Blog

November 2019

How to deal with the 20% restriction on availment of Input Tax Credit

The recent notification followed by a circular issued on 11 November 2019 states regarding restriction on availment of ITC. The ITC in respect of invoices or debit notes, the details of which have not been provided for by the supplier has been restricted. This is not an automatic restriction by the portal and has to be exercised by the taxpayer himself on basis the reconciliation. What’s the restriction? The taxpayers claiming ITC on the basis of the invoices, are now required to ascertain if the corresponding details are uploaded by the [...]

July 2019

Reduce taxes on salary

How to reduce taxes on salary

Introduction The salaried employees are always in a frenzy about taxes and plans out ways to save it. The allowances and perquisites received by a salaried person is either fully taxable or partly taxable or exempt. The article below illustrates different ways in which salaried class can save their taxes. 1. Standard Deduction Standard Deduction, re-introduced in 2018 budget, has replaced the conveyance allowance and medical allowance. A deduction of flat Rs. 40,000 (for FY 2018-19)/50,000 (for FY 2019-20) can be claimed by the employee from the [...]

Doctors required to register under GST?

Are doctors required to register under GST?

The health care sector is one of the biggest sectors in India, is regulated by the Indian Medical Association (IMA). Doctors, apart from engaging themselves in healthcare services by working as doctors and consultants in hospitals, or running their own clinic etc. can do a lot of other activities. For instance, they can set up camps in rural areas, and sometimes are also involved in any nonmedical activities like education etc. So, whether doctors aren’t required to register under [...]

June 2019

Changes in ITR-1 form for FY 18-19

Recently Income Tax Department came with the changes in Form 16 issued by employer along with changes in TDS return filed in form 24Q and Income Tax Form to be filed by employees. This year steps have been taken by Income Tax Department in order to reconcile following forms: Form 16 : Certificate from the employer that has details of salary paid to an employee and tax deducted at source (TDS).Form 24Q : Returns filed by the employer for the tax deducted.ITR-1 : To [...]

What is Form 16?

Form 16 is a certificate from the employer that has details of salary paid to an employee and tax deducted at source (TDS) from his or her salary for the financial year. It has to be issued by the Employer to the Employee under Section 203 of the Income-tax Act, 1961. It has two sections—part A and B. CBDT (Central Board of Direct Taxes) have notified new format of “Form 16 – The Salary TDS Certificate” requiring detailed breakup of [...]

Which ITR Form to use for Assessment year 2019-20

CBDT has already released new ITR Forms. One can file the ITR now. While, Individuals are due to file their ITR by 31st July. Corporate entities are to file by 30th September. The big question is which form should one use according to their status, income level, sources of income etc. Here, we discuss about all the forms to let taxpayers use the correct form to file. These ITR Forms are related for assessment year 2019-20 only i.e. it is only related to the income earned [...]

Treatment of F&O transactions under Income tax

Income Tax Implication on Futures & options (F&O) transactions & Intra-day trading

This article is about how trading in derivatives(F&O) and intra-day trading is to be treated under the Income tax. We will briefly discuss the following: 1. Basic understanding of the concept 2. Computation of income- F&O & intra-day trading 3. Calculation of turnover- F&O 4. Set-off & Carry forward of losses 5. Applicability of tax audit A basic understanding Derivatives are the instruments whose value is derived from an underlying asset. Its value is based on an underlying asset. The most popular derivatives are futures and options. Futures [...]

May 2019

Companies to declare commencement of business

Companies having share capital to declare commencement of business

All Companies having share capital registered on or after 02nd November 2018, are required to declare commencement of business to the authorities, before it could start its business. This needs to be declared within 180 days of incorporation to avoid penalties. This requirement was also present there in erstwhile Companies Act 1956 and Companies Act 2013. However, it was omitted eventually on 29th May 2015 and companies were not required to declare commencement of business. Now, it has again been [...]

Recent Company law compliance a director should know

Recent Company law compliance a director should know

A person who is a Director is one or more companies or just holding DINs need to look at the following new compliance which makes a director directly or indirectly responsible for the compliance associated with the director or the company. As a director, one need to meet these in order to avoid fines & hassles such as DIN Deactivation, Company being marked as Inactive etc. amongst other legal action that can be taken against director Following are the compliance: 1. DIR-3 [...]

Filing of Income Tax Return after the deadline.

