TDS UNDER GST ACT : SECTION 51 OF CGST ACT

Section 51 of the Central Goods and Services Tax (CGST) Act lays down the provisions of Tax deducted at source (TDS). The concept of TDS on GST was initially introduced in the Income Tax Act and has now been introduced in GST as well. The purpose of introduction of TDS on GST is only to enable the govt to have a trail of transactions and to monitor and verify the compliance.

The provisions of the Tds is as follows:

·         Deductor: As per section 51(1) of the CGST Act, deductor will be:

1)      Department or establishment of the Central Government or State Government; or

2)      Local Authority; or

3)      Governmental agencies; or

4)      Such persons or category of persons as may be notified by the Government on the recommendations of the Council.

 

·         Applicability: TDS @ 2% (1% each under SGST AND CGST ACT) is required to be deducted on payment made to the supplier of taxable goods or services of both where the value of such supply under a contract exceeds Rs. 2.5 Lakhs.

·         Computation: following shall be excluded from contract value:

1)      Central GST

2)      State GST

3)      Union Territory GST

4)      Integrated GST

5)      Cess

·         Registration: The deductor have to take a separate registration as deductor even if it is registered as supplier.

 

·         Exemption: The provisions of Tds do not apply in case of Exempt goods and services. TDS on GST would not be applicable if the Location of Recipient is different from the Location of Supplier and the Place of Supply.

 

·         Return: Deductor must file GSTR-7 within 10th of the month succeeding the month in which deduction have made. GSTR-7A is a system generated certificate to be issued by the deductor within 5 days of furnishing GSTR-7.

 

Penal provisions: If the TDS Certificate is not issued within 5 days from the date of deposit with the Govt., the deductor would be liable to pay late fees of Rs. 100/- day. However, the late fees levied should not be more than Rs. 5,000 each under CGST and SGST Act.

PRESUMPTIVE TAXATION FOR PROFESSIONALS : SECTION 44ADA OF THE INCOME TAX ACT, 1961

The Scheme for Presumptive Taxation was introduced under section 44ADA from the F.Y.2016-17. Section 44ADA provides a simple method of taxation for Specified Small professionals. Earlier, the presumptive scheme of tax was applicable only for small business. The presumptive scheme of taxation reduces compliance burden on small professions and facilitates ease of doing business.

Eligilble Business:

The scheme is available to the following Assessee:-

(i)             who is engaged in any profession referred to in section 44AA(1) such as legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette; and

(ii)           Whose total gross receipts does not exceed Rs.50 lakhs in a previous year.

Presumptive Income:

Presumptive income would be a sum equal to 50% of the total gross receipts, or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the Assessee.

Eligible Assessee:

 Resident Individual, Resident HUF and Resident Partnership Firm (Not Including LLP).

Expenditure not allowable:

(i)  Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no  further deduction under those sections shall be allowed. 

 (ii)  In case the Assessee is a firm of Professional's, salary and interest paid to partners is not deductible even though it is within the limit specified under section 40(b).

Deemed written down value:

Written down value of any asset used for the purpose of the profession of the Assessee will be deemed to have been calculated as if the Assessee had claimed and had actually been allowed the deduction in respect of depreciation for the relevant assessment years.

Maintenance of Books of Accounts and Audit not required:

Eligible Assessee opting for presumptive taxation scheme will not be required to maintain books of account under section 44AA (1) and get the accounts audited under section 44AB in respect of such income.

Advance Tax:

Eligible Assessee is required to pay advance tax by 15th March of the financial year.

Opting IN and OUT of the scheme:

Assessee can opt in and opt out of Sec.44ADA at any time without any restriction. Unlike Sec.44AD for business, a professional can opt in and opt out at any time without 5 year restriction.

MOST USEFUL M.S. EXCEL FORMULAS FOR PROFESSIONALS

In my experience working in finance the following are really common, grouped by category:

Present Value & Rate of Return

·       XIRR() - Finds the internal rate of return for a set of cash flows and cash flow dates, using Act/365 day-counting and semi-annual compounding.

·      XNPV() - Finds the net present value for a set of cash flows and cash flow dates, using Act/365 day-counting and semi-annual compounding. A user provides the annualized yield in decimal format.

·      IRR() - Finds the internal rate of return for a set of cash flows, assuming equivalent length time periods between each cash flow.

 

Mortgages

·      PMT() - Solves for the fully amortizing payment of a mortgage assuming payments are separate by equal length time periods (i.e. using 30/360 day-counting for monthly payment).

·   NPER() - Calculates the number of equal length time periods it would take to fully amortize a mortgage at a given fixed payment amount.

 

Array Range Manipulations

·      OFFSET() - Creates an array range of a user defined size from any given input array range. This is used for a powerful technique in Excel sometimes called "Dynamic Ranging".

·       INDIRECT() - Returns the value or values associated with a cell or array range specified using text. Since Excel has a special way of representing cell addresses, the text can be constructing dynamically to vary the output of this function. Again, this can be very powerful.

