MCA Update – Aadhaar Integration For Availing Various MCA21 Related Services

aadhaar

MCA is actively considering Aadhaar Integration for availing various MCA21 related services. As a preparatory step, all individual stakeholders viz. DIN holders / Directors / Key Managerial Personnel / Professionals of the Institute of Company Secretaries of India/Institute of Chartered Accountants of India/Institute of Cost Accountants of India (whether in employment or in practice) are requested to obtain Aadhaar as early as possible for integrating their details with MCA21 and also ensure that the information in Aadhaar is in harmony with PAN.

 

Note:

When implemented, all MCA21 services shall be available based on Aadhaar based authentication ONLY. The date of Aadhaar integration with MCA21 would be announced shortly.

 

gst tax

Reduced Liability Of Tax On Complex, Building, Flat etc. Under GST

According to complaints from buyers of flats and other buildings-under-construction recently, builders are demanding that they be paid the entire amount of cost of buying the flat before 1st July, 2017.

This is what the builders are claiming: pay now, or else pay higher amount of tax under new GST (Goods and Services Tax) system. They say this because the current service tax that you pay on goods would amount to a maximum of 6.5%, whereas under the GST scheme, you will pay 12% service tax on the cost of construction.

What they do not tell you, and what you may not have noticed before, is that the tax you would pay on your flat or office building before GST rolls out, is calculated even on the inputs (cement, steel, etc.) the builder uses to construct the building. So until the GST rolls out, you will have to pay for the service of construction as well as for the cost of acquiring the raw materials used for construction.

After the GST rolls out however, you will pay only for the service of construction in the form of tax calculated at 12% on the cost of construction (labour). This is because builders are provided with a facility called Input Tax Credit (ITC), wherein they can claim a reduction of taxes on total cost of construction. So if it cost them Rs. 1000/- to get raw materials and another Rs. 500/- for labour, they can get back Rs. 1000/- from the government as it comes under the definition of “Inputs”. So if you make the entire payment for your flat before 1st July 2017, you will pay tax on Rs. 1500/-, but if you pay the total amount after 1st July 2017, you will pay tax on Rs. 500/-

Therefore, you will not bear the cost of input (raw materials) after GST rollout. This means you will pay less after GST for your house/office overall, than you pay now. So any builders out there claiming you can pay less before GST rolls out, are only trying to profit from your lack of knowledge about the effect of cost of inputs, on the price you pay for the flat. Such builders can be deemed to be profiteering under section 171 of GST law. Hence, it is good to be advised on this matter before making a purchase of a new home or office.

 

For more information, visit the following page: http://pib.nic.in/newsite/PrintRelease.aspx?relid=165663


 

Financial tasks that you need to do right away

Here are some financial task that you need to deal with immediately:-

1. LINK YOUR AADHAAR CARD

It is mandatory to link your Aadhaar card to bank account, PAN card and mobile number. Here’s how you can do it:

(A) Bank Account

Step 1. Log on to the Net banking facility of your bank.
Step 2. Click on ‘Update Aadhaar card’ or ‘Aadhaar card seeding’ option.
Step 3. Enter Aadhaar card details and submit.
Step 4. After verification, the linking will be done and you will be informed via SMS or e-mail. You can also link it offline.

 

(B) Pan Card

Step 1. Log on to the government income tax website www.incometaxindiaefiling.gov.in and click the link ‘Link Aadhaar’ on the left under ‘Services’
Step 2. Give PAN and Aadhaar numbers, fill name and submit. After verification from UIDAI, the link will be confirmed.

OR

Step 1. If you are registered on the income tax portal, log on and go to ‘Profile Settings’. Pull it down, click on ‘Link Aadhaar’.
Step 2. Verify details like name, date of birth and gender with those in your Aadhaar card. If the details match, fill in the Aadhaar number and captcha code, and click on ‘Link now’.
Step 3. A pop-up message will inform you when the linking has been done.

