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

Direct Tax

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

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www.carajput.com; RACP Bill, 2020

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

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

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

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

4) As per section 54 to 54 GB

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

5) Chapter-VI A pursuant to heading B-

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

 6) As per Vivad ke vishvas Act-20

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

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

8) No expansion of the tax payments.

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

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

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

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

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

In Addition,

Further improvements are also suggested in the Income Tax Act.

Companies (Amendment) Bill, 2020

Highlights of Companies (Amendment) Bill, 2020

www.carajput.com; Comapnies Amendment Bill, 2020

www.carajput.com; Companies Amendment Bill, 2020

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

New chapter for Producer Company

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

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

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

Direct Listing in foreign Jurisdiction

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

Update in the definition of Listed Company

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

Remuneration for Qualified Director and NED

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

Decriminalization of Companies Act

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

Fresh Bench in NCLAT

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

 Corporate social responsibility ( CSR)

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

Regards

Rajput Jain & Associates

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

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www.carajput.com; Tax Benefits

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?

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www.carajput.com; 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?

www.carajput.com;Tax Benefits on Business Loan

www.carajput.com; Tax Benefits on Business LoanThe 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

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www.carajput.com;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)

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 the 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 the due date Rs. 5,000/-
In any other case Rs. 10,000/-
Upto Rs. 5 Lakh After the 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. The 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 the late filing of income tax return is based on the conclusion of the assessing officer.

Contract us to Know more about the 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)

CBDT ALLOWS ONE TIME RELAXATION FOR VERIFICATION OF ITR

CBDT Circular dated on 13th July 2020: CBTD allows to verify previous ITR one time relaxation for verification for the FY 2014-15 TO FY 2018-19  by September 2020

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www.carajput.com; CBDT: INCOME TAX

The tax return filer effectively makes a declaration by reviewing the tax return that the information contained in the return are correct.

Normally, the tax return must be checked within 120 days of the filing of the income tax return or any extended date announced by the tax department.

The procedure for filing income tax returns is not complete until the tax return is checked. The return will not be processed by the tax department until, and until confirmed. If not confirmed, the return is invalid.

1) By circular no. 3/2020 of 13 July 2020, CBDT offered one more-time opportunity for taxpayers whose income tax returns had been filed electronically but were awaiting verification.

2) Now any taxpayer whose ITR is pending for verification can verify their ITR by 30 September 2020 or before that date.

3) It is possible to check ITR for the duration 2014-15 to FY 2018-19 via this one-time relaxation scheme

4) All these checked ITRs are to be issued by 31 December 2020 or before.

5) ITRs may be checked by EVC or by a properly signed hard copy being sent to CPC Bangalore.

Note: if any lawsuits against taxpayers have been launched in view of the fact that the taxpayer has not filed a report for that year then the value of relaxation can not be used

Benefits:-

  • In the event of failure to acknowledge return, AO may initiate proceeding u / s 144 as such returns filed are deemed invalid.
  • The carryforward of loss can get permitted, ThanksRajput 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)

Essential key concepts Gift Taxation: Income Tax

Essential Key concepts Taxation on gifts

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www.carajput.com; Income Tax (Gift taxation)

Gifts up to Rs 50,000 per year are exempt from tax in India. In addition, donations from particular relatives, such as parents, spouses, and siblings, are also exempt from tax. Gifts are taxable in other cases. The gift tax in India falls under the Income Tax Act as there is no specific gift tax after the Gift Tax Act of 1958 was enacted in 1998.

In India, gifts are given on a number of occasions, such as celebrations such as Diwali, Holi, or the occasion of marriage, to express love for our loved ones. Nevertheless, gifts are now also used for tax planning reasons as, in multiple given to a specific, any amount of gifts received is exempt from tax. Some people whose gifts they got in their ITR claim that they’re still gifts obtained out of love and affection.

Even so, it’s not the right way, since donations are tax-exempt only in such specific circumstances or where they are obtained by particular persons. Non-disclosure of gifts could result in penalties of between 50 and 200 percent of the tax payable on the income attempted to be avoided.

