How to cut down your loan load?

Efficiently cut down on your loan load

Borrowing is now without doubt one of life’s most critical constituents. We’ve all made use of it to tide over the financial crisis we face from time to time. But loans can also prove to be a burden, even when they’re repaid with interest and within a specified time period. However, one can effectively reduce the loan burden by managing properly and live lives which are essentially stress-free.

Go through the write-up and find some of the ways how smartly reduce your loan burden for yourself.

Option for reasonable EMI

When the borrower struggles to repay the monthly EMI then his credit score takes a beating that spoils his record and harms his potential borrowing chances. Hence, it is essential that he opts for reasonable  EMI     that can be easily repaid.  In order to learn about the EMI that you will have to pay on the loan that he is preparing to take,   you could request online EMI calculator assistance. This will help the borrower know the EMI that he will have to pay for and if he could afford it.

Increase the amount of repayment with raise in your income

  So if your price grows, then you are also needed to increase your monthly EMI amount. Doing this would ensure you complete your loan earlier than that of the specified period and are free to take care of those other valuable things in your life. If one has to clear more than one loan then he will manage to clear the highest interest loan.In the other hand, if you still have current debt from the credit card, you should first clear it.

A Wonderful idea to Refinance Presents

Refinancing or transferring a balance not only reduces interest but also actually reduces the loan burden. It means that one can pay off the existing loan with a new loan that can be acquired from the same or any other lender.

Refinancing can prove helpful in cases where the borrower has an ongoing loan that he has taken full advantage of at interest rates, unfavorable conditions, etc., whereas different lenders offer the same loan at good deals.

To opt for refinancing the borrower will have to apply for a transfer to balance with the new lender who will pay the money immediately to the previous lender who will then close his loan account while activating his new account with the new lender.

If possible then opt for pre-payment or part-payment

Prepaid and part-payment allow the borrower to pay off the amount of the loan as well as the interest before the specified time. Pre-payment of the loan decreases the outstanding principal amount and in turn reduces the EMIs.

On the other hand, times occur when the borrower has any surplus amount. He also will take advantage of this opportunity to pay parts of a home loan. These partial home loan installments bring down the principal amount and the EMIs and interest paid thereon.

Both pre and part payments are reducing the borrower ‘s big-time financial burden.

However, it is important to clarify whether or not the lender offers the pre- and part-payment facility at the very end.

Existing investments that  can also be used to repay debt

Borrowers can use the loan for repaying their debt against investments such as PPF, life insurance policy etc. Here it would be worth recounting that the PPF permits the investor to take advantage of the investment loan from the third financial year which can then be repaid over the next three years.. The maximum amount that can be used as a PPF loan can be up to 25 per cent of the balance. The interest paid on borrowing is 2 per cent higher than the average interest rate of PPF.

Unless one follows the above points then there can be no shred of doubt that he will be able to repay his loan on time without any hassles, and there will be no debt burden in his life.

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)

How to obtain tax savings through Business Loan in Indian Situation

Tax Saving on business loans in India

Whether you’re thinking about taking benefit of a small business loan, but you’re hesitating to go for it and you’re not sure how it will affect your taxes for next year.

Actually, the answer is  – Interest on Corporate loans is  Tax-deductible expenses!

Business loans don’t dramatically alter what the other one owes in taxes. Pursuant to the 1961 Income Tax Act, having money through loans is like not earning money for the company. The interest paid on a commercial loan is also called tax-deductible, while the principal sum is not tax-deductible. Yet, then you have to obey certain laws.

How To Take Advantages of  Business Loan?

Financing for the company serves as a fuel that helps them to be alive and functional. Business loans are those investment funds designed to meet a business’s funding needs. From meeting the requirements for working capital to buying inventory and from paying the staff to paying rent for the workspace or factory space a business loan has the potential to help you with all these. So, it’s not likely to be incorrect if we suggest a business loan plays a vital role in the growth of the company. Taking up a business loan India offers the borrowers several benefits

  • You can use a business loan to serve multiple business purposes.
  • Business loans are easily accessible and come with flexible repayment terms which make borrowers’ loan repayment more convenient.
  • The government has launched several loan schemes to support small and medium-sized enterprises that have very flexible terms and conditions and off course pocket-friendly borrowing costs.
  • Interest paid on business loans is tax-deductible because it is considered an expense for companies. The reduction of interest rates lightens the tax burden on the borrower.

