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

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

www.carajput.com;TDS on immovable property

www.carajput.com; TDS on immovable property

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

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

www.carajput.com;Section 194IA

www.carajput.com; Section 194IA

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

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

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

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

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

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

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

www.carajput.com;TDS Form 26QB

www.carajput.com; TDS Form 26QB

These are:

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

Points should be Buyer of Property identify:

Deduct tax @ 1 % from consideration for sale.

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

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

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

Points should be Seller of Property identify:

www.carajput.com;Section 194IA

www.carajput.com; Section 194IA

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

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

Information needed for Challan26QB:

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

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

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

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

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

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

Q How to Download 26QB Form?

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

www.carajput.com;CHALLAN

www.carajput.com; CHALLAN

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

Download process: Form 26QB

www.carajput.com;TDS Form 26QB

www.carajput.com; TDS Form 26QB

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

Q What type of form 26QB and form16B are?

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

Q What is the depositing procedure of TDS?

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

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

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

 

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

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

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

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

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

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

                Stage 5 Filled up empty blanks and press to Continue.

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

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

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

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

Mode of Payment

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

For the payment here is the list of some Authorised bank

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

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

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

Q What is the Process for issuing form 16?

Ans Process for issuing form 16 are as under : 

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

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

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

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

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

Q Is deduct TDS is required for purchasing agricultural land?

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

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

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

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

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

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

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

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

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

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

 

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

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.

 

www.carajput.com;Income TAX and TDS Update

www.carajput.com; Income TAX and TDS Update

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 the tax finally deducted shall be paid for the late deduction.

In addition, interest for late payment at a rate of 1.5 percent per month or half of the month on the number 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)

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 Revise TDS / TCS return filing due date & Payment due date for 2020

New Revise TDS / TCS return filing due date & Payment due date for 2020 as per the Taxation and Other Regulations (Relaxation of Some Provisions) Order, 2020.

www.carajput.com;CBDT; TDS Certificate

www.carajput.com; CBDT; TDS Certificate

The deadlines for specific GST and Income Tax legislation have been expanded by the Minister of Finance. Pandemic COVID-19 has forced a lockout in India. There are many challenges for businesses and professionals during this period, including different compliances under tax legislation.

Various reliefs are provided with respect to the submission of the TDS / TCS declaration and the issue of the certificate in the “Taxation and Other Laws (Relaxation of Other Provisions) Order 2020” for the quarter ended 31.03.2020.

Complete Coverage of Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020

calendar year 2020 has begun with many challenges, with the revised due dates for various TDS related return filings and tax payments following.

Complete Chart of TDS

Attributable Due Date for TDS E-filing Returns for Fy 2019-20.

Quarter Quarter Period Last Date of Filing
1st Quarter 1st April to 30th June 31st July 2019
2nd Quarter 1st July to 30th September 31st Oct 2019
3rd Quarter 1st October to 31st December 31st Jan 2020
4rd Quarter 1st January to 31st March 30th June 2020 Read Rescript 2020

Changes in interest rate for delay in the deposit of TDS / TCS in time as provided for in the Taxes and Other Laws (Relaxation of Other Provisions) Legislation, 2020.

TDS / TCS Changes to Covid19 by Ministry of Finance

  • “Government to infuse Rs 50,000 crores of liquidity by reducing the rate of TDS, the rate of non-salaried specified payments made to residents, and the rate of Source Tax Collection for specified receipts by 25% of the current rate”
  • “Among other steps, the due date of all income tax returns for the fiscal year 2019-20 will be extended from 31 July 2020 and 31 October 2020 to 30 November 2020 and the tax audit from 30 September 2020 to 31 October 2020”
  • “The period of the Vivad se Vishwas scheme for making payment without an additional amount will be extended to 31 December 2020”
  • Advanced tax, self-assessment tax, standard tax, TDS, TCS, equalization fee, STT, CTT late payments made between 20 March 2020 and 30 June 2020, the lower interest rate at 9% instead of 12%/18 percent per year (i.e. 0.75 percent per month instead of 1/1.5 percent a month) will apply. There is no late fee / penalty available.
  • The government extended the scope of the lower or nil TCS, TDS credential until 30 June 2020 due to a coronavirus pandemic.

Arrival Due date for TDS & TCS Payment Deposit for Government & Non-Government Companies

  • The due date for the submission of the TCS deposit is the 7th of the next month.