  1. Gifts received from the employer

There are occasions when employers give the employee a present on a special occasion or to boost their productivity, or because they do well. An employee shall be liable for gifts received from the employer only if the value of such gift is equal to or greater than Rs. 5,000. Gifts below Rs. 5,000 in value within the financial year shall be excluded from vat. These gifts shall be taxable as perquisites under the Head of Salary Income.

  1. Gifts received from any other person;

Section 56(2)x) of the Income Tax Act, 1961 deals with the taxability of gifts received by a person, except the employer, throughout the year. This provision shall apply regardless of the status of the resident or of the class of assessee. The donor or donor can be an individual, a partnership business, LLP, a corporation, AOP, BOI, a cooperative society, or an artificial legal body, whether resident or non-resident.

Previous gifts from a resident to a non-resident are, even then, claimed to be non-taxable in India as the recipient used to claim that income does not accrue or arise in India. In order to make sure that the receipt of gifts is also taxed in the hands of non-residents, Section 9 has been amended by the Finance Act (No. 2), 2019, to provide that income is considered to have accrued or to have arisen in India as a result of the payment of gifts (exceeding Rs. 50,000) without adequate consideration by a resident to a non-resident. It does not provide proof of the taxability of the gift of the estate as referred to in Section 56(2)(x), inter-alias, immovable property, gold, securities, etc.

Therefore, after the amendment, it may be inferred that gifts in the nature of money in the hands of non-residents provided by resident persons would be paid in their hands, even though gifts of any other manner are also beyond the control of the Income Tax Act.

2.1. Gifts received in cash form

Where even a person receives any amount of money without consideration and the total value of that sum exceeds Rs. 50,000, the total aggregate value of that sum shall be taxed on the basis of capital income from other sources. For the determination of the threshold, the aggregate amount of receipt from different sources and persons throughout the year shall be considered.

2.2. Gifts obtained in the form of real estate

Immovable property received by the assessee for the year, either without consideration or for lack of consideration, shall be deemed to have been income in his hands and to have been taxable in that year if the receipt is within a period of time.

  • If the immovable property is received without consideration as well as the stamp duty value of the property reaches Rs. 50,000, the stamp duty value of the immovable property shall be liable to tax.
  • If an immovable property is obtained for payment far less than the stamp duty value, the discrepancy between the stamp duty value and the compensation shall be taxable if the difference meets the above two limits: Rs . 50,000; or 10% of the consideration

For all cases, the cap of Rs. 50,000 shall be reviewed for each transaction and not for all transactions as a whole.

2.3. Gifts received in the form of Movable Goods

Movable property as described in the Act shall include any property in the form of shares and stocks, jewels, historical artifacts, sketches, portraits, sculptures, any work of art, or bullion. In which the transaction includes any other movable property, such as car furniture, the excess consideration for the fair market value shall not be taxed. In this case, the deemed income shall be calculated as follows given way :

If any property is obtained without regard and the total fair market value of it reaches Rs. 50,000, the entire fair market value of such property shall be paid.

3. Gifts Exempt

I Upon the occurrence of a specified incident
  • On the occasion of marriage of an individual
  • By will or by means of inheritance
  • Considering the death of the payer or of the donor.
II Due to the status of the Doner
  • The gift is to be accepted from any specified relative;
  • Gifts obtained by any local authority;
  • Gifts earned from any fund or foundation or university or other educational institution or hospital or medical institution or from any trust or institution referred to in Section 10(23C);
  • Gift received from any trust or institution registered under section 12A/12AA/12AB[2];
  • Gift obtained by an person from a trust formed or established exclusively for the benefit of the relative of the recipient.
III. Owing to the position of the Donee
  • Gifts shall be handled by any trust or institution registered under section 12A/12AA/12AB2;
  • a certain fund or trust or institution, or any university or other educational institution, or any hospital or medical institution referred to in Section 10(23C)(iv)/(v)/(vi)/(via).
IV Due to transactions not considered to be a transfer
  • Any distribution of capital assets to the full or partial division of the HUF[Section 47(i)]
  • the transfer of capital assets by an Indian parent company to its subsidiary company;
  • Transfer of a capital asset to a merger, demerger or company reorganization scheme such that the requirements laid down in Section 47(vi) to Section 47(vii) are fulfilled.
V Other class of persons who have been notified
  • Immovable property acquired by a citizen of an illegitimate colony in the NCT of Delhi, pursuant to the requirement that such transaction must be regularized by the Central Government on the basis of the most current power of attorney, the selling document, the will, etc.
  1. The first and only manner to save the tax via a gift

