

7) Extension of the time period to 31^st march 2021 from 30^th Sept. For ITR filing for the Assessment Year 2019-20

8) No expansion of the tax payments.

9) Interest rate 3/4 percent pm or part thereof for late payment of taxes. (Only if tax payable is over Rs.1 lac)

10) Extension of the time period to 31^st march 2021 from 31^stOct for Filing of Audit Report under the Provision for Assessment Year 2020-21.

11) Return for TDS / TCS is to be extended to 31^st March 2021 for Feb & March-20 and Q 4 for March 20 (as applicable) for all the Sub-sections.

12) No liability shall be imposed & No evaluation be disciplined for the delay in paying taxes.

Explanation-The delay period refers to the interval between the due date and the payment time.

In Addition,

Further improvements are also suggested in the Income Tax Act.

Companies (Amendment) Bill, 2020

Highlights of Companies (Amendment) Bill, 2020

www.carajput.com; Comapnies Amendment Bill, 2020

www.carajput.com; Companies Amendment Bill, 2020

On Saturday, Lok Sabha introduced the company law amendment bill, which introduced 72 amendments to the Companies Act, 2013 to decriminalize and modify or abolish fines for different offenses, directed at enhancing the ease of doing business.

New chapter for Producer Company

Introduction of a new Chapter XXIA in the act related to Manufacturer Companies, which was originally part of the Companies Act of 1956;

Reduced penalty for Small companies, OPC and Start-Up companies

For extended the applicability of section 446B, referring to lesser penalties for small businesses and one-person companies, to all provisions of the Act which attract financial penalties and also extend the same reward to Producer Companies and start-ups

Direct Listing in foreign Jurisdiction

Allowing provisions for the direct listing of Indian public entities’ shares in allowable foreign jurisdictions

Update in the definition of Listed Company

Empowering the government to exclude private companies issuing specified classes of shares on exchanges from the concept of a listed company, in conjunction with the Securities and Exchange Board of India.

Remuneration for Qualified Director and NED

Furthermore, it is recommended that the exception given to main administrative roles from government-mandated pay limits in case a corporation faces liquidation be applied to cover independent directors as well.

Decriminalization of Companies Act

To comply with an in-house arbitration tribunal process, 23 compoundable offenses must be recategorized out of 66 compoundable offenses under the Act. Moreover, there will be seven compoundable offenses omitted.
35 complex offenses, referred to as non-compoundable, include fraud, public interest damage or deception.
48 sections have been modified to render decriminalization and 17 sections have been modified to improve living comfort;
These 66 violations, according to the law, were minor, technological or administrative violations and did not include fraud, harm to the public interest or other non-compoundable offence. That will also reduce the pressure on the Law Tribunal for the National Corporation.

Fresh Bench in NCLAT

It also allows for the creation of additional National Corporate Law Appeal Tribunal benches at locations designated by the Centre.

Corporate social responsibility ( CSR)

Bill provisions allowed undertakings to carry over excess corporate social responsibility ( CSR) spending on successive years and exempted undertakings with a CSR requirement below Rs 50 lakh from the need to constitute a CSR committee.

Regards

Rajput Jain & Associates

by Rajput Jain & Associates

TAX AUDIT CEILING U/S 44AB FROM RS 1 TO RS 5 CR APPLIES W.E.F AY 2020-21

TAX AUDIT CEILING U/S 44AB FROM RS 1 TO RS 5 CRORE APPLIES WITH EFFECT FROM AY 2020-21

www.carajput.com; Tax Audit

There might be some uncertainty between specialists as to the assessment year from which the modification to raise the tax audit ceiling under section 44AB from Rs 1 crore to Rs 5 crore applies, i.e. whether the amendment means with effect from AY 2020-21 (for accounts for the financial year 2019-20) or from AY 2021-22 (The financial year 2020-21).

Pursuant to paragraph (a) of Section 44AB, as it stood before the Finance Act of 2020, any person engaged in the company was required to have audited accounts if the overall sales, turnover or total receipt in business exceeds Rs.1 crore. The Finance Act, 2020 raised this ceiling to receive audited accounts from Rs.1 crore to Rs.5 crore in those situations where the sum of all collections in cash during the year and the sum of all payments rendered in cash over the year does not cross 5 % of total receipts and total payments, respectively.

Who is a binding and required Compulsory Tax audit?

A taxpayer is expected to carry out a tax audit if revenue, turnover, or gross business receipts surpass Rs 1 in the financial year. However, under some other cases, a taxpayer might be forced to have their accounts audited. In the tables below, we have classified the different circumstances:

POINT TO BE NOTED: The requirement of Rs 1 crore for a tax audit is expected to be raised to Rs 5 crore with effect from AY 2020-21 (FY 2019-20) if the taxpayer’s cash receipts are restricted to 5 percent cent of the gross receipts or turnover and if the taxpayer’s cash payments are restricted to 5 percent of the aggregate payments. Below are different categories of taxpayers below:

www.carajput.com; Tax Audit Applicability

Category of person	Threshold
Business www.carajput.com; Tax Audit Applicability
Carrying on business (not opting for presumptive taxation scheme*)	Total sales, turnover or gross receipts exceed Rs 1 crore in the FY
Carrying on business eligible for presumptive taxation under Section 44AE, 44BB or 44BBB	Claims profits or gains lower than the prescribed limit under the presumptive taxation scheme
Carrying on business eligible for presumptive taxation under Section 44AD	Observes taxable income below the limits specified by the presumptive taxation system and has income that exceeds the basic limit.
Carrying on business and is not eligible for presumptive taxation under Section 44AD by opting for presumptive taxation in any one financial year of the lock-in period, i.e. 5 consecutive years from the date on which the presumed taxation system was implemented.	If the income reaches the permissible amount not to be paid for tax in the following five successive tax years from the financial year in which the assumption of tax was not introduced,
Carrying on business which is declaring profits as per presumptive taxation scheme under Section 44AD	If the overall revenue, turnover, or gross receipts for the financial year do not exceed Rs 2 crore, the tax audit would not apply to such entities.
Profession
Who Carrying on the profession	Total gross receipts exceed Rs 50 lakh in the FY
Who Carrying on the profession eligible for presumptive taxation under Section 44ADA	1. Claims for profit or gains below the permissible level under the presumptive taxation scheme 2. Profits increases the permissible sum not to be paid for taxation
www.carajput.com; Tax Audit Applicability Business loss
In case of loss from carrying on of business and not opting for a presumptive taxation scheme	Total sales, turnover or gross receipts exceed Rs 1 crore
If the gross income of the taxpayer exceeds the basic threshold but has suffered a loss from carrying on a business (not opting for a presumptive taxation system)	In case of loss from business when sales, turnover, or gross receipts exceed 1 crore, the taxpayer is subject to tax audit under 44AB
If continuing on business (opting a presumptive tax scheme under section 44AD) and making a business loss but with profits below the basic level	In this Tax audit not apply
If going on business (presumed tax scheme under section 44AD applicable) and making a business loss but with profits above the basic threshold	Declares taxable income far below limits specified by the presumed tax scheme and has income that exceeds the basic level.

It should be observed that there is no uncertainty in the amendment on this subject. It is explicitly mentioned in the amendment that it is valid from AY 2020-21 (FY 2019-20). In this regard, it is necessary to notice that the Memorandum of Understanding on the provisions of the Finance Bill 2020 and the Clauses Notes created as part of the Finance Bill 2020 clearly state that ‘These amendments will take effect from 1 April 2020 and will therefore apply in reference to the assessment year 2020-2021 and corresponding assessment years.’

As a result, the amendment made to section 44AB will apply from AY 2020-21 (Financial Year 2019-20) itself and no individual engaged in business will be allowed to obtain the accounts audited for FY 2019-20 if the revenue does not cross Rs 5 crore during that year given that the specified condition is met, i.e. the total of all cash receipts and the combination of all payments.

For effective from 01/04/2020, that is to say from the assessment year 2020-21, this requirement is changed as follows:

The threshold limit has been updated in order to increase it for an individual engaged in business from Rs . 1 crore to Rs . 5 crores if the following criteria are satisfied.

www.carajput.com; Thresshold limit for Business Assesse

www.carajput.com; Threshold limit for Business Assess

The sum of all receipts in cash in the preceding year shall not exceed 5 percent of such revenues.
The sum of all payments in cash during the previous year does not exceed 5 percent of all expenditures.

Through AY 20-21 the stated date shall be one month before the due date for the income tax return referred to Section 139(1). Thus, I inform you that the 44AB limit is still 1 crore (except as indicated above) and the 44AD limit is Rs . 2 crores. Also, there is NO Improvement IN FINANCE BILL 2020 in Section – 44AD, which deals with a special provision for calculating income and earnings of industry on a presumptive basis.

As a result of such an amendment, some strange situations could arise which CBDT should explain.

It should be noted that the modification of the increased threshold extends to any ‘person’ engaged in business and, thus, the value of the modification is available to all individuals, corporations, LLP, Firms, etc. engaged in business.

However, it should be explained that the amendment made is only applicable to an individual engaged in ’employment’ and thus an individual engaged in ‘profession’ would continue to be allowed to have audited accounts if the gross receipt in the profession exceeds Rs.50 lakh in the year.

Due to the planned amendment under the 2020 budget, the scenario is as follows:

– For assesse who have TO>2 crores (but less than 5 crores and have cash receipts and cash payments not exceeding 5 percent), they are NOT liable for a tax audit. This holds true regardless of whether the assessee shows income of up to 6 percent or 8 percent in 44AD or not.

– For assesse who have TO<2 crores (but have cash receipts and cash payments not exceeding 5 percent), they are liable for tax audit if they do not have an income of up to 6 percent or 8 percent as per 44AD.

Regards

Rajput Jain & Associates

by Rajput Jain & Associates

Reasons for the Movement of Goods under the GST

GST is a tax-based destination, i.e. goods/services would be taxed at the place where they are purchased and not at the point of origin. So, the state in which they are consumed would have the right to receive the GST.

This, in effect, makes the idea of the place of supply essential to GST, as all the regulations of GST revolve around this one.

The place of supply of goods under the GST determines if the transaction will be counted as intra-state or interstate, and the levy on SGST, CGST & IGST will be calculated and the results.

GST: Place of Supply In case There is a Movement of Goods

Reasons for the Movement of Goods under the GST

Supply – In case of outward supply of goods, the supply liable to GST as per Schedule I or inward supply of goods liable to tax under reverse charge by a taxable person.

Export or Import – In case of export of goods from or import of goods into the territory of India

Job Work – When the principal and the job worker are registered persons the EWB will be generated by the principal when he occasions the movement of goods for job work and by the job worker when he occasions the movement after job work, and by the recipient, if the job worker is not a registered person.

SKD or CKD – The goods may be supplied on semi-knocked down (SKD) condition or the goods may be supplied in batches to be assembled at the place of the recipient in case of completely knocked down (CKD) conditions, the e-way bill is to be generated, based on the value of the product being transported

Line Sales– When the goods are taken in the delivery van in a particular route to effect sale to all the retailers, the movement of goods is to be covered by an e-way bill. When the goods are moved under ‘Recipient not known’, they may not know the details of sales. However, the total value of the consignment e-way bill has to be generated.