Tax benefits under the Business Loan which can be used?

The interest rate on business loans varies from lender to lender, where it is classified as a cost owing to the use of loan funding to fulfill business purposes.

Hence the element of interest paid in the loan repayment is claimed as a tax-deductible cost.

The interest payable is deducted from the gross income when calculating income tax on your company. Make sure you keep correct records of your business loan so that you can have proof if the income tax department requests for it.

In the case of company debt principal which is not tax-deductible

The principal balance on a corporate loan is not tax-deductible. And you are not permitted to subtract the number from your gross business income when calculating taxes.

The fact of the matter, however, is that your company is not really getting the principal amount. The cash is borrowed by a third party and is due to be repaid. And it can’t be counted as your revenue from the company.

What does it mean you can not include the balance of the business loan in your gross revenue? And you don’t have to pay income tax on this sum nor should you deduct it from your taxable profits.

In today’s world, getting a business loan has become fairly straightforward; this has become possible with the introduction of advanced banking technology. The loan is readily available and will help you grow your business and hit new heights. However, the crucial part that can not be discounted with any of these advantages is that it’s a loan that has to be repaid over time.

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)

Tips How to Handle Financing

Tips on Managing the Finances

We should all know about financial management. It plays a vital role in our lives as it cannot be a perfect day any day. Life is full of ups & downs and you never know what’ll happen next. We need to be financially prepared to conquer any type of situation at some point in time or another. Does the trick of having a healthy personal financial state. You can take the COVID-19 pandemic as an example of an economic crisis where the whole world is in. Companies have even commenced pay-cuts and layoffs in some sectors around the world. Employees will suffer a good amount financially but what is the solution? The economy has crashed, and most private companies have no business to pay their employees’ salaries.

In this situation, your financial management skills and your savings & backups are what can support you.

Here are a few important tips about financial management that will help you in these times.

Live within your means: This is the number one rule for the effective administration of personal finance.

Make sure you buy what you can afford — This is the most fundamental thing you need to learn. Don’t depend on credits to buy something.

Let’s understand this better- suppose you want to buy your wife an expensive present, it might be a package of diamonds or something else. You may not have enough money to buy the same one. Whatever it may be, you decide to take a loan-a a personal loan or use your credit card.

But after some time, what you’ll realize is- you’re paying much more on interest than the actual amount borrowed. To resolve the particular debt, you need to pay monthly EMIs for a minimum of one to two years. These are all unnecessary debts that can be easily avoided. If the EMIs you pay towards this had been invested elsewhere- it would have resulted in even more profit!

Track your expenditures: Keep track of what you spend. This way, your account is less likely to be overspent. It’s also a great way to keep track of your credit card spending so you can avoid and restrict the excessive outgoing from your revenue.

Have a budget: You’re supposed to have a money plan. Like what do you want to do with it? What can you do to maximize the value of the same? Suppose you are also in your account of Rs 50000. Make break-ups and the expenditure and investment plans. You’re going to spend Rs 10,000 on supermarkets, Rs 10,000 on loan repayment (EMIs), Rs 5000 for driving, and others. Plan for full savings, and effectively invest the left number.

Clear your bills monthly: It’s always considered one of the good financial habits to clear your bills frequently. It not only removes the risk of late payment but also leads to savings. Credit cards are one of the plastic money commonly used which facilitates your financial life.

But, on a very high side, the interest rate charged. Late payment not only adds to the interest on your credit card bills, but penalties are the addons that make it huge. So, when you’re using a credit card, try paying the bill monthly, it’s a must if it’s not possible to pay the minimum.

Hold your debt rates low: It’s you are a need borrow for a few items like a home, car, or education. But only seek to borrow what you need when borrowing for these. Seek to borrow as little as possible & as per your capacity to payback. With a better credit score, your total loan payments need not be higher than 36 percent of your monthly income.

Make sure you pay the best prices: make sure you compare the price on various websites & stores when purchasing any item. Ensure that you pay the lowest prices for the products and services that you may have exposure to. Look for discounts, coupons, and offers to help to make your purchase worth.

To conclude, you’ll be better prepared for tomorrow by following and respecting healthy financial behaviors. Here are only a few simple steps to help you handle your money the right way:

  • Creating a Budget.
    Understand the outlay.
  • Understand how much you earn.
  • Strengthen debt.
  • Slash or do away with needless costs.
  • Establish an Emergency Fund.
  • Before retirement, save 10 to 15 percent.
  • Check your credit history, and accept it.