Filing of ITR- Income Tax Return after the deadline

Deadline for filing ITR is 31 July for every assessment year. If you missed the deadline, you can always file a belated return up-to 31 March every year. If you have also skipped the deadline for filing a belated return for the year, 2016-17 and 2017-18, you cannot file a belated return anymore. Now, you can file return only through direction of the Income tax officer, i.e. if you receive a notice for not filing the return, in that [...]

April 2019

Tax aspects every Freelancer in India should know

Tax aspects every Freelancer in India should know

Freelancing is the talk of the town; it’s the way new generation works. So, every freelancer needs to be aware of the tax implication on freelancing. This article aims to address issues such as Whether a freelancer require GST registration? Is he/she supposed to file GST returns? How should a freelancer file ITR optimally? So, we are looking into the tax implications on freelancing under two separate heads i.e. the Income tax Act & Goods & Service taxes Act. A. Under Goods & Service [...]

Changes in Income tax & GST effective from 01st April 2019

Changes in Income tax & GST applicable from 01st April 2019

The new financial year has just begun, and there has been a lot of changes in Income tax & GST. So in this article, we aim to discuss few changes, relevant to most of the taxpayers. We are covering the changes made in Income tax Act and GST. A. Changes in Income tax Act 1.Rebate u/s 87 A The tax rebate available under Section 87A has been increased from Rs. 2,500 to Rs. 12,500. However, it would only be available to a resident individual [...]

TDS on Rent Payable by Individual

Introduction: In most of the cases, an Individual is not required to deduct TDS on payments. We will discuss the cases where an Individual is required to deduct TDS while making payments. Individuals making payment of rent would be required to deduct TDS on rent at the applicable rates depending upon the situation as explained below: I. TDS on rent paid by individuals who were liable for tax audit A person making payment of rent to any resident would have to deduct [...]

March 2019

Requirement of Filing MSME form-1 & INC 22A by the Companies

Recently the MCA has announced certain compliance to be met by the registered companies. Here we are discussing about which companies are required to file, due date of filing, consequences of non-filing & what details would be required to file form MSME-1 and INC 22A A. MSME Form-1 MCA has directed all the companies who get supplies of goods or services from Micro, Small & Medium Enterprises (MSMEs) to report & file MSME form-1, if the payments for such procurements has [...]

February 2019

compliance to be met by a private limited company

Compliance to be met by Private limited company after Incorporation

Once a company is registered, we can run the company, starting operations under its name. Running a company also requires us to meet certain Compliance under the applicable laws. So, here are the most important & common Compliance one needs to take care of while running a private limited company in India. There could be several other situational Compliance depending upon the event, nature of business & scale of operations. Emphasis of this write up is acquainting one with the Compliance [...]

January 2019

Input tax credit review

Review of Input tax credit

The GST law aims at providing seamless Input tax credit to the registered persons. While the missed ITC could be a loss to an entity, an undue or excess claim of ITC could put an entity to a trap of interest, penalty & litigation. It goes without saying that there could be several errors of understanding, system errors and transactional mistakes around availing, reversing & utilizing input tax credit. It is pertinent for a business to conduct a review [...]

November 2018

MSME Loan

Procedure to apply for MSME loan up to Rs 1 crore in 59 minutes

The government has recently announced a quick loan scheme for MSME Sector, in which they claim to approve the MSME loan in less than an hour. They have launched a dedicated portal to apply for the loan: https://www.psbloansin59minutes.com Salient features of MSME loan MSMEs loan would be applied to SIDBI & 5 PSU Banks Entire application process in online, i.e. the applicant would not be required to visit the bank until the sanction or disbursement stage. MSMEs can avail business loans from Rs [...]

October 2018

Applicability of TCS under GST & it’s impact on E-commerce

The deferred TCS provisions has now become applicable w.e.f. 01st October 2018 and we aim to discuss how is it going to impact the E-commerce sector, what would they need to do as E-commerce operator and seller registered on E-commerce platforms. TCS under GST refers to tax collected by the electronic commerce operator like Amazon, Flipkart etc. on supply of goods or services through its portal and the payment for that supply is collected by the electronic commerce operator. What are [...]

TDS under GST

Applicability of TDS under GST

Introduction You might be aware of the concept of TDS & TCS in the Income tax Act. Similar concepts were introduced in GST, though these were deferred to a later date. Recently, government has notified that the provisions relating to TDS under GST would become applicable w.e.f. 01st October 2018. So, the laws around these concepts become relevant & thus we aim to let taxpayers be acquaint with the applicable laws. TDS under GST TDS is one of the modes/methods to collect tax, [...]