TDS Deposit Due Date as follows:

  • For non-governmental entities-7th of the next month (with the exception of March where the due date is scheduled for April 30th)
  • Government departments
  • If you pay via Challan-7th of next month
  • If paid via book-entry, the same day on which the TDS is deducted.

TDS Deposit Due Date as follows

 

As per section 201(1A) Interest at the rate of 1 % per month or part of the month on the amount of TDS deductible from the date of tax until the date of tax actually deducted shall be charged for the late deduction.

Also, interest for late payment at a rate of 1.5 percent per month or part of the month on the amount of the payment.

Interest in late payment of TDS: amendments made pursuant to Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 dated 24th March 2020:

For late payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between 20 March 2020 and 30 June 2020, the interest rate will be reduced by 9 percent instead of 12 per cent/18 percent per year (i.e. 0.75 percent per month instead of 1/1.5 percent per month). No late fee/penalty shall be paid for any delay in respect of that time.

Interest in late payment of TCS or failure to collect TCS:

In the event that the collector responsible for collecting the tax at source does not raise it or refuses to pay it to the Government, he shall be liable to pay basic interest at a rate of 1% a month or part thereof on the balance of that tax from the date on which the tax was collected to the date on which the tax was actually charged and that interest shall be paid until furnish.

Punishment

You will have to pay a fine equal to the amount deducted/collected under the provisions of the Income Tax Act.

Prosecution (Sec 276B)

As per the prosecution (Sec 276B), if a person refuses to pay the payment to the Central Government, the TDS deducted by him under the provisions of Chapter XVII-B shall be entitled to obtain a strict penalty of at least three months, which may be expanded to seven years. The fine depends on the conditions or inquiry conducted by the appointed tax authority/assessment officer.

Penalty (Section 234E)

The deductee of the TDS shall be liable to pay a fine of INR 200/-per day before the full sum of the TDS is paid. However, the penalty shall not exceed the actual amount of the TDS.

Late Filing Fees :

For the delayed fee of TDS after deduction under Section 201(1A), you have to pay interest at a rate of 1.5 percent per month from the date of the deduction to the actual date of the deposit. It should also be remembered that interest is measured on a monthly basis rather than on a number of days. Half of a month will also be regarded as a whole month.

What is important to remember here is that

The estimation of interest on the balance of the TDS owed starts on the day from which the TDS was withheld rather than the day from which it was due.

PENALTIES (Section 271H)

Pursuant to this rule, the Assessing Officer may direct a person who has not filed a TDS payment on time with a minimum of INR 10,000, which may even be extended to INR 1,000,000.

If the following conditions are met, no penalty will be levied (under section 271H) for late payment of TDS / TCS returns:

  • The tax deducted at source must be paid to the credit of the government.
  • No penalty will be levied if interest and late filing fees are paid to the Government’s credit.
  • Before the one-year period expires, the TDS / TCS return has been filed from the due date.

TDS for the purchase of immovable property

For the purchase of immovable property on which TDS applies, the return, together with the payment of TDS, must be made before the 30th of the following month. For example, TDS for property purchased in May must be deposited by 30 June.

Summary of Important Due date of July and Aug 2020

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)

CORPORATE AND PROFESSIONAL UPDATE SEPT 27, 2016

Professional Update For the Day:

6Direct Tax:-

IT: Assessee has directly deposited cash in the supplier’s account and has produced the bills, no evasion of tax by claiming the bogus expenditure in cash – Arun Kumar Mondal Vs ITO, W-2(2), Burdwan (2016 (9) TMI 995 – ITAT Kolkata)

SC modifies Karnataka HC order on the issue of taxability of amount received by assessee-company (engaged in real estate business) on account of share capital from various share-holders. ITAT has held that share capital received by the assessee was in the nature of  of capital receipt and cannot be treated as business income despite the same having been received towards allotment of flats/ units. [TS-513-SC-2016]

Indirect Tax:-

CBEC has made amendments in various notification u/s 25(1) in Custom Act 1962 vide Notification No. 52/2016 –Custom-Tariff  dated 23/09/2016.(Click here to view)

Reg. Service Tax exemption on advancement of Yoga [Notification No. 42/2016-Service Tax]

In the below citied case petitioner had calculated and deposited tax 10.3% whereas the tax had to be calculated 12.36% as per department.Delhi high court held that here is no provision in the VCES which permits correction of errors of this nature by the Petitioner.It was not obligatory for the Respondent to inform the Petitioner what the correct rate of service tax was. It was for the Petitioner to have ascertained the correct rate of tax and calculated the service tax.(Techno Concept India Pvt. Ltd. Versus The Deputy Commissioner of Service Tax, Delhi)

GST UPDATES

Under GST,all cesses to be subsumed in GST. Only 5% assessees would be audited in GST regime, against 70-80% by some states now.