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)

Significance and Process of PAN and Aadhaar Linking

Importance’s and Process of PAN & Aadhaar linking

Aadhaar Card is a verifiable 12-digit identification number issued by India’s Unique Authority for Identification (UIDAI). It acts as evidence of identity and as proof of residence. PAN or Permanent Account Number is an alphanumeric identifier of ten characters issued by the Income Tax Department under the supervision of the Central Direct Tax Board (CBDT). It is necessary for income tax filings and also acts as proof of identity.

There are about few days left to end PAN-Aadhaar linking completion date. Within the next few days, if PAN not linked to Aadhaar it becomes useless as from next month. Moreover, there is no need to worry regarding those who have already linked their PAN to Aadhaar.  The Ministry of Finance’s (CBDT) issued a notice clarifying the time limit for PAN-Aadhaar.

The CBDT statement said, “In some media sections it has been reported that certain PANs that are not linked to the Aadhaar number may be nullified. The central government has considered the matter and now the cut-off date for notifying the Aadhaar number and linking PAN with Aadhaar is —–, unless formally exempted.

The Supreme Court claimed that quoting Aadhaar Card is necessary for the filing of income tax returns and the implementation of a new PAN. Section 139 AA(2) of the Income Tax Act states that as of 1 July 2017, every person with PAN who is qualified to obtain Aadhaar must notify tax authorities of his Aadhaar number

The Income Tax Department has listed various ways for income tax assesses to link their Aadhaar to PAN on its website – incometaxindia.gov.in.

What are the benefits of linking PAN and Aadhaar card  :

PAN and Aadhaar are both considered a proof of identity for resident Indians. The benefits of linking a PAN card to an Aadhaar Card are:

In the case of Individuals

  1. Linking the Aadhaar to the PAN would make the process of income tax filing simpler and much more convenient. It’ll also help an individual avoid the physical signature and digital signature process while filing income tax.
  2. It also helps an individual open a bank account electronically without any further documents being provided.
  3. The individual is given the option for verifying their tax filings with their own Aadhaar card.
  4. It will allow the individuals to display all transactions by log in to Income Tax.

In the case of Government

  • The multiple tax evasion PAN cards dilemmas will be solved as Aadhaar is linked to unique biometric identification. It will also help the government identify all transactions, thus reducing tax avoidance and increasing the government’s direct tax.
  • The Black-money issue must be curbed.
  • Tax evasion is a thing of the past. The huge taxpayer base would allow the government to lower the tax rate, as it will be compensated by higher wages.

Mistakes that may lead to Trouble to us.

The link can be easily made on the website of the income tax department, or even via SMS.

However, a number of PAN card holders have trouble making the link simply because the records of either the Income Tax Department or India’s Unique Identity Authority (UIDAI) have a mismatch.  The  I-T department issues PAN cards while Aadhaar cards are issued by the UIDAI

There may be at least three types of cases where linking between PAN-Aadhaar is expected to fail.

  • In case PAN-Aadhaar Name found Mismatch

Earlier, the UIDAI had a provision to permit linking in case of minor name differences but with effect from December 2017, the provision was deleted. Around the time, Aadhaar authentication was possible by using an OTP-based verification if the cardholder’s name had a minor change.

“It is hereby accepted to discontinue the provision of partial matching in demographic authentication in order to remove any chance of wrongful identity verification using demographic authentication,” a UIDAI memorandum said.

PAN cardholders have been asked also by the Income Tax department to ensure that the Aadhaar number and the name as per Aadhaar are exactly the same in the PAN card.

2) In case mismatch in Date of Birth of the person

If in either of the two documents you entered an incorrect birth date, you are in for some trouble. Aadhaar cars won’t be linked to a PAN card if your date of birth is not matched. In situations where the Aadhaar card only contains the year of birth then the records in the PAN card should match.

3) In case gender Mismatch found

In the worst cases where either PAN or Aadhaar accidentally mentions gender, the linking is bound to fail. “Like that of Aadhaar, the I-T department must confirm your name, date of birth, and gender as per PAN,” says the income tax e-filing portal.

What is the process when Aadhaar and PAN Mismatch?