June 2018

Procedure for efiling income tax return (Which ITR form to use?)

Procedure for efiling income tax return (Which ITR form to use?)

The time for efiling income tax return is nearing so earlier we start preparing for, the better it would be. The IT department has released the efiling forms recently and one can use those to file their ITR. The biggest question that haunt us is which ITR form should I use for efiling income tax return. So we have come up with a detailed & easy description on each forms, which would help you in choosing the correct form. There are [...]

TDS ON SALE OF IMMOVABLE PROPERTY 194IA AND FORM 26QB

There are various provision related to TDS where tax is to be deducted at source at a given percentage either at the time of payment or at the time of credit, as the case may be e.g. TDS on salary, TDS on professional fees, TDS on Contract, TDS on rent etc. Here, we are going to discuss about TDS on sale of immovable property u/s 194IA and form required to be filled for this i.e. Form 26QB. Applicability of form 26 [...]

Determination of Place of Supply of Goods under GST

Before we discuss about the provisions for determining place of supply of goods, we should be aware of the following terms: Goods: Goods means any kind of movable property other than money or securities, includes actionable claim (like insurance claim, pending litigations, lottery, betting and gambling), growing crops, grass and things which are attached to or which forms the part of land which are agreed to be severed before supply or under a contract of supply Supply: It means supply of [...]

May 2018

Procedure to claim refund on export under GST

A proper refund mechanism is necessary for effective tax administration, as trade is facilitated via the release of blocked finances for modernization, expansion and working capital requirements of a business. Here we are discussing about the options available for exporters to claim the refund but for that we firstly need to understand the “Meaning & taxability of export of Goods & Services”. Meaning of Export of Goods & Services Export of Goods means taking goods from India to any place which [...]

TDS

What to do if someone has deducted TDS and did not submit it to the government?

This happens quite often, somebody deducts the TDS & do not submit it to government or do not file the TDS return due to which it does not reflect in our tax credit statement (26 AS). In such a case you won’t be able to claim credit of TDS and you would receive a tax notice stating a mismatch in TDS, if you anyway claim the TDS credit while filing ITR. How to claim such TDS? 1. Communicate with the deductor The [...]

RCM under GST

Reverse Charge Mechanism RCM under GST

Before the implementation of GST, reverse charge mechanism (RCM) was applicable only on services and there was a concept of partial reverse charge also. However, after GST implementation, there is no such concept as partial reverse charge, and reverse charge is applied on notified services as well as notified goods also. Reverse charge means, instead of payment of tax by the supplier, the tax is paid by the recipient of supply of goods or services and all the provision of [...]

April 2018

Whether Business dealing in exempt or non-taxable goods liable for GST registration?

Whether such business is required to take the GST registration? In general, the businesses with annual turnover up to Rs.20 lakhs are not required to take the GST registration. However, there are some specific cases, where a person is required to take GST registration even if the turnover is below Rs.20 lakhs. More about this could be read at https://moneyboat.in/would-gst-apply-to-me/ With this write-up, we aim at enlightening the situations where a business dealing in non-taxable goods is exempt from GST registration [...]

E-way Bill FAQs

Here’s a categorized section of various FAQs relating to E-way bill, which got implemented on 1st April 2018 for interstate movement of goods and would further apply to intrastate movement in a phased manner. GeneralWho all can generate the e-way bill?The consignor or consignee, as a registered person or a transporter of the goods can generate the e-way bill. The unregistered transporter can enroll on the common portal and generate the e-way bill for movement of goods for his clients. Any person can [...]

March 2018

Can we do multiple GST registration on a PAN card?

A taxable person supplying goods or services from different states is mandated to take different GST registration for each state (which would be based on a single PAN). Also, a person who has different verticals of business within the same state can choose to have different GSTIN for each vertical (and these would again be based on a single PAN) Important thing to note here is each GSTIN whether in different states or in the same state (for different verticals) would [...]

December 2017

Sale of Second hand goods under GST

While GST is charged on transaction value under a normal supply. For a second hand supply, GST would be applicable only on the margin i.e. the difference between the value of  sale and purchase price. If there is no margin, no GST is charged for such supply. The purpose of the scheme is to avoid double taxation as the goods, having once borne the incidence of tax, re-enter the supply and the economic supply chain. Valuation of second hand goods Second hand goods are [...]