Sales Return – When the recipient rejects and sends back the goods they have to generate an e-way bill or the supplier will have to generate an e-way bill on the capacity of the recipient of such goods

Exhibition or Fairs – When the registered person is going to participate in an exhibition or fair, and the goods are moved from the godown of such person, then the e-way bill is to be generated

For own use – When goods are purchased for personal use, the supplier will generate EWB

Others – For any item other than the above, such as the movement of goods for provision of supply of service or for any other purpose which involves movement of goods, EWB should be generated

GST: No Movement of Goods

by Rajput Jain & Associates

FEMA Compliance for FDI in Equity share in India

FCGPR – FEMA Compliance for FDI in Equity share in India

OVERVIEW

FDI Stands for Foreign Direct Investment (FDI) Reserve Bank of India has made regulations and issued certain notifications in relation to the receipt of Foreign Direct Investment (FDI) in India.

RBI has allowed the receipt of Foreign Direct Investment (FDI) by the way of the issue of capital instruments in India.

Further, the company receiving Foreign Direct Investment (FDI) has to make reporting of receipt of FDI in form FCGPR.

Form FCGPR is required to be filed in case the company is issuing equity shares, Compulsorily Convertible Preference Shares (CCPS)/ Compulsorily Convertible Debentures (CCD) to a person resident outside India.

What is FCGPR?

FCGPR stands for the Foreign Collaboration general permission route. RBI has specified Form FCGPR for making reporting of Foreign Direct Investment (FDI).

Whenever a Company issues equity shares, Compulsorily Convertible Preference Shares (CCPS)/ Compulsorily Convertible Debentures (CCD) in consideration of money received from a person resident outside India by way of Foreign Direct Investment (FDI), then the company needs to file FORM FCGPR using FIRMS Portal.

Time Limit for filing FORM FCGPR

www.carajput.com; time limit for FORM FC-GPR

Form FCGPR needs to be filed within 30days of allotment of shares / Compulsorily Convertible Preference Shares (CCPS)/ Compulsorily Convertible Debentures (CCD).

Applicable Regulation

Inward remittance of Foreign Direct Investment (FDI) by a person resident outside India is regulated by Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017

Document Required for filing FORM FCGPR

The following documents shall be required for filing Form FCGPR:
1 Board Resolution for Allotment of Shares / Compulsorily Convertible Preference Shares (CCPS)/ Compulsorily Convertible Debentures (CCD)

2 Memorandum of Association of the company in case the shares are allotted for the subscription to the Memorandum of Association (MOA)

3 Foreign Inward remittance Certificate (FIRC) from AD Bank

4 KYC from AD Bank

5 Valuation certificate regarding the value of shares from the Chartered Accountant

6 CS Certificate in the prescribed format

7 Declaration by Authorised representative of the Company

8 Debit Authorisation for debiting charges from the Bank

9 Declaration regarding issue price by the directors of the Company

10 Reason for delay in submission, if any

Routes of Foreign Direct Investment(FDI)

FDI can be received by way of the following routes:

1 Automatic Route: where no approval is required for getting inward remittance from a person resident outside India.

2 Government Approval Route: There are certain sectors in which government approval is required for receiving inward remittance from a person resident outside India.

Prohibited Sector for Foreign Direct Investment(FDI)

A person resident outside India cannot make any Foreign Direct investment in any of the following sectors:

1 Lottery Business. It includes the Government / private lottery or online lotteries

2 Gambling and betting including casinos

3 Chit Fund (except for investment made by NRI’s and OCI’s on a Non – repatriation basis)

4 Nidhi Company

5 Trading in Transferable Development Rights (TDR’s)

6 Real Estate business or construction of Farmhouses

7 Manufacturing of Cigars, cheroots, cigarillos and cigarettes, tobacco or of tobacco substitutes.

Note: The prohibition is on the manufacturing of the products mentioned and foreign investment in other activities relating to these products including wholesale cash and carry, retail trading, etc. will be governed by the sectoral restrictions laid down in Regulation 16 of FEMA 20(R).

8 Activities/sectors not open to private sectors investment i.e Atomic energy and Railway operations

9 Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for Lottery Business and Gambling and Betting activities.

Process for filing FORM FCGPR

The following process shall be followed for reporting of Foreign Direct Investment (FDI) in India:

Step 1: Registration for Entity User on Firms Portal

The company has first of needs to get the registration of Entity user on the FIRM’s Portal in case the reporting of FDI is being made the first time for the Company.

In the case of subsequent reporting, the company does not need to make any registration for entity users.

Documents to be attached: Authority letter in signed Format, PAN of Entity, and PAN of Authorised Representative of the company.

After registering an entity user, the concerned authority will check and verify the details and documents filed and after being satisfied, a Password will be sent to the registered email ID which needs to change.

www.carajput.com; Entity User Registration

Step 2: Creation of Entity Master

After registration of entity user, there needs to create an entity master by logging into the FIRM’s Portal using the User ID and Password as created in the entity user process.

The Company needs to fill all the details as required in the entity master form in the FIRM’s Portal and then click on “Submit”.

Step 3 Registration for Business User on Firms Portal

After the creation of Entity Master, the company needs to apply for business user registration.

One important point to be noted is that here in the business user form the company needs to select the IFSC Code of the AD Bank from the Drop Down. So, the company should confirm the IFSC Code to be chosen in the form in advance from the Concerned Bank.

Documents to be attached: Authority letter in signed Format, PAN of Entity, and PAN of Authorised Representative of the company.

www.carajput.com; Business User Registration

Step 4 Reporting of FDI Received

The Last step is to make the reporting of remittance received from a person resident outside India. The company needs to fill all the required details and attach the relevant documents as mentioned above while making reporting in this form and then submit the Form.

www.carajput.com; RBI

After filing Form FCGPR, the AD Bank or both AD Bank and RBI as the case may be will check the form and in case any discrepancy is found in the Form, then they will reject the Form giving the appropriate reasoning or otherwise they will approve the Form.

In case the form got rejected, then the company needs to file the Form again after removing all the discrepancies.

Consequences of late filing of FORM FCGPR

If the Company makes reporting of Foreign Direct Investment (FDI) after the period of 30 days of allotment of shares / CCPS / CCDs, then the Form will first be checked by the DA Bank and then AD Bank will send the form further to the Respective regional Reserve Bank of India.

Further, the Reserve Bank of India will either charge late submission Fees (LSF) or ask the Company to go for compounding for approval of Form FCGPR.

How Rajput Jain & Associates can Assist

We offer all kinds of Consultancy, Compliances, and Registration Services in relation to Foreign Direct Investment (FDI) in India. We have impaneled various experts to provide the expert advisory, Registration, and Compliances services for Foreign Direct Investment (FDI) in India.

The services that we offer include in Foreign Direct Investment (FDI) in India are:

FEMA Compliances related to Foreign Direct Investment (FDI)
Reporting to RBI in relation to Foreign Direct Investment (FDI)
Drafting of documents for reporting to RBI
Valuation of shares
Advising various routes for remitting the money in India
ROC Compliances in relation to Foreign Direct Investment (FDI)
Liaisoning with AD Bank and RBI in relation to compliances and FDI matters

Frequently Ask Question(FAQ)

Q 1 Where we can make reporting of Foreign Direct Investment (FDI)?

Ans Reporting of Foreign Direct Investment (FDI) can be made online using FIRMS Portal.

Q 2 What is the Time limit for allotment of shares for FDI received in India?

AnsThe shares need to be allotted within 60 days of receipt of Foreign Direct Investment (FDI) in India.

Q 3 Do we require to file form FCGPR for issuance of Preference shares or debentures?

Ans Form FCGPR is required to be filed if the Preference shares or debentures issued are fully and compulsorily convertible in shares, otherwise, it would be treated as ECB.

Q 4 Do we require to file form FCGPR for partly paid equity shares?

Ans Yes, Form FCGPR is also required to be filed for issuance of partly paid shares.

CS Akshay Gupta is a diligent and innovative qualified Company Secretary, striving in matters related to Corporate Law. Akshay takes a deep interest in corporate, NBFC and FDI matters and his specialization includes corporate Compliance, FEMA Compliances, and NBFC Registration. As a Company Secretary, Akshay is passionate about matters relating to corporate funding, NBFC, and its compliances.

Don’t Worry! Our experts are here to help you. Get in Touch with our team for easy filing of SMF Form FCGPR.

Write to RAJPUT JAIN & ASSOCIATES or call us on________________

by Rajput Jain & Associates

Three-tier TP Documentation & threshold Requirement

Three-tier Transfer Pricing Documentation & threshold Requirement

www.carajput.com; III-Tier

Taxpayers are expected to maintain, on a yearly basis, a collection of detailed information and documentation relating to international transactions performed with AEs or specified domestic transactions. Rule 10D of the Income Tax Rules of 1962 provides for accurate records and documents to be kept by the taxpayer. These specifications may generally be divided into two sections.

The very first part of the rule sets out required documents/data which must also be preserved by a taxpayer; the second part of the rule specifies that sufficient documentation is kept to support the data/analysis/studies recorded below the first part of the law. The second part also includes a suggested list of such supporting documentation, like government papers, reports, surveys, technical papers/market research studies performed by credible organizations, price publications, relevant agreements, agreements, and communications.

Taxpayers with cumulative foreign transactions just below the defined INR 10 million threshold and specified domestic transactions below the INR 50 million thresholds are exempted from keeping the defined documents. However, even in these situations, it is crucial that the documents preserved should be sufficient to sustain the price of the arms-length of international transactions or defined domestic transactions.

Both required records and details must be preserved at the same time (to the extent possible) and must be in order by the due date of the filing of the tax return. Businesses subject to the regulations are usually expected to file their tax returns on or before 30 November following the conclusion of the tax year in question. The required records must be retained for a period of nine years from the end of the applicable tax year and must be revised on a continual basis on an annual basis. Supporting documents provisions also extend to multinational companies whose income is subject to Indian tax liability.

Applicable Transfer Pricing Documentation

www.carajput.com; Transfer Pricing

	Purpose	Timeline
Applicable -Form 3CEB	Chartered Accountant’s report in respect of the international transaction	Within 8 months from the end of the financial year.
		Last Date:- 31st October 2020
TP Study Report	Analysis to show international transactions are at arm’s length	Within 8 months from the end of the financial year.
		Last Date:- 31st October 2020

Structure of three-tier transfer pricing documentation:

www.carajput.com; the structure of III-Tier· Local File-This must be recorded by the Organization itself.

· Master File-Requires to be filed with the IT department.

· Nation by Nation Study – Requires to be sent to the IT Department.

