KEY TAKEAWAYS WITH FAQ ON FORM 26QB & FORM 16B AND SECTION 194-IA

Section 194-IA- 1 Percent TDS rate applicable on Sale of Real estate transactions with Form 26QB and Form 16B application

www.carajput.com;TDS on immovable property

www.carajput.com; TDS on immovable property

Basic key takeaways things Regarding Form 26QB: TDS relates to the sale of real estate/property according to the Finance Bill of 2013, where the cost of sale is equal to or greater than Rs 50,00,000. Section 194 IA of the Income Tax Act, 1961, provides that, as of 1 June 2013, the buyer can deduct tax at 1 % when making the property payment on the purchase of real estate immovable property. The seller will receive Form 16B for the deducted payment of TDS, while the buyer has to obtain Form 26QB as per the income tax Act 1961.

Provisions requirements as per section in Section 194-IA are giving below

www.carajput.com;Section 194IA

www.carajput.com; Section 194IA

A new provision of income tax i.e Form 26QB is a TDS Return-cum-challan form for the payment of TDS deductions made U/s 194-IA of IT Act, 1961. The section of this Act deals primarily with transactions concerning the sale of immovable property, and the relevant TDS along with Form 26QB must be submitted within 30 days which are counted from the end of the month in which TDS was deducted. For Example, if the financial transaction took place on March 14th then Form 26QB must be submitted Compulsory by April 30th of that year.

Tax Law Provide and laid down several primary regulations for selling and purchasing real estate property. In each and every that transaction covered by Section 194-IA, if such financial transaction value is greater than Rs. 50 lakhs, the buyer, also known as the deductor, is allowed to deduct TDS. The deductor (purchaser)  under this section 194IA will be required to issue to the deductee (seller) Form 16B.

The person buying of the property must deduct TDS from the overall selling valuation at the rate of 1 percent. A significant point to remember is that the purchaser, not the other party, has to subtract the TDS.

TDS shall not be deducted where the sale value is less than Rs. 50,00,000. In this event, if payment is in installments, TDS would have to be deducted from each payment.

The tax applies to the entire sum of the sale-even if the buyer or seller is more than one.

With effect from the FY 2013-14 budget, the 1 % TDS Rate deduction regulation on property sales was introduced to inspect underhanded property deals. With effect from June 2013, the regulation stipulates that on the sale of property exceeding Rs. 50 lakhs in India, a 1 percent tax on the total sale consideration must be deducted before making the payment to the vendor.

All the specifications for Form 26QB are provided under Section 194-IA.

www.carajput.com;TDS Form 26QB

www.carajput.com; TDS Form 26QB

These are:

  • Under Section 194-IA, at the time the transaction is done, the buyer must deduct TDS at a rate of 1 percent of the total selling price. TDS u / s 194-IA does not attract to Agricultural Land transactions. This taxation amendment does not apply to agricultural land sales transactions.
  • TDS on the sale of immovable assets shall not attract to transactions priced at less than Rs. 50 lakhs. For transactions above this cap, the entire cost of the transaction is deductible for TDS. For example, if the property costs Rs. 52 lakhs then you will pay TDS on Rs. 52 lakhs rather than Rs 2 lakhs (Rs. 52 lakhs – Rs. 50 lakhs).
  • The purchaser will deposit the 1 % TDS to the Income-tax department as per Govt’s specification. The permanent account number must be mandatory provide by both buyer and seller while filling out Form 26QB to confirm that sellers do not avoid taxes on the capital gains they generate.
  • If the payment is made in installments then TDS is deducted on a proportionate basis on each individual installment.
  • The buyer doesn’t need to obtain a Tax Deduction Account Number (TAN) to deduct and deposit TDS. However, PAN is mandatory for both the seller and the buyer in case TDS deduction occurs using Form 26QB.
  • The purchaser must deposit TDS and apply the Form 26QB within 30 days of the end of the month TDS was deducted.
  • If the payment involves multiple buyers and sellers, the deductor will be required to apply multiple Form 26QB.
  • After completing the complete process of deducting and depositing TDS, the buyer is mandated to provide the seller a TDS certificate within fifteen days of the transaction in lieu of the tax deducted and deposited to the Government.
  • The buyer is required to obtain Form 16B and furnish it to the seller.
  • TDS duly deposited and the properly filled Form 26QB, It must be deposited within 30 days from the end of the month in which TDS was deducted.
  • For the seller the PAN card is mandatory. If the PAN card is not available to the seller, otherwise 20 % TDS will apply.
  • After payment of the TDS, the buyer must give the TDS certificate to the vendor. This can be accessed in about two weeks from the date of deposit of TDS.
  • Obtaining a TAN number is not compulsory for the customer.

Points should be Buyer of Property identify:

Deduct tax @ 1 % from consideration for sale.

Collect the Seller’s Permanent Account Number (PAN), and inspect the same with the Original PAN Card.

Seller’s and buyer’s PAN should be mandatorily filled in the online form for furnishing sales transaction information.

Do not make any errors in quoting the PAN or other details in the online form, since there is no online error correction mechanism. You are required to contact the Income Tax Department for rectification.

Points should be Seller of Property identify:

www.carajput.com;Section 194IA

www.carajput.com; Section 194IA

Provide your PAN to the Department of Income Tax for the collection of TDS details to the Purchaser.

Check your Form 26AS Annual Tax Statement for the deduction of taxes deducted by the Buyer.

Information needed for Challan26QB:

The following details are needed when filling out the form 26QB) for Full Challan 26QB.

  • Sale & buyer’s PAN,
  • Copy of the Seller & Buyer PAN Card,
  • Information of seller & buyer, and amount of final consideration
  • Property descriptions in which transaction to complete.
  • The amount payable/credited & details of the tax deposit.

Frequently Asked Questions (FAQ) about On selling of property and application of  form 26QB and form16B:

www.carajput.com;Section 194IA; Form 26QB; Form 16B

www.carajput.com; Section 194IA; Form 26QB; Form 16B

Here we answered a few of the commonly asked questions about Form 26QB:

Q How to Download 26QB Form?

A. If you are wondering how to pay and access the form through Challan 26QB then here are the steps you need to follow:

www.carajput.com;CHALLAN

www.carajput.com; CHALLAN

  • Go to the TIN NSDL website and click on the link “e-payment: Pay Tax Online” located under the homepage’s “Services” tab.
  • On the next tab, click on Form 26QB (Online Form for Property Furnishing TDS) under the TDS on Property Sale menu:
  • Fill out the appropriate details

Download process: Form 26QB

www.carajput.com;TDS Form 26QB

www.carajput.com; TDS Form 26QB

  • When the payment has been made, the purchaser will have to wait a few days for the information to be reflected on the TRACES website. Registered users will be able to receive either Form 16B or Form 26QB, accepted in Form 26AS.
  • If the payment has been recorded in Form 26AS, the payment made on the sale of the property against TDS is reflected in Part F of Form 26AS under ‘Details of Tax Deducted at Source on      Sale of Immovable Property under section 194(IA). This will display information such as the   TDS certificate number, name of the deductee, PAN of the deductee, total transaction amount, booking status, date of transaction, TDS deposited, acknowledgment number, deposit date, and booking date.
  • Now click on the ‘Downloads’ tab to go to the TRACES website. Click on ‘requested files’ in the drop-down line. If an application is not submitted the user will be asked to submit a download request. Enter the nine-digit acknowledgment number reflected on Form 26AS Part F. After doing so, the user may display the application status. The application will be processed in a few hours, and the user can access Form 16B by entering the number of the submission. To receive Form 26QB a similar procedure must be followed.

Q What type of form 26QB and form16B are?

A. Form 26QB is a return cum challan which is used for payment of TDS to the government of India. Form 16B is a TDS certificate issued to deduct TDS by the buyer to the seller.

Q What is the depositing procedure of TDS?

A. following List of the process for filing TDS is as follows

  • Calculate 1 Percent of TDS on the overall consideration for sales. The seller will be paying Rs.59,40,000 after TDS for a property being sold for Rs. 60 lakhs.
  • Make the payment online on Form 26QB. It creates a challan. Notice that this has to be completed within 7 days from the end of the month TDS is deducted in.
  • The payment is reflected within 7 days on Form 26AS of the seller under Part F heading.
  • The buyer will then be allowed to provide the seller with a TDS certificate called Form 16B. This is available for free on the TRACES website.
  • To do this, register with your PAN and challan number on the TRACES web site.

Payment By Challan 26QB (Online & Offline) : To make your payment through Challan 26QB, here’s what you need to do:

 

www.carajput.com;CHALLAN;Form-26QB

www.carajput.com; CHALLAN;Form-26QB

  • Stage 1-Go to.tin.egov-nsdl.com / e-tax new / tds non tds.jsp services online.
  • Stage 2Click Form 26QB.
  • Stage 3- If you are a corporate taxpayer pick 0020. Others could just press 0021.

To fill Form 26QB, select one of the options given:

  • (0020) Corporation Tax (Companies)
  • (0021) Income tax (other than corporations)
  • Assessment Year and financial year
  • TDS deductor address and
  • Information on Property
  • After that, pick the Payment Mode
  • Payment of e-tax (via net banking facility) immediately
  • Payment of e-tax by subsequent date (payment by bank branch at a later date)

                Step 4 – Fill up the empty blanks and click on Proceed.