FAQ as Issued by CBEC

Q . How to compute ‘aggregate turnover’ to determine eligibility for composition scheme?

Ans. The methodology to compute aggregate turnover is given in Section 2(6). Accordingly, ‘aggregate turnover’ means ‘Value of all supplies (taxable and non-taxable supplies + Exempt supplies + Exports) and it excludesTaxes levied under CGST Act, SGST Act and IGST Act, Value of inward supplies + Value of supplies taxable under reverse charge of a person having the same PAN.

Q . What are the penal consequences if a taxable person violates the condition and is not eligible for payment of tax under the Composition scheme?

Ans. Taxable person who was not eligible for the composition scheme would be liable to pay tax, interest and in addition he shall also be liable to a penalty equivalent to the amount of tax payable. (Section 8 (3) of the MGL).

Q . What is the minimum rate of tax prescribed for composition scheme?

Ans. 1%

Q . When exemption from whole of tax collected on goods and/or services has been granted unconditionally, can taxable person pay tax?

Ans. No, the taxable person providing such goods or services shall not collect the tax on such goods or services.

FAQ on Company Law:

Query: In case of a right issue of shares by a private limited company for which board meeting we should file MGT 14 u/s 179(3)(c). Is it for the Board Meeting where rights issues offer is made or the Board Meeting where rights issue shares are issued and allotted?

Answer: In case of Rights issue, you shall be required to file Form MGT-14 under section 179(3) within 30 Daysof passing the Board Resolution in which Shares are issuedand allotted and put its SRN in Form PAS 3 accordingly.

MCA UPDATE

MCA has made an amendment to the Companies (Management and Administration) Rules, 2014. These rules may be called the Companies (Management and Administration) Amendment Rules, 2016 which shall come into force on the date of their publication in the Official Gazette.

Key Dates:

  • Advance information in BE_2  Formf or 1st fortnight of Oct of functions with booking cost more than rs 1 lakh in Banquet Halls, hotels etc. in Delhi for DVAT-27/09/2016
  • Return by banks in Form no. 26QAA for interest upto Rs. 5000 for September quarter.-30/09/2016
  • E-filling of reconciliation return of statutory forms for the year ending 2015-16-30/09/2016
  • Payment of TDS for the purchase of property for the month of August-30/09/2016
  • Due date for income declaration scheme  2016 is 30th September, no extension expected.

“In order to carry a positive action we must develop here a positive vision.”

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com         E: info@carajput.com             T: 011-233-4-3333, 9-555-555-480

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)

CORPORATE AND PROFESSIONAL UPDATE SEPT 26, 2016

Professional Update For the Day:

tax

Direct Tax:-

IT: Penalty u/s 271B – assessee firm could not get the accounts audited within time limit prescribed u/s 44AB – there is no mala fide reason for not obtaining the accounts audited in time and penalty u/s 271B should not be imposed – M/s. Gemorium Vs ITO Ward-5(1), Jaipur (2016 (9) TMI 962 – ITAT Jaipur)

CBDT has issued office memorandum regarding withdrawal of notifications granting approval  u/s 35(1)(ii) of the Income-tax Act, 1961 in some cases.{ notification.No.203/09/2015/ITA.II  dated 21/09/2016}

IT: Late filing fee u/s 234E – late filing of TDS return prior to 01 JUN 2015 – demand notices u/s 200A for intimation for payment of fee u/s 234E can be said as without any authority of law and the same are quashed and set aside to that extent – Sri Fatheraj Singhvi & Others Vs Union of India & Others (2016 (9) TMI 964 – Karnataka High Court)

IT: Adjustment in respect of levy of fees U/s 234E was indeed beyond the scope of permissible adjustments contemplated U/s 200A – Little Servants of Divine Providence Charitable Trust Vs ITO (TDS), Alappuzha (2016 (9) TMI 960 – ITAT Cochin)