 

c) Mobile Number

If you are linking for the first time, download the Aadhaar card correction application from the UIDAI website. Fill the details, attach copies of Aadhaar card and identity proof, and submit these to the enrolment centre. It will be updated in about 10 days. If you are updating a new number, go to the UIDAI site, fill the Aadhaar number and captcha code. On getting an OTP, update your number and it will be linked.

2. PREPARE TO FILE YOUR TAXES

To ready yourself for the online filing process, get the information and documents you will need at the time.

Step 1.Secure Form 16 from your employer.
Step 2. Check your TDS status so that you know if there is any tax due. Do so by logging on (if you are registered) to the income tax website (www.incometaxindiaefiling.gov.in). Under ‘My account’ click on ‘View Form 26AS’.
Step 3. Make sure you have other information and papers like interest income, charity contribution and details for exemptions (HRA, health insurance premium, etc.) that have not been take into account by your employer.
Step 4. Go through the latest tax slabs and exemption limits before starting with the calculations.

3. FATCA COMPLIANCE

 

The Foreign Account Tax Compliance Act enables exchange of information between India and the US.
Under a 2015 agreement, all individuals and entities who opened a bank account or invested in mutual funds, NPS and insurance schemes between 1 July 2015 and 31 August 2015, will have to get compliance by providing self-certification. Though the last date was 30 April, you can still do it to avoid your account being blocked.

Is Your Adhaar Card Ready?

aadhar-card

The Central boards of Direct Taxes vide its Press Release dated 05.04.2017 have made it mandatory to quote your Aadhaar card for PAN Applications & Filing Return of Income.

Section 139AA of the Income-tax Act, 1961 as introduced by the Finance Act, 2017 provides for mandatory quoting of Aadhaar / Enrolment ID of Aadhaar application form, for filing of return of income and for making an application for allotment of Permanent Account Number with effect from 1st July, 2017.

It is clarified that such mandatory quoting of Aadhaar or Enrolment ID shall apply only to a person who is eligible to obtain Aadhaar number. As per the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, only a resident individual is entitled to obtain Aadhaar. Resident as per the said Act means an individual who has resided in India for a period or periods amounting in all to one hundred and eighty-two days or more in the twelve months immediately preceding the date of application for enrolment.

Accordingly, the requirement to quote Aadhaar as per section 139AA of the Income-tax Act shall not apply to an individual who is not a resident as per the Aadhaar Act, 2016.

 

Why link Aadhaar and PAN?

  • The government can keep a tab on the taxable transactions of a particular individual or entity, whose identity and address will be verified by his Aadhaar Card.
  • By linking the two, entities will no longer have to submit their Income Tax acknowledgement to the I-T department.

 

How to Link Aadhaar and PAN?

  • The first step towards linking Aadhaar with PAN to register on Income tax e-filing portal.
  • On logging in to the site, a pop up window will appear prompting you to link your PAN card with Aadhaar card.
  • You can input your Aadhaar number enter ‘captcha’ code and click on ‘link now’.
  • In case you have decided to link Aadhaar with PAN later click on ‘later’ button.
  • On logging, if no pop up window appear, go to Profile setting and click on ‘link Aadhaar’.
  • Enter your Aadhaar number enter captcha code and click on ‘link Aadhaar’.
  • The system will match your name, date of birth and gender with PAN card and Aadhaar database, if detail matches, you will get the message “Aadhaar – PAN linking is completed successfully.”

 

Your name in Aadhaar and PAN doesn’t match ? Don’t worry !!

In case you are unable to link PAN with Aadhaar because of discrepancy in name, log in to the Aadhaar website (http://www.uidai.gov.in), request for a name change and upload a scanned copy of PAN card as supported proof. In this case, your registered mobile number has to be functional .

The tax department is also planning to introduce an option on the e-filing portal through which taxpayers can choose to link the Aadhaar without changing the name by opting for a One-Time Password (OTP), provided that the year of birth of the person matches in both documents.

 

www.unicomply.com , Contact No.: 080-40463170

 

 

No More Faking Of Rent Receipts To Claim HRA

rent

If you have been producing fake rent receipts to reduce the tax burden and escape up to 60% of HRA amount, there is a bad news for you. You may no longer be able to claim income tax deductions for house rent allowance (HRA) by fabricating fake bills.