The alternative tax can be saved is by offering gifts to your parents or legitimate guardians or to a kid who is a major. Nonetheless, when you contribute the sum, your taxable income stays the same. However, the interest they earn from other products by continuing to invest these funds becomes their own income. So, presuming that their income is lower, you can rest in peace knowing that the money is not going to be taxed.

Previously, so when long-term capital gains (LTCG) tax was effective, gift money can also be invested in a mutual fund or stock for 1 year and used as tax-free income. However, it is not feasible now as the LTCG tax has been reintroduced with effect from 1 April 2018.

  1. Are gifts, both in cash and kind, taxable?

Actually, all sorts of donations, including dollars, jewelry, real estate, paintings, or some other valuables, are taxable. However, if the amount of cash or the value of the gift in kind is less than Rs 50,000, the same amount would not be taxable.

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)

What is the process of applying Instant Free PAN through Aadhaar e-KYC : FM launches

FM launches Instant PAN through the Aadhaar-based e-KYC Knowledge Process to get Free PAN

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www.carajput.com; PAN

In accordance with the statement made in the budget of the Union, the Minister for Finance and Corporate Affairs of the Finance Minister officially unveiled the PAN Instant Allocation Service (on a near-real-time basis) here today. This facility is now available to those PAN applicants who have a valid Aadhaar number and a mobile number registered with Aadhaar. The allotment process is paperless and an electronic PAN (e-PAN) is issued free of charge to the applicants.

It may be remembered that the budget of the Union for 2020 requires Smt. Nirmala Sitharaman FM  had announced that it would soon be launching an instant PAN service. In paragraph 129 of the Budget Address, the Finance Minister said, “In the last budget, I implemented the interchangeability of PAN and Aadhaar, for which the required rules had already been notified. In order to further accelerate the process of assignment of PAN, we will soon launch a program in which PAN will be instantly allocated electronically on the basis of Aadhaar without any need to fill out a comprehensive application form.

The Instant PAN facility via Aadhaar-based e-KYC was officially launched today, but its trial-based ‘Beta’ edition was released on 12 February 2020 on the Income Tax Department’s e-filing website. Since then, 6,77,680 instant PANs have been released with a processing period of around 10 minutes, until 25 May 2020.

It can also be noted that, as at 25.05.2020, a total of 50.52 crore Accounts have been allotted to citizens, out of which roughly 49.39 crores is allotted to individuals and more than 32.17 crores are so far seeded with Aadhaar.

The instant PAN application method is very quick. Instant PAN applicants are expected to visit the Income Tax Department’s e-filing website to provide their valid Aadhaar number and then apply the obtained OTP to their registered Aadhaar mobile phone. Upon effective completion of this process, a 15-digit recognition number is created. If required, the applicant can, at any time, check the status of the request by providing its valid Aadhaar number, and on positive submission, download the e-PAN. The e-PAN will also be submitted to the user via e-mail if it is registered with Aadhaar.

The introduction of the immediate PAN facility is just another step by the Income Tax Department towards Digital India, making it easier for taxpayers to comply.

It is compulsory to connect your PAN card to Aadhaar by 30 June of this year, otherwise, it will become inoperative. The income tax department also allowed all income taxpayers to use their Aadhaar numbers instead of the PAN.

What is the process of Instant online PAN for Free Using Aadhaar?