                Stage 5 Filled up empty blanks and press to Continue.

If you prefer the net banking option then you will use your Internet banking credentials to log in to your account and make the payment. You can access the Form 26QB when payment is completed.

However, if you choose the “Pat Later” option then a unique Acknowledgement Number will produce with Form 26QB for you. To make the payment, you need to print it out and take the form to your bank branch. You need to make the TDS payment using Form 26QB within 10 days of producing this form.

The taxpayer can log in to the TRACES website after completing the TDS payment and verifying that the payment is reflected in Form 26AS, and download Form 26AS from the Downloads menu after providing the relevant information.

A confirmation screen appears. The two options are given to user-” Print Form 26QB “and” Send to Bank. It also shows a specific acknowledgment number. Keep a record for future use of that acknowledgment amount. To take a copy of the document click “Print Form 26QB.”

Mode of Payment

You may make the Taxation payment instantly, i.e. via net-bank or by visiting one of the bank branches on a subsequent date. If the payment is made online, a print of the Challan 280 marked on 800 may be taken. If the payment is made at a branch, an e-receipt for Form 26QB will be generated along with a unique acknowledgment number. This has to be submitted with the cash or cheque to each of the approved lenders. The institution must generate the Challan until the tax sum is paid to the bank.

For the payment here is the list of some Authorised bank

  • HDFC Bank
  • Central Bank of India
  • Indian Overseas Bank
  • Jammu & Kashmir Bank
  • Axis Bank
  • Bank of Baroda
  • Corporation Bank
  • Andhra Bank
  • ICICI Bank
  • Dena Bank
  • IDBI Bank
  • Indian Bank
  • Bank of India
  • Bank of Maharashtra
  • Canara Bank
  • Syndicate Bank
  • Oriental Bank of Commerce
  • United Bank of India
  • Vijaya Bank
  • Punjab and Sind Bank
  • Punjab National Bank
  • State Bank of India
  • Allahabad Bank
  • UCO Bank
  • Union Bank of India

Q How does this appear on the seller’s sales tax return?

A. Capital gains from property sales along with the TDS details found in Form 26AS would have to be recorded in the seller’s income tax return.

Q What is the Process for issuing form 16?

Ans Process for issuing form 16 are as under : 

  1. After 5 days, proceed to the TRACES portal (www.tdscpc.gov.in) to download Form 16B.
  2. Steps to get Form 16B downloaded:
  • Register & sign in as a taxpayer using your PAN on the TRACES portal (www.tdscpc.gov.in)
  • Under the “Downloads” tab, pick “Form 16B (For Buyer).”
  • Enter the property transaction information for which you must submit Form 16B. Enter the Seller’s Assessment Year, Acknowledgement Number, PAN and press “Continue”
  • A screen appears for confirmation. To continue, click on “Submit Application.”
  • A message of completion should appear on the submission of a download request. To check for the download request please note the request number.
  • To download the requested files, click on “Requested Downloads.”
  • Request check with the request number. Select the row of requests and click on the “download HTTP” button.

Q How can I deduct TDS if I don’t have TAN?

A. To deduct TDS, the buyer need not have a Tax Collection and Deduction Account Number (TAN). Additionally, both the buyer and the seller need to provide their PAN for the transaction like TDS deduction.

Q. I had forgotten to subtract TDS when I bought a house. Now, what will I do?

A. Non-deduction of TDS on the remaining TDS balance faces a penalty value of 1 percent. To set the account straight you need to act and pay the penalty as soon as possible. Be sure to forward the TDS to the government and file the return of TDS within the specified period, as well as avoid certain penalties.

Q Is deduct TDS is required for purchasing agricultural land?

A. No. As per Section 194-IA, If you are purchasing agricultural land, you do not need to deduct TDS for the transaction

Q. Is the Deduction of TDS is Compulsory if I am Purchasing Agricultural Land?

A. No, As per section 194-IA there is no need to deduct TDS if you are Purchasing Agricultural Land.  Agricultural Land is an area  within the jurisdiction of Municipality or Cantonment Board which has a population of not less than 10,000 or It is Area in any area within below given distance measured are as under:

The population of the Municipality Distance from Municipal limit or Cantonment Board
More than 10,000 but does not exceed 1,00,000 Within 2 kms
More than 1,00,000 but does not exceed 10,00,000 Within 6 kms
Exceeding 10,00,000 Within 8 kms

Q. How to make payment of TDS by using Form 26QB?

A. By using Form 26 QB, you can avail of any of the options for remit TDS to the government Choose the E-tax payment option on the TIN NSDL webpage and payment online with net banking. Generate Form 26QB with a unique acknowledgment number, and use this form to visit your bank to pay. Form 26QB with acknowledgment number is 10 days validity.

Q. What penalties do Form 26QB enforce for non-compliance with the above TDS provision?

A. Penalties relating to Form 26QB of Section 194-IA

It is important to remember here that failure to deduct TDS, issue Form 16B or failure to file Form 26QB attracts attention and penalty. The penalties which apply are as follows:

Condition Penalty
Non-deduction of TDS The interest of 1% on the amount not deducted for TDS
Non-remittance of TDS to the government The penalty of 1.5 percent of the sum deducted each month
Delay in filing of TDS returns The penalty of 200 Rs per day for the default day

 

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)

IBC Forms- Insolvency and Bankruptcy Code 2016 – Forms, Demand Notices, Returns

IBC Forms- Insolvency and Bankruptcy Code 2016 – Forms, Demand Notices, Returns

www.carajput.com; IBBI

www.carajput.com; IBBI

The implementation of the 2016 Insolvency and Bankruptcy Code (“IBC”) in India has provided a fundamental change in attitude to addressing the issue of rising non-performing assets (NPA) and assisting the financial sector with early detection, rehabilitation and restructuring steps of stressed assets.

www.carajput.com;IBBI Code & Regulation

www.carajput.com; IBBI Code & Regulation

Various Kind of Demand Notice Forms issued under the IBC Code, Insolvency is that state when one is unable to pay the debt. Demand Notice to recover the debt is sent under of IBC Code, 2016 by the creditor/ Employee/ Workman or any other person to the corporate debtor. IBC Code also prescribes the procedure to file an insolvency proceeding before NCLT.

Insolvency Resolution Process for Corporate Person- Time Limits under IBC

www.carajput.com;Flowchart

www.carajput.com; Flowchart

Key point Under the IBC

As per IBC sections 7 and 9, it is not mandatory to allow the corporate debtor the chance to be heard until IBC’s application is accepted. And as set out in section 14, once the IBC application is accepted, the management team goes into the hands of IRP proposed by such an applicant. Therefore, there are high chances that even a small default could cause a situation where the business goes to hands. It is because, on the one hand, creditors recover debts from the bankrupt company while, on the other, certain creditors use IBC to intimidate and harass the corporate debtor. It is a manipulation of new legislation to place pressure on corporate debtors to recover the fraudulent/falsified claims.

The civil recovery issues take a very long time to determine which is a well-known reality. There is a weak credit control in trade, due to poor recoverability. It has influenced companies, as it also contributes to a high demand for capital investment and leading to greater pressure on profitability.

Insolvency & Bankruptcy Code (IBC) has made a big change, and now an operational creditor can take action under IBC to recover their duties in a very cost-effective manner. Various Forms Specified areas under Insolvency Resolution Process for Corporate Person:

Forms Description Go to
Form A Public Announcements Click here
Form AA Consent to act as Resolution Professional Click here
Form AB Consent to act as an authorized representative Click here
Form B Proof of claim Click here
Form C Submission of a claim by the financial creditor Click here
Form CA Submission of a claim by the financial creditor in a class Click here
Form D Proof of claim by workman or employee Click here
Form E Proof of claim by workman or employee by an authorized representative Click here
Form F Submission of a claim by creditors Click here
Form FA Application for withdrawal of CIRP Click here
Form G Invitation for expression of interest Click here
Form H Compliance certificate Click here
Form 1 Application by financial creditor to initiate CIRP Click here
Form 2 Written communication by proposed IRP Click here
Form 3 Form of Demand Notice demanding payment under IBC code, 2016 Click here
Form 4 Form of Notice with which Invoice demanding payments to be attached Click here
Form 5 Application of Operational Creditor to initiate CIRP Click here
Form 6 Application by Corporate Applicant to start CIRP Click here
Due dates Under the IBC 

Fast Insolvency Resolution Process for Corporate Person

www.carajput.com;IBBI Section55 to 58

www.carajput.com; IBBI Section55 to 58The aim of the Fast Insolvency Resolution Process for Corporate Person is to speed up the CIRP of start-ups and small businesses with less complexity and the time taken to complete an insolvency resolution to nearly half as opposed to the standard Code procedure. The Fast Insolvency Resolution Process for Corporate Person must be done within a period of ninety (90) days, as compared in other situations to one-eighty (180) days. The adjudicating authority may, however, extend the duration of ninety ( 90 ) days by a further period of up to forty-five (45) days to complete the proceedings. However, this extension can only be given once and can only be applied for if COC agrees that in a resolution adopted and approved by a majority of 75% of the voting share

The Regulations and the Fast Track Resolution process apply to the following corporate debtor categories-:

(I) a small enterprise as described in the 2013 Companies Act;

(ii) a start-up (other than a partnership) as set out above;

(iii) an unlisted corporation with total assets not exceeding one crore, as stated in the financial statement of the financial year immediately preceding it.