·   SUMPRODUCT() - On the surface, this function merely takes the dot product of two arrays. However, underneath the hood, it can be used to do any of the next four functions (e.g. SUMIF(), SUMIFS(), COUNTIF(), COUNTIFS()). And it can be used to create dynamic ranges or even pivoted tables of normal form data. This is one of the most powerful functions in Excel when used appropriately.

·         SUMIF() - Takes the sum of elements in an array, if a certain provided condition is met.

·        SUMIFS() - Takes the sum of elements in an array, if certain provided conditions are met.

·         COUNTIF() - Counts the elements in an array, if a certain provided condition is met.

·         COUNTIFS() - Counts the elements in an array, if certain provided conditions are met.

·      SMALL() - Returns the n-th smallest element of an array range, where n is provider by the user.

·         LARGE() - Returns the n-th largest element of an array range, where n is provider by the user.

·         TRANSPOSE() - Inverts the rows and columns of any input array range.

 

Lookup & Matching Functions

·         INDEX() - Finds an element horizontally and/or vertically in an array range using integer addresses starting at [1,1] = [row, column].

·         MATCH() - Returns an integer corresponding to where an element is located in an given one dimensional array with options to specify either an exact match or something close. If nothing is found, returns #N/A.

·         VLOOKUP() - Combines INDEX() and MATCH() to find an element vertically in an array range.

·         HLOOKUP() - Combines INDEX() and MATCH() to find an element horizontally in an array range.

 

Boolean Logic & Error Handling

·         AND(), OR() - Returns TRUE or FALSE subject to boolean "and" or "or" definitions for any number of conditions.

·         IF() - A basic conditional that does one thing if TRUE and another if FALSE.

·         IFERROR(), IFNA() - Performs a formula unless a certain errors are encounter, then takes a different action.

·         ISERROR(), ISNA(), ISBLANK() - Returns TRUE or FALSE depending on if a cell contains an error or some other specific criteria.

 

As mentioned above, a real mastery of Excel means doing manipulations quickly and without the use of a mouse. The "Copy Paste Special" feature (Ctrl + Alt + V) is invaluable in contributing to this, since it can be use to copy only the formulas or only the values of the buffered data copied.

Another excellent resource is the "Goal Seek" feature, which is a simplified version of the Excel Solver package. The "Goal Seek" feature can be accessed quickly by pressing Alt, then A, W, G (in that order).

TDS ON CASH WITHDRAWAL : SECTION – 194N OF INCOME TAX ACT, 1961

The budget 2020 has reduced the threshold limit for TDS to Rs 20 lakh for taxpayers who have not filed their income tax returns for past three years. Such taxpayers withdrawing cash in excess of Rs 20 lakh have to pay 2% as TDS. Earlier, the Union Budget 2019 has introduced Section 194N for deduction of tax at source (TDS) on cash withdrawals exceeding Rs 1 crore to discourage cash payments. Section 194N is applicable in case of cash withdrawals of more than Rs 1 crore during a financial year.

Applicability

The section will apply to withdrawals made by any taxpayer including:

·         An Individual

·         A Hindu Undivided Family (HUF)

·         A Company

·         A partnership firm or an LLP

·         A local authority

·         An Association of Person (AOPs) or Body of Individuals (BOIs)

The following payers are covered under this section:

·         Any bank (private or public sector)

·         A co-operative bank

·         A post office

Non applicability :

·         Any government body

·         Any bank including co-operative banks

·         Any business correspondent of a banking company (including co-operative banks)

·         Any white label ATM operator of any bank (including co-operative banks)

·         Any other person notified by the government

Rate of TDS :

The payer will have to deduct TDS at the rate of 2% on the cash payments/withdrawals of more than Rs 1 crore in a financial year under Section 194N. In case the individual receiving the money who has not filed income tax return for three years immediately preceding the year, then the TDS is 2% on the cash withdrawals of more than Rs 20 lakh and up to Rs 1 crore, and 5% for withdrawal exceeding Rs 1 crore.

 

EPF (EMPLOYEE PROVIDENT FUND): PASSBOOK, BALANCE, CLAIM STATUS ETC.

The three Social Security Schemes run by the EPF Organization are for the employees engaged in the Industries and establishments and EPFO constantly makes effort to provide better services. Information regarding all the available services and the application forms for Employees and Pensioners are available for download and the process for availing the benefits have been explained in the documents and FAQs. The women employees are also given the benefits at par and there are special benefits for the employees who had to leave the present job due to physical incapacitation. The youth of the country who are our potential customers either by becoming an entrepreneur or an employee can also collect all information on the facilities and the benefits provided by the EPFO.

Following are the services provided by EPFO to employees :

1.    Members passbook. Visit “EPF Passbook Portal”, log in using UAN and password. Download/View passbook.

2.    You can check your EPF balance by SMS. For this, Send ‘EPFOHO UAN LAN’ from registered mobile number to 7738299899.