In data mismatch cases the only solution is to have it rectified. For instance, if your name’s spelling in Aadhaar is wrong then get it corrected from UIDAI. If there is any error in the PAN card, get it corrected either from UTI or NSDL — the two agencies responsible for issuing PAN cards. Whenever the correction is done, you will make a successful attempt to complete the link again, this time.

How to link PAN card and Aadhaar card?

An individual can link the PAN card and Aadhaar card through three ways:

  1. Go to Online using of Income-tax web site
  2. Which can be done through sending SMS
  3. Which can be done through filling up the form

 

Link Aadhaar & PAN through Income Tax E- Filing Website

Process 1: Visit the I-T Dept e-filing website. And find out that option of                            PAN-Aadhaar linking

Process2: File up your PAN  &  Aadhaar card number

Process3: Enter your name in the ‘Name as per AADHAAR’ mention as a category

Process4: Mark ‘I have the only year of birth in Aadhaar card,’ if you have                          only the birth year on the Aadhaar

Process5: Mark ‘I agree to validate my Aadhar details with UIDAI,’ if you                         agree to do so

Process6: Enter the captcha code on your screen.

Process7: Click on ‘Link Aadhaar’ option to request linking of PAN and                             Aadhaar

How to Link Aadhaar with Pan Card by sending SMS

An individual can also link Aadhaar with PAN by sending SMS. The steps are as follow:

Process1. Type a message in UIDPAN<12 Digit Aadhaar><10 Digit PAN >                        format.

Process2. Send any message from your registered mobile number to either                        567678 or 56161.

Process3. If the information is right the Aadhaar will be successfully connected to PAN.

 PAN -Aadhaar Link by filling up the form

Individuals are also given the option to manually connect the Aadhaar to the PAN. The person will be required to visit the NSDL PAN Service Provider, complete the necessary form, and provide the relevant documents to connect  Aadhaar to the PAN card.

How to check Aadhar Link Status online with PAN card?

An individual can check whether or not his or her Aadhaar is connected to PAN. Following are the steps to check:

Process1. Continue to Visit the official                                                                                         https:/www.incometaxindiaefiling.gov.in / home website.

Process2. Click the ‘Aadhaar’ sub-option Link below the Quick Links option.

Process3. Continue. A new screen will pop up, clicking on ‘click here to                              view the status if you have already submitted a request for                                  Aadhaar link.’

Process4. Enter the details and click ‘Aadhaar Status View Link.’

The website will show the status of whether the Aadhaar is linked or not.

Regards

Rajput Jain and Associates

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

Meaning of relative under different act

Image result for TAX IMPACT ON RELATIVE TRANCASTION

As per section 2(41) of income tax act

“Relative”, in relation to an individual, means the husband, wife, brother or sister or any lineal ascendant or descendant of that individual ;

As per sec 56

As per the Income tax act, the term “relatives” is described in detail. As gift received in the form of cash, cheque or good from your relative is fully exempt from tax. So if you receive a gift money from any of your relatives listed below, you are not liable to pay any tax on the same.

Gift received from relative is not taxable in hands of recipient under section 56 of Income Tax Act.

The persons who are considered as relatives are

In case of individual

  1. Spouse of the individual
  2. Brother or sister of the individual
  3. Brother or sister of the spouse of the individual
  4. Brother or sister of either of the parents of the individual
  5. Any lineal ascendant or descendant of the individual
  6. Any lineal ascendant or descendant of the spouse of the individual
  7. Spouse of the person referred to in above points

In case of HUF – Any member of the HUF

As per section 2(77) of company act

A person shall be deemed to be a relative of another if,-

(a) They are members of a Hindu undivided family; or

(b) They are husband and wife; or

c) The one is related to the other in the manner indicated below

Sr.no Company`s act 2013
1 Father(including step father)
2 Mother(including step mother)
3 Son(including step son)
4 Son`s wife
5 Daughter
6 Daughter`s husband
7 Brother(including step brother)
8 Sister(including step sisters)

 

Relationship Sec-2(41) of income tax act Sec-56(2) –gift Sec-2(77) –foreign exchange management act
Spouse

 

Yes Yes Yes
Parents( father/mother) Yes Yes Yes
Brother /sisters Yes Yes Yes
Son/daughter Yes Yes Yes
Spouse of brother/sister No Yes No
Spouse of son/daughter No Yes Yes
Parent`s brother/sisters

and their spouse

No Yes No

 

