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

Corporate Social Responsibility

“ARE YOU A GOOD CORPORATE CITIZEN?”

CSR might be defined as corporate strategic philanthropy, even narrowed to “effective public relations” where the excellence of the organization and build accommodating relationships with stakeholders. It can be viewed as cause-related marketing. At best, it can be conceived of as knowing, achieving, and communicating about higher standards of performance in the public or community interest.

Consideration of corporate social responsibility is as old as organizations themselves. The central question always has been this: Does each organization, as it strives to achieve its mission and vision, add value to the society which explores its existence? Long before consideration focused on business, especially large corporations, questions about CSR addressed the rationale and acceptability by the government.

Here are the related provisions that are dealt with Corporate Social Responsibility in accordance with Companies (corporate social responsibility) Rules 2014.

Sl.no     Provisions Description/ explanations
1. Governance
  • Sec.135 of Companies Act,2013
2. Applicability

To

  • Every Companies having net worth of Rs.500 crores or more. (or)
  • Every companies having turnover of Rs.1000 crores of more. (or)
  • Every companies having net profit of Rs.5 Crores or more.
3. Minimum limit for Spending
  • Atleast 2% of their Average net profits accrued over last 3 years.
  • List of Activities may be initiated on CSR projects have been specified in schedule 7 of the Act, along with board’s approval.

4. Methods of implementation
  • On Suo-motto basis

  • Via Not for profit venture setup.

  • Collaborating or pooling their resources with other companies.

5. Domains where CSR activities are carried in
  • Education
  • Communication Ecology and health care
  • Business sustainability
  • Diversity.
6. Benefits/Advantages
  • Enhances business relationships with clients

  • It encourages both professional and personal development.

  • Ability to have positive impact in the society.

  • Cost Reduction

  • Employee retention.

7. Critics/Disadvantages
  • Larger companies take advantage as that costs would be included in cost of production, which inturn burdens the end customers.

  • Costs and expenses are needed for CSR Committee to set-up.

8. Disclosure
  • Disclosure of the reason for not spending the said amount is a compliance of the provisions. Non-disclosure, or absence of the details about the CSR policy and its implementation in the Boards’ report would attract penalties
9. Penalty for Contravention
  • For Companies: Failure to comply fine of not less than 50,000 which may extend to 25 lakhs.

  •  For Officer-in-default:  Imprisonment upto 3 years or with fine of not less than 50,000 which may extend upto 25 lakhs for every officer-in-default or with both.

 

CHARGES

Meaning of Charges

As per Section 2 (16) of the Companies Act, 2013 , charges means an interest or lien created on the property or assets of the company or any of its undertakings or both as security and includes a mortgage.

Essential Features of Charges

There should be 2 parties:- creator of charge and chargeholder. There should be a subject matter of charge, which may be current or future assets. The intention of borrower, in respect of repayment of borrowed money plus interest at agreed rate, should be displayed by an agreement entered by him.

Registration of Charges

All types of charges are required to be registered whether:

  • Created within or outside India.
  • Created on property or assets or any of the company’s undertaking.Creation is tangible or otherwise, situated in or outside India.

 

**If the company fails to register the charges within 300 days of creation or modification or within 30 days of satisfaction, then it may seek extension from Central Government to condone the delay.

Satisfaction of charges

The company shall give intimation to the Registrar within 30 days of payment or satisfaction of charges.

** The Registrar shall issue a notice to the charge-holder within 14 days, if the satisfaction form (i.e. Form CHG-4) is not signed by the holder or if it is not satisfied with intimation made by the company. If no response comes from the holder then the Registrar shall record the same and inform the company.

Consequences of Non-Registration Of Charges

Following are the consequences of non-registration:-

  • Charge becomes void.
  • Charge holder becomes unsecured.
  • Debt is still recoverable.
  • Company is penalized for the same.

Penalty for Non-Registration Of Charges

Applicable to Fines and penalties
Company Rs 1,00,000 to Rs 10,00,000
Officer in default

Imprisonment- Upto 6 months

Or

Fine- Rs. 25,000 to Rs. 1,00,000

Or

Both

 

Particular of charges

The following particulars in respect of each charge are required to be filed with the Registrar:

(a) date and description of instrument creating charge;

(b) total amount secured by the charge;

(c) date of the resolution authorizing the creation of the charge; (in case of issue of secured debentures

only);

(d) general description of the property charged;

(e) a copy of the deed/instrument containing the charge duly certified

or

if there is no such deed, any other document evidencing the creation of the charge to be enclosed;

(f) list of the terms and conditions of the loan; and

(g) name and address of the charge holder.