Various Forms Specified areas under Fast Insolvency Resolution Process for Corporate Person :

Forms Description Go to
Form A Public Announcements Click here
Form B Proof of claim Click here
Form C Submission of a claim by the financial creditor Click here
Form D Proof of claim by workman or employee Click here
Form E Proof of claim by workman or employee by an authorised representative Click here
Form F Submission of a claim by creditors Click here

The Laws as a whole provide for the resolution process from the commencement of the corporate debtors’ insolvency resolution until its completion, with the adjudicating authority’s approval of the resolution plan within the specified deadlines, thus guaranteeing the extremely viable of any case under the fast track procedure.

Liquidation Process

www.carajput.com;IBC

www.carajput.com; IBC

 

www.carajput.com;IBC process

www.carajput.com; IBC process

Under the following conditions, the winding-up process is activated under section 33 of the Insolvency and Bankruptcy Code 2016-

  • When no resolution plan is presented by qualified interim resolution as provided from the adjudicating authority at or before the insolvency resolution period expires.
  • If the resolution strategy is not consistent with section 31 as provided by IRP.
  • When a request from the creditor’s committee is issued for the liquidation of the corporate debtor during the corporate insolvency resolution process, the same shall be conveyed to the adjudicating authority by the interim resolution professional.
  • If the corporate debtor refuses to obey the resolution plan authorized by the adjudicating authority and the individual or creditor impacted by this files an application for the liquidation of the corporate debtor and the adjudicating authority considers the corporate debtor responsible.

When the mechanism of liquidation is begun in compliance with the above requirements, the moratorium will begin. During the suspension, a public statement shall be made on the liquidation of the corporate debtor.

As per section 34, a liquidator is named and the fee to be charged to him in respect of the trial is determined. The liquidator fee is part of liquidation assets proceeds. The Professional Counsel also serves as a liquidator until NCLT replaces him.

Liquidation trust shall be established in compliance with section 36 of the Code of Insolvency and Bankruptcy. Each section is the cornerstone of the corporate liquidation process as it determines which corporate debtor’s assets will form part of the liquidation estate, how the assets will be allocated by the liquidator, and who will retain the estate as a fiduciary for all creditors’ benefit.

Various Forms Specified areas under Liquidation Process :

Forms Description Go to
Form A Performa for Reporting consultations with Stakeholders Click here
Form B Public Announcements Click here
Form C Submission of a claim by the financial creditor Click here
Form D Proof of claim by workman or employee Click here
Form E Proof of claim by workman or employee by an authorized representative Click here
Form F Submission of a claim by creditors Click here
Schedule 111 Form for cashbook, general ledger, bank ledger, register of assets, securities, and investment registers, tenants ledger, etc. Click here

The creditors’ claims are then assessed. There are different parts assisting in this process. Section 38 specifies how financial and operational creditors’ claims should be combined, section 39 specifies how claims should be checked, and section 40 describes the procedure for approving and rejecting claims, and under section 42 of IBC describe how the applications against the liquidator decision shall be processed.

Voluntary Liquidation Process

www.carajput.com;IBC

www.carajput.com; IBC

The company isn’t always flourishing. This may face other difficulties, such as liquidity crisis and economic downturn, as a result of which the corporate debtor delays meeting its creditor’s responsibility.

If the corporate debtor has been unable to discharge his debts and does not have adequate resources such as available funds, then the corporate debtor will voluntarily file the insolvency petition for the Corporate Insolvency Resolution Process and NCLT must accept it if the petition has not been submitted to defraud the creditors.

Forms Description Go to
Form A Public Announcements Click here
Form B Proof of claim Click here
Form C Submission of a claim by the financial creditor Click here
Form D Proof of claim by workman or employee Click here
Form E Proof of claim by workman or employee by an authorized representative Click here
Form F Submission of a claim by creditors Click here
Schedule 11 Form for cashbook, general ledger, bank ledger, register of assets, securities, and investment registers, tenants ledger, etc. Click here

Connect to us for expert legal consultation for more effective legal aid or knowledge about the value of claim notice under the insolvency and bankruptcy code.

The insolvency law requires a financial creditor and operational creditor to file insolvency proceedings against a defaulting corporation after determining that there is a dispute between the parties. The first move is to give the corporate defaulter a claim notice (Form 3 of IBC) to recover operating debt under insolvency law. To creditors that are not financial creditors and operational creditors, to example: homebuyers, submission of a “Form F” is necessary to file a claim.

Depending on the facts and details of the operating debt to be recovered, a good corporate lawyer will draft a notice of claim on your behalf.

Want Legal Assistance? Consult with Rajput Jain & Associates most accomplished lawyers anywhere in India!

How does the Role of Resolution Professional help under IBC

Fresh IBC has been suspended for one year. As per the declaration of FM.

Just contact us at info@carajput.com or call us at 9555-555-480 now.

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)

CBDT: New Income Tax Policy changes under new 26AS

CBDT: New Income Tax Policy changes under new 26AS For More Transparency and Compliance

www.carajput.com; CBDT New Income Tax Policy

www.carajput.com; CBDT New Income Tax Policy

  1. Income Tax New declarations needed in the latest ITR forms 1to7 are as follows: Ownership of the house: Individual taxpayers who are joint owners of the house can not file ITR 1 or ITR4.
  2. If having the Passport: Than the Passport number must be recorded if it is owned by the taxpayer. It is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, this will be made mandatory in other ITR forms as and when they are notified.
  3. In the case of Cash deposit: In the case of ITR 4-Sugam filings, it has been made mandatory to report the money deposited as cash on the bank account if the balance exceeds Rs 1 crore during the financial year.
  4. International travel: If you expended more than Rs 2 lakh traveling abroad during the FY, you need to report the exact cost expended.
  5. Energy consumption: If your energy costs were more than Rs 1 lakh in total throughout the year, you need to report the actual amount.
  6. Investment details: details of the investment eligible for deduction under Chapter VIA with details of the capital invested during the period from 1 April 2020 to 30 June 2020.
  7. For each assessment year, the last date for filing tax returns is July 31, but this year the ITR filing deadline has been expanded to November 30, 2020, due to the Covid-19 pandemic.
  8. Income tax deductions and exemptions that can be sought under the current tax law for FY 2020-21 (AY 2021-22): the withdrawal of an employee from the Employees’ Provident Fund (EPF) is not taxed after 5 years of sustained service.
  9. Withdrawal from the National Pension Scheme (NPS) at maturity or discontinuance, up to 40% of the money raised on such withdrawal remains tax-free for all. In the event of a partial withdrawal from the NPS, up to 25% of the contributions made by individuals will be tax-free. Business owners’ contribution to NPS up to 10% of their basic salary and allowances persist tax-free.
  10. Pursuant to Section 10(10D) of the Income Tax Act, the balance of the insurance and bonus paid on maturity or surrender of the life insurance scheme is tax-free. Revenue on maturity continues to be excluded under Section 10(10D) even under the current system. The maturity number, including the interest charged to Sukanya Samriddhi Yojana, does not incur any tax.
  11. Conveyance reimbursement given to cover the cost of transport incurred in the execution of the duties of the office and any compensation provided to the employee to cover the cost of traveling on tour or move (including relocation) is tax-free.
  12. Interest received from the post office savings account balance to 3.500 per individual per year will remain tax-free.
  13. Any scholarship given to cover the cost of education is excluded from tax under Section 10(16) of the Income Tax Act. Compensation earned from the employer up to 20 lakh after five years of continuous service. Leave the encashment earned at the time of resignation or retirement up to 3 lakh.
  14. Form 26AS will now be the full profile of the taxpayer w.e.f. 01.06.2020, CBDT empty Notification dated 28 May 2020 as amended Form 26AS in Sec 285BB w.e.f. 01.06.2020.

The main take-feature in amended Form 26AS is: With the launch of The Transparent Taxation: Honoring the Honest on August 13, 2020, Honorable PM Narender Modi announced a landmark shift in income tax management to put things easy, pain-free and transparent.