IT: Penalty u/s 271B – assessee firm could not get the accounts audited within time limit prescribed u/s 44AB – there is no mala fide reason for not obtaining the accounts audited in time and penalty u/s 271B should not be imposed – M/s. Gemorium Vs ITO Ward-5(1), Jaipur (2016 (9) TMI 962 – ITAT Jaipur)

IT: Assessee has directly deposited cash in the supplier’s account and has produced the bills, no evasion of tax by claiming the bogus expenditure in cash – Arun Kumar Mondal Vs ITO, W-2(2), Burdwan (2016 (9) TMI 995 – ITAT Kolkata)

INDIRECT TAX:-

ST: Reimbursable expenses cannot be added in the assessable value of the C&F, ST tax is payable only on the commission and not on the reimbursable expenses  – CCE, Indore Vs Virmani Enterprises (2016 (9) TMI 1025 – CESTAT New Delhi)

VAT & ST: Sale of apartment – petitioner doesn’t become works contractor unless it had already entered into a contract with potential purchasers – Oceanus Dwellings Pvt. Ltd. Vs C.T.O. & Ors (2016 (9) TMI 971 – Kerala High Court)

VAT & ST: Sale of apartment – petitioner doesn’t become works contractor unless it had already entered into a contract with potential purchasers – Oceanus Dwellings Pvt. Ltd. Vs C.T.O. & Ors (2016 (9) TMI 971 – Kerala High Court)

GST Updates:-

Under GST compounding dealer can switch to normal dealer during the year but he can’t change again to compounding dealer during same year.

GST: CBEC released Frequently Asked Questions (FAQ) on GST on 21.09.2016. Link athttp://www.cbec.gov.in/resources//htdocs-cbec/deptt_offcr/faq-on-gst.pdf

GST CBEC issues FAQ’S on Registration, Valuation, ITC, Assessment, Audit, Refund, Demand & Recovery, Appeals, Advance Ruling, Offence & Penalties etc.

SEBI Updates:-

 SEBI has issued circular in respect of Permission for trading in futures contracts and modification in contract specifications at exchange level.

SEBI has issued a clarification that ‘Income from Operations’ may be disclosed inclusive of excise duty, instead of net of excise duty, as specified in the Companies Act, 2013.

FAQ on Company Law:

Query:  Can a Pvt. Ltd. Company pay remuneration to its Ordinary Director (other than M.D/WTD) on Monthly, Quarterly or yearly basis apart from 1% or 3% of Net Profit as provided under Section 197 of The Companies Act, 2013?

Answer: Private Company can pay remuneration to director (other than M.D/WTD) without any limit subject to provisions contained in the Articles of Association of the Company. However by passing a board resolution you can fix/revise the remuneration of the directors in private company. 

MCA Update :

MCA released Companies (Management and Administration) Amendment Rules, 2016 vide Notification dated 23.09.2016.  : The Ministry of Corporate Affairs (MCA) has made an amendment to the Companies (Management and Administration) Rules, 2014. These rules may be called the Companies (Management and Administration) Amendment Rules, 2016 which shall come into force on the date of their publication in the Official Gazette.

Amendment is made to clarify the provision of Section 93 of the Companies Act, 2013 under which every listed company is required to file with the Registrar, a return in Form No. MGT.10, with respect to changes in the shareholding position of promoters and top ten shareholders of the company, in each case, representing increase or decrease by two per cent or more of the paid-up share capital of the company, within fifteen days of such change.

Further, Form MGT-6 which is Return to the Registrar in respect of declaration of beneficial interest in shares under section 89 by the company has also been revised.

OTHER UPDATES:-

The Union Cabinet has approved today the proposal of the merging of Union Finance Budget and Railway Budget. Now a Consolidated Budget shall be presented on February 1 every year instead of the last day of the month of February.

Cabinet approves Agreement between India and Samoa for exchange of information with respect to Taxes – See more at: http://taxguru.in/income-tax/cabinet-approves-agreement-samoa-tax-info-exchange.html#sthash.njfis8w1.dpuf

Cabinet approves extension of the validity of Central Orders dated 28.09.2015 in respect of edible oils and edible oilseeds and Central Order No. S.O. No. 2857(E) dated 18.10.2015 in respect of pulses from01.10.2016 to 30.09.2017.

Today is last date for e-payment of ESI, and for DVAT & CST pertaining to august, 2016.

ICAI Updates:-

ICAI: Please pay your Membership and COP fee for 2016-17 before 30 SEP 2016.