List Of E-Filing Under Charge

Sl. No. E-Form                      Purpose
1 CHG-1 Creating or modifying the charge (for other than Debentures)
2 CHG-2 Certificate of registration
3 CHG-3 Certificate of modification of charge
4 CHG-4 Intimation of the satisfaction to the Registrar
5 CHG-5 Memorandum of satisfaction of charge
6 CHG-6 Notice of appointment or cessation of receiver or manager
7 CHG-7 Register of charges
8 CHG-8 Application for condonation of delay shall be filed with the Central Government
9 CHG-9 Creating or modifying the charge in (for debentures including rectification)
10 CHG-10 Application for delay to the registrar

DIFFERENCE BETWEEN PRIVATE LIMITED COMPANY V/S ONE-PERSON COMPANY (OPC) V/S LIMITED LIABILITY PARTNERSHIP (LLP)

What kind of business you should Start off with?????

There are several platforms which are available, to Choose one’s plan of owning a business and deriving maximum benefits out of it. However, one need to make a proper analysis of the risks and returns of which they are anticipating of such occurrence before venturing into a new project or certainly the outcome from it.

Here’s the quick analysis of the 3 different forms of organization.

There are various criteria which distinguishes Private ltd company, OPC & LLP.

 

Aspects Private Ltd Company One-person Company(OPC) Limited Liability partnership(LLP)
Governed by Companies Act 2013 Companies Act 2013 Limited Liability partnership Act 2008
Minimum No of Members Min.2 members (Can be body corporate also) 1 member who is resident of India, and 1 nominee should be present. LLP should have a minimum of 2 members. There is no limit on maximum number of members.
Minimum No of Directors Min.2 Directors out of which 1 Director has to be present in India. 1 Director who has to be a resident of India. 2 Designated partners out of which 1 director has to be present in India.
Name shall include Name of the Private Company to end with “Private Limited”. “One-person Company” shall be mentioned in brackets below the name of such company. Name to end with LLP (Limited Liability partnership)
Minimum Capital No minimum requirement No minimum requirement No minimum requirement
Taxation Taxed at 30% + Surcharge + Cess. Taxed at 30% + Surcharge + Cess. Taxed at 30% + Surcharge + Cess.
Annual filings Annual accounts and annual returns to be filed with ROC. Financial Statements and Annual return to be filed with ROC. Annual statement of Accounts and Solvency & Annual Return has to be filed with ROC.
Statutory Audit Compulsory Compulsory If Contribution is >than 25 lakhs, or turnover is

>40 lakhs.

Minimum Number of Meeting (Including Board & AGM)
  • Atleast 4 Board Meetings, 1 in each quarter & the gap between 2 meetings should not be more than 120 days.
  • AGM to be held within 6 months from closure of Accounts (usually in the month of September of every year)
  • Atleast 1 Board Meetings, 1 in each half year & the gap between 2  meetings should not be less than 90 days.
  • No requirement of AGM.
  • No specified Limits.
Suitability More suitable for businesses, trade, manufactures, large industrial establishments etc. Suitable for Individuals whose Capital requirements are less than 50 lakhs or Turnover is less than 2 Cr. More suitable for professionals like CA, CS, Advocates etc.
Conversion Can be converted into LLP. Can be converted only after the expiry of 2 years from the date of incorporation. Can be converted into Company/Firm.
Time taken for Registration 5-7 days 7-10 days 10-15 days
Procedure for Incorporation
  • Obtain Director Identification Number(DIN).
  • Obtain Digital Signature Certificate(DSC)
  • Name Approval
  • Filing of Various Documents & forms required for Incorporation
  • Obtain Director Identification Number(DIN).
  •   Obtain Digital Signature Certificate(DSC)
  •   Name Approval
  •   Filing of Various Documents & forms required for Incorporation
  •   Filing Nominee Details.
  • Obtain Director Identification Number(DIN).
  •   Obtain Digital Signature Certificate(DSC)
  •   Name Approval
  •   Filing of Various Documents & forms required for Incorporation
  • File LLP Agreement.
Liability Limited Liability Limited Liability Limited Liability

Conclusion:

  • One-person Company is a new concept that has been introduced in India. Still there are lot of Changes having to be undergone and lot more review for the improvement of OPC Company is required.
  • In an LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. This is an important difference from the traditional unlimited partnership under the partnership Act, in which each partner has joint and several
  • Private Limited Company the business owners hold all shares of the company privately. Shareholders may operate the business themselves, or hire directors to manage the Company on their
  • Forming a private limited Company results in protection of personal assets, access to more resources, financial assistance and greater