Applicability of CbCR

Particulars	Threshold
Consolidated revenue of International Group	INR 5500 Crore

Note:

Turnover to be taken for Master File is the Accounting Year (i.e., for F.Y 2019-20, accounting Year will be 2019-20)

Compliance applicable on Transfer Pricing

Master File– Forms and Timelines

Section 92D (Master File Forms)	Purpose	Conditions Apply	Timeline
Form 3CEAA	Part A: – Basic Limited details to be furnished.	Every constituent entity/ designated constituent entity of an international group has to file Part-A irrespective of the turnover.	Within eight months from the end of the FY.
			For Assessment Year 2020-21:- 30th November 2020
	Part B: – Detailed details to be furnished. (Broadly same as OECD Master File)	1. Total revenue > 500 cr; and
		2. Aggregate international transactions> 50 cr or; intangible related transactions > 10 cr.
Form 3CEAB	To notify the Constituent Entity designated for furnishing Master File	When there is more than one CE in India.	30 days before the due date of furnishing Form 3CEAA.
			For Assessment Year 2020-21:- 31st October 2020

Transfer pricing rules wouldn’t really apply if the arms-length price results in a downward revision of the income taxed in India.

Burden of proof

The responsibility of establishing the arm’s length existence of the transaction rests mainly with the taxpayer. If during the audit process on the basis of content, details, or records in their possession, the tax authorities are of the opinion that the arm’s-length price did not apply to the transaction or that the taxpayer did not maintain / Produce sufficient and accurate documentation / Details/information, the overall taxable income of the taxpayers may be computed as follows after the hearing right has been provided.

Compliance Under CBCR

CbCR – Forms and Timelines :

Particulars	Purpose	When to file?	Timeline
Form 3CEAC	To intimate Alternate Reporting Entity or PE (Whether itself or some other)	If international Total revenue > 5500 crores (If CE is resident in India)	2 months prior to the due date for furnishing Form 3CEAD.
	To intimate Alternate Reporting Entity or PE (Whether itself or some other)
			For Assessment Year 2020-21:- 31st October 2020
Form 3CEAC	CBCR Reporting requirement	If international Total revenue > 5500 crores	Within twelve months following the end of reporting accounting year.

			For Assessment Year 2020-21:- 31st December 2020
Form 3CEAC	To notify the Constituent Entity designated for furnishing CBCR, only if there is more than one Constituent Entity in India (and conditions given in note 1 below are fulfilled)	If international Total revenue > 5500 crores	Not Specified yet as per the Final Rules.

S.No	Turnover	Compliance to be made
1. a)	Upto 500 Crores	All Constituent Entity /Designated Constituent Entity of the international group to file Part A of Form 3CEAA
b)	>500 crores but < 5500 crores
c)	International transaction < 50 crore and;
d)	Intangible related transactions < 10 crores
2. a)	> 500 crores but < 5500 crores; and	Part A and Part B of Form 3CEAA
b)	International transaction > 50 crore; or
c)	Intangible related transactions > 10 crores
3. a)	> 5500 crores	CBCR requirements apply on entity
4. a)	>5500 crores; and	Details to be Maintain and furnish Master File. Also, CBCR requirements apply on entity
b)	International transaction > 50 crores; or
c)	Intangible related transactions > 10 crores

Time-Time for Creating Transfer Pricing Documents

www.carajput.com; Creating Transfer pricing

Regrettably, the timeline for processing the report varies from country to country. Many countries need details to be ready when a tax return is filed. Other countries want to see something ready at the time of the audit.

Even so, the whole rationale of the transfer pricing legislation is to consciously enforce the Arm’s Length concept. You do this by determining the right transfer price before the actual transaction takes place. What this means is that you build up the transfer pricing paperwork over the year when you’re doing the business. Not at end of each year, like that.

Summarizing

The latest events have given rise to a renewed emphasis on transfer pricing practices. Standard reporting standards are now in place to address (assumed) abusive tax practices.

The aims of such provisions are, first of all, to increase awareness of the transfer pricing legislation and the environment of adherence. In addition, the report provides policymakers with an analysis of possible threats. In the end, it makes the future audit much simpler.

There are many three reports to be given. Master File, Local File, Country-by-Country Chart. The Country-by-Country report is for major Multi-National Companies with a turnover of Dollars 750 million or more.

by Rajput Jain & Associates

Top Govt Scheme Launched for the Public & National benefits

Pradhan Mantri Matru Vandana Yojana

www.carajput.com; Parthan Mantri Matru Vandana Yojana

Pradhan Mantri Matru Vandana Yojana – PMMVY is a maternity support scheme provided by the Indian government, in which pregnant women and lactating women receive a cash reward of Rs. 5,000. The opportunity is given for the family’s first living child to meet the unique maternal and newborn health conditions.

Targets of Parthan Mantri Matru Vandana Yojana

The Government-run policy seeks to meet the following goals:

To offer benefits for the income loss in cash benefits, so that the mother can take sufficient rest before and after the first living child is born. It is a partial payout and is part of a deal to give the woman on average a cumulative amount of Rs. 6,000. After institutional distribution, the remaining cash reward (of Rs . 1,000) comes under Janani Suraksha Yojana (JSY).
Enhancing wellbeing promoting activity in pregnant women and mothers who are lactating.

The benefit of PMMVY especially giving to :

www.carajput.com; Targets of Parthan Mantri Matru Vandana Yojana

For pregnant women and lactating mothers except those who are in routine jobs with the Central / State or Public Sector Undertakings (PSUs) or those who under some statute enjoy similar benefits.
For qualifying pregnant women and lactating mothers getting their pregnancy with the first child in the family on or after January 01, 2017.

The date and point of a beneficiary’s conception are counted for the date of her Last Menstrual Period (LMP), as shown in the Mother and Child Security (MCP) card.

How to enrol for a Pradhan Mantri Matru Vandana Yojana?

A recipient may only register for the programme within 730 days of their Last Menstrual Period (MP). Under the system the LMP reported in the MCP card is regarded as the Date of Pregnancy.

Process for getting benefit under PMMVY

A. Offline Process

Step 1: Qualifying women wishing to take advantage of maternity benefits under the scheme must register for the scheme at an Anganwadi Centre (AWC) or an authorised (government) health facility, whichever is the implementation department for that specific State / Union Territory. You must file within 150 days of LMP.

Necessary Documents:

Copy of Proof of Identity
Copy of the Bank / Post Office Passbook
An agreement/consent properly granted between the claimant and her spouse,
Duly filled out Form 1A
MCP-card copy

The application form can be accessed free of charge from the AWC / approved health centre, or downloaded from the Ministry of Women and Child Development website. For future documentation, the claimant should get an approval of registration from the implementing authority.

Step 2: After 6 months of pregnancy, the recipient may demand the second instalment of the benefit by submitting the properly filled Form 1B at the AWC / approved health care facility, along with a copy of the MCP card showing at least one Antenatal Check-up (ANC) and a copy of the Form 1A recognition slip.

Step 3: In order to assert the third instalment, the recipient must request a properly filled out Form 1C along with a copy of the childbirth certificate, ID evidence and MCP card indicating that the infant has earned the first cycle of CG, OPV, DPT and Hepatitis B immunisation.

B. Online Process

Step 1: Visit https:/pmmvy-case.nic.in and log in to the PMMVY software using authentication information from the facilitator of the scheme (AWC / approved health facility).

Step 2: To enrol under the program, click on the ‘Current Beneficiary’ tab by filling in the information as per the Beneficiary Registration Form (also called Application Form 1A). You should follow the instructions for filling out the form given in PMMVY CAS User Manual.

Step 3: After 6 months of pregnancy, log in to the PMMVY CAS app again and click on the ‘Second Update’ tab and fill out Form 1B according to the guidance in the user manual.

Step 4: After the child’s birth and completion of his/her first CG, OPV, DPT and Hepatitis B immunisation period, log in to the PMMVY CAS app and click on the ‘Third Update’ tab and fill out Form 1C according to the instructions given in the user manual.

See the ‘Offline Protocol for Availing Maternity Benefits under PMMVY’ segment above to know the documentation needed at each of the points.

Situations

A. In the case of Miscarriage or still Birth

A recipient will be entitled to claim the remaining instalment(s) for a potential pregnancy in the event of a miscarriage or stillborn.

For example, whether the recipient had a miscarriage after earning the first cash reward payment, she will then be able to collect the second and third instalments for a subsequent birth.

B. In the case of Infant Mortality

In the case of child mortality, a recipient will not be entitled under the programme to seek compensation if she had already received all the maternity benefit instalments under PMMVY.

KISAN VIKAS PATRA

www.carajput.com; KISAN VIKAS PATRA

Introduction

Kisan Vikas Patra (KVP) is an investment scheme in the form of certificates available at Indian Post Offices. It’s a small fixed rate investing plan intended to double the contribution over a specified period of time (124 months in the issue currently available). The scheme is established to enhance consumption and savings among the population over the long term. It is ideal for investors who are hesitant to take chances, have excess capital and are searching for guaranteed returns.KVP certificates may be obtained from select public sector banks as well as from India Post Offices, in compliance with the existing laws.

Varieties of KVP

Single Holder certification: Provided to an individual adult or on behalf of a minor
Joint A: Provided collectively to two adults. This is liable to the individuals or the person who survives until maturity
Joint B: Provided jointly with two adults and charged to either the owner of the survivor before maturity

Characteristics of KVP

Kisan Vikas Patra is a Government-scheme who provide fixed return and that produces secured dividends. The main characteristics of the Scheme are as follows:

Certificates are currently available in the Rs 1,000, Rs, 5,000, Rs 10,000 and Rs 50,000 variants.
Certificates are readily accessible at all Indian Post Offices and KVP Application forms can be found online as well as at Indian Post Offices and at some select banks.
The maturity period can vary on the basis of rate changes made by the ministry of finance. The maturity value is pre-printed on the issued certificate.
Kisan Vikas Patra can be moved quickly from one post office to another and from person to person.
Kisan Vikas Patra Account may be initiated with a minimum initial Rs.1000 deposit (in Rs.100 multiples);
There is currently no upper limit on contributions under the KVP.
According to terms and conditions, premature encashment permitted after two and a half years.

Eligible criteria for KVP

www.carajput.com; Eligible criteria for KVP

Eligibility conditions for investment in the KVP scheme are as follows:

In Kisan Vikas Patra, the Hindu Undivided Families (HUFs) and the Non-Resident Indians (NRIs) can not contribute.
The applicant must be an adult Indian citizen.
The parent/guardian can invest on the minor’s behalf

Advantages of KVP

KVP is not designed to target tax-savvy buyers. There are no tax deductions on the principal sum and the interest. But it also gives customers a few primary advantages. Some of the advantages are Explain here:

Kisan Vikas Patra can be used as collateral for receiving loans from banks at desired rates.
Long-term development of wealth as Kisan Vikas Patra helps you to remain invested for nearly 10 years and doubles your cash.
Transferable from person to person and from the post office to post office.
Ensured returns as a KVP certificate is a tool backed up by the government.
The customizable investing instrument, as KVP, does not have an upper limit.

Maturity Period of KVP

As per the latest amendment of the scheme, the maturity period is 10 years and 4 months (124 months). The sum invested will return after the term of the scheme has been finished. For example: If an individual has spent Rs.10,000, at maturity he/she will get Rs.20,000 at the end of the maturity.