Key Dates:

Advance information in BE_2  Formf or 1st fortnight of Oct of functions with booking cost more than rs 1 lakh in Banquet Halls, hotels etc. in Delhi for DVAT -27/09/2016

Time, power, money & body may not cooperate every time in life but Good nature, good understanding, spiritual path & true spirit will always cooperate in life.

Silence is the strong fence around wisdom, If your foot slips, You can re-gain your balance, but if your tongue slips, you can never re-build your image again.

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com E: info@carajput.com T: 011-233-4-3333, 9-555-555-480

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)

HIGHLIGHTS RESULTS OF THE GST COUNCIL MEETING HELD ON 22-23 SEPTEMBER,2016:

HIGHLIGHTS RESULTS OF THE GST COUNCIL MEETING HELD ON 22-23 SEPTEMBER,2016:

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www.carajput.com; GST

  1. The threshold Annual Exemption Limit fixed at ₹ 20 Lac.
  2. The threshold limit for the north-eastern and hill states paged at ₹ 10 Lac.
  3. GST rates and tax slabs would be decided at three-day’s meeting during 17-19 Oct, 2016.
  4. GST rollout slated for 1st April, 2017.
  5. All cesses will be subsumed in the GST
  6. GST Council’s next meeting on 30th Sep, 2016 to finalise draft GST law / rules.
  7. The state authorities will have jurisdiction over assessees with annual turnover of less than ₹ 1.5 crore.
  8. Those with turnover of over Rs 1.5 Crores would be cross examination either by officers from the Centre or state to avoid dual control.
  9. The existing 11 Lac service tax assessees would continued to be assessed by the Centre.
  10. New assessees which would be added to the list would be divided between the Centre and the States.
  11. Council is working on a compensation law and draft compensation formula.
  12. The base year for calculating compensation would be 2015-16 and the formula for payment of compensation would be deliberated b/w the state and Central authorities.
  13. All decisions today by the GST Council were taken on the basis of consensus.

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com E: info@carajput.com T: 011-233-4-3333, 9-555-555-480

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)

Any dishonest act of CA isn’t a professional misconduct if it is done in Individual capacity

 

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www.carajput.com; CA

Chartered Accountant Act, 1949: Where a CA sold his shares but continued to receive dividends declared by the Company by cheating upon transferee, such activity could not be said done in relation to practice as CA as such act of dishonesty was done in individual capacity. Thus, disciplinary committee’s proposal to remove CA’s name from registers of members of ICAI for 6 months was to be set aside.

Facts: 

  • A Chartered Accountant sold his shares in November 1999 however, share transfer deed for transfer of shares was lodged on November 04, 2004. In the meantime, CA continued to receive dividend declared by company for 5 years
  • The transferee made complaint about this conduct of CA before the Disciplinary Committee of the Institute of Chartered Accountants. The Disciplinary Committee found that the conduct of CA was wholly unworthy and amounted to professional misconduct.

On appeal the High Court held as under:

  1. In the instant case the respondent was acting as an individual in his dealings with the complainant which were purely commercial. While selling the shares held by him the respondent was not acting as a Chartered Accountant. He was not discharging any function in relation to his practice as a Chartered Accountant.
  2. In the decision reported as AIR 1958 SC 72 Council of Institute of Chartered Accountants & Anr. vs. B. Mukhreja, a Chartered Accountant who had been appointed as a liquidator was held liable for professional misconduct on the reasoning that Regulation 78 provided for a Chartered Accountant to act as a liquidator and thus while acting as a liquidator Sh. B. Mukhreja would be deemed to be in practice as a Chartered Accountant. The judgment brings out that the acts of omission or commission must relate to the offender acting as a Chartered Accountant and rendering service for remuneration and must be engaged in an activity which a Chartered Accountant would be entitled to be engaged in, wearing the hat of a Chartered Accountant.
  3. For example, a Chartered Accountant may drive rashly and negligently and in the process may kill a human being. This conduct would be an offence, but not a misconduct for the purposes of the Act
  4. The Disciplinary Committee’s proposal to remove CA’s name from registers of members of ICAI for 6 months was to be set aside. –[2016] 72 com 197 (Delhi)

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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)