Spouse`s brother /sister

and their spouse

No Yes No
Grand-Parents and

Grand Children

Yes Yes No
Spouse of Grand-

Children

No Yes No
Great-Grand-Parents

and Great-Grand-

Children

Yes Yes No
Spouse’s Parents,

Grand-Parents

and Great-Grand-

Parents

No Yes no

 

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)

Section 234F -Fee (Penalty) for delay in filing Income-tax return

Under this section, the fee (penalty) is levied if the Income-tax return is not filed within the due date. It is likely to be increased from 1st April 2018 onward as per Section 234F of the Income Tax Act. Provisions of Section 234F of the Income Tax Act are as follows.

 Section 234F: New penalty for late filing of Income Tax Return under section 234F is introduced in Budget 2017. This penalty is applicable for the assessment year commencing from 1st Day of April 2018. If a person who is compulsorily required to file Income Tax Return (ITR) under section 139, doesn’t file a return on time then he is liable to a penalty as follows

Total Income Return filed Fee (Penalty)
Exceeds Rs. 5 Lakh On or before 31st December of Assessment Year but after due date Rs. 5,000/-
In any other case Rs. 10,000/-
Upto Rs. 5 Lakh After due date Rs. 1,000/-

 

Let us discuss the above provision below:-

AMOUNT OF PENALTY

For a person with a Total Income of more than Rs. 5,00,000. Penalty amount would be as follows:-

  1. If ITR is filed on or before 31st December following the last date – Rs. 5,000
  2. If ITR is filed after 31st December – Rs. 10,000

For a person with Total Income of up to Rs. 5,00,000 – Rs. 1,000

Before 1st April 2018 – Penalty for Late Filing would be as follows-

Up to FY 2016-17, taxpayers who do not file their income tax return in a stipulated time period are liable to a fine (penalty) of Rs. 5,000.

It is further noted that liability to pay the penalty of Rs.5,000 is arises when an Income Tax Officer issues a notice for a late filing of the income tax return. It is worthwhile to note that the penalty for late filing of income tax return is based on the conclusion of the assessing officer.

Contract us for Know more about consequences and penalty for late filing income tax return. We also handle tax & registration services 

We offer our service in ​all Taxation and Various Registration related services ​managed by professional,

our bouquets of services portfolio are:

S.No. COMPLIANCES NATURE OF COMPLIANCES
1 INCOME TAX Return Filing, Tax Deposit, TDS Returns, TAN, PAN, MAT, Tax Planning, NRI Taxation, Scrutiny, Assessments, Representing for Appeals etc.
2 GST Registration, GST Tax Deposit, Monthly & Annually Return Filing, Input Credit, Department Notice, Assessment, And Other Compliance.
3 COMPANY PVT. LTD./LTD/LLP Company Incorporation, Minutes, Annual Filing, Income Tax Return Filing, Routine Compliance, Section 8 Company, Nidhi Company, Inspection & Investigation for Mergers & Takeover.
4 SOCIETY/ TRUST (NGO) Registration of Society/Trust, All India society, MOA, Income Tax Return Filing, Registration 80G & 12A, Utilization Certificates, Regs in NITI Aayog/NGO Darpan, etc.
5 PARTNERSHIP FIRM Partnership Deed, Registration, Accounting, Income Tax Return Filing etc
6 PROPRIETOR FIRM Registration, Accounting, Income Tax Return Filing, Refund etc.
7 IMPORT-EXPORT CODE Registration

​ & ​

Amendment

8 ACCOUNTING ​Accounting of  Prop. The firm, Partnership Firm, Company, Trust, Society, Proper Accounting in Tally, Ledger Management, Inventory Management, etc
9 OTHER REGISTRATION &COMPLIANCE SSI/MSME REGS, ESI, EPF, GMP CERTIFICATION, CGMP, HACCP, SA 8000, UL MARKING, CE MARKING ETC.

We are always available with the best of our assistance and services for you.

 

 

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 REQUIREMENTS INCLUDING IN CARO 2020 REPORTING

NEW ADDITIONAL REQUIREMENTS INCLUDING IN THE CARO 2020 REPORTING AFTER ON CONSULTING ON WITH THE NFRA

CARO, 2020 (Applicable from FY 2019-20)-Changes made

  • Fixed Assets/ Property, Plant and Equipment

# Reporting over maintenance of records of Intangible assets have been specifically added.

# Leased Immovable property is specifically excluded from the reporting over the holding of title deeds in the Company’s name. If owned Immovable property is not held in the Company’s name, Dispute status and details of the registered owner need to be reported.