FAQ on e-commerce under GST

E-commerce has emerged as an emerging trend of business in India, there are thousands of suppliers under e-commerce operators, we will discuss about the applicability of GST on the suppliers selling goods or services through an e-commerce platform. An e-commerce platform/operator is an entity which owns, operates or manages digital or electronic facility or platform for E commerce like Amazon, Flipkart, Google Playstore etc. Here’s a list of common FAQs on Ecommerce Also read: Applicability of GST on sellers in e-commerce market place i.e. [...]

November 2017

Debit note: How & when to issue under GST

What is a debit note? When a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, would issue a debit note to the recipient indicating the same. The issuance of debit note is a convenient and legal method by which the value of the [...]

Credit note: How & when to issue under GST

What is a Credit note? Where a tax invoice has been issued for supply of any goods or services  and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services may issue a credit note to the recipient indicating the same. The [...]

October 2017

Ineligible Input tax credit under GST

Following are the goods and services where the GST law has imposed restriction while availing GST input tax credit, primarily called as Ineligible Input tax credit. We will discuss about the extent and eligibility of ITC of these goods and services. 1. ITC for Motor Vehicles is not available. The GST levied on purchase of Motor vehicles and conveyance is an ineligible Input tax credit. However, there are few exception cases where GST credit is available. These are: Dealers who are engaged [...]

Important changes announced in 22nd GST council meet

The GST Council, in its 22nd meeting held at New Delhi on 6th October 2017, has recommended the following facilitative changes to ease the burden of compliance on small and medium businesses: A.Flexibility in eligibility to composition scheme 1.Increase in turnover limit The turnover limit for eligibility of opting composition scheme has been increased from present Rs. 75 lakhs to Rs 1 crore and for special category states, it has been increased from Rs 50 lakhs to 75 lakhs. The increase in the turnover [...]

September 2017

Treatment of Cash discounts & Trade discounts under GST

There has been a lot of confusion in treatment of discounts in invoice and questions with respect to which amount should be chargeable to GST. Though the law is pretty clear about it. GST treats all the discounts such as trade discounts, cash discounts, volume/turnover discounts, etc. Instead, the treatment varies with the timing of discount being given, so we classify the treatment of discounts under the following two categories: 1. Discount given before or at the time of supply, and 2. [...]

How to utilize GST credit against GST liability

Credit Utilization rule under GST There are three types of GST credit that a person can avail viz. the following: IGST Credit- this is the credit you could avail when you make interstate purchases & IGST is charged on invoice by the seller. CGST Credit- this is the credit you could avail when you make intrastate purchases & CGST is charged on invoice by the seller. SGGT Credit- this is the credit you could avail when you make interstate purchases & SGST is [...]

Input credit under GST

What is Input credit In simple words taking input credit means taking credit of GST paid on various purchases A registered person is entitled to take credit of GST charged on purchase of goods or services which are used or intended to be used in the course or furtherance of his business The said amount shall be credited to the electronic credit ledger of such person. Conditions for taking Input credit 1. You must possess a tax invoice or debit note issued by a [...]

August 2017

Key things to keep in mind with respect to accounting under GST

With every change in tax laws, there must be certain points which must consider while preparing the accounts or keeping our books and records. So, we are trying to highlight a few key areas & procedures one should know and must keep in mind while creating, maintaining & accounting records under GST 1.Invoicing: What should an invoice include? There is a prescribed format for an invoice under GST. Following things are essential: Your details – Trade name, GSTIN, Registered address. The customer’s details: Trade [...]

Due date of filing form GSTR-3B for July 2017 has been extended to 28th August. Here’s all you need to know about GSTR 3B.

For months of July and August, the due dates for filing GSTR1 and GSTR2 has been deferred to aid convenience to the taxpayers. GSTR-3B It is a summary return which is to be filed for the month of July & Aug 2017. Its due date is 20th of next month i.e. 20th August & 20th September respectively for July & August. The due date to file GSTR-3B has been extended for July from 20th Aug 2017 to 28th Aug 2017 subject to [...]

Applicability of GST on sellers in e-commerce market place i.e. sellers registered on Amazon, flipkart, Playstore etc.

E-commerce has emerged as an emerging trend of business in India, there are thousands of suppliers under e-commerce operators, we will discuss about the applicability of GST on the suppliers selling goods or services through an e-commerce platform. An e-commerce platform/operator is an entity which owns, operates or manages digital or electronic facility or platform for E commerce like Amazon, Flipkart, Google Playstore etc. Suppliers on E commerce platform is an entity or individual which supplies goods or services on/through an E commerce platform.  Applicability [...]