www.carajput.com; CBDT new Form 26AS

www.carajput.com; CBDT new Form 26AS

  1. New form 26AS will also provide details on “Specified financial transactions” that include transactions for the purchase/sale of goods, properties, services, works contracts, investments, expenditures, receipt or approval of any loan or deposit of the value that may be approved but not less than Rs 50,000. The FM also suggested steps to ensure full compatibility by extending the scope of monitoring and reporting on subsequent transactions in New Form 26AS:
  • Schooling fee/donation payment over Rs . 1 lakh per year
  • Power consumption Recharge of more than Rs 1 lakh per year
  • Domestic Air Travel or Foreign Travel
  • Payment over Rs 20,000 to Hotel
  • Jewelry purchase, white goods, sculptures, marbles, etc. above Rs 1 lakh
  • Financial assets/credits over Rs 50 lakh in the current account
  • Deposits or credits over Rs 25 lakh in the non-current account
  • Property tax payments above Rs 20,000 per annum
  • life insurance Primum over Rs 50,000
  • Health Premium Cover over Rs 20,000
  1. Data on income tax claim, refund, delayed hearings, and completed proceedings which may include assessment, reassessment pursuant to section 148,153A 153C, revision, the appeal will also be shared in this form 26AS. New form 26AS will also provide the “selected monetary Transactions” information which includes:
  • Buy / sale of goods or real estate transactions, delivering of services
  • Transactions under contractual works,
  • Transactions made by way of an expenditure or expense.
  • Receiving or approving any loan or deposit of the amount specified but not less than Rs 50,000.
  • Demand & Refund under the income tax act
  • Pending and completed proceedings which may include assessment, re-evaluation under section 148,153A 153C, revision, appeal
  1. In this form, 26AS will also be posted details about income tax demand, refund, pending proceedings, and completed proceedings which may include assessment, reassessment under section 148,153A 153C, revision, and appeal.
  2. Details on this Form 26AS at year-end will not be a one-time affair. This will be a live 26AS, as this will be updated regularly within 3 months from the end of the month that such information is gathered in.
  3. For that specific year, Form 26AS will now be a full taxpayer profile as opposed to the previous form 26AS, which only provided taxpayer information via TDS / TCS or self-assessment. This form will also have e-mail, mobile no, and Aadhar no. of the taxpayer.
  4. An enabling provision has also been notified authorizing the CBDT to authorize DG Systems or any other officer to upload information received from any other officer, the authority under any law, in this form. Thus any negative action initiated or found or order carried under any other legislation such as custom, GST, Benami Law, etc. as well as data on turnover, import, export, etc. will also be placed in this form 26AS so that not only the taxpayer involved but also all the tax authorities will understand and have access to the data.
  5. This 26AS form will provide information obtained from any other nation by Tax Deptt under the agreement/exchange of taxpayers due to income data outside India.
  6. The implication of this new form 26AS will be that financial institutions, financial institutions or any other authority or customer, buyer, etc. will now ask for form 26AS while performing thorough research of the person/corporation worried so as to ensure that there are no significant problems about such people/corporations. And
  7. It will now make it impossible for any taxpayer to keep secrets from any bank / financial institution/authority about any proceedings against any statute or tax demand, tax disputes, etc.
  8. The govt has also suggested deducting TDS / collecting TCS at higher rates for those who do not file returns on income tax (ITR). There is also a proposal for the obligatory filing of ITR by those who have their bank transactions above Rs. 30 lakh, all professionals, companies with revenue above Rs. 50 lakh, and rent payment above Rs. 40,000.

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)

Complete understanding of setting up a Branch Office in India

Complete understanding of setting up a Branch Office in India 

Complete understanding of Global Companies Preferences and Needs for open up operation setting up a Division or branch in India. a foreign company for setting up an office in India

  • Branch office in India
  • The liaison office in India or
  • Setting up a Private limited company in India or
  • Project office by a foreign company.
www.carajput.com;Foreign Company

www.carajput.com; Foreign Company

There are few requirements for a foreign corporation to open its branch in India. A subsidiary should be established for different reasons and the establishment of a head office in India’s requirements and needs.

The Reasons for set up Branch Office in India

For the following reasons, international firms, including US corporations, are allowed to set up branch offices in India:

  • Import and Export of supply of goods
  • Provision for Professional or advisory facilities
  • Start the research work which includes the parent company is already doing.
  • for enlarge the Promoting technical or financial collaborations between Indian businesses and a foreign parent or group of companies worldwide.
  • To provide the services to the parent company in India and to act as purchasing/selling representatives in India.
  • for initiate information technology services, and software development in India.
  • for the starting technological assistance to parent/group business provided goods.
  • open up Shipping / Foreign Airline operation
  • Global Banks opening

A Branch office is not allowed to conduct production operations of its own but is authorized to subcontract them to an Indian company. Branch offices founded with RBI approval may remit branch income outside India, net of relevant Indian taxes, and subject to RBI guidelines subjected to the condition of RBI grants permission to set up branch offices.

Specifications and conditions of an establishing  Branch office in India

www.carajput.com;procedure to establish a foreign entity

www.carajput.com; procedure to establish a foreign entity

  • Indian branch office name will be the same as the parent business name.
  • The Branch Office has no control, it is just an extension of an Existing company foreign world market.
  • All branch office costs are borne by the Principal /head office because it has Indian activities revenue does not have revenue.
  • Over the immediately intervening five years in the homeworld, the international parent corporation planning to open a branch office in India would have a successful track record.
  • The company must have The Net Worth, i.e., amount of paid-up capital and free deposits, less intangible assets as specified in the latest Audited Balance Sheet or Financial Report accredited by a Certified Public Accountant or other Registered Financial Practitioner of that name shall not be less than or equivalent to USD 100,000.

A branch office is ideal for international firms looking to set up a temporary office in India and not involved or intending to make long-term plans for Indian operations; except for the above-listed finance, shipping and airlines, etc.

Necessary document required to establish a branch office in India

www.carajput.com; Branch Office

www.carajput.com; Branch Office

Presently, the application for the branch office and BRANCH office is sent through the AD according to the Reserve Bank of India conditions. The approved dealer implies obtaining banking licenses for a different entity.

To start a branch office in India the following filings are required:

  • Certification of Incorporation – Translated & duly notarized and properly authenticated.
  • The Latest audited Balance sheet and annual accounts of the parent company duly Translated notarized for the past 3 years and properly authenticated.
  • The expected funding level for operations in India.
  • Details Relating to address of the proposed local office, the number of persons likely to be employed, the number of Foreigners among such employees, and address of the head of the local office, if decided
  • Details of Activity carried out in Home Country by the applicant organization in brief about the product and services of the company in Brief.
  • Bankers Certificate
  • Name, Address, email ID, and telephone number of the authorized person in Home
  • Letter from the principal officer of the Parent company to RBI.
  • Letter of authority from the parent company in favor of Local Representative.
  • Letter of authority/ Resolution from the parent company for setting up BRANCH office in
  • Comfort letter from the parent company intending to support the operation in India.
  • Two copies of the English version of the Certificate of Incorporation, Memorandum & Articles of association (Charter Document) of the parent company duly attested by the Indian embassy or notary public in the country of registration.
  • Details of Bankers of the Organization the Country of Origin along with the bank account number
  • Commitment from the Organization to the effect that it will be open to report / opinion sought from its banker by the Government of India / Reserve Bank of India
  • Form FNC 1 (Three copies)
  • Latest Proof of identity of all the Directors – Properly Certified by Banker in Home Country and duly authenticated
  • Latest Proof of address all of the Directors – Properly Certified by Banker in Home Country and duly authenticated
  • Details of the Individuals / Company holding more 10% of Equity
  • Structure of the Organization and its Shareholding pattern
  • Complete KYC of Shareholders holding more than 10% Equity in the Applicant Company Resolution for Opening up Bank Account with the Banker
  • Duly Signed Bank Account Opening Form for Indian Bank
  • Note: We can assist in getting all these documents, wherever required prepared and advice on the various issue relating to this. Please feel free for clarification, if any required in this regard.

The RBI accepts the application for BRANCH office licenses but the Approved Dealers (AD) route the applications for BRANCH office as per the recent changes. Despite that, the timeframe for creating the BRANCH office has significantly expanded. Even the paperwork needed for the same has significantly increased.

Other criteria for Incorporation of Branch Office

That RBI-licensed branch office shall be licensed with the Ministry of Corporate Affairs, it is a branch office registration as a foreign business establishment in India. On such registration, the business registrar allocates a CIN i.e. Corporate Identification Code. The following forms must be filled out with the Companies Registrar:

  • Form 44
  • Charter, laws or document and articles of agreement or other act constituting or establishing the creation of a company(In the manner provided for in Rule 16, General Rules and Functions of the Companies (Central Government), 1956)
  • Unless the records alluded to above are not in English instead of the original edition of the papers.
  • Information Director(s)-Persons
  • Information Director(s)-Public bodies
  • Reserve Bank of India letter of approval
  • Information Secretary(s)
  • Resolution of control of attorney or board in lieu of designated representative(s)

Procedural criteria for post-incorporation

The below few more criteria for a branch office are also required after Incorporation:

  • PAN of company.
  • TAN (Tax-deductible Number) -Shop and Establishment certificate details
  • certificate of GST Registering if  Branch provides services in India or provide  facilities in India

Annual enforcement practices a Branch Office needs

www.carajput.com; Branch Office

www.carajput.com; Branch Office

Every branch office is required each year to do the following activities:

  • To be maintaining complete record Files
  • To audited Financial Report
  • To be Filling with RBI Annual Operation Certificate
  • To be Completion of the regular report and balance sheet for business registrar
  • to timely inform about some shift in the world Business constitution of RBI & ROC
  • to timely information about any change of Foreign Company Directors to RBI & ROC
  • to timely information about all change or shift to RBI & ROC at the BRANCH office
  • No additional place of business may be established until RBI intimation and approval.

Regarding company management standards in India see also Annual Corporate Filings in India.