# In the case of EPP revaluation, the auditor must determine that the same has been achieved on the basis of the Reported Interest survey. Changes ought to be recorded if 10% or more of the adjustments are made in the WDV.

  • Inventory

# Inconsistencies recognized by management with an effect of 10% or more of the inventory value need to be reported.

# In the case that the Corporation has a working capital limit of more than INR 5 Crores depending on the security of the current assets (e.g. Stock, Debtors), the auditor must report that the regular filings (e.g. Financial Accounts, Debtors Listing) made with the lender are in compliance with the books.

  • Undisclosed Income:

# The auditor must disclose whether or not any income has been returned under the Income Tax Act, 1961 and the same has been duly accounted for in the books of accounts.

  • Default in repayment of loans

# The auditor must determine that the company is considered to be a “Willful defaulter.”

# Information on the removal of term loans from allowable use needs to be published.

# Data has been given on how short-term loans have been used for long-term purposes.

# The auditor must comment on all money taken to meet the commitments of the community business.

# Reporting on loans received by the Firm was made on the basis of the commitment of shares issued by the Firm to shareholders, Joint ventures and associates.

  • Fraud reporting

# Fraud reporting has been extended to fraud against the Company by any person rather than by officers or employees in the past.

# The fraud report issued by the auditors in the form ADT-4 to CG should be reported.

# The auditor has to record his evaluation of “Whistle Blower” allegations.

# The auditor must report whether the internal audit system exists within the company and whether or not the internal audit reports have been considered.

# The particulars of the proceedings (pending/initiated) under the Benami Law need to be published.

  • Consolidated Financial Statements

# Details of consolidated companies with qualifications or adverse reactions in the CARO report must be reported along with Paragraph Number of the auditor with audit report on Consolidated Financial Activities.

  • Non-Banking Financial Activities

# The auditor must report on the conduct of financial activities of an NBFC nature by the company without valid Certificates and reporting.

  • Cash Losses

# The auditor will document whether the Company has suffered CASH LOSS during the current AND preceding financial year and the volume of such cash loss.

# The resignation of the statutory auditor and the causes, problems with him duly considered by the incoming auditor or not; must be published.

  • Financial Ratios

# The goals of the Organization to meet its Existing Obligations on the basis of percentages, maturity and plans for execution must be stated.

  • Corporate Social Responsibility:

# The Auditor will disclose that the unexpended amount has been allocated to the designated fund within 6 months of the end of the fiscal year and whether or not the pending project balance has been moved to a special account. (Amendment itself under the Corporations Act, not yet told in 2013).

APPLICABILITY OF ANNEXES TO THE AUDITOR’S REPORT:

  1. Annexure of the CARO Report is not needed in the case of Small Business, Banking Firm, Insurance Company, Section 8 Company, One Person Company, and any private company having paid-up capital and free assets to INR 1 crores as at the balance sheet date and borrowing up to INR 1 crores at any time during the year and revenue up to INR 10 crores as per the financial reporting of the year mentioned.
  2. Annexure of the Internal Financial Control Report is not required in the case of Small Company, One Person Company, AND any Private Company with Turnover up to INR 50 Crores as per the financial statements of the year concerned and borrowing up to INR 25 Crores at any time during the year.

CONCLUSION:

The CARO 2020 is supposed to substantially increase the overall standard of the audit reports on the company’s financial statements and thereby contribute to greater accountability and confidence in the company’s financial affairs. It is inevitably expected to increase the inflow of investment by and in Indian companies.

Click here to access the overview of the MCA Order on CARO, 2020 dated 25.02.2020.

Post by Rajput Jain & Associates

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

New Turnover Threshold for the Purposes of TDS Applicability

New Turnover Threshold for the Purposes of Tax deducted at Source (TDS) Applicability as per the Finance Act 2020.

New Turnover Threshold for the Purposes of TDS Applicability

TDS was applicable to individuals and to HUF if their accounts were subject to audit in Section 44AB of the preceding year. The Finance Act 2020 specifies that All individuals & HUF will be liable to deduct TDS if the revenue exceeds Rs. 1 Crore in the case of corporation and Rs. 50 Lakhs in the case of the profession in the previous year. Such revisions shall take effect from 1 April 2020.