Documents needed to receive Kisan Vikas Patra

To get a KVP certificate, the Applicant must supply copies of the following documents:

Proof of identity for KYC process (Aadhaar card / PAN / Voter ID card / Passport / Driving licence)
Application Form for KVP
Proof of Address
Certificate of Date of Birth

Download form to apply for KVP

To request for a Kisan Vikas Patra certificate, you must submit the application form online or get that from the Post Office directly. You need to fill out and submit this form at the Post Office.

Points to be remembered;

The purchase amount must be specifically shown in the form below. Prevent cutting and rewriting
Please state the check no. on the form if you make the payment by check
Specify whether KVP is acquired on the basis of single or joint ‘A’ or joint ‘B’ subscription. Where bought jointly, state the names both of beneficiaries
The full name, date of birth and the nominee’s address (if any) must be specified on the form
On submission of the form, the KVP certificate shall contain the name of the applicant, the date of maturity and the sum of the maturity
The document should be forwarded to the Post Office’s corresponding Postmaster General, where it is submitted
Payments can be made via Cheque or Cash against the KVP form
If the beneficiary is a minor, Specify the date of his / her birth (DOB), the name of the parent, the name of the guardian

Transfer of Kisan Vikas Patra

1.Post office to another post Office

The Department of Post, India has provided consent to the move of a certificate from one post office to another for the comfort of subscribers.

To facilitate the transfer from the registered post office to some other post office, the account holder must fill out the KVP Transfer Form-B and send it to the registered post office along with all the documentation required:

Records required for transfer of KVP Post Office:

Form B, properly filled and approved
Identity of proof (Aadhaar Card / PAN Card / Voter ID)
Address proof (Passport / Electricity bill / Water Bill / Bank statement)
Original certificate of KVP
Transfer confirmation certificate, signed by the account holder

2. One person to another person

The recipient must request a written application at the registered Post Office for the move of KVP Certificate from one person to another. In the following situations, the transfer is necessary-

Passing of a Deceased ‘s Certificate to his / her successor
From sole proprietors to mutual owners
From cooperative owners to sole proprietors
From beholder to statute magistrate

Calculation of maturity amount of Kisan Vikas Patra (KVP)

A detailed description of the measurement of the maturity and interest rates under Kisan Vikas Patra is given below.
Note: Minimum contribution expected to be Rs.1000

Duration →	15th Jan 2000-28th Feb 2001	1st March 2001-28th Feb 2002	3rd March 2002-28th Feb 2003	After 1st March 2003
Year↓	Amount Accrued ↓
1	NA	NA	NA	NA
2	NA	NA	NA	NA
2 Years 6 Months	Rs.1246	Rs. 1209	Rs. 1195	Rs. 1170.51
3 Years	Rs. 1302	Rs. 1274	Rs. 1256	Rs. 1207.95
3 Years 6 Months	Rs. 1407	Rs. 1327	Rs. 1305	Rs. 1267.19
4 Years	Rs. 1478	Rs. 1409	Rs. 1382	Rs. 1310.8
4 Years 6 Months	Rs. 1585	Rs. 1470	Rs. 1439	Rs. 1355.9
5 Years	Rs. 1668	Rs. 1572	Rs. 1534	Rs. 1435.63
5 Years 6 Months	Rs. 1779	Rs. 1644	Rs. 1602	Rs. 1488.49
6 Years	Rs. 1874	Rs. 1770	Rs. 1672	Rs. 1543.3
6 Years 6 Months	Rs. 2000	Rs. 1857	Rs. 1800	Rs.1649.13
7 Years	NA	NA	Rs. 1883	1713.82
7 Years 3 Months	NA	Rs. 2000	NA	NA
7 Years 6 Months	NA	NA	NA	1781.06
7 Years 8 Months	NA	NA	Rs. 2000	NA
8 Years & 8 Years 7 Months	NA	NA	NA	Rs. 1850.93
8 Years 7 Months	NA	NA	NA	Rs. 2000
More than 8 years 7 Months	NA	NA	NA	NA

Rate of interest offered under the scheme i.e. Kisan Vikas Patra

The interest rate applicable to Kisan Vikas Patra (KVP) can adjust periodically depending on the Ministry of Finance’s announcements. The average interest rate for KVP is 6.9 per cent per annum, which double the savings in 124 months.

Historical interest rates paid under the Kisan Vikas Patra scheme * are:

Time Period	Interest Rate of KVP
Q1 FY 2020-21	6.9%
Q4 FY 2019-20	7.6%
Q2 FY 2019–20	7.6%
Q1 FY 2019–20	7.7%
Q4 FY 2018-19	7.7%
Q3 FY 2018-19	7.7%
Q2 FY 2018-19	7.3%
Q1 FY 2018-19	7.3%

KVP compounded interest annually

Withdrawal of money before the expiry of the period

Investors are entitled to withdraw their investments under the scheme at any given time but there are some limitations:

No interest will be granted on premature withdrawals made within 1 year. Even the beneficiary will have to pay a tax according to scheme legislation.
Premature withdrawals made after 1 year for up to 2.5 years shall earn interest but at a discounted rate.
Premature withdrawal after a 2.5-year period will not incur any fines and will therefore earn interest at the appropriate rate.

Calculation of premature redemption value

Here’s an instance of measuring the balance assigned to the KVP certificate on premature redemption. Let’s say the denomination for a certificate was Rs.1000:

Encashment After	Amount to be Received (Including Interest)
2.6 yrs but less than 3 yrs	Rs.1,176
3 yrs but less than 3.6 yrs	Rs.1,215
3.6 yrs but less than 4 yrs	Rs.1,255
4 yrs but less than 4.6 yrs	Rs.1,296
4.6 yrs but less than 5 yrs	Rs.1,339
5 yrs but less than 5.6 yrs	Rs.1,383
5.6 yrs but less than 6 yrs	Rs.1,429
6 yrs but less than 6.6 yrs	Rs.1,476
6.6 yrs but less than 7 yrs	Rs.1,524
7yrs but less than 7.6 yrs	Rs.1,575
7.6 yrs but less than 8 yrs	Rs.1,626
8 yrs but before 8.6 yrs	Rs.1,680
8.6 yrs but less than 9 yrs	Rs.1,735
9 yrs but before maturity	Rs.1,793
On maturity	Rs. 2,000

Tax liability for Kisan Vikas Patra

Under this scheme, no tax-benefits are available. The accumulated interest is taxable under ‘Income from Other Sources,’ paid annually. And, 10 per cent TDS is deducted from the interest. Thus the final maturity amount is excluded from tax deductions.

Kisan Vikas Patra (KVP) vs. Fixed deposit(FD) vs. National Saving Certificate(NSC)

A Fixed Deposit is applied to a bank or NBFC managed financial instrument that provides borrowers with higher interest rates than saving accounts.

National Savings Certificate is an Indian Government Savings Bond that is used in India as a tool for small deposits and income tax saving schemes.

Basis of difference	Kisan Vikas Patra (KVP)	Fixed Deposits (FD)	National Saving Certificate (NSC)
Investment	Minimum- Rs.1000 Maximum- No limit	Minimum- Rs.50 Maximum- Not Limited	Minimum- Rs.100 Maximum- Rs.1,50,000
Rate of Interest	6.9% annually	Differs from bank to bank. Highest ROI is offered by IDFC bank i.e, 8.50%	6.8% annually
Maturity Period	10 years and 4 months	10 years. However, subscribers can withdraw money after 7 days from the date of investment	1. NSC under VIII issue mature in 5 years. 2. NSC under IX issue mature in 10 years.

Premature Withdrawal	Withdrawals are allowed before maturity but it is advised to keep the corpus invested for 8 years to get best returns	Money can be withdrawn as and when the subscriber wants, after 7 days	Withdrawals before maturity are very difficult and restricted
Liquidity	Lock-in period of 2 and a half years	No lock-in period. The tenure of Fixed deposits range from 7 days to 10 years	Lock-in period of 5 or 10 years
Tax Treatment	Returns on KVP are taxable	Tax saver FDs are tax exempted for up to Rs.1.5 Lakh under Section 80(c)	Enjoys tax benefits and exemption under Section 80(c)

Prime Minister’s Social Security Schemes

www.carajput.com; Social Security Schemes

Insurance plans and pension schemes in India are being widely overlooked. A relatively small number of Indians vote for protection schemes. Prime Minister Modi initiated three Social Security Programmers to allow more people to participate in those programmers: Pradhan Mantri Jeevan Jyoti Bima Yojana, Atal Pension Yojana and Pradhan Mantri Suraksha Bima Yojana

Here’s a summary on the three schemes of social security:

1. Pradhan Mantri Suraksha Bima Yojana (PMSBY)

www.carajput.com; Pradhan Mantri Suraksha Bima Yojana (PMSBY)

Due to the increasing importance of life insurance, the Prime Minister launched the PMSBY which provides life cover for people aged 18 to 70-year-old. For a small premium rate of only Rs. 12 per annum, this scheme guarantees that all those living below the poverty line can afford life cover.

In the event of an unexpected death or the insurance holder’s total disability, a sum of Rs. 2,00,000 will be paid to the family. And in case of partial handicap a sum of Rs. 1,00,000 will be given. In reality, PMSBY is interconnected with Jan Dhan Yojna. All who have their accounts under the Jan Dhan Yojana Scheme are liable under this scheme for life protection. The prime amount is deducted annually directly from the account. The insurance cover will be discontinued until the person is 70 years old or if the account balance isn’t adequate to subtract the annual premium.

2. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

www.carajput.com; Pradhan Mantri Suraksha Bima Yojana (PMSBY)

The PMJJBY is a Government-backed life insurance scheme. Figures reveal that just 20 per cent of the Indian population opts for insurance of any kind. This system is targeted at supporting insurance policies and increasing customer numbers.

Anyone between the ages of 18 and 50 years, can get the benefit of the Pradhan Mantri Jeevan Jyoti Bima Yojana. To get the benefit of this scheme, you must pay Rs. 330 per annum (and taxes) amount. It provides a sum amount of two lakh rupees in sustainable life insurance protection in case of death due to any cause unexplained. An insured person has to keep a savings bank account with respect to the participating bank.

3.The Atal Pension Yojana (APY)

www.carajput.com; The Atal Pension Yojana (APY)

In Hindustan, the percentage of the population who apply for pension plans is very limited, in general, and especially among the weaker masses. Prime Minister Modi launched the Atal Pension Yojana to allow the working poor to get benefit from pension schemes. This scheme focuses on the employees from India’s unorganized market. The scheme is available to all holders of bank accounts. A guaranteed income would be applicable to members between Rs. 1K and Rs. 5K if they enter the scheme between 18 years and 40 years of age. For five years, if apply before December 31, the Central Government will pay 50 per cent of the gross contribution or Rs. 1K per annum (whichever is lower). The termination threshold for the donation and the initiation of the pension is 60 years.

Also, check out these two other significant schemes which are directed specifically at the economically weaker classes:

1. Pradhan Mantri Jan Dhan Yojana

www.carajput.com; Pradhan Mantri Jan Dhan Yojana

The scheme aims to offer standard bank and debit card accounts to everyone. A person at zero balance can open an account with any branch of the bank. Few key highlights are, for all Aadhaar-linked accounts, Rs. 5K overdraft facility, A Rupay Debit Card pre-loaded with Rs. 1,00,000 accidental insurance cover.