How to close a Branch office actives in India

www.carajput.com; Branch Office

www.carajput.com; Branch Office

A branch office license is usually issued for three years. If a business decides to close the branch office set up in India at any time, it must file with the RBI via its Registered Dealer the required documentation. Liaison offices cannot able closed without Properly compliance made with ROC,

The specification for the termination usually contains the followings:

DOCUMENTS REQUIRED FOR CLOSING OF LIAISON OFFICE: – For processing the Closing of Liaison Office, it shall file the necessary documents with the  AD, and the application for the closure shall be forwarded by the Authorized Dealer. following documents are required

  •   Copy of the Reserve Bank’s permission/ approval from the sectoral regulator(s) for establishing the BO / LO.
  •   Auditor’s certificate-
  1. i) indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant, and indicating the manner of disposal of assets;
  2. ii) confirming that all liabilities in India including arrears of gratuity and other benefits to employees, etc., of the Office have been either fully met or adequately provided for; and iii) confirming that no income accruing from sources outside India (including proceeds of exports) has remained un-repatriated to India.
  • NOC / Tax Clearance Certification for the remittances from the Income-Tax department.
  • Confirmation from the applicant/parent corporation that no civil proceedings are pending at any court in India and that there is no procedural barrier to the remittance.
  • A report from the Registrar of Companies regarding compliance with the provisions of the Companies Act, 1956, in case of winding up of the Office in India.
  •  Any other document/s, specified by the Reserve Bank while granting approval.
  • Copy of the authorization/approval by the Sectoral Regulator(s) of the Reserve Bank to create the BO / LO.

Note: We can assist in getting all these documents, wherever required prepared and advice on a various issues relating to this. Please feel free for clarification, if any required in this regard.

The branch must be on “Stand Alone basis” in India 

Stand-alone branch offices are segregated and restricted to the Special Economic Zone ( SEZ) only, and no commercial activity/transaction is allowed beyond India’s SEZs, which involve branches/subsidiary offices of the parent company.

For a business to create a branch/unit in SEZs to conduct manufacturing and service activities under prescribed conditions, no approval is needed from RBI.

Liaison Office /Representatives office 

www.carajput.com; Branch Office

www.carajput.com; Branch Office

With the approval of the Indian government, a liaison office could be created or started. The Liaison Office’s function is limited to knowledge collection, export/import promotion, and promoting technical/financial partnerships.

The Liaison Office can not do any commercial operation explicitly or implicitly for business operations in India. For  processing the Liaison Office application of Stand Partners, the following fresh documents are required:

  • Duly signed & stamped detailed covering application ;
  • Financial projections of the proposed liaison office duly certified from its auditors ;
  • Signed & stamped new form FNC in quadruplicate ;
  • Fresh notarised & apostle Certificate of Incorporation of the applicant company along with Memorandum & Articles of Association ;
  • Signed & stamped Audited Financials of last 3 year from the auditors of the company duly signed from directors of the applicant company;
  • Fresh notarised & apostle POA along with duly signed & stamped board resolution of the applicant company
  • Signed & stamped letter of authority in our favor;
  • Signed & stamped details of activities carried on by the applicant company and to be carried on by the proposed liaison office ;
  • Signed & stamped details of Companies banker along with a report from the respective bank  about its tenure of operation of account & relations with the applicant company ;
  • Signed & stamped details of the state;
  • Signed & stamped details of directors of the applicant company;
  • A letter of comfort is not required in case if the applicant company provides audited financials of last year;

Should you require any further clarification/explanation in this regard, please feel free to revert.

Project Office in India 

www.carajput.com; Branch Office

www.carajput.com; Branch Office

Foreign companies intending to carry out unique projects in India will create temporary project/site offices in India to carry out activities relevant to that project only. The Indian Government has now given foreign companies normal permission to create project offices subject to defined conditions.

S.No. Particulars
A. SET-UP OF PROJECT OFFICE
1. GENERAL PERMISSION
Reserve Bank has granted general permission to foreign companies to establish Project Offices in India,

provided they have secured a contract form an Indian company to execute a project in India, and

(a) the project is funded directly by inward remittance from abroad; or

(b) the project is funded by bilateral or multilateral International Financing Agency; or

(c) the project has been cleared by an appropriate authority, or (d) a company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project.

2. SPECIFIC PERMISSION
However, if the above criteria are not met, or if the parent entity is established in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China, such applications have to be forwarded to the Central Office of the Foreign Exchange Department of the Reserve Bank at Mumbai for approval.
Procedure for Opening Project Office by Foreign Companies in India:

·        The foreign company has to apply in the form FNC 1 to the Reserve Bank of India in order to open a project office in the country

·        The foreign company has to secure a contract for a project from an Indian firm that will be executed in India

·        The project, that the foreign company has secured, has to be approved by the appropriate authority or

·        The project, that the foreign company has secured, has to receive funding directly from abroad in the form of inward remittance or

·        The project that the foreign company has secured has to receive funding from the Agency of International Financing or

·        The Indian firm that has given the contract to the foreign company has been granted by a bank or Financial Public Institution a term loan in the country for the project

 
Documents/Information Required:

·        Duly filled application form by Foreign Company

·        Copy of Memorandum / Charter of incorporation of a foreign company

·        Certificate of Incorporation of a foreign company

·        KYC of a foreign company

·        Name and address of Foreign Company

·        Reference No. and date of letter awarding the contract along with a copy of the contract, if any

·        Particulars of authority awarding the contract

·        Total amount of contract

·        Address of proposed project office

 

Note: It is really necessary to select the right form of company or corporate body for a foreign investor in India that better fits its interests and takes care of the issues of liability and tax planning. Foreign firms seeking to do business in India will pay careful attention to Foreign Investors Entry Strategies & Tax Preparation and corporate structuring to save taxes to the maximum possible degree permitted by laws and international tax treaties.

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)

Key highlights of PM Modi’s speech on Transparent Taxation: Seamless, painless, Faceless Assessment

Key highlights of PM Modi’s speech on Transparent Taxation: Seamless, painless, Faceless Assessment

www.carajput.com; PM MODI Speech; Income Tax

www.carajput.com; PM MODI Speech; Income Tax

On 13 August PM Modi will launch the platform ‘Transparent Taxation – Honoring the Honest’,  The upcoming platform would help CBDT’s reform agenda to make the tax filing process clearer and simpler, the Ministry of Finance said. The CBDT has taken a number of steps in recent years to boost transparency and introduced direct tax reforms: PMO.  In the run-up to Independence Day, in a bid to honor honest taxpayers, Prime Minister Narendra Modi is preparing to launch the Transparent Taxation Honest Platform, a move that will enhance attempts to reform and streamline our taxation system.  The system that will be launched today is expected to continue the journey of direct tax reforms that have been undertaken over the last six years.

Key highlights of PM Modi’s speech on Tax Reforms are as under:

www.carajput.com; PM MODI Speech; Income Tax

www.carajput.com; PM MODI Speech; Income Tax

  • Faceless Income Tax Scrutiny – The income tax assessment is now entirely faceless. No local officer shall be engaged in the proceedings. Such a process shall be confidential to the taxpayer as well as to the tax officer.
  • Now, a smooth, faceless, and tireless process.
  • Faceless Income Tax Appeal
  • No issue with the transfer of income tax officers
  • Out of 130 Crores, only 1.5 Crores Indian pays income tax. Therefore, they should come forward to pay their taxes properly.
  • In the last 6 years, about 1500 laws have been abolished by the Modi administration. In India, for ease of business.
  • Incorporated the Taxpayer Charter, which set out the dedication of the Income Tax Department and the perceptions of the Taxpayers.
  • The main purpose is to make every rule-of-law, policy-driven, and public-friendly. This is the use of the new governance model and the country is getting results.
  • Taxpayers charter is also a major step forward on the nation’s development journey.
  • India is among the lowest corporate tax nations, says PM Modi.
  • There is a very small percentage of the total population of taxpayers in the country. He said that.
  • The goal is to make the tax system seamless, painless, and faceless.
  • The statement posted on Wednesday stated that tax reforms would involve increasing accountability in official communications through the recently launched Document Identification Number (DIN) in which each departmental communication would carry a unique document identification number generated by a computer.

The IT Department also outlined the Direct Tax “Vivid  Vishwas Act, 2020,” under which declarations for settlement of disputes are currently being filed, in order to provide for the resolution of pending tax disputes. The monetary requirements for filing departmental appeals in multiple appellate courts have been increased to efficiently raising taxpayer lawsuits and litigation. Several measures were taken to promote digital transactions as well as electronic payment methods. The IT dept is determined to take measures forward and has also made efforts to ease adherence for taxpayers during the COVID period by trying to extend statutory timeliness for filing returns as well as releasing refunds promptly to increase liquidity in the hands of taxpayers.

The Prime Minister’s forthcoming announcement of the “Transparent Taxation-Honoring the Honest” initiative would begin the path of direct tax reforms.

www.carajput.com; PM MODI Speech

www.carajput.com; PM MODI Speech

we hope, this will improve the quality of assessments, even if there would be more litigation at ITAT/HC/ SC level due to the difference of opinion of Tax Payers and the Income Tax Department.

https://carajput.com/learn/key-highlights-of-pm-modis-speech-on-transparent-taxation-seamless-painless-faceless-assessment.html

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)

New Small Business Idea that match with your Personality

www.carajput.com;Small Business

www.carajput.com; Small Business`

Everybody wants to do something that gives them the opportunity to earn more money and becoming a businessman is possible. One of the existing paths to wealth is to establish your own company. Entrepreneurship is one of the critical decisions that need to be taken and it involves a number of risks and also has its own benefits. Just the same Beauty of becoming your boss is still above any other form of work. There are several items you have to focus on to launch your own business. Choosing the correct idea is a difficult call for an entrepreneur, which is an important choice. To start your own business, you need to understand the environment in order to set up your own company.