Below is the TDS average for the year 2020-21. In the following table valid from 14th May 2020

o   Individuals include the individual and HUF

o   Company and others include Company, Company, LLP, Co-op Society, Local Authority.

Interest in delayed payment and late deduction of TDS:

As per section 201(1A) Interest at the rate of 1 % per month or part of the month on the balance of TDS deductible from the date of tax before the date of tax finally deducted shall be paid for late deduction.

In addition, interest for late payment at a rate of 1.5 per cent per month or half of the month on the amount of TDS withheld from the date of tax to the day on which the tax is collected shall be levied.

Profit in late payment of TDS: amendments made pursuant to the Taxes and Other Laws (Relaxation of Other Provisions) Order 2020 of 24 March 2020:

For late fees  payable on self-assessment tax ; advanced tax, income tax, TDS, TCS, equalization cessation, STT, CTT made between 20 March 2020 to 30 June 2020, the interest rate will be decreased by 9% instead of 12%/18% per year (i.e. 0.75% per month instead of 1/1.5% per month).  No late fee/penalty shall be paid for any delay in respect of that time.

Default fees for the TDS / TCS return file:

Fees are payable at Rs. 200 a day for each day on which the loss continues. The amount of the fees can not exceed the value of the TDS.

You can give your comments and suggestions under the comment box.

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)

ICAI Announcement for Student: ICAI cancelled CA May 2020 Examination

Examination Department
The Institute of Chartered Accountants of India
3rd July, 2020
IMPORTANT ANNOUNCEMENT

1. The students are aware that vide Announcement dated 15th June 2020, the Institute, after taking in account the academic interests and health safeguards of students intending to appear in May 2020 Examinations, had enabled them to change their centre for appearance in May/ July 2020 Examination and/or to decide, at their free will, to “Opt Out” of the May/ July 2020 Examinations with carryover of all benefits including fee paid and exemptions. The Announcement also stated that Institute will review the situation of pandemic (COVID cases, MHA guidelines, Centre and State Government directions) in first week of July 2020 and the conduct of examinations commencing from 29th July 2020 was to be strictly dependent upon prevailing Government’s advisories for the area in which a particular Centre is situated and, in any eventuality, the students were to be accommodated to November 2020 Examination cycle.

2. Further Announcement dated 17th June 2020 provided for FAQ’s relating to conduct of May/ July 2020 Examinations, change in centre and operation and procedure for Opt Out to address the queries raised by the students. Announcements dated 20th June 2020 and 26th June 2020 extended the availability of facility to “opt out” to allow the students to make their decision which facility is available to the students even as on date.

Further Developments:

  • A. With Unlock1, the severity of COVID 19 Pandemic was expected to subside from the later part of June 2020, but has rather become more severe and, therefore a Review as per announcement dated 15 June 2020 has become necessary.
  • B. Ministry of Home Affairs, Government of India vide its Guidelines dated 29th June 2020 has extended the closure of all schools & academic Institutions and academic congregations till 31st July 2020. Select State Governments have put extended prohibitions in their respective States. Post the said Notification dated 29th June 2020, many Schools/ Academic Institutions have expressed their inability to provide their premises to conduct the Examinations.

On a review of above developments and in order to ensure the interest of its students and their well-being, the Institute has decided to cancel May 2020 Examinations and merge the May 2020 attempt with November 2020 Examinations, with due carryover of all benefits already available to students including fee paid and exemptions. The students who have made application for May 2020 Examinations will have an option to change the group(s) of their appearance and centre of Examinations at the time of making a fresh application for November 2020 Examinations, which, subject to conditions prevailing at relevant time, will start from 1st November 2020. It is again clarified that in this schema, the students will be free to exercise the options afresh for the groups that they intend to appear in the November 2020 examinations.

The students are advised to stay in touch with the Institute’s website www.icai.org for further announcements relating to November 2020 Examinations and in case of any queries can write at may2020exam@icai.in.

(S. K. Garg)
Additional Secretary (Exams)
Announcement – PDF Version

https://carajput.com/Admin/ProImage/icai-announcement-for-student-icai-cancelled-ca-may-2020-examination.pdf

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)