PAN stands for Permanent Account Number, by means of which all tax-related information for a person/company is registered. It serves as the primary key to the storing of knowledge that is spread throughout the world. Therefore, one person can not have more than one PAN card or two people can not have the same PAN. The PAN is valid for life.

the Minister for Finance and Corporate Affairs of the Union Smt. Nirmala Sitharaman has launched a new facility through the 2020 budget, where people will be able to access instant PAN through the Aadhaar number without having a comprehensive application form. The facility is completely paperless and no physical submission is required. The Instant PAN allocation service is for users who have a valid Aadhaar number. PAN is issued to applicants in PDF format free of charge.

The process to Apply Instant Free PAN through Aadhaar :

www.carajput.com;PAN flowchart

www.carajput.com; PAN

Step by Step Process to apply for PAN online free of charge:

Step 1: Go to https:/www.incometaxindiaefiling.gov.in / home and click “Instant PAN”

It’s going to lead you to the Instant PAN through the Aadhaar tab.

Stage 2: Now press the “Get New PAN” button

It will forward you to the PAN application form

Step 3: Filing a PAN form

You will be asked to include your Aadhaar number for the PAN assignment after phase 2.

Enter the 12-digit Aadhaar code, select “I confirm that” checkbox, enter Captcha, and press “Generate Aadhaar OTP”

The OTP will be sent to the registered mobile number or to the Aadhaar phone. Enter the OTP and validate the number of Aadhaar.

Now validate the Aadhaar details, i.e. the address indicated on the Aadhaar card. Please also check your Email Address.

After you have provided the details above, click on “Submit PAN Request.”

After you have submitted details, a 15-digit recognition number will be generated. Save it from your history.

Check the status of your PAN card by repeating Step 2 and clicking “Check Status / Download PAN”

Aadhaar-based PAN distribution FAQ

  1. What’s the PAN?

Answer: PAN, or Permanent Account Number, is a special 10-digit alphanumeric code. The Income Tax Department issues PAN in compliance with the Income Tax Act & Regulations. Financial institutions and agencies are also required to have PAN.

  1. What is Instant PAN based on Aadhar card?

Answer: Aadhaar-based instant PAN allocation service is to provide PAN in near-real-time. You are required to quote a valid Aadhaar number issued by the Indian Unique Identification Authority (UIDAI) and not linked to any PAN. The e-KYC details for that Aadhaar number shall be shared with the Specific Identity Authority of India (UIDAI). After due process of e-KYC details in the Income-tax database, you get a PAN.

  1. Is this PAN right? Is it separate from the PAN provided by other types of applications?

Answer: Yes, the PAN is valid. It is not distinct from the PAN provided by the Income-Tax Department by other modes of application. After due process of e-KYC details in the Income-tax database, you get a PAN.

  1. Is this PAN right? Is it separate from the PAN provided by other types of applications?

Answer: Yes, the PAN is valid. It is not distinct from the PAN provided by the Income-Tax Department by other modes of operation. However, this PAN is paperless, online, and free of charge.

  1. If I apply for Instant PAN, how am I going to get the assigned PAN?

Answer: You can access the PAN by uploading the Aadhaar number to Test the status of the PAN. You can also get the PAN in PDF format via e-mail if your e-mail ID is registered with Aadhaar.

  1. Do I have to pay for using this Instant PAN-based Aadhaar facility?

Answer: No, this facility is free of charge.

  1. What’s the e-PAN?

Answer: e-PAN is a digitally signed PAN card issued in electronic format by the Department of Income Tax.

  1. Would be e-PAN a proper PAN form?

Answer: Yes, e-PAN is a valid PAN proof. e-PAN contains a QR code with demographic details of the applicant for PAN, such as name, date of birth, and photograph. This information can be obtained via a QR code scanner. E-PAN is hereby acknowledged by Notification No. 7 of 2018 dated 27.12.2018, issued by the Chief Inspector General of Income-tax (Systems). Click here to view the notification (https://www.incometaxindiaefiling.gov.in/eFiling/Portal/e-PAN_PDF_and_App_Links/notification_7_2018_pan.pdf).

  1. Where can I download the QR code reader from?

Answer: This can be downloaded from the connection given on the QR Code Reader website.