The taxman may now insist on proof from you showing that you are a genuine tenant, staying in the property mentioned in the rent receipt.

According to a report in Economic Times, Dilip Lakhani, senior tax advisor, Deloitte Haskins & Sells LLP said, “The ITAT (Income Tax Appellate Tribunal) ruling has now laid down the criteria for the assessing officer to consider the claim of a salaried employee and if necessary question its justification. This will put the onus on the salaried class to follow the rules in availing the tax rebate.”

The assessing officer can now demand proof, such as leave and licence agreement, letter to the housing co-operative society informing about the tenancy, electricity bill or water bill if he suspects the rent receipts are fake, according to a recent tribunal ruling. Till now, to avail of the benefit, the PAN of the owner of the residence was needed in case the rent is above Rs 1 lakh per annum. But now the official can ask for proof even if it is below Rs 1 lakh and the burden of proof will be on the employee who submits the rent receipt. The ruling by the Mumbai tax tribunal is likely to set a precedent and the salaried class is likely to come under the scanner on this count, the report said.

www.unicomply.com Contact No.: 080-40463170

 

 

March End Tasks

What are some of the things one must keep in mind before it is 31st March?

The Business Owners must check the following before closing their books of accounts:

1. Provisional Profit and loss Account – Make this excel based and keep checking income and expenses on an ongoing basis. Take appropriate action such as;

  • a. Investment: The profit estimate helps in evaluating the money, which is available for Investment as this improves net worth.
  • b. Tax Planning
    • Collation of capital gains for tax planning must be done. Take advantage of short-term capital loss if any.
    • Advance Tax should be paid in installments on the profit estimated, as per the due dates provided by the IT department if your total tax liability is Rs.10,000 or more in a financial year. If not paid as per the schedule specified,interest u/s 234B and C has to be paid.
    • Tax deducted at source should be checked. The TDS statement can be accessed from the Income Tax website www.incometaxindiaefiling.gov.in through 26AS. The 26AS statement also helps in reconciling the total income, which we have arrived at with the Income reflecting in the TDS statement. The arrived Income should be equal to/more than the income reflecting in 26AS.
    • Check on contra entries to avoid unnecessary transactions and close off any open transactions in this year itself.
    • Check on loan entries if any and try to close off in the year itself.

2. Should one check on debtors and creditors position?

  • Debtor’s position should be checked at the end of the year. Any receivable you would like to be added to this year’s income?
  • If you have credit period built in for creditors then use the idle cash management strategy.

3. Should one prepay loans at this time? Would that be a good idea?

  • A review of the existing liabilities should be conducted. If there are surplus funds some repayment / prepayment may be considered. For
    instance housing loans can continue however car loans and personal loans can be considered for repayment.
  • Also check the status of the OD account and LAS account.
  • Compare interest rate prevailing and interest rate for a new loans for new clients – can you ask for a reduction?

4. What are some of the investment related actions to be undertaken by March?

  • Tax saving Investments also needs to be made for availing the tax benefits. There are many tax saving instruments available some of which are ELSS, PPF,NPS, NSC, etc.
  • If you have invested in bond funds and are planning to sell anything before March, estimate taxes before doing so. If you are using SWP (Systematic
    withdrawal plans) facility for earning monthly income then make sure you know the capital gain you have to pay.
  • Review your bank statement for any anomalies
  • Equity review – ideally in June but it is a good idea to study this in March too. Settle account with brokers.

E-Verification of Tax Return via Net Banking

After you have successfully filed your income tax return, the next step is to VERIFY it. The Income Tax Department starts processing your return when it is verified. Refunds, if any, are processed for returns, which have been submitted and verified.

We recommend it through Net banking as is the easiest and fastest way to verify your tax return.

Steps to e-verify your tax return via net banking

STEP 1:
Login to your net banking account and locate the income tax e-filing tab. This differs from bank to bank. You will be directed straight to the Department website from here.

STEP 2:
Select the ‘View Returns/Forms’ option to see e-filed tax returns.