2. Pardhan Mantri Mudra Yojana (PMMY)

www.carajput.com; Pardhan Mantri Mudra Yojana (PMMY)

Under the Pradhan Mantri Mudra Yojana (PMMY), the Mudra Loan is made available to micro and small non-farming & non-corporate enterprises. Here are the Loan Details:

Amount	The upper limit of Rs. 10,00,000. For e.g. · Shish – Loans up to Rs. 50,000 · Kishore – from Rs. 50,001 – Rs. 5,00,000 · Tarun – from Rs. 5,00,001 – Rs. 10,00,000
Fees of Processing	Shishu and Kishore – no fee Tarun – 0.5% of the loan amount
Eligibility	Both for New as well as existing enterprises
Time period	3-5 years

Bhamashah Yojana

www.carajput.com;Bhamashah Yojana

Introduction

On 15 August 2014, Rajasthan’s government launched Bhamashah Yojana in a straightforward way for the simple allocation of financial and non-financial benefits of government schemes to female beneficiaries. The Bhamashah Yojana is known to be the first step towards digital transformation in the state. The scheme is named after Bhamashah, a popular minister, financier and general of the army who was a close assistant of Maharana Pratap when he became financially vulnerable to the degree that he reached the point of poverty. The financial and qualifying candidates are distributed from the end to the end and advantage and non-financial service.

Objective

Launched with the aim of women’s financial inclusion and advancement, the Rajasthan Bhamashah Yojana was initially launched in 2008, when about 50 lakh women registered, and at that time only 29 lakh accounts were available. The initiative seeks to make women financially stable and through the Bhamashah Card Yojana provides the benefits of several other schemes.

The Bhamashah card issued under this yojana in the house woman’s name is connected to a bank account. The card also provides the women with biometric authentication and key banking features, along with several cash incentives that are deposited directly into the bank account.

Bhamashah Card

The applicants who apply for the Bhamashah scheme will get their Bhamashah cards which are made in their family’s woman’s name. Using the card all family members will be eligible to take advantage of the rewards. Candidates can register for the card using online as well as offline tools.

For access the Bhamashah card is

University tuition Stipend for
Loan for small business startup
Free medical care for such conditions and procedures at designated hospitals
Recognition of Unrestricted and Subsidized Ration recipients
Women pursuing vocational training to develop their careers

Characteristics of Bhamashah Yojana

The scheme aims to pass benefits provided by the Government of the State directly to the helpless women in society
The scheme allowed 1.5 Million women to open their bank accounts and take advantage of the benefits
The Bhamashah Card also gives Rs.30000 medical protection to the needy and the vulnerable in the event of medical emergencies
Women carrying the Bhamashah Card will buy ration from the stores using the biometric method.
Government benefits from Bhamashah Yojana are paid directly to the beneficiary’s account, which also leads to minimising wrongdoing
The Bhamashah Card is issued to the students and mentally disabled individuals qualifying for the scheme
Men can also take advantage of Bhamashah Card benefits by paying Rs.20 or Rs.25.

Qualification to apply Bhamashah Yojana

The following conditions must be fulfilled to apply for the Bhamashah Yojana-

Adults needing financial assistance to start up a business
People needing medical care requiring financial support for operations.
Children must be registered in government schools and colleges that offer enrolment in learning institutions to train for coaching tests.
Women who fight for their identities and want to set themselves up as leaders

How to Apply for Bhamashah Yojana

1. Offline application

To qualify for the scheme offline, the candidates will visit the camp in both rural and urban areas arranged by the state government for each ward in all the village panchayat.

2. Online application

Even the qualifying candidates can apply online for the Bhamashah Yojana by submitting their Aadhaar number. The applicant will be asked to fill out a form the details of which will be used for the Bhamashah card production.

If the candidate does not have her Aadhaar number, the candidate may use e-Mitra- Kiosk to get her Aadhaar card and then apply for the scheme.

How to modify Bhamashah Portal Info

In the event of any modifications to the Bhamashah card, candidates are required to access the official website and make the changes themselves. You may update the following information on the Bhamashah online portal-

A family member expired
Change of place of residence address
Changes in related records, for example, bank account
Addition of new family member
Marriage for every family member

But the applicant would have to use her SSO ID to edit Bhamashah online.

Necessary documents to apply for Bhamashah Card

Please send the following documents when applying for the Bhamashah card online-

A copy of the application
Certificate of caste
Letter of expérience (for businesses)
Certificate of birth
Proof of identity (Aadhar card, passport, ration card, etc.)

Pradhan Mantri Awas Yojana

www.carajput.com; PMAY

If you are trying to buy a house under Pradhan Mantri Awas Yojana ( PMAY) from the government, you might consider buying it under the Credit-Related Subsidy Scheme (CLSS). The government has extended the time-limit for subsidised CLSS housing until March 31, 2021. Pradhan Mantri Awas Yojana (Urban) was initiated on 25th June 2015 to provide pucca houses to all deserving beneficiary by 2022 to ensure accommodation for everyone in urban areas. Pradhan Mantri Awas Yojana (Urban) Project launched on June 25, 2015, to provide accommodation for citizens in urban areas by 2022. The Project offers central assistance to implementing partners by States / Union Territories (UTs) and Central Nodal Agencies (CNAs) to provide accommodation for all qualifying families/beneficiaries against approximately 1.12 cr validated housing demand. The size of a house for the Economically Weaker Group (EWS) may be as large as 30 sq according to PMAY(U) guidelines. Mt. carpet region, however, Member States / UTs have the ability to raise the size of houses in conjunction and Ministry approval.

How to get your name on the PMAY list

If you’ve already enrolled for Pradhan Mantri Awas Yojana ( PMAY), the PMAY List includes four ways to find your name and information.

Pradhan Mantri Awas Yojana List: Candidates to the Pradhan Mantri Awas Yojana (PMAY) look forward to having their own house under the government’s flagship ‘Housing for All’ scheme by 2022. The main feature of the PMAY system is the Credit-Related Subsidy, which allows the owner to hold down the expense of buying the property. There are various criteria for qualification and after registering, the PMAY applicant receives a registration ID from which he or she can check the application’s viability. If you’ve already requested for Pradhan Mantri Awas Yojana ( PMAY), the PMAY List includes 4 ways to find your name and information. You might want your Aadhaar number, mobile phone, registration ID or examination ID to find the information, as the criteria vary in each case.

The list Pradhan Mantri Awas Yojana can either list PMAY Urban or list PMAY-Gramin (rural). Here are four ways to search the Urban PMAY List and PMAYG list.

1. Check PMAY Urban List

A. With the use of Aadhar Card

• By visiting https:/pmaymis.gov.in, visit the official PMAY website;

• Press the link below: https:/pmaymis.gov.in/Find Beneficiary Details.aspx

• To go to the next tab, click on ‘Search Beneficiary’ in the top pane. There was formerly an alternative to pick ‘Search By Name’ from the drop-down menu of ‘Search Beneficiary.’

• Type your Aadhaar number on the next page and submit it.

• Specifics of your PMAY response will be shown along with the status upon submission of the requisite information.

B. Without Use of Aadhar Card

You can check the Pradhan Mantri Awas Yojana list with your personal information and mobile number or with your assessment ID if you don’t have the Aadhaar number available with you.

• https:/pmaymis.gov.in/Track Application Status.aspx connect

• Enter personal information or assessment ID to obtain compliance status for PMAY compliance.

2. Check the list on PMAY-G

A.with the help of Registration number

If you have the registration number, please visit the official PMAY-Gramin website at https:/rhreporting.nic.in/entity/Beneficiary.aspx to see your name and other info on the PMAY Rural List.

B. Without the help of registration number

However, if you don’t have the registration number, the information might be available on the official PMAY-Gramin website.

• On your computer, to link https:/rhreporting.nic.in/entity/Beneficiary.aspx.

• You will be required to select State, District, Block, Panchayat, Scheme name, and other information on the next page.

• Your contact information, bank details, website details, fines, and complete details will be given upon request.

Regards

Rajput Jain & Associates

by Rajput Jain & Associates

Tax Planning Tips towards availing Tax-saving/Benefits

www.carajput.com; Save Income Tax

Right now that most of us don’t start earning, we’re all wondering why someone needs to hear about the tax-savings mess. But when we get our first salaries and see the amount of tax reduced, we know how much efficient tax management is required. Yet most of us are unable to take advantage of all the tax-saving opportunities that we have. Most of the time, we fail to claim a deduction under chapter VI i.e Section 80C, mostly because we don’t know about the investment that saves our tax and lack of understanding of other options.

Where would you save up to 78,000 annually?

	Investment	Tax applicable	Surcharge (4%)	Total amount
In the U/s 80C (NPS, Term Life Insurance, ELSS, PPF, etc.)	₹150,000	₹45,000	₹1,800	₹46,800
NPS under Section 80CCD (1B)	₹50,000	₹15,000	₹600	₹15,600
Health insurance for self, family and parents under Section 80D	₹50,000	₹15,000	₹600	₹15,600
			Total tax savings	₹78,000

Let’s address in depth the various sub-sections under Chapter VI deductions and other benefits :

In this blog, we’re going to tell you about some strategies that could save you tax above Rs. 1.5 lakh. Here are some possibilities that will help you invest money in tax benefits;

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Investment in National Pension Scheme under Section 80CCD (1B)

Under Section 80C, you can claim a deduction up to Rs 1.5 lakh by donating to the National pension scheme or NPS per year. Besides this, by adding another Rs 50,000 you will claim an extra deduction under Section 80CCD (1B). This implies you can minimize your tax value by Rs 15,600 by investing in NPS if you fall below a 30 percent tax bracket. Also included in this is 4 percent educational cess.

Health Insurance under Section 80D

Today health insurance is not an option but a requirement. If you do not have a health insurance policy then your financial stability will be negatively impacted by a medical crisis. But health insurance policies come with some tax incentives so more and more consumers are adopting it.

Under Section 80D, you can obtain tax incentives for the additional payment charged for your insurance cover. And the incentives can be applied for – a regular life insurance policy, health insurance providers, and child-care plan as well. You can also receive a tax deduction for routine health check-ups, as long as it is under the insurance coverage limits.

Type of policy	Deduction limit from Tax
Individual, spouse & children, and if anyone is a senior citizen	Rs. 50,000
Parents which are not a senior citizen	Rs. 25,000
The parent which are a senior citizen	Rs. 50,000

If your immediate family and not parents are insured by the insurance scheme, then you can demand up to Rs 25,000 on the premium charged. If an individual above the age of 60 is covered by the scheme then the maximum you can demand is Rs 50,000. Besides, if you have taken any scheme for your parents, then the premium is Rs 25,000 for non-senior citizens. And it’s Rs 50000, for senior citizens. This is beyond the limitations of family protection.

Let us take a look at one case. Suppose Anil, a 35-year-old working professional, has acquired a health insurance policy covering him, his wife, and child. Under Section 80D, he may in a financial year claim up to Rs 25,0000 for this policy. This policy also includes preventive health check-ups. For this policy, he pays Rs 18,000 each year and another Rs 4,000 for a preventive health check-up. Under Section 80D, he may claim a Rs 22,000 deduction.