  1. May I use this facility if I have a PAN already? May I ask for a separate PAN?

Answer: No, no. Pursuant to Section 272B(1) of the Income Tax Act, an individual with more than one PAN is liable to pay a penalty of Rs.10,000.

  1. Who can apply for the assignment of Instant PAN through Aadhaar e-KYC?

Answer: Applicants of PAN who have an Aadhaar number from UIDAI and have registered their mobile number with Aadhaar may apply.

  1. Can foreign citizens apply for PAN via e-KYC?

Answer: No,

  1. Is there any mandatory requirement to apply through e-KYC?

Answer: Yes, the mobile number of PAN applicants should be registered with UIDAI in the Aadhaar database.

  1. May I apply for a PAN if my Aadhaar card isn’t active?

Answer: No, you can’t apply.

  1. How is Aadhaar verified by instant PAN?

Answer: UIDAI sends an OTP to the registered mobile number through the Aadhaar e-KYC process.

  1. What if I don’t have an OTP?

Answer: You can resubmit your Aadhaar e-KYC page to get a new OTP. If you don’t have an OTP yet, you need to contact UIDAI.

  1. How many times is it possible to produce OTP?

Answer: Any amount of times,

17 If Aadhaar authentication is rejected during e-KYC, what should I do?

  • Answer: Aadhaar authentication can be refused due to incorrect OTP. The problem can be solved by entering the correct OTP. If it is indeed denied, you need to contact the UIDAI.
  1. would I need a Digital Signature Certificate (DSC) to apply for a PAN card through an Aadhaar-based Instant PAN facility?

  • Answer: No,
  1. would I have to request a physical copy of the KYC application or proof of the Aadhaar card?

Answer: No, It’s an online operation. No paperwork is needed.

20. Do I need to upload an e-KYC scanned photo, signature, etc.?

  • Answer: No,
  1. Will I have to give an acknowledgment or a record if an instant PAN is used in e-KYC Aadhaar mode?

  • Answer: No, The PAN user will use the Aadhaar number to know the status of the Instant PAN application and to produce PAN in PDF format.
  1. Would I need to carry out an in-person check (IPV)?

  • Answer: No, Aadhaar based e-KYC does not require any in-person verification.
  1. Which centers are assigned to PAN by e-KYC?

  • Answer: PAN allocation through Aadhaar e-KYC is permitted only via the e-filing website.
  1. Can we give a different address to the Aadhaar card address?

  • Answer: No, The address available to UIDAI in the Aadhaar database will be registered in the PAN database.
  1. How would I track the progress of my Instant PAN application?

Answer: when the request is submitted, the applicant can verify the status of the request by following the following steps:

(a) To access the PAN, kindly go to the Income Tax Department’s e-filing website. (Url: https://www.incometaxindiaefiling.gov.in)

(b) Click the link- ‘Instant PAN through Aadhaar'(https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/ApplyePANThroughAadhaar.html).

(c) Click the link- ‘Check Status of PAN’ (https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/ePANStatus.html?lang=eng).
(d) Apply the Aadhaar number in the space given, then send the OTP sent to the registered Aadhaar mobile phone.

  1. would I get a PAN card?

Answer: No, no. You will be given an e-PAN that is a legitimate type of PAN.

  1. Where can I get a physical PAN PAN card?

  • Answer: If you have assigned a PAN, you can obtain a printed physical PAN card by submitting a PAN to the links below.

https://www.onlineservices.nsdl.com/paam/ReprintEPan.html
https://www.utiitsl.com/UTIITSL_SITE/mainform.html

  1. Can I make any changes in my existing PAN through this facility?

Answer: No. Please use the Change Request Facility provided on the links below-
https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html
https://www.pan.utiitsl.com/panonline_ipg/forms/csfPan.html/csfPreForm

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 Understanding on TDS on Payments to Resident Contractors & Professionals: Section 194M, Form 26QD and FORM 16D