STEP 3:
Select the option ‘Click here to view your returns pending for e-verification’

STEP 4:
Select the option ‘e-verify’.

STEP 5:
A new pop-up window appears. Click on ‘Continue’ to generate EVC and get your income
tax return verified.

STEP 6:
A confirmation message will be displayed with a transaction ID and EVC code. Click on the green button to download the attachment. This is for your record only. No further action is required.

Advance Tax And Self Assessment Tax 2017

ADVANCE TAX AND SELF-ASSESSMENT TAX

For Individuals, there are two types of tax that you might have to pay before
submission of your return as on 31st July 2017:

A. Advance Tax

If you have annual tax dues of more than Rs.10,000, you must pay income tax in
advance. Usually, for the salaried, these income tax payments are taken care of via TDS
deductions by employer.

Due Dates of payment of Advance Tax for FY 2016-17

For Individuals
  • On or before 15th June – Up to 15% tax
  • On or before 15th September – Up to 45% of tax
  • On or before 15th December- Up to 75% of tax
  • On or before 15th March- Up to 100% of tax

How to calculate and pay advance tax:

  • Estimate your Total Income: Add income from all sources. Include salary income, interest income,capital gains etc.
  • Allow deductions:From your total income reduce deductions and arrive at your taxable income.
  • Calculate Tax due on total income:Apply the latest income tax slab rates on your taxable income to calculate your income tax due. Reduce any TDS that may have been deducted from your total tax due.

These have to be paid as per the installments mentioned above.


B. Self Assessment Tax

Your income tax return cannot be submitted to the tax department, unless you have paid tax dues in full. Sometimes,you may see tax payable at the time of filing your return (inspite of paying advance tax).
You can only file the returns once you have successfully paid the
income tax online.

Usually, interest under section 234B and 234C will also have to be paid along with your tax due, if you are paying tax after 31st March.

For online payment of both advance tax and self assessment tax

Step 1: Login to http://www.tin-nsdl.com > Services > e-payment: Pay Taxes Online.

Step 2: Select the relevant Challan (CHALLAN NO./ITNS 280)

For individuals paying tax, select 0021 (INCOMETAX OTHER THAN COMPANIES).

Choose the Assessment Year correctly. Choose the type of payment as “100 (ADVANCE TAX)” if you are paying taxes during the financial year. Choose “300 (SELF ASSESSMENT TAX)” if you are paying tax after the financial year has ended. Choose “(400) TAX ON REGULAR ASSESSMENT” if you get a demand notice from the Tax Department.

Figure: Challan for payment of Advance Tax and Self Assessment Tax

Step 3: Select your bank and pay the amount through net banking. Double check the
information entered here and fill in the income tax amount to be paid in the income tax field.

Step 4: A challan counterfoil will be displayed containing CIN, payment details and
bank name through which e-payment has been made. This counterfoil is proof of payment being made. Please store the Counterfoil.

Corporate Benefit after Budget

 

Impact of Budget-2017 on Companies & LLP/Partnership Firms

  • Budget 2017 has given companies an advantage over partnership and Limited
    Liability Partnership in terms of Income Tax
  • The maximum marginal tax rates including surcharge will be lesser in
    Companies in comparison to LLP/Partnership Firm after Budget-2017.
  • As per the new budget 2017, the corporate tax on companies has been reduced
    from 30% to 25% though the tax on LLP/Partnership remains same i.e. 30%.

Applicable Tax Rate on Companies & LLP/Partnership Firms

Advantages Of Companies Apart From Taxation Point Of View

Restriction on payment of Salary and Interest to Partner when compared to
Company

  • Limit Partners to draw salary, remuneration and interest from partnership/LLP whereas there are no Limit on payment of
    Salary/Remuneration to Directors.
  • The formula is given in Income Tax under Section 40(b) which defines maximum amount which can be given to partners and
    claimed as expenses for partnership firm and LLP.
  • Following are the Limits:-

Dividend Distribution Tax

Dividend distribution tax is the tax levied by the Indian Government on
companies according to the dividend paid to a company’s investors. At
present the dividend distribution tax is 15%. However many closely
held companies instead of declaring dividend they pay Salary and
remuneration to directors to avoid paying DDT.