3.    You can also check balance by giving a missed call on 011-22901406 from your registered mobile number.

4.    You can check your claim status.

5.    There is a one employee one EPF account.

6.    You can download ‘UMANG APP’ from playstore for easy view of passbook and checking your EPF balance.

7.    You can register your Grievance on portal.

8.    You can make an enquiry about Pension Payment.

9.    EPF passbook portal https://passbook.epfindia.gov.in/MemberPassBook/Login

10.  Grievance register portal https://epfigms.gov.in/

11.  Pension Payment Enquiry portal https://epfigms.gov.in/

For making PAN CARD through Aadhar Card visit the link https://chingaridailynews.blogspot.com/2020/07/instant-pan-card-through-aadhaar-card.html

HOW TO FILE INCOME TAX RETURN : SELF GUIDE

The last date to file income tax return (ITR) is JULY 31. Although you have more time, filing your return before the deadline comes with certain benefits such as carry forward of losses, you will also avoid paying late filing fees. If you file your ITR after the deadline you will have to pay late filing fees of up to Rs 10,000.

Now, everyone has to file ITRs digitally except for super senior citizens (that is those aged 80 years and above. To file ITR electronically, one must be registered on the e-filing website of the income tax department.

STEP-BY-STEP GUIDE TO FILE YOUR INCOME TAX RETURN (ITR):

 

1.     Collect all the required documents required to file ITR like bank statements. form 26AS,   Capital Gain Reports , Tds certificates etc.

2.       You can download Form 26AS from the TRACES website. To download it, login to your account on the e-filing website, click on 'My Account' tab and select 'View Form 26AS'. The website will redirect you to the TRACES website to view and download the same.

3.       Compute total income for the year. Total income is computed by adding incomes from five different heads and claiming all the relevant deductions allowed under the Income-Tax Act and setting off losses, if any.

4.       Once you have computed your tax liability in the earlier step, deduct the taxes that have been already paid by you through TDS, TCS and Advance Tax during the year. Add interest, if any, payable under sections 234A, 234B and 234C.

5.       If any additional taxes are due, individuals can be paid physically via cheque or online using challan ITNS 280.

6.    ITR can be filed by downloading the software in Excel or Java utility. However, taxpayers who are eligible to file ITR-1 and ITR-4 also have the option to file it online without downloading any software utility.

7.    If you are eligible to file ITR-1, then you can use option 'Prepare and submit online' without downloading the excel software utility.

8.       The last step of ITR filing is verification. If you want to verify your tax-return electronically, you will not be required to send any documents to the tax department. However, if you wish to verify your return physically, then you will be required to send a duly signed copy of ITR-V/Acknowledgement to 'CPC, Post Box no. 1, Electronic City Post Office, Bangalore- 560100, Karnataka, India.'

9.       Remember after you file your ITR, you have 120 days to verify it. If you do not verify your ITR, then it will be deemed as you have not file ITR. In case you forget to verify your ITR before the deadline, you can file a request to your assessing officer.

If you verify your ITR using an electronic method, then you will immediately receive the confirmation from the tax department regarding verification of your ITR. If you have sent ITR-V via post to the I-T department, they will send you an email confirming that your ITR-V has been received by the I-T department, i.e., your return stands verified.

MSME : MEANING, CLASSIFICATION AND REGISTRATION PROCESS

The Ministry of Micro, Small and Medium Enterprises (MSME), a branch of the Government of India, is the apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India. MSME is basically classified into three parts based on Investment in Plant & Machinery/equipment and Annual Turnover which are:

Ø  Micro: Investment in Plant and Machinery or Equipment is
Not more than Rs.1 crore and Annual Turnover is not more than Rs. 5 crore

Ø  Small: Investment in Plant and Machinery or Equipment is
Not more than Rs.10 crore and Annual Turnover is not more than Rs. 50 crore

Ø  Medium: Investment in Plant and Machinery or Equipment is
Not more than Rs.50 crore and Annual Turnover is not more than Rs. 250 crore

UDYAM REGISTRATION FORM - For New Entrepreneurs who are not Registered yet as MSME

 For the registration of MSME visit the site https://udyamregistration.gov.in/and enter the required details and validate the Aadhar card. Following details are required for validation:

• An enterprise for the purpose of this process will be known as Udyam and its Registration Process will be known as 'Udyam Registration'
• A permanent registration number will be given after registration.
• After completion of the process of registration, a certificate will be issued online.
• This certificate will have a dynamic QR Code from which the web page on our Portal and details about the enterprise can be accessed.
• There will be no need for renewal of Registration.
• Our single window systems at Champions Control Rooms and at DICs will help you in the process.
• Registration Process is totally free. No Costs or Fees are to be paid to anyone.
• Aadhaar number shall be required for Udyam Registration.
• The Aadhaar number shall be of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership firm and of a karta in the case of a Hindu Undivided Family (HUF).
• In case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organisation or its authorised signatory shall provide its GSTIN and PAN along with its Aadhaar number.