Basic Understanding on TDS on Payments to Resident Contractors & Professionals: Section 194M, Form 26QD, and FORM 16D

www.carajput.com;TDS: form 26QD; Form 16D

www.carajput.com; TDS: form 26QD; Form 16D

TDS on Payments to Resident Contractors

A new section 194 M has been introduced by the Finance Act, 2019. Pursuant to this clause, if the individual makes payments to contractors and practitioners above Rs. 50 Lakhs, the individual is allowed to subtract TDS at a rate of 5% from the amount payable to the resident deductee/payee. This provision applies to individuals and to HUFs who are not liable for tax audits. As announced by the Finance Minister on 14 May 2020 for FY 2020-21, the person is liable for the deduction of TDS at a rate of 3.75 percent.

TDS on payments to residential contractors and Professional Consultants

Under the new law of the TDS, i.e. Section 194J (TDS on Technical and Medical Services) and Section 194C (TDS on Contractors) Persons or HUFs not subject to audit were not entitled to deduct TDS irrespective of the volume of payment. This was the main reason for the introduction of section 194 M to cover non-audited individuals under the TDS.

Reason for the implementation of Section 194M

  • Section 194 M of the Finance Bill, 2019, allows for a tax-deductible at source on any money paid by an employee or HUF to a local contractor where the services are rendered for personal use. Therefore, this section refers both to personal and company payments.
  • Prior to the introduction of this section, there was no liability on the part of an individual or HUF to deduct tax at source in the situation referred to above.
  • Nor did the people or HUFs carrying on business or the practice (not subject to any audit) subtract any tax at source, even though the charge was made for commercial or technical purposes.
  • As a result of this loophole, a large amount of payment for contracted activities and consulting fees avoided the TDS levy, providing room for tax avoidance.

TDS rate under Section 194 M

  • The 5 percent TDS will be deducted under 194 M if the total amount paid to a resident exceeds Rs 50.00000 in a particular financial year.
  • In the case that the deductee’s PAN is not eligible, the TDS will be deducted at 20%.

What then is the time frame for depositing the TDS?

  • When any payment is made by or on behalf of the Government – the amount of the TDS will have to be paid to the Department on the day of payment.
  • Where any payment is made by any other person other than the government:

The TDS would have to be paid for:

  • If payment is rendered in March – on or before April 30 of the next financial year. For example, if the amount was paid in March 2020, the TDS will be deposited with the Department by 30 April 2020.
  • For every other month – within seven days from the end of the month in which the reduction is made. For example, if the payment had been charged in the month of September 2019, then the TDS would

The accompanying are the requirements for the deduction of TDS for payment to resident contractors and professionals above Rs. 50,00,000:

  1. It is applicable to all individuals or HUFs who make payments to resident contractors and professionals above Rs. 50,00,000.
  2. As per section 194 M, the individual or HUF that is required to have his books audited pursuant to section 44AD is not required to deduct tax under section 194M, they are covered by section 194J (TDS on Technical and Professional Services) and section 194C (TDS on Contractors)
  3. The payee must subtract TDS at the rate of 5 percent of the amount charged, in the event that no PAN is covered by the recipient, otherwise TDS is deductible at the rate of 20 percent up to the overall rent cap payable for the month of March or the last month of the lease, as the case may be. As announced by the Finance Minister on 14 May 2020 for FY 2020-21, the person is liable for the deduction of TDS at a rate of 3.75 percent.
  4. TDS shall be deducted only at the earliest of the following dates:
  • At the time of the payment of the sum, or
  • At the time of payment by cash or cheque or draft
  1. No TAN is required for that person to deduct and deposit the TDS to the Government
  2. The transaction is to be made by the individual using form 26QD, which is a call cum statement:
  • If the contractor’s work is not finished at the end of the financial year, apply Form 26QD within 30 days from the end of the fiscal year.
  • If the contractor work is between the financial year, file Form 26QD within 30 days from the end of the month when the contract/service is completed or terminated.
  1. If a person pays Rs. 50.00000 to more than one resident contractor or professional, then form 26QD shall be made twice a year for each contractor or professional, in other words, the tenant must submit form 26QB for each contractor or professional.
  2. In the case that the form needs to be submitted more than once, the invoice must also be made more than once, as a separate payment is to be made by each consultant or practitioner by their respective fees.
  3. If payment is made to a non-resident, the TDS is deductible under section 195.
  4. The entity deducting the TDS must apply the TDS certificate to the resident contractor or practitioners in Form 16B.