Now for his parents, who are senior citizens, taken another health policy. He will demand deductions up to Rs. 50,000 under this scheme. In total, he could claim a deduction for two policies up to Rs 75,000.

Disabled Dependent under Section 80DD

If a taxpayer caring for a disabled dependent, then he can claims tax deductions under Section 80DD. This deduction is provided as a support to the disabled family members. A disability dependent may come under this section are spouse, children, parents, and sibling It may be any family member of the Hindu Undivided Family (HUF).

It is important to ensure that the disabled dependent has not claimed a deduction under section 80U for receiving compensation under this act. Under the section, Disabilities which are covered –

Blindness
Low vision
Loco-motor disability
Hearing impairment
Mental retardation
Mental illness
Autism
Cerebral palsy

May you demand deductions on Expenses for the care, caring, development, and rehabilitation of disabled persons.

For the premium paid for these particular conditions on policies
But the deduction amount depends on the severity of the disease. The taxpayer will demand deductions up to Rs 75,000 if the injury is up to 40 percent. If the individual with a disability is at least 80% disabled, then the taxpayer will demand a deduction up to Rs 1,25,000.

Interest on Education loan under Section 80E

Section 80E states that tax incentives can be obtained on the interest portion of an educational loan. And, that does not have a fixed limit. This deduction can be received by either the student or the guardians, whoever makes the repayment. However, this advantage will be accessed from the first year of the loan to the eighth year or until the loan period is complete, whichever is earlier.

Let’s suppose, for example, you finish the repayment period within six years, so you will take advantage of the gain for six years. On the other hand, even after the eight-year term, you will continue to repay the college debt, but in any situation, this tax incentive can not be taken advantage of.

Interest on Saving Bank account under Section80TTA & 80TTB

We already have money in the banks and we get an interest in it. Any individual and HUF can claim a tax deduction on the interest paid. Taxpayers who are not senior citizens which claim exemptions under Section 80TTA and senior citizens which demand tax under Section 80TTB. Tax deductions can not be claimed on interest earned on Fixed Deposit, Recurring Deposit, or term deposits.

Section 80TTA:

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Under this clause, the maximum amount to be deducted is Rs 10,000. You can demand a deduction of interest earned up to Rs 10,0000. And if you have several savings accounts, the interest earned from all the deposits will be combined. Surplus income will be defined as income from other sources and taxable profits. This deduction is given on interest received –

From a bank deposit account
From a savings account with a cooperative organization engaged in the banking industry
From a savings account with a postal office

This deduction is NOT permitted for interest received on time deposits. Term deposits mean deposits which are repayable at the end of fixed periods. It is not permitted for –

Interest in fixed deposits
Interest in recurrent deposits
Any other deposits of time

Section 80TTTB:

This section was initiated as a reward for senior citizens to use as their source of revenue, interest earned by saving savings accounts and deposits on 1 April 2018. Senior citizens can assert tax deductions as high as Rs 50,000 under such a provision.

Amount of deductions allowed: A deduction of less than Rs 50,000 or a sum from a defined income is permitted from the total income. Mentioned income is the sum of all of the following income:

Interest in deposit accounts (savings or fixed deposits);
Interest in deposits held in a cooperative company engaged in banking operations, like a cooperative land mortgage bank or a cooperative land development bank; or
Interest in deposits at the post office
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PPF (Public Provident Fund)

Established by the National Savings Organization and sponsored by the Government of India, PPF is a long-term fund (read 15 years) that you can use for purposes such as raising your child or retiring. This ensures the investment you make, the profits you receive, and the gains from the growth are absolutely tax-free. You will also demand tax benefits for the amount you spend according to Section 80C of the Income Tax Act.

For PPF the minimum contribution is just Rs. 500. For a financial year, you can spend up to 1,50,000 Rs. The central government sets the interest rate for PPF along with many other savings schemes and revises the rates each quarter.

EPF (Employee Provident Fund)

T hat is only if, of course, you deduct the money after retirement! Premature withdrawal if you have kept the EPF account for 5 consecutive years is tax-free. The amount of interest would be tax-free too. Accordance with Section 80C you can demand tax deductions for the amount invested.

You should pay 12 percent of your basic salary to EPF compulsorily while your employer contributes equally. EPF includes a company employing 20 or more employees with a rate of 12 percent applied to these organizations. However, the EPF rules specify that under some requirements and conditions those organizations that have less than 20 employees will contribute to 10 percent. You may also make voluntary contributions in excess of that limit. How much can you help? In your EPF, you could spend up to 100 percent of your minimum salary plus dearness allowance. Both of the investments you make will receive the same rate of interest. The tax and withdrawal regulations would also be similar for such voluntary contributions.

Remember that the employer’s contribution to the Employee pension scheme (EPS) would be 8.33 percent. Rs 1250 will be spent in EPS for any employee whose basic salary is Rs. 15,000 or more. If the basic salary is less than Rs. 15,000, so EPS will earn 8.33 percent of the wage. The average interest rate for EPF is 8.55 percent, measured on the basis of the monthly operating balance. Assume you receive a basic salary of Rs. 50,000, the EPF balance will be Rs. 1.29 lakhs at the end of one year considering the existing interest rate. If you include the balance of your EPS it will be Rs. 1.34 lakhs.

Today, after one month of resigning from service, EPF customers will deduct 75 percent of their overall account balance.

ULIP (Unit-Linked Insurance Plan)

A portion of the ULIP premium, being a hybrid option, will go into insurance coverage and another portion will be deposited in the stock market. The premium you pay counts under Section 80C for tax exemptions and the returns you will obtain on maturity will also be excluded from tax under Section 10(10D) of the Income Tax Act.

According to the Insurance Regulatory and Development Authority (IRDAI) of India’s, the overall annual fund management fees can be 1.35 percent. The minimum insurance plan must therefore be 10 times the average premium, it has reported. These rules guarantee that the premiums do not reduce the returns, and insurance coverage is not negligible.

You can select from the fund options that insurer offers that come with various asset allocations. Based on your risk profile, investing in both equity and debt may allow you to invest more in equity, debt, or have a balanced approach. Post-tax returns from ULIPs may be between 7 percent -9 percent.

SSY (Sukanya Samridhi Yojana)

Are you going to have a baby girl? SSY is also one of the best long-term initiatives to produce tax-free returns. The average interest rate of the program is 8.1%. Pursuant to Section 80C, the money deposited will be registered as a tax deduction. The minimum deposit balance is Rs. 250 and you can invest Rs. 1.5 lakhs in a financial year.

You can create an SSY account before your child turns 10. You’ll handle your account until you get married, or 21 years from the opening date of your account, whichever is earlier. Once she turns 18, you will make a partial withdrawal for your daughter’s education.
Contribution Given to political party

Section80GGC

If, in the previous year, any individual except the local authority and any artificial legal entity, wholly or partially supported by the government, contributes to any political party or political trust. The tax incentive is required to pay 100% of the amount only if the donation is not paid in cash.

Section GGB

If, in the preceding year, any Indian Corporation contributes to any political party or political trust and to the expenses incurred, directly or indirectly, by an advertising company in any publication by or on behalf of a political party. The deduction shall be given to 100% of the value of the donation only if the donation is not paid in cash.

Investment in notified equity saving scheme Section 80CCG

If a resident person (may be ordinarily resident or not ordinarily resident) invests in registered equity or listed unit or equity-oriented fund. The tax benefit shall be given to a resident person for 3 financial years of assessment, beginning with the assessment year applicable to the preceding year in which the listed share or the listed share of the equity-oriented fund was first acquired. The incentive is given at 50 percent of the amount invested, but the tax incentive is not allowed at more than Rs. 25.000.

Contribution to certain pension fund Section 80CCC

Where an individual has made a contribution of taxable income to LIC or to some other eligible insurer under an eligible pension scheme. The tax benefit is the sum of the deposit of Rs. 1,50,000, whichever is less. However, the pension earned or the amount withdrawn by the applicant or his / her candidate is taxable in the year of receipt. There were also two subsections in this section:
Section 80CCD (1): NPS investments are eligible for tax deductions under this provision. Any Indian citizen between the ages of 18 and 60 can invest in NPS and make use of this tax benefit. This profit may also be asserted by NRIs. The maximum deduction that can be made under this clause is 10% of your income (including basic salary + DA). For self-employed people, the cap is 20% of their gross net income. Also, the maximum profit you will enjoy per year under this section is 1.5 lakh.
Section 80CCD (1b): This clause allows for an extra deduction of 50,000 for investment in NPS. This is over and beyond the 1.5 lakh available in Section 80CCD(1).

So, in brief, you can make use of a total income tax deduction of 2 lakh a year when you invest in pension fund Section 80CCC i.e NPS.

Housing Loan

Section 80C

Housing loan principal payments: whether you have borrowed a home loan, the portion of EMI that is used to repay the principal sum is qualified for tax deductions under Section 80C. The amount you pay as interest is not eligible to claim deduction under this provision.
If a person or HUF has taken a loan for his first house which is self-occupied or leased or vacant (deemed to be disposed of) then he may obtain a maximum tax reward of Rs. 1,50,000 only for payment of the principal amount repaid.

Section 80EE with Section 24 and Section 80EEA

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The deductions under this clause are only applicable to individuals. This means that whether you are a HUF, AOP, a corporation, or any other form of the taxpayer, you can not assert any advantage under this clause.
Limit of amount: this deduction (up to Rs. 50,000) exceeds the cap of Rs 2 lakh in compliance with section 24 of the Act on income tax. Learn more about the deduction of Rs 2 lakh on home loan interest here.
In order to claim this deduction, you need not own any other property on the date of the approval of the loan from a financial institution.
Conditions to be met for the claim deduction
House value should be Rs 50 lakhs or less
Loan to the house must be Rs 35 lakhs or less

When you’re in a position to comply with both Section 24 and Section 80EE of the Income Tax Act, be swift to assert the benefits. Next, reach the deductible maximum under section 24, which is Rs. 200,000. Then proceed to claim additional benefits under section 80EE. In addition to the Rs 2 lakh limit authorized under section 24, these deductions are also permitted.

The additional deduction is allowed to the individual in respect of interest paid on loan taken for residential house property to provide benefits for first home buyers. The tax incentive shall not allow Rs. 50,000. The Union budget 2019 announced a new section 80EEA to increase the tax advantages of interest deductions to Rs 1,50,000 for housing loans for affordable homes over the term 1 April 2019 to 31 March 2020. The taxpayer should be a first-time homeowner and should not be eligible for a tax deduction 80EE. The tax incentive is only available until the repayment of the loan continues.

14. Section 80TTA

Section 80TTA allows you to demand a deduction of Rs. 10,000 on your interest earnings. This deduction is really only applicable to individuals and to HUFs. The deduction shall be entitled on:

Money earned in a savings bank account.
Profit earned on a savings bank account with a cooperative organization engaged in banking activities
Profit in a savings bank account with a post office

Your whole interest income would count as a deduction if it is less than 10,000. If your interest income is more than Rs. 10,000, your deduction shall be limited to Rs. 10,000.