A new and vibrant part of the Indian Economy is the small business market. This sector is the nursery for entrepreneurial talent development and is now an important component of the production chain. The government is shifting to small and medium-sized enterprises and businessmen in both industrialized and emerging countries as a way of economic development and a practical means of solving problems. It is a foundation of creativity, development, and work formation. To run a successful small business you don’t need to be a genius but you need some help. So that’s just what this book is, a roadmap into the enjoyable world of ownership and management in small businesses.

India Company gets up

Our honorable Prime Minister has unveiled a 19-point course of action for start-up companies in India. Honorable Prime Minister, emphasizing the value of the Standup India Project, said the work-seeker must become an employment maker. The Prime Minister declared that the plan anticipates loans from the Scheduled Castes, Scheduled Tribes, and at least two young enterprises Categories Gender. It was also reported that the loan to one crore rupee limit is to be in the 10 lakh. A startup India platform will be established as a common point of touch for the whole business community to allow for the sharing of information and access to finance.

We’ve assembled a collection of the new small business concepts from which you can pick. So read on to figure out which one would better match you.

1. Kinder garden & daycare

www.carajput.com;Small Business

www.carajput.com; Small Business

Indian families were turned nuclear in the 21st century. Finding that both parents work full-time jobs has become very normal. In this case, it becomes necessary to have daycare for children between 3yrs -12yrs aged age groups. Merging play area and daycare will render the company a searched-after service provider for all the working parents.

2. Pregnant woman activities class

This company will prove very profitable if you sell it well after getting a swift certification. Remember that you will get your certifications from a recognized training center to get your customers to trust in your activities.

3. Handcrafted Gift Store

www.carajput.com;Small Business

www.carajput.com; Small Business

When it comes to gifting, several people struggle for creative ideas. Whether it comes to gifts receiving qualified support goes a fairway. Corporate Gifting services are in great demand nowadays. The correct gift should make you leave the recipient with a positive vibe.

4. Flip Market

It has become quick to locate buyers for used products, with the aid of platforms such as OLX. When you have the ability to see a used product’s correct worth, you will earn a decent profit by selling it digitally.

5. The consumer market in Chocolate

Chocolate is one of the best Home Business items. If you like chocolate producing make it your company. To start this business, you need a chocolate recipe, utensils, cookware, molds, and packaging material. To purchase the candy, you need to join up with shopping centers or independent shop keepers. You should also be talking about building an identity online.

6. Education classes  

Starting from Education Class is one of the best ideas for home-based small businesses. You can start this business if you have good teaching skills and knowledge-how. To start this company you will need a couple of wooden benches and blackboards. This business at first demands mouth marketing or advertising

7. Food Chain  Services

In Beginning Food Chain services is a very attractive concept for a small company focused on your residence. If you are good at cooking tasty food at a good price you should start this company, everybody needs food. It has become very easy to market your delights with the new App-based delivery companies. The expenditure needed for this enterprise is very small. The positive mantra of this company is buttery food with the right quality.

8. Yoga session

www.carajput.com; SMALL BUSINESS

www.carajput.com; SMALL BUSINESS

One of the profitable and valuable, home-based business options is to start a yoga class. In India, the healthcare professions are rising at a higher pace. People shift their mindset from an appropriate treatment approach to preventive care. You can start your own yoga session when you’re a certified yoga teacher or expert in yoga. There is also a high demand for internationally certified Yoga teachers.

9. English Language Coaching Training

Spoken English coaching is a common concept for small companies located in the home. If you are fluent in English you can start coaching classes in Spoken English. English is a language that is accepted internationally. People are likely to invest time in developing a spoken English-related ability. With low investments, the class can be begun. But in teaching English, you have to be fantastic and highly qualified.

10. Wedding Planner   

Don’t connect this with organizing activities. Planning for the case is a far wider concept. But wedding planning is an area which is very sophisticated. Planners for weddings are also in demand. You should launch your own wedding preparation company, provided you have design experience and employees. This company needs moderate effort. It’s also a kind of concept for small enterprises.

11. Foodstuff store

The next idea for a small business is the diet food shop. A number of people are involved in weight loss and ready to consider diet food. And launching a Diet Food shop would certainly turn out to be a profitable business. I would recommend that you obtain your personality-qualified qualification before proceeding.

12. Antique Remodeling

If you enjoy working with wood and lovely, usually useful items but don’t have the artistic ability to build your own, antique redevelopment could be your ticket to success. You don’t have to spend a lot of time to get started, depending on what exactly you do, but you’ll need to travel across the country to get the best bits of objects you can get.

13. Herbal oil and organic milk

www.carajput.com;Small Business

www.carajput.com; Small Business

Another, low investment, new business idea. As people are increasingly health aware, there is a development for healthy products. India’s traditional medicinal philosophy, Ayurveda, prescribes certain vitamin and herbal beverages to avoid, treat, or hold health issues.

Unfortunately, India’s market for these herbal and vegetable juices remains relatively under-catered. You can open a highly profitable new business of producing and selling such medicinal juices with some knowledge about the medicinal benefits of vegetables, herbs, and roots.

There’s relatively low investment in this market. You must ensure a fresh daily supply of the raw material. In fact, only fresh juices are of therapeutic benefit and, thus, you would not be allowed to sell boxed or frozen variations that can be processed.

14. Oxygen cafe

Admittedly, a lightweight oxygen cafe is relatively inexpensive for households and workplaces. Notwithstanding this, they are valued or used by a few men. From a small shop or commercial premises, you may sell a full oxygen-cafe operation. You may even sell the service from your home if storage permits. Oxygen cafe indicates when a consumer wears an oxygen mask and inhales over an hour or more the therapeutic consistency of this vital product. Inhaling such oxygen has other safety advantages found in it.

It is said to slow down the cycle of aging thereby promoting healthy skin. It also removes the toxins a customer inhales during the day. This program is especially valuable in busy, heavily air-polluted cities.

It’s a new medium-investment business idea but demand is high.

15. Nonmilky ice creams

www.carajput.com; SMALL BUSINESS

www.carajput.com; SMALL BUSINESS

Milk – free ice creams are once again a largely untapped market in India. It means ice cream produced without milk, including yogurt, food ingredients. Although this seems unlikely, it is true.

A number of firms around India are seeking to popularize coconut milk ice cream, almond milk, and soy milk creams. While slowly these small companies are making headway. Unfortunately, they don’t have a big promotional budget like the main, traditional brands of ice cream. You can get into this non-milky ice cream business too. Such ice creams are in immense demand. However, the non-milky ice cream market, which accounts for its uniqueness, remains mostly unorganized.

Such ice creams have the ability to hit it big in major cities where health-conscious consumers live. Therefore they seek to reject ice cream dependent on butter, which they claim is filled with calories.

Conclusion

The proposals to which we have applied are uncommon. And in a nation like India, these young companies seem to have immense promise. This country’s younger demographic is motivated to keep fresh thoughts and concepts.

Tradition and values run high here, at the same time. It is strongly recommended that you do an independent survey and test for their viability before beginning work on some of the projects that we mention.

Some of these proposals, naturally, need professional skills. In fact, you’ll be spending your vital money on the company. Consequently, it is advised to get recommendations from professionals from the area you choose.

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)

Effective work from home and challenges & Advantages

How Effectively do Work from Home?

www.carajput.com;Remote Worker

www.carajput.com; Remote Worker

While COVID-19’s effect continues to expand across the globe, entities like Gartner support the health and safety of employees by introducing work from home policies. Whereas this may not be a huge effect for already remote employees, the change may be difficult for those who are used to working in an office every day.

However, you can reduce any disturbances with a little planning using some of the best practices below and continue to be a valuable member of your team. Here are 5 tips for beginners who work from home:

1. Defining a workspace

Most of the remote employees make use of a designated room as office space in their home. Every morning you will “commute” over there and stay there in working hours. If you have no other room in your house, don’t be scared! What you need is a room where there will be no disturbances. Find a private room, (with a door if you can!) and set it up with all the essential work such as your laptop, notebook, pens, etc. Try to copy your office environment as closely as you can. This means that if you don’t have a TV in your dressing room, you shouldn’t have one on it while working from home.

2. keep flowing your daily routine

When you’re used to doing exercise at 6:00 AM, read the paper or whatever else your morning consists of — try your best to stick to the same schedule. Take your shower, put on clean clothing, make your coffee, and get ready for the day of work. It would most certainly not add to efficiency as tempting as it may be to sleep until 10 minutes before your workday beginning and work from your pajama pants!

3. Develop and implement a routine

Sticking to a daily routine often means making sure you stick to your usual schedule of work. If you work regularly with an hour for lunch in your office from 8:00 AM to 5:00 PM do the same at home. Even when you’re working remotely, it’s easy to lose track of time and when you’re ready to go home, you don’t ‘pack up for the day’ which can always lead to overwork. Set your own limits, and make sure to remain on top of your schedule.

4. Miscommunicate

Communication is key to success in any situation, but it is much more essential when working remotely because you’re no longer only a few desks away from your colleagues and clients. When working remotely it can be easy to disconnect and lack of contact is never a positive thing for you — personally or professionally. When you have internal online chat messaging systems in your organization make sure you are still available. Call your colleagues or send them a greeting every day. If you’re not already doing so, schedule 1:1 weekly check-in meetings with your boss to determine your priorities, future projects, and daily activities. Using camera technology so that colleagues can see you. Even if you’re actually finding it really hard to manage not to have people around you, make a call and talk to someone.