GST – A REALITY SOON

GST – A REALITY SOON

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www.carajput.com; GST

The 122ND Constitutional Amen tdment Bill for the introduction of Goods and Services Tax (GST) inhe Indian Constitution has been passed by the Rajya Sabha. The Bill has already passed by the Lower House (Lok Sabha) on 6th May 2015. Further, the Empowered Committee of the State Finance Ministers has released Model GST Law in June 2016. In order to have GST as the indirect Taxation Structure in force following steps needs to be followed:

Steps to convert GST a reality

  • 122nd Constitutional Amendment Bill to be ratified by at least 50% of the State Legislatures under Article 368 of the Constitution.
  • Assent by President of India to the 122nd Constitutional Amendment Bill will require.
  • After Constitutional amendment GST Council (GSTC) to be constituted within 60 daysunder Section 279A of the amended Constitution.
  • GSTC to recommend GST Law and procedure. IGST and CGST bill for Parliament/Centre and Model SGST bill for State Legislature.
  • CGST and IGST Laws to be introduced in Parliament and will require be passed by simple majority.
  • SGST Laws to be passed by concerned state legislatures.
  • Once Approval from Parliament and States, GSTN (GST network a Section 8 Company will launch the IT Platform for implementation of GST).

GST Council Formation Approved – A Step Forward :  Another step has been taken by the government on the right direction for the implementation of biggest tax reform. The Constitution (One Hundred and Twenty¬ second Amendment) Bill, 2014, for introduction of Goods and Services tax in the Constitution of the country was accorded assent by the President on 8th September, 2016, and the same has been passed as the Constitution (One Hundred and First Amendment) Act, 2016.

Today, i.e. on 12th September 2016, the union Cabinet has approved the setting up of the GST Council (Section 279A) and its secretariat with the following details:

  • Union Finance minister will be the Chairperson with state finance ministers as members to the GST council
  • Setting up of Secretariat of GST council with its office at New Delhi
  • Appointment of the secretary (Revenue) as the Ex-Officio Secretary to the GST Council.
  • Inclusion of the Chairperson, CBEC as a permanent invitee (non-voting) to all the proceedings of the GST Council
  • Create one post of Additional Secretary to the GST Council in its secretariat (at the level of Additional secretary to the Government of India), and four post of the Commissioner in its secretariat (at the level of Joint secretary to the Government of India)

The Finance Minister has also decided to call the first meeting of the GST Council on 22nd and 23rd September 2016 in New Delhi.

The GST Council shall make recommendations on tax rates, cesses, exemptions, threshold limit, and other provisions.

GST Constitutional Amendment Bill gets Presidential assent:  Honorable The President of India gave assent to the 122nd Constitutional Amendment Bill 2014 on Goods and Services Tax (GST) and now it becomes One Hundred and First Amendment Act, 2016, a major milestone for the introduction of the Goods and Services Tax (GST) expected to be implemented by 1st April 2017.

For your information, The Bill was passed unanimously by both the houses of Parliament in august 2016 and ratified by the legislative assemblies of more than 50% of the states. Assam was the first state to ratify the Bill and the other states which have passed the legislation include Bihar, Jharkhand, Chhattisgarh, Himachal Pradesh, Gujarat, Madhya Pradesh, Delhi, Nagaland, Maharashtra, Haryana, Sikkim, Mizoram, Telangana, Goa, Odisha and Rajasthan.

Going forward, GST Council will be formed within 60 days of the enactment of One Hundred and First Amendment Act, 2016. CGST and IGST laws will be introduced in Parliament and SGST Laws in State Legislative Assemblies for the rollout of GST.

Article on Supply without Consideration under GST : (Permanent transfer/ disposal of business assets and Temporary application of business assets to a private or non- business use)

With the passage of 122nd Constitutional Amendment Bill as One Hundred and First Amendment Act, 2016 in both the houses of Parliament by full majority and the release of Draft GST Model in June 2016 by the Empowered Committee of State Finance Ministers, it is expected that the GST will be in force very soon.

The Team DYKS has been analyzing the Draft GST Model deeply and initiated a Series of Articles on the issues emerging from the analysis.

Goods and Services Tax whether in the form of CGST, SGST or IGST will be levied on the“supply” of goods or/and services. Supply is defined in the Section 3 of the Draft Model Act which will also include a supply as mentioned in Schedule I even without consideration.

We have come up with an Article to analyse two transactions which are mentioned in the Schedule I i.e.

  • Permanent transfer/ disposal of business assets
  • Temporary application of business assets to a private or non- business use.

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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)