CONCLUSION: What you need to know about saving income taxes

Prior to actually selecting a tax-saving instrument, it is necessary to take into account the degree of risk, lock-in time, liquidity, and returns. There is no point in opting for a tax-saving plan unless it fits the particular needs as well. It also helps to keep up-to-date on the latest trends in tax-saving legislation. Barring Section 80C, most taxpayers are not acquainted with some other parts of the Income Tax Act that allow them to substantially keep their tax burden. It is Strongly advised ways to save taxation under Sec 80C & 80D

Investment Rs 1.5 lakh under Section 80C to limit your net income
Buy Medical Insurance & seek a deduction of up to Rs. 25.000 (Rs. 50.000 for senior citizens) for a medical insurance premium under Section 80D.
Claim deductions up to Rs 50,000 for housing loan Interest under Section 80EE

Regards

Rajput Jain & Associates

by Rajput Jain & Associates

Free Credit Score Update & factors which affect and help in improve credit score

Free CIBIL Update & major factor which may affect and help in improve CIBIL Score

TransUnion CIBIL Ltd., formerly known as the Credit Information Bureau Ltd., is one of India’s leading credit information firms. It was founded in 2000 and is widely referred to as the CIBIL credit agency.

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The Office is approved by the RBI and is governed by the Credit Information Companies (Regulation) Act of 2005. It has more than 2,400 members, including banks, financial institutions, non-profit financial companies, and housing finance firms. The credit bureau holds more than 550 million payment records for consumers and businesses.

What is the credit score or CIBIL?

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The CIBIL score represents your creditworthiness, which indicates whether your financial credibility is favorable or unfavorable. The scale is 300-900. This rating is determined by taking into account a few factors, such as the actions of loans, the history of repayments, the types of loans used, defaults in EMI or in repayment, etc. The greater the ranking is 900, the more likely you are to be approved for a loan or a credit card. A higher score suggests that you have been a good borrower and that you have a decent credit record. A score of 750 and above gives you greater access to credit and credit cards as per the basic information.

How your credit score consist?

In the CIBIL SCORE, only 4 major factor consists are hereunder :

History of payment	30 percent
Other Reasons	20 percent
Exposure of credit	25 percent
Type and amount of credit	25 percent

Recognize how credit agencies measure your CIBIL score

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To measure a CIBIL score, most agencies use financial position, loan type, and debt-to-credit ratios, etc. If you want to get an incredible CIBIL score, knowing the main information of how your score is measured is.

Each authorized Company has its own way of calculating the credit score. But, the most important components measured are your financial background (which shows how successful you are in making the payments) and your amount of debt (represents how much credit you apply and how much you use).
Combined, these two reflect about two-thirds of the credit score.

Check your free CIBIL report

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RBI made mandatory in 2017 for all credit reporting agencies in the country to including CIBIL Report, to give customers one free credit score report per calendar year per person. You will get a free download of your CIBIL survey by accessing the official CIBIL website.

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Several factors which affect your credit score

Past History of repayment of the loan, EMI, interest, etc.

A significant part of your CIBIL score is paying your old outstanding bills on time. Payment background is one of the key variables impacting the CIBIL ranking. Late payment will diminish your credit score and will continue to appear on the record for up to seven years. Paying the credit card payments, as well as loaning EMIs on time should be a priority. A default in EMI is not a positive thing. When they look at your paper it pops out to a borrower. Default would have a larger effect in modern times than an EMI option more than two years earlier. 30-day delinquency will decrease the CIBIL score by 100 points according to a recent CIBIL study (as stated by Financial Express). If you appear to fail to make the payments by the due date, set up SMS or e-mail alerts or send standing orders about how to automatically subtract the EMI or credit card number.

2. Maintaining your total Debt Ratio

Your debt is the biggest cause for your CIBIL, either great or worse. The aggregate amount of debt you have at a particular point in time would have a huge impact on your CIBIL ranking. The credit utilization ratio is the amount of credit you’ve used in comparison to your total credit limits. To get a decent score, you will have a low credit utilization ratio at all times. It is best to use up to 30 percent of the overall credit limits as per experts. Going into more debt at once will result in a poor CIBIL ranking. This is that if you take too many loans at once your Income-to-debt ratio will drop and will affect your CIBIL. So choose not to take more loans at the same time, to keep a decent credit score. Take as much as you can quickly cover, without disrupting your schedule. In the first place consider the repayment schedule. So it is equally important to handle your debt diligently and retain a decent credit score. Until you take up a loan then intend to repay it, if you can easily repay it then just go for it. The kind of loans you make use of is a significant element in deciding your Credit Score. If you are strong on unsecured, high-interest loans such as credit cards or personal loans, so it works against you. However, if you have a combination of secured loans, such as Home Loan and Car Loans, then it would have less negative effects.

3. Maintain your Outstanding credit balance as low as possible

To calculate your score, credit bureaus look at the ratio of your total credit balances to the amount of debt that you have. It is advised to use a credit card for emergency purposes only, and to pay off the debt as quickly as possible your credit card balances should be under 30 percent of the overall credit cap to be on the better side and for healthy investments. When your debt crosses this cap, it is adversely expressed on your credit report. The higher the credit card balance is the greater the risk of not making full payment and missed payments as well. Aim to keep the credit card balance low, to prevent such a case. However, to maintain a decent CIBIL score, it is still best to use your credit card to make the most of the transactions. It’s very essential to keep a decent credit score along with regular payments holding your credit card balance down.

4. Time to time check revaluated CIBIL Report

You should keep reading frequently on your credit report. A summary of your credit score and survey from credit bureaus can be quickly viewed. Those agencies only have one free report every year. If you notice certain defects, you will instantly get them rectified. Falsely reported inaccuracies may be delayed or misrepresented personal information, etc. Daily tracking of the CIBIL score is of such interest that many of you don’t know about it. Chances of that your Credit records can contain errors or faults. These defects are very necessary for rectification and correction. This can occur because the provider avoids delivering the notification or it can also occur due to inaccurate details being implemented. These errors will harm your CIBIL and even impact your potential creditworthiness.. There are several advantages of having strong CIBIL, which means getting a loan accepted at a cheaper rate of interest and you can even save money on any of the loans’ down payments. So it becomes important to keep a decent credit score to take advantage of such advantages.

5. Complete your full inquiries about your credit and its Score.

Ignore numerous credit requests within a quick time period. Therefore, it is recommended that you just ask for credit when you genuinely need it. When you ask about a loan or credit card to a bank or financial institution, the borrower will take out the CIBIL report. Such an investigation is considered a “hard investigation,” because it impacts the ranking adversely. Meanwhile, it’s called a “soft investigation” when you review your own score or study. You should review your report various times and it won’t impact your CIBIL score as soft inquiries don’t show on your record. You prefer to apply for loans or credit cards to several lenders when you need credit urgently.

6. Size and amount of borrowing as per requirement only.

A decent credit history helps make the score higher. It indicates you have a good credit-management experience. Lenders like to give loans to those with a rich background, as it makes it easy to judge yourself as a borrower. It is also best to stop closing old cards as you would miss out on the long credit history and related positive lending behavior. Getting a good mix of credits is critical. Having a positive, stable, and unsecured credit balance helps raise your CIBIL ratings. You need to make sure you don’t get heavily secured loans or unsecured loans and strive to keep a decent balance of both instead.

7. Keep maintaining your previous credit cards if possible.

Maintaining your older credit cards will contribute a substantial amount to your credit score. This is because old credit cards help to keep the credit history going continuously. This will increase / good credit score more. But it’s recommended to do this for as long as you can pay the bills on time. Otherwise, it could function in the negative.

8. Prepare the right mix between secured and unsecured credit

You should really get a good balance of credit accounts. If you only have one type of credit account, your score may be lower. For instance, secured loans such as home loans or car loans boost credit score as they display your financial track record over a long period of time and illustrate your dedication and willingness to repay when you take out a loan by promising your loan. On the alternative, having only unsecured debts or personal loans, credit card debt in your financial background will drag down your score too much. Stop applying for new credit too frequently: Applying for a new credit account will also have a negative effect on your credit score.

Factors which help you to improve your credit score

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Use credit lines responsibility

Any money out of a credit card is borrowed money by the end of the day. Depending on the form of the credit line and the lending actions you need to return it to the lender, with or without interest. But make sensible use of your credit card, loan amount, or some other kind of borrowing. Don’t ever buy or spend more than you can afford to pay back. This could drive you into a debt trap.

2. Ignore late payments and forget about payment
This repayment activity will also be disclosed to the credit agencies, impacting the ranking, aside from being paid late payment fines for the late payments. If you have to make several payments via credit card and loan EMIs, it is best to set up payment notifications or due date notices and keep more coordinated. Never hesitate to make your payment this way. You will also be able to set up a direct debit agreement with your loan where the contributions are immediately withdrawn on the due date from the savings / current account. And you never have to think about remembering due dates, or about late payments or missing payments.

3. Maintain less credit utility ration

Ideally, you should not exceed 30 percent of the overall credit card cap listed earlier by VAS. This is highly important in the future if you are applying for a home loan. The banks will calculate the debt-to-income ratio (DTI) while applying for a home loan. This measure assesses your gross liability to your overall sales. If your debt reaches 50 percent of your earnings, banks are more likely to deny your offer. Another explanation you should have a good credit usage level is not to be greedy for the credit. If your credit lines incurred any of your bills, you will look like a creditor who can not handle their bills on his own.

4. Always close the account instead of settling

If in the past you have defaulted on any transactions that will be mirrored in your credit report and carry down your CIBIL ratings. Be sure the outstanding balance is paid off and close the account instead of settling for a payout. You should make sure the account is having a ‘locked’ status. Often, it is safe for the loan to get a formal certificate of closing from the provider.

5. Stability

For years on the go, you need to be prepared and disciplined to retain a perfect credit score. Pay your bills every month even before the due date, and keep a close eye on your revenues and expenses. And by setting up a plan will you be able to monitor your savings consistently over the years and meet your loan repayment responsibilities.

5. Wait for the credit score rise

Time is a crucial part of the equation to get a decent credit score particularly when you restart after your credit score decreases due to your past mistakes Once you start working on a credit enhancement plan, it can start to steadily show as an increase in your score beginning at least 6 to 8 months out. You’ll need a good credit history of at least 5-7 years before you can reach the top score of 850 +. Part of measuring your credit score takes into account the era of the oldest credit account. But stop transferring accounts or closing old accounts.

RAJPUT JAIN & ASSOCIATES

by Rajput Jain & Associates

Basic of Permanent Account Number (PAN)

Historical Background of Permanent Account Number (PAN)?

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A taxpayer had to be classified using the General Index Registration No. (GIR No) prior to the launch of the PAN in 1972. It was a manual operating system, specific to the person assessing officer group, which eventually led to errors/miscalculations.

It was unique only to the non-national circle level.
the concept of PAN (based on old series i.e. GIR No. series) came up in 1972 with the government of India. This, too, lacked the individuality nationally.
Initially, PAN Card allotment was rendered manually, and each ward/circle was supplied with a certain collection of numbers to prevent duplication.
There were a number of reasons why GIR No. & PAN (olds) were not successful.
No database to verify PAN Allotment Multiplicity.
Neither centralized authority
No permanent Taxpayer number
Non-structured database, with few parameters restricted.