5. Embrace breaks

Once you continue working daily from home, you can find yourself sitting for hours at your desk — sometimes refusing to sleep, drink enough water, or simply stretch. Notwithstanding what you might think, breaks will encourage efficiency! Taking a walk away from the screen to get some fresh air, enjoying a healthy lunch, doing a little yoga, or simply breathing will also help you to re-energize and refocus.

Challenges Faced during Work from home

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www.carajput.com; Work From Home Challenges

A) The daily commute can be completely avoided and can be easily eliminated not only because of environmental reasons but also saves tonnes of money and energy for people.

B) multimedia-conferencing can and should be replaced by transporting people around the world for meetings (for cost and environmental reasons).

(C) The intention of calling meetings should be clear and specified, in addition to being very clear on who needs to attend and why.

Advantages of Work from Home

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www.carajput.com; Work from Home

A) Appliances

If you’re operating from home, all the facilities you’re having to need can come right out of your wallet – whether it’s internet access, power, or food/snacks that you might probably have picked up from the canteen and workplace pantry. While some of these costs are already factored into the household budget, due to increased consumption you can find a change in spending on these items.

(B) Assurance

One of the benefits of working in an office environment is that you don’t need to remain affixed to your desk and can take frequent breaks. It not only takes away your attention from problems but also reduces the pressure on your back caused by sitting for a long time in one place. From the other side, working from home will cause a decrease in your activity rates and raise your medical costs related to injuries caused by severe spinal pain, lower back, etc.

C) Incertitude

At work, technical meetings above and beyond meetings and phone calls give you an understanding of the company’s situation, the growth strategies, and other important details that you may overlook when operating from home. This could affect your professional life outcomes and increase your employment stress and anxiety.

D) Transportation

Once you’re WFH, that means you’re not likely to really go anywhere during working hours. In two-way travel, this route, you can save substantially. You could save anything between Rs. 100 a day for those who take public transport to over Rs. 200 a day for all who hire private transport, depending on your regular mode of transport.

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)

Way to bring back your business on track post-COVID-19.

Way to bring back your business on track post-COVID-19

www.carajput.com;bring back your business

www.carajput.com; bring back your business

With the aid of exceptional public health and economic policies, India is facing the COVID-19 pandemic. The situation at Corona has forced businesses in a tight spot. Looking towards facts, the country has around 63 million enterprises providing services to over 114 million people and producing approximately 30% of GDP.

www.carajput.com;BRING IT BACK

www.carajput.com; BRING IT BACK

According to GOQII’s latest survey, about 26 percent of enterprises said their earnings and expenditures were largely impacted due to the virus outbreak. Small and medium-sized companies are suffering from issues such as lack of manpower and weak cash flow or liquidity. In the current situation, RBI’s decision to delay loan repayment for small and medium enterprises has come as a refreshing relief. Also the body of industry, CII has urged the government to set up the ‘CII COVID Rehabilitation and Relief Fund’ to support small and medium businesses.

Some of the ways in which the Government can help the different sector get a boost are described below:

www.carajput.com;BRING IT BACK

www.carajput.com; BRING IT BACK

1. Measure the Financial loss

This would be the first step in helping businesses survive after the crisis. Taking stock of the financial losses for months caused by a lack of employment would help the businesses take steps to restart. The enterprises will first and last be updated with their working capital and statements of profit and loss. This would prove to be extremely beneficial in making connections with the numbers of the previous year which would help to determine the figures that the company needs. This will also be a good idea to plan for consumers who have moved to rivals due to cost reduction in marketing and advertisement.

2. Long term tenures

The companies are looking for the Government’s financial help. The Government’s relief of the enterprises from loan repayments has come as a relief for this portion. Definitely this move will help them to overcome financial problems. Relieving bad loan standards for this particular industry may also be a saving move

3. Limits to working capital

With effective credit rules, the CII suggested raising working capital limits. Small enterprises will need additional working capital equal to the investors’ April-June wage bill (backed by a government guarantee of 4-5 percent with an RBI refinance guarantee) to leap out.

4. Agreement of Funds

Even in usual times, small enterprises find it difficult to arrange cash for the management of operations. So expecting them to arrange for cash in this serious emergency will be far too much. It is quite likely that, while trying to emerge from the pandemic effect, small businesses would require unsecured working capital loans to start their business. Quick bad credit business loans and online small business loans India are other financing solutions that can allow enterprises to get back on track post-COVID-19.

5. Project Long Term Repo

The Reserve Bank of India recently launched Long Term Repo operations worth Rs 100,000 crore to support financial institutions expand lending at affordable interest rates to keep the MSME segment functional. The Government-led banks are also encouraged to keep Rs 60,000 crore worth of loans ready. In addition, the Finance Minister announced the extension of the last date from March 31 to June 30 to file overdue Income Tax Return for all companies for the 2018-2019 FY. Also, the GST Returns deadline now is June 30.

6. Export market Inventory Management

The management of inventories may be a great support for exporting businesses. The development of warehouses at the block-level has been introduced in the Union Budget 2020. If the government could assign subsidized warehousing to exporters while organizing the supply chain side of things to improve the economy, it would be an advantage.

The government can decrease the load on the micro, small and medium enterprises sector with the help of the above-mentioned measures and immediate action. It has also been suggested that government agencies should not introduce delay fines as interruptions are clear due to the challenges created by the lockdown.

7. Make-in-India

Maybe now is the best time for the government to request that MSMEs generate locally. The Government’s e-Marketplace can be of great benefit to suppliers requiring procurement. Encouraging small companies to locally source and invest in online infrastructure will help improve the manufacturing sector and also raising our import costs.

8. Improving new ways of marketing the brand

www.carajput.com;bring back your business

www.carajput.com; bring back your business

The COVID-19 pandemic is possible to modify customers ’ buying behavior. Therefore businesses, especially small businesses, would do well to embed it in their pattern of work. But if you want to raise the lockdown people would always hesitate to join crowded places and markets. Even business managers may avoid trade shows and events. Organizations that previously relied heavily on people who talk to customers will now have to modify new ways of selling their goods and services.

9. Informed to the customer

Businesses, especially the smaller ones, will do well not to forget that while people’s buying habits will most likely shift, their existing clients will always yearn for some relaxation they used to get from you. So it’s important that small businesses let their customers know they’re up and running once again. We will also do well to allow their consumers aware of their post-COVID-19 policies. And a few clients will also want to support and encourage a local and small enterprise that has strongly faced the crisis and is now making a comeback.

10. Settlement of outstanding due

The industry body also recommended outstanding clearance of all government dues to MSMEs, including MSMEs’ procurement payments for products and services to PSUs, GST refunds, various state and central government bonuses for MSMEs.

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)

Details of E-Invoice under GST

What is an E-invoice Process is initiated by the GST Network?

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www.carajput.com; GST E-Invoice

E-invoice is not a bill that you can download or create from the Official website of the GST department, but it is a system of digitally validating all B2B invoices via the GST Network (GSTN). Creating e-invoices directly from the portal isn’t feasible.

E-invoicing or authentication is needed to ensure that the invoices created by your accounting system are valid for processes such as the creation of e-way bills and filing of GST returns. The procedure requires the submission to the GST Portal of company bills created by various accounting system to verify them in a common way.

So the invoices generated by various GST return filing software may have various forms, the software can not all be directly generated to the GST system. The government has therefore decided to adopt a standard format (Schema), requiring all accounting software to follow a common format that can be uploaded for verification and confirmation to the GST portal.

To sum up, E-invoice is a standardized process or schema for the exchange of data between different manufacturers’ GST billing applications.

Note: “The roll-out of e-invoicing will be relevant to corporations with a turnover of more than 500 crs from 1 October onwards.”

The benefit of the GST E-Invoicing System?

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www.carajput.com; Benefits

The basic goal behind the tax departments’ adoption for the e-invoice program is the ability to pre-populate the returns and reduce the challenges of reconciliation. That is done through the IRP design process, which shares the invoice data with the GST system and also with the e-way bill system. Thus, one-time invoice uploading would ensure that most of the information needed in returns are auto-populated, and also in the e-way bill.

A few of the key benefits of e-invoicing are as follows:

  • The processing and validation of B2B invoices from the common portal would ensure the automated preparation of GST ANX-1 and ANX-2 in the new format. IT also makes GSTR 1 auto ready for B2B supplies.
  • E-invoicing may be further used for providing only vehicle information for generating e-way bills.
  • Invoices submitted for verification by vendors shall be exchanged directly with purchasers for reconciliation.
  • The output tax directly matches the input credit liability. For Debit / Credit Notes, Invoices, and other qualifying documents, e-invoice can be generated.
  • Debit / Credit Notes, Invoices, and other qualifying documents can be generated by e-invoice.

Introduction of e-Invoicing

While invoices generated by each system look more or less the same, it can not be understood by the computer system while the business users can fully understand it. For example, an accounting software-generated invoice “A” can not be viewed by a system that provides accounting software “B.”

Now there are hundreds of accounting/billing software generating invoices and they all use their own formats to store the data. Just because of that, the GST program is unable to read and understand these invoices whereas the invoice data remains the same.

To shorten the long story, the same information is being presented in different invoice formats today and there is no way a system can understand that.