Formation and Other cost

The cost for formation of Company is bit higher than compared to partnership and
LLP. However it is one time cost and can be adjusted against the tax benefit it
receives over LLP and partnership.

Other Benefits

  • ✓ Company has Limited Liability when compared to partnership Firm
  • ✓ Better Corporate Governance
  • ✓ Easy Succession Planning and expansion
  • ✓ Separate Legal Entity as compared to Partnership Firm

Conversion OF LLP into Private Limited Company

Before filing application for conversion, please ensure the followings:

  • That secured creditors have given their consent for such conversion;
  • A notice in newspaper about such conversion, one in English and in vernacular language seeking objections must be
    published;
  • There are minimum seven or more members in the existing LLP for converting the LLP into a Company.
  • A general meeting must be held where majority of partners have given their consent for such conversion.

Procedure to be followed for Conversion:

  • Apply for DIN in DIR-3- In case members ought to be directors;
  • Apply for Name approval in form INC-1-The name once approved by the authority is valid for 60 days;
  • File eform URC-1- for conversion;
  • File eForm INC 7- For declaration of compliance;
  • File eForm INC 22- For registered office address; and
  • File eform DIR 12- For appointment of Directors

New Budget Highlights 2017


1.INDIVIDUALS

  • Existing tax rate for personal income of INR 2.5 – 5 lakhs reduced from 10% to 5%
  • 50% tax savings if a person is earning less than INR 5 lakhs
  • 10% surcharge to be levied on annual income from INR 50 lakhs – 1 Crore
  • 87A Rebate decreased from INR 5000 to INR 2500
  • Dividend Income taxable @ 10% if exceeds Rs 10 Lakhs, except for domestic companies or trust or institution or fund registered under
  • section 12AA or referred to in section 10(23C).
  • Simple one-page form to be filed as Income Tax Return – if taxable income other than business income is up to 5 lakhs
  • Levy of Additional Fees Max to 10000 for delay in Return Filling.
  • LIC to issue pension with 8% return
  • Once in A Year TDS @ 5% to be deducted on Rent Paid beyond 50000 P.M.
  • Restriction on set off of loss from house property to Rs 2 lakhs
  • Indexation benefit to be obtained from 1/4/2001 instead of 1/4/1981
  • Holding period for immovable property for LTCG reduced to 2 years

2. BUSINESS/PROFESSION

  • Corporate tax of 25% on Domestic Companies with turn over less than the INR 50 Crore
  • MAT credit can be availed up to 15 years
  • No Cash transaction above INR 3 lakhs, Penalty may be Levi able.
  • Allowable cash limits for cash payments reduced from INR 20,000 to INR 10,000 for all revenue and capital expenditure
  • No major changes under indirect taxation
  • Allocation to Make in India Schemes to be increased
  • A tax return can be revised in 12 months from completion of F.Y
  • For turnover up to INR 2 Crores, presumptive income is reduced from 8% to 6% for turnover which is by non- cash means
  • Maintenance of book of accounts for individual & HUF, if annual turnover is 25 lakhs (what about Professionals)

3. OTHER IMPORTANT ANNOUNCEMENTS

  • FIPB to be phased out
  • A new ETF with diversified CPSE stocks and other Government holdings to be launched in 2017-18
  • By 2019, all coaches of Indian Railways will be fitted with bio toilets
  • New Metro policy to be announced
  • Tier 2 airports infrastructure to be taken under PPP mode
  • A proposal to mandate all government receipts through digital means, beyond a prescribed limit, is under consideration
  • Strategic crude oil reserves proposed to be set up at 2 more locations
  • Head post office to issue PASSPORTS<
  • Introduction of a system to measure annual learning outcomes in schools
  • Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) to be launched
  • Next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) to also be launched in 2017-18
  • A scheme for creating employment in the leather and footwear industries along the lines in Textiles Sector to be launched