7 common reasons for getting income-tax notices and how to avoid them

Notices from the Income Tax Department are rarely pleasant. The natural reaction of a taxpayer upon receiving a notice is one of panic. However, once the momentary panic has subsided, you should carefully go through the notice and understand what it is about. It may not always be bad news. Often, the I-T department also sends out refunds through notices. Whatever may be the reason behind the notice, you should respond to it as quickly as you can. Remember: never [...]

Moving to GST: Carry forward of input credit held in unsold stock to GST

One of the key things of discussion for most businesses while transiting to GST is the eligibility pertaining to the transfer of input credit held in the closing stock. This is super-critical for businesses, as the rules will determine the amount of input tax credit available on the closing stock, and based on that, businesses will need to re-organise themselves in the last few days of the current taxation regime to manage their inventory effectively. Transiting rules of carry forward [...]

Moving to GST: Carry forward of closing balance of Credit under VAT/Excise & Service Tax

Present Scenario The dealers/traders were allowed Input VAT credit but CENVAT Credit levied on Service tax & Excise were not allowed. Now, as they move to GST, they are entitled to take credit of input tax charged on any supply of goods & services. How to deal with the input tax credit? What all am I eligible for? As you move to GST, you must have questions as how would you transfer the input tax credit of VAT, Excise, Service tax etc. [...]

GSTR 3B: GST Return Filing for July and August 2017

Under current GST regime a normal dealer has to file 3 returns per month and an annual return (making it total 37 returns in a year). However, one should know that out of three returns which are prescribed, only one return has to be filed by the retailer. The remaining two returns are auto-generated by the computer which is only a facility given to them to see so that if there is any mistake they can correct it out. [...]

How to file your monthly GST Returns

Under GST, a regular taxpayer needs to furnish 3 monthly returns, out of which 2 would be system generated returns & taxpayer would need to verify, modify , confirm & submit these so as to complete the return filing process. Get help with filing GST return at convenient prices Return no. 1: Form GSTR-1: For Every month by 10th of next month. This return signifies the tax liability of the supplier for the supplies effected during the previous month. With Form GSTR-1, one would report [...]

How to carry forward credit of Input tax which were there in previous laws such as Excise, VAT, Service tax etc.

Elaborate provisions have been made to carry forward the ITC earned under the previous law to the GST. a) Taking credit of closing balance of credit in the last returns In order to claim this credit, declaration in form “GST TRAN 1” is required to be furnished within 90 days. b) Taking credit of un-availed credit on capital goods This can also be taken by filing the declaration in form “GST TRAN 1”. Conditions Such credit would be available only if one had filed returns for the last [...]

Imports under GST

GST have subsumed the major indirect taxes, however, import duty such as Basic Customs duty, Education Cess, Anti-dumping duty, Safeguard duty etc. will continue. The additional duties of Customs i.e. the Countervailing Duty (CVD) and Special Additional duty of Customs (SAD), would be replaced with the levy of Integrated Goods and Services Tax(IGST). Duties at the time of import IGST and GST Compensation cess will be levied on imports, it would be levied on cargo that would arrive on or after 1st [...]

May 2017

All you need to know before choosing Limited Liability partnership as a form of business

Introduction Limited liability Partnerships (LLP) is the most popular form of partnership in India which is becoming the most favoured form of partnership over the traditional forms of partnerships and sole proprietorships Features of Limited Liability Partnership It should have a minimum of 2 partners There is no limit on maximum number of partners No minimum capital is required to start it Factors to be considered Benefits of a LLP Limited Liability: Unlike the sole proprietorship and partnership firms, where the owners have an unlimited liability, the liability of [...]

All you need to know before choosing Private Limited company as a form of business

Introduction Private limited company is the most popular corporate entity amongst small, medium and large businesses in India. Features of a Private Limited company It should have a minimum of 2 members and can have up to 200 members No minimum capital is required to start it. It has minimum 2 directors Factors to be considered Benefits of a Private Limited Company Separate Legal existence: A private limited company will be a separate person in the eyes of law, i.e. its members and “the company” will both enjoy [...]

April 2017

Take loan for higher studies & save tax

Section 80E- Deduction of interest paid on educational loan If you have taken an educational loan for higher studies (only full time courses) for yourself, spouse or children and paying interest on it, you can avail the deduction for the interest so paid. Entire interest paid would be eligible for deduction for 8 consecutive years, there is no deduction for principal repayment To be eligible under this section, loan must be taken from an approved financial institution like banks or charitable trusts

Submit a query
close slider