Therefore, there is a need to standardize the format where an invoice’s electronic data is exchanged with others to ensure data connectivity.

How do we implement e-invoicing?

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www.carajput.com; GST E-Invoice

Initially expected to introduce the e-invoice under GST on April 1st, 2020. However, the new date for launching e-invoicing is 1 October 2020, as per the 39th GST Council meeting held on 14 March 2020.

To ensure that companies have enough time to adapt to the new electronic invoicing system, the GST Council has approved the implementation of e-invoicing. To begin with, that will be implemented on a voluntary basis.

  • It can be introduced on a voluntary (trial) basis starting 1 January 2020 * for taxpayers with a turnover of more than 500 crores.
  • Those with a turnover of more than 100 crores may adopt it from February 1, 2020 (on a voluntary trial basis).
  • The updated date for compulsory implementation of e-invoicing is 1 October 2020

*The latest e-invoicing date is revised as per the 39th meeting of the GST Council.

To whom e-invoice is applicable?

Electronic Invoicing shall apply to all businesses whose aggregate turnover exceeds “One Hundred Crore Rupees” in a financial year

Who will upload the e-invoice?

Under the e-invoice rule, the seller will electronically upload the invoice to the IRP system and collects the IRN (Invoice Reference Number) in the form of a physical copy of the invoice given to the recipient.

The IRP program is also configured to send the digitally signed e-invoice with QR code via e-mail to both the manufacturer and the recipient.

Documents required to send to the GST system?

The definition of e-invoice is protected according to the following articles. This means the creator of this document has to upload it to the IRP system.

    • Supplier invoice
    • Supplier credit note
    • Supplier debit note
    • Any other document which is required by law to be published by the document creator.

How E-Invoice vary from current invoicing practice?

E-invoice is a system in which a unique invoice reference number (IRN) must be electronically uploaded and verified to the invoice. It will have no effect on the existing physical (printed) or electronic (ex.pdf version) invoice issuing process.

The users will continue to see the physical or electronic (PDF / Excel) output of the invoices in the same way that occurred before the e-Invoice format was implemented into the program.

Procedure for generating GST e-invoice

www.carajput.com;GST E-INVOICE Flow chart

www.carajput.com; GST E-INVOICE Flow chart

It is the duty of the taxpayer or companies to produce the invoice / s, and then send them for approval to the Invoice Registration Portal (IRP). The portal will return the invoice to the manufacturer, along with a unique reference number, digital signature, and a QR code, after successful verification. The e-invoice will also be exchanged with the corresponding buyer on the provided e-mail ID

Stage 1: Formation of an Invoice

The seller/supplier will use his / her accounting or billing software to create an invoice in the prescribed format (e-invoice schema). It must have the required details.

For each B2B invoice, the supplier’s accounting program must produce a JSON. The JSON file is imported into the IRP.

Stage 2: Generation of an IRN

The next step will be to use a standard hash-generation algorithm to create a unique invoice reference number (IRN) by the vendor.

Stage 3: Uploading the Invoice

Now the seller will upload JSON to the Invoice Registration                      Portal, either directly or via third-party software, for each of the invoices, along with IRN.

Stage 4: Sign and Authenticate

If it’s not already uploaded by the supplier, IRP will validate the hash / IRN attached to JSON, or generate an IRN.

Then, it verifies the file against GST’s central registry.

Upon successful verification, JSON will have its signature attached to the invoice and a QR code.

The earlier created hack will become the new E-invoice IRN. The e-invoice will be the unique identifier for the whole financial year.

Stage 5: Data-sharing

The data uploaded will be shared with both the E-way bill and the GST program.

Stage 6: Download via e-invoice

The portal will forward the digitally signed JSON back to the seller along with IRN and QR code. The invoice is also sent to the customer on their registered email I d.

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)

Basic Details of Invoice Registration Portal(IRP) on GST

Introduction of IRP on GST e-invoicing

www.carajput.com; E-INVOIVE

www.carajput.com; E-INVOICE

E-Invoicing or ‘electronic invoicing’ is all set to be compulsory from 1 October 2020 for B2B and B2G transactions for large and medium-sized taxpayers, but voluntary implementation commenced on 1 January 2020. National Information Centre, along with other modes, provided e-Invoice registration facilities in the Invoice Registration Portal (IRP) via API mode. These APIs allow taxpayers & GSPs to combine their business systems & procedures with the mechanism of e-Invoice for easy and security flaw-free registration and invoice generation on their systems.

The Invoice Registration Portal (IRP) also makes it easier for developers or taxpayers to understand the e-Invoicing system integration with their business processes and allows login to access the APIs. IRP supports API documentation by supplying all the information such as URLs, / calling methods, JSON payload format, sample request payloads & sample responses, verifications being introduced, and similar details that the application developer requires to implement the systems.

IRN platform also supports developers in simulating end-to – end-use of APIs. This includes understanding the generation of request payloads, the encryption, and decryption of requests & replies, and the accuracy of the encryption evaluation.

What is Invoice Registration Portal (IRP)?

The Invoice Registration Portals are organizations that serve as registrars and run of invoice/credit note/debit note via a website for assigning Invoice Reference Numbers (IRNs). For either create or verify the Invoice Reference Number (IRN) of the submitted invoice, the invoice information can be submitted to the Invoice Registration Portal using a specified mode. Only such invoices with an approved IRN shall be considered valid according to law.

There is actually just one IRP-NIC. Multiple registrars (IRPs) will also be added in the future.

Functions of IRP?

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www.carajput.com; E-INVOICE

The functions of the IRP are as follows:

  1. Hash / IRN generation for invoices:

Where the invoices have been uploaded without hash, the                          Invoice Registration Portal generates the hash / IRN based on the IRN parameters for that invoice in the prescribed format.

  1. Hash / IRN validation for invoices:

Where the taxpayer produces hash on their systems, the hash is added to the invoice, and the IRN checks whether the specified requirements are met.

  1. Test on de-duplication:

IRP performs a hash / IRN test of an invoice for any duplicate or repeat by comparing the same with data stored in the Central Depository.

  1. Digital Validated Invoice Signage:

The Invoice Registration Portal digitally signs all of the approved invoices using the IRP’s private key. This signed digitally, is then made available to the manufacturer.

  1. Generation of QR codes with respect to invoices validated:

In addition to the digital signature, the Invoice Registration Portal also produces a QR code in respect of each invoice.   The resulting QR code can be used for checking/printing the invoice, and for easy view/access on handheld devices.  This feature is especially useful for tax officers and other stakeholders when they have no / limited Internet access to verify such information. The following parameters are available via QR code:

  1. Supplier GSTIN
  2. Recipient GSTIN
  3. Invoice number as the supplier has indicated
  4. Date of Invoice Generation
  5. Price invoiced (taxable and gross tax)
  6. Number of objects in a line
  7. HSN Principal element code (the line item with the highest taxable value)
  8. Special Reference Invoice Number (hash)

6. E-mail the invoice to:

The approved invoice is sent to the buyer’s and seller’s email address as indicated in the invoice.

  1. Offline Application:

The IRP will provide an offline app for authenticating offline invoice QR code and viewing its basic details. The complete invoice details would only be available after logging into the portal.

  1. Integration of the program with GST and E-Way Bill:

The information of the submitted invoice will be exchanged automatically with the GST system allowing for automatic updating of ANX-1 (of the seller) and ANX-2 (of the buyer). Furthermore, the information will also be exchanged automatically with the E-Way Bill framework wherever possible to make the E-Way Bill development process even simpler. Only then would the E-Way Bill system require vehicle numbers to complete the creation process of an E-Way Bill.

Generation of Direct Invoices at IRP

E-invoicing ensures that a prescribed format is followed for invoice details to be recorded electronically. GST taxpayers must follow a prescribed format that allows the system to read out the output generated by another system (readability of inter-systems). Therefore, if the invoice details are recorded in compliance with the prescribed format, this would result in a major improvement in the process of filing returns by software.

Therefore, it can be presumed that the purpose of the Invoice Registration Portal is not to create online e-invoices, but only to record day-to-day information of the invoices generated by the entity. For downloading invoice details into the IRP, The invoice will be available as a JSON file for uploading information of the invoices into the IRP.

The GSTN has provided eight unrestricted accounting/bookkeeping software to help generate an invoice as a JSON file. Accounting/bookkeeping apps other than the following eight would possibly have the same features. In addition, an Offline Tool will also be available for entering paper invoice details and generating the JSON file of the same.

Modes of Login to IRP

Multiple modes for recording an invoice on the IRP have been proposed:

On the Web:

The invoice information can be entered into the IRP database for registration/validation purposes of the same.

Based on API:

This mode would enable large taxpayers and accounting software providers to use their own software to communicate with the Invoice Registration Portal. The IRN, similar to the E-Way Bill system, can be produced validated for invoices either one at a time or in bulk.

SMS-based service:

This mode is designed to allow the invoice information to be entered in a specific format and submitted for processing to the Invoice Registration Portal via SMS.

Mobile App based on:

IRP offers a mobile app that executes some of the IRP                                  functions as mentioned above.

Resource-Based on Offline:

The invoice details may be entered on the Invoice Registration                 Portal website for registration/validation purposes of the same.

Basing on the GSP:       

Taxpayers may also use GST Suvidha Provider (GSP) services such as Clear Tax to help them carry out their compliances related to e-invoices.

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)