INTRODUCTION OF PERMANENT ACCOUNT NUMBER(PAN)

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Permanent Account Number (PAN) “is a ten-digit alphanumeric number provided under section 139A of the Income Tax Act, 1961 by the Income Tax Department (ITD). It is a unique Id number that includes a track record of all an individual’s income-related aspects.

Now we Will discuss in detail the Character of 10Digit of PAN card;

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1^st-5^th characters

First 3 characters: Alphabetic series from AAA to ZZZ
4th character: Represents Status of PAN card holder
“A”-stands for Association of Persons (AOP)
“B”-stands for Body of Individuals (BOI)
“C”-stands for Company
“F”-stands for Firm/ Limited Liability Partnership
G”-stands for Government Agency
“H”-stands for Hindu Undivided Family (HUF)
“J”-stands for Artificial Juridical Person
“L”-stands for Local Authority
“P”-Individual
“T”-stands for Trust
5th character: Represents first letter of PAN holder’s last name i.e. surname

other than Individual representing the 1^st letter of the name of Permanent Account Number Card Holder.

6^th– 9^th Characters

Representing the Number series of sequence from 0001 to 9999

10^th Character

Representing Alphabetic Check digit

WHO CAN OBTAIN THE PERMANENT ACCOUNT NUMBER?

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A person whose total income exceeds the chargeable limit in the assessment year.
Trust / charitable institution that is required to file income from property held under its name. (Section 139-4A of IT Act 1961).
Business/profession, the total sales/income / gross receipts of which exceed the limit.
The financial transaction with the obligatory mention of the PAN card.

VARIOUS TYPES OF FORMS :

Form 49A: Indian nationals/entities formed into India

According to section 139A of the Income Tax Act, 1961; application form 49A is for the issuance of PAN Card to Indian citizens, an entity formed in India. It is used to add a new PAN or other previously requested changes.

Form 49AA: Foreign citizens

Rule 114 of the Income Tax Act, 1962, allows foreign citizens to apply for a PAN Card in India by submitting a form 49AA. It is filled by foreign nationals/entities formed outside India but has considerable responsibility for taxation of their operation in India.

Form 60: Individual/person does not have a PAN Card but does join a transaction referenced to Rule 114B.

ESSENTIAL DOCUMENT NEEDED WHILE APPLY FOR PERMANENT ACCOUNT NUMBER (PAN)

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Some papers are also required to be attached to Form 49A or Form 49AA for the PAN card or the acknowledgment form (if you apply online) authentication process when applying for a PAN Card. When individuals or other organizations apply for a PAN card, the main documentation needed for the PAN application form.

-For Individual

Proof of Identity(POI)

Arms License
Pension Card containing applicant photograph
Central Government’s Health Scheme Card or Ex-Servicemen’s Contributory Health Scheme Photo Card
Bank certificate which is issued on the bank’s letterhead from the branch of the bank containing an attested photograph of the applicant along with the bank account number.
Government ID – Aadhar, Driving License, Voter ID, etc.
Photo ID card issued by Central Government, State Government, or a Public Sector Undertaking (PSU)

Proof of Address(POA)

Domicile certificate
Aadhar Card
Date of birth (DOB) proof
Birth certificate by the Municipal Authority/authorized authority
Matriculation certificate
Pension order
Passport
Marriage certificate
Electricity/Landline Bill
Post-paid mobile phone bill
Water bill
LPG or piped gas connection bill or Gas Connection book
Bank account statement
Credit card statement
Post Office account Passbook
Passport
Domicile certificate (DC)

An affidavit is sworn before a magistrate stating the applicant’s date of birth

Voter’s ID Card
Driving License
Property registration document

-For HUF (Hindu Undivided Family)

An affidavit is given by the HUF’s Karta state, as the case may be, the name, address, and father’s name of each member
Identity proof, address proof, and date of birth.

-For Indian Company

Certificate of Registration which is issued by the Registrar of Companies (ROC)

-For LLP (Limited Liability Partnership) and Firm Which is Registered In India

Registration certificate issued to the Limited Liability Partnership (LLP) or Firms by the Registrar of Companies

Individual who is not a citizen of India

Proof of Identity(POI)

Passport copy
PIO card photocopy
OCI Card photocopy

Copy of other national or citizenship Identification Number or TIN attested by applicable ‘Apostille’, Indian Embassy, High Commission, or Consulate where the applicant is based.

Proof of Address(POA)

Copy of bank statement of the residential country
Copy of NRE bank statement in India

Copy of resident certificate or Residential permit

Passport copy
PIO card photocopy
OCI Card photocopy
Copy of other national or citizenship Identification Number or TIN attested by relevant ‘Apostille’, Indian Embassy, High Commission or Consulate

PROCESS FOR ACQUIRE PERMANENT ACCOUNT NUMBER CARD

www.carajput.com; PAN Online

There is 2 way to get PAN Card.i.e.

National Securities depository Limited (NSDL): www.tin-nsdl.com
UTI infrastructure technology & services ltd. (UTIITSL)::www.utiitsl.com

OFFLINE PROCESS

Download the application form from the NSDL/UTIITSL website.
Complete the form, and attach the supporting documents for POI/POA.
Submit the duly filled form with NSDL/UTIITSL.
You will receive your PAN Card within 15 working days.

www.carajput.com; PAN Online

ONLINE PROCESS

Visit the website .i.e.: NSDL / UTIITSL.
Fill the online application form.
Processing fees to be paid by using Net Banking/Debit credit card/Demand draft.
After processing fees are paid then the final page contains a 15 digit Acknowledgment number.
After receiving the acknowledgment number, one should send them to NSDL along with form 49A within 15 working days.
When verification is done PAN Card number is generated by NSDL.

IMPORTANT THINGS TO CONSIDERED

When a person who is engaged in any of the above transactions is a MINOR & has no taxable income, he/she should state the father/mother/guardian PAN Card information.

Anyone not holding a PAN Card and entering into transactions in which PAN is mandatory shall fill out Form No. 60 according to Rule 114B of Income Tax Act, 1962.

Note PAN Card details are required for source tax deduction i.e. The aggregation of TDS or Tax at source i.e. TCS, as described in section 139 [5b & 5c].

The penalty of Rs. 10K for not linking Pan with Aadhar

www.carajput.com; Linking

If you do not link your Permanent Account Number to Aadhaar card within the March 31 deadline, the income tax department may impose a penalty of as much as Rs. 10K for using an inoperative Permanent Account Number. The income tax department had previously stated that all unlinked PAN cards would be considered “inoperative” and now a new notice has been released stating that certain Permanent Account Number cardholders would face consequences for failure to supply PAN under the Income Tax Act.

As per Section 272B of the Income Tax Act, when a Permanent Account Number becomes inoperative, it would be presumed that PAN has not been furnished/quoted as prescribed by law and that a penalty of Rs. 10K will apply.

Confronted with this, using the PAN card as ID proof for non-tax related reasons such as opening a bank account or applying for a driving license does not incur a penalty. In the case of individual transactions, the liability would be imposed on all other instances, i.e. the assessee will have to pay the penalty on any possible non-compliance with the actual transaction.

However, problems may emerge if the bank account opened with an inoperative PAN has activities that put it under income tax jurisdiction. For eg, whether you need to deposit or withdraw cash over Rs.50K Permanent Account Number is necessary.

Rajput Jain & Associates, Chartered Accountant, said that in view of the penalty provisions laid down in Section 272B and the latest notification, it could be understood that an inoperative Permanent Account Number would relate to the non-furnishing and non-quotation of PAN, which is mandatory pursuant to section 139A of the Act. Section 272B(1), for non-compliance, carries a penalty of Rs. 10K.

However, if you link your Permanent Account Number and Aadhaar, the PAN will become active and there will be no fines applied after the linking date. Many with inoperative PAN cards must bear in mind that they do not need to reapply for a new PAN card as once the transfer is completed the Permanent Account Number card becomes usable again.

Regards

Rajput Jain & Associates

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September 2020
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Direct Tax

Highlights of Redevelopment Assistance Capital Program (RACP) Bill, 2020

4) As per section 54 to 54 GB

5) Chapter-VI A pursuant to heading B-

6) As per Vivad ke vishvas Act-20

In Addition,

Companies (Amendment) Bill, 2020

Highlights of Companies (Amendment) Bill, 2020

New chapter for Producer Company

Reduced penalty for Small companies, OPC and Start-Up companies

Direct Listing in foreign Jurisdiction

Update in the definition of Listed Company

Remuneration for Qualified Director and NED

Decriminalization of Companies Act

Fresh Bench in NCLAT

Corporate social responsibility ( CSR)

Regards

Rajput Jain & Associates

TAX AUDIT CEILING U/S 44AB FROM RS 1 TO RS 5 CRORE APPLIES WITH EFFECT FROM AY 2020-21

Who is a binding and required Compulsory Tax audit?

Regards

Rajput Jain & Associates

GST: Place of Supply In case There is a Movement of Goods

GST: No Movement of Goods

FCGPR – FEMA Compliance for FDI in Equity share in India

OVERVIEW

What is FCGPR?

Time Limit for filing FORM FCGPR

Applicable Regulation

Document Required for filing FORM FCGPR

Routes of Foreign Direct Investment(FDI)

Prohibited Sector for Foreign Direct Investment(FDI)

Process for filing FORM FCGPR

The following process shall be followed for reporting of Foreign Direct Investment (FDI) in India:

Step 2: Creation of Entity Master

Step 3 Registration for Business User on Firms Portal

Step 4 Reporting of FDI Received

Consequences of late filing of FORM FCGPR

How Rajput Jain & Associates can Assist

Frequently Ask Question(FAQ)

Write to RAJPUT JAIN & ASSOCIATES or call us on________________

Three-tier Transfer Pricing Documentation & threshold Requirement

Applicable Transfer Pricing Documentation

Purpose

Timeline

Structure of three-tier transfer pricing documentation:

Applicability of CbCR

Particulars

Threshold

Compliance applicable on Transfer Pricing

Section 92D (Master File Forms)

Purpose

Conditions Apply

Timeline

Compliance Under CBCR

Time-Time for Creating Transfer Pricing Documents

Summarizing

Top Govt Scheme Launched for the Public & National benefits

Pradhan Mantri Matru Vandana Yojana

Targets of Parthan Mantri Matru Vandana Yojana

The benefit of PMMVY especially giving to :

Process for getting benefit under PMMVY

B. Online Process

Situations

KISAN VIKAS PATRA

Introduction

Varieties of KVP

Characteristics of KVP

Eligible criteria for KVP

Advantages of KVP

Maturity Period of KVP

Documents needed to receive Kisan Vikas Patra

Download form to apply for KVP

Points to be remembered;

Transfer of Kisan Vikas Patra

Calculation of maturity amount of Kisan Vikas Patra (KVP)

Rate of interest offered under the scheme i.e. Kisan Vikas Patra

Withdrawal of money before the expiry of the period

Calculation of premature redemption value

Tax liability for Kisan Vikas Patra