CBDT Has notified New TDS Return Filing Forms 26QD & 16D : 

  • Tax enforcement may be one of the most important factors for any form of business organization. It is also recommended that persons and corporations shall comply fully with the requirements of the Income Tax Act 1961. It is necessary to observe due dates for the payment of income tax deduction tax at source (TDS) in addition to the ITR filing as well as the TDS return filing. In this regard, 2 new TDS Return Filing e-forms have been introduced by the Income Tax Department, viz. Type 26QD and Type 16D.
  • Two New TDS Return Filing e-forms have been introduced by the Central Board of Direct Taxes, viz. Type 26QD and Type 16D.

What’s FORM 26QD?

  • Form 26QD is the TDS return reporting form for payments to resident contractors and practitioners 194M.
  • According to the CBDT notification, any tax deducted at source 194 M must be paid to the Central Government within 30 days from the end of the month in which the deduction was made. This deduction must be stated in the form 26QD of the Challan-cum-statement.

What is FORM 16D?

  • Form 16D is the TDS credential for reimbursement of the TDS u / s 194M.
  • According to the CBDT notification, from now on, all individuals who have to deduct tax u / s 194 M shall send a TDS certificate to the payer in Form 16D within 15 days from the due date for the TDS report filed in Form 26QD.

Details Required for Form 26QD: The CBDT had stated that individuals / HUFs making contractual or professional payments will be allowed to deduct TDS under section 194 M from the financial year 2019-20 (September 1st, 2019). TDS is deducted at 5% if the payment exceeds Rs. 50,000,000. And the TDS return for the same needs to be filed in Form 26QD. The payee will receive Form 16D as proof of the TDS deduction

  • Deductor / Payer PAN
  • Deductee / Paye PAN
  • Form of payment (work under contract/commission/brokerage or technical service charges)
  • Date of agreement/contract
  • Amount of payment
  • Number of certificates provided by the Assessment Officer pursuant to section 197 for non-deduction or lower deduction
  • Credit date
  • The TDS Rate
  • Payment details for TDS

Steps-How to fill out the form 26QD

  • Go to www.incometaxindiafiling.gov.in\
  • Click on the ‘E-Pay Tax’ button.
  • Click on ‘Continue to the NSDL website’
  • The next page will appear.
  • On Tab TDS on Contractor Payment Form 26QD.
  • Click the Proceed button.
  • Fill out the details.
  • Submit it.

Points to be recalled by the payer/deductor:

  • All individuals or HUFs (except those subject to audit pursuant to paragraph a and b of section 44AB) making payments to residents greater than 50.000.000 are liable to deduct TDS pursuant to section 194M.
  • Tax @ 5 percent to be deducted from the payment made to the payer.
  • Collect the Payee / Deductee Permanent Account Number (PAN) and verify the same with the original PAN card.
  • The Payee / Deductee PAN as well as the Payer / Deductor PAN should be made mandatory in the online form used to provide payment information.
  • Do not commit any mistake by citing the PAN or any other information in the online form. You will notify the Income Tax Department for the purpose of error correction.
  • Download and supply the TDS certificate in Form 16D from TRACES and give it to the Payee / Deductee within 15 days from the due date of receipt of the voucher in Form 26QD.

Points to be understood by the payer/deductee

  • Provide the Payer/Deductor with PAN to provide the Income Tax Department with information on TDS.
  • Verify the amount of taxes paid by the payer/deductor in the Form 26AS Annual Tax Declaration.
  • Insist on obtaining Form 16D from the Payer / Deductor that has been downloaded from the TRACES website only.
  • The Payee / Deductee may apply to the Assessing Officer under Section 197 to obtain a Nil or Lower TDS certificate in respect of the amount paid or payable to TDS under Section 194 M if his estimated tax liability is justified to the satisfaction of the Assessing Officer in issuing such a certificate.

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 Income Tax Scheme 30 percent additional deduction on New Payroll expenses for certain assesses : Section 80JJAA

New Income Tax Scheme 30 percent additional deduction on New Payroll expenses for certain assesses: Section 80JJAA

www.carajput.com;TDS Section 80JJAA

www.carajput.com; TDS Section 80JJAA

In order to encourage job generation in India, the Government enacted Section 80JJAA under Chapter VIA of the Income Tax Act, 1961, which provides for deductions for the employment of new workers. It shall refer to any assessee who has company income and who is liable for audit pursuant to section 44AB of the Income Tax Act, 1961. The rule is useful to newly formed start-ups and companies. The assessee will not be given a deduction if the business is established by changing the existing business or if the business is bought from another entity. The assessee will be excluded if he opts for a new tax regime or an existing tax regime of 115BAC from the previous year 2020-21.

How it is that will I get an extra 30 percent deduction from payroll payments for company and start-ups under Income Tax Chapter 80JJAA?

Only two types of deductions are available under the new tax regime for fiscal year 2020-21. The first concerns the employer’s contribution to the employee’s National Pension System (NPS) account and the second concerns Section 80 JJAA. Here’s a peek at who will gain from Section 80JJAA under the current income tax regime:

Section 80JJAA shall extend from AY 2017-18. This provision provides for deductions for extra payroll expenses for new hires under Chapter VI-A of the Income Tax Act. The deduction may be reported by assesses who have started a new company, employed new staff and their tax records need to be audited.

Quantum of deductions under this section: The assessee shall earn a discount of 30 percent of the increased staff costs for three successive years from the year in which the assessee continues to incur additional staff costs. To order to assert the benefit, the assessee is required to file Form 10DA. Form 10DA is to be submitted by the Practitioner Chartered Accountant on behalf of the assessee on the Income Tax e Filing Portal before or at the time of filing the income tax return.

What would you mean by extra personnel costs?

Additional employee cost means total emolument/ salary/ wages paid or payable to additional employees during the previous year. In the case of new business additional employee cost shall be emolument paid or payable to employees employed during that period.

Conditions for alleging deduction under Section 80 of the JJAA in the ITR

The assessee shall comply with the following requirements for demanding deductions under Section 80 of the JJAA:

  • The assessee shall have profits from ‘Company End’ and shall be required to have his / her account audited in compliance with Section 44AB along with the CA report in Form 10 DA.
  • The assessee will be modern, not built by breaking up or restoring an existing business.
  • The Company business should not be acquired through a transfer from any other person.
  • The exclusion under Section 80 of the JJAA must be stated in the income tax return.

Note:

  1. In the case of an existing commercial enterprise, no deduction shall be allowed unless there is a change in the number of employees. For example, the total number of employees as of 31/03/2019 was 100, and, in the previous year, 2019-20, 15 workers left the job and 15 new workers Attached there will be no deduction under this section. If 20 new workers have entered in the example specified, the deduction would be provided on the emolument charged to five employees.
  2. If the salary is paid in cash, the assessee shall not be liable for the deduction under Section 80JJAA.
  3. Additional staff do not include-

(a) The worker whose emolument/salary is more than Rs. 25.000 a month;

(b) An employee working for less than 240 days in the intervening year (in the case of the manufacture of garments or boots or leather goods working for less than 150 days in the PY)

(c) Workers do not invest in the Approved Provident Fund;

(d) Worker for whom the whole fee is paid by the government under the Workers pension scheme notified in compliance with the law of the employees’ provident fund & miscellaneous provision act, 1952.

(e) As provided for in the Financial Act 2018, if an employee is working for less than 240 days or 150 days in the preceding year in the case of the manufacture of garments or footwear or leather goods but is working for more than 240 days or 150 days in the subsequent year, he shall be considered to have been employed in the subsequent year. Consequently, the contractor will be able to subtract 30 percent of the increased payroll expenses of those workers in the next year.

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)