Category: CA

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Why filing income tax returns on time is essential

Why filing income tax returns on time is essential

In case you have begun to earn, you have to file ITR or Income Tax Returns. Receipts regarding your income tax returns are important documents that aid you while investing. These happen to be some benefits of filing ITR prior to the due date.

Avail tax refunds comfortably

Usually, the Income Tax Department owes refunds to people. If your refund is due, then you can only claim by filing an income tax return in a timely manner.

Issue credit cards devoid of any hiccups

Banks won’t give credit cards if you can’t furnish a copy of your latest ITR. In case you have filed your income tax return prior to the deadline, then the receipts serve the purpose of proof, which will make the bank grant your request for a credit card.

Losses are carried forward

In case you take your losses of one year to other years, you can then adjust the same against your income of those years. But, this is possible only if you have filed ITR prior to the expiry of deadline.

Loans are disbursed smoothly

Several banks seek income tax returns prior to granting any loan, especially home or vehicular loans. In case you have filed income tax return on time, then you should be having copies of the receipts to be furnished when the need arises. This expedites loan disbursal swiftly.

Address and income proof

Income tax return receipts can easily be your proof of address or your income, particularly if you happen to be self-employed or a freelancer. In case you have filed ITR on time, then you can use the copy as proof if the need arises.

Big-ticket Insurance can be availed

Several insurance companies want to see ITR receipts. Reason is to find out whether you are paying your taxes or not. In case you have filed income tax returns on time and provide evidence regarding the same, then you will be able to avail good insurance policies.

Penalties can be bypassed

You can be penalized by tax officials for not filing ITR on time. In several scenarios, you have to file income tax returns prior to the due date, and if you do not follow these rules, you might be handed a heavy fine. This can be a red mark on your track record and will severely dent your credibility.

Visa processing becomes convenient

While applying for a Visa, the majority of embassies or consulates seek your income tax returns belonging to the last two years. In case you file ITR on time, then you can easily provide documents proving the same, and this helps you in obtaining a visa with ease.

Avoid paying extra amount

In case you don’t file ITR on time, then additional interest will be levied to the tax amount. Hence, you will have to pay an additional amount. That is why it is essential to pay the taxes before the expiry of the deadline.

Conclusion

So, filing the income tax returns is a must as it has several benefits and not filing the same can land you in several problems. The above-mentioned points make it amply clear the benefits of filing ITR on time. Therefore, pay your taxes on time and avoid some severe headaches.

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Govt must lower 1% TDS on e-commerce deals to reduce cash liquidity impact for MSME sellers

Govt must lower 1% TDS on e-commerce deals to reduce cash liquidity impact for MSME sellers

E-commerce, a rising industry in India, has provided humongous investments in infrastructure and logistics in the last 10 years. It has even generated innumerable number of direct and indirect jobs, and assisted money generation in the entire country, with chief effects witnessed in Tier II and Tier III cities. Evolving at a quicker rate, the e-commerce has attracted unwanted attention of regulators and led to imposition of more taxes and compliance burden. The sector has seen a large number of regulations being thrust into the earlier stage itself. This has to be stopped as there is a requirement to liberalize policy-making for e-commerce and internet companies to back the sector’s growth as it has generated a lot of jobs.

The Finance Act 2020 has included a fresh section 194-O in the Income Tax (IT) Act regarding payment by an e-commerce operator (or operator) to an e-commerce participant (or online seller(s)). This warrants the e-commerce operators to reduce income tax (TDS) at the rate of 1 per cent from the cumulative amount of sale of goods/ services/ both, during credit of the amount of sale in the account of the e-commerce participant.

Online retail (or e-commerce) in terms of percentage of entire retail in India comes to around 3 per cent, meaning a minor online seller base. Section 194-O also exempts online sellers from gross merchandise sale of less than Rs 5 lakh from the last year. This leads to a minority seller base (as a percentage of overall retail) that would give the concerned TDS and thereby defeat the whole objectives. Implementation in the present manner can be looked into by reducing the concerned TDS rate (to say 0.25 per cent) to cut down cash flow impact for MSME. This will aid in bringing down the amount of working capital that gets blocked and critically in these pandemic times, it will do a world of good.

The government can look towards changing the base for TDS calculation from Gross to Net Sales Consideration which is exclusive of GST and fees to operators. The proposed calculation of TDS on Gross Sale Amount, which includes GST, is a case of enforcing a tax-on-a-tax. Along with TCS, the combined impact on blocked working capital would be greater than two percentage points. This would put online sellers working under a high-volume, low-margin model under immense pressure.

TCS collection as the GST law is computed at 1 per cent of the total value of taxable supplies, which even factor in returns (which happened to be roughly 30 per cent for e-commerce companies). In a bid to have consistency in provisions, the Government of India might go for the same Net Sale Consideration (excluding GST and fees/ charges payable to operators) after returns. Together with the consideration in (2) this would also assist in reducing the amount of working capital of online sellers getting blocked while following the no tax-on-tax principle.

The Finance Act 2020 has even included a new clause 1h in Section 206-C of the Income Tax (IT) Act which mandates that all sellers getting sale consideration for goods beyond Rs 50 lakh in any preceding years shall take it from the buyer TCS of 0.1 per cent of the sale consideration going above Rs 50 lakh. This multiplication in taxation will result in strict compliance and blocking of working capital. This can lead to a super hike in the cost of doing business across the whole supply chain of supplier, wholesaler/trader and seller.

The data gathered on sellers via TCS collected by operators, together with data on sellers (offline and online) as per the extended scope of Section 206-C will be an adequate measure for the income tax authorities to curb tax avoidance across majority sellers. So, the Government of India has to reassess the implementation of 206-C (1h) in a bid to reduce the amount of taxable transactions to improve the Ease of Doing Business.

The government has to understand the importance of these e-commerce platforms as they happen to be the distribution medium of India’s biggest job provider- the MSME sector. Therefore, it should look at offering and developing an ecosystem having convenient Tax Regulations. E-commerce sector has to be accommodated the way the IT Sector has been in India.

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What Is Said To Be Dormant Status Of The Company

what-is-a-dormant-company

Dormant status of the Company

 

The concept of Dormant Company came into existence in India with Companies Act, 2013. And it basically is formed as a sleeping or inactive company which is made for the future perspective. There is not any specific clause in the companies Act but it is mentioned in section 455 of Companies Act, 2013. And under this section the types of companies which are formed for future references is being discussed.

 

Inactive company does not carry any business operations or has not made any significant accounting transaction during the last two financial year.  Companies must have not filed any financial statements or Annual returns during the last two financial years. Companies who have fails regarding mandatory annual requirements, those companies are also referred as a Dormant Company.

 

Here are some Rules regarding Dormant Company

 

MSC-1- Application for seeking- Application for obtaining a status of a Dormant Company can only be obtained through a special resolution Approval and through issuing a notice to all the Shareholders. There should not be any kind of dues i.e. tax dues or any outstanding loans, then only the status of a Dormant Company can be obtained.

 

MSC 2- Certificate of Registrar- Registrar will issue the Certificate.

 

MSC 3- Return of Dormant Company-  By filing return the financial position of the Company can be seen. And the returns of the Company should be filed by the Chartered Accountants who are in Practice.

 

MSC 4- Application for Active Status- If a Company wants to get its Active Status then it can simply move an application for the revert of the status along with the requisite fees.

 

MSC 5- Certificate of Application status- In this certificate of Application status is being issued.

 

There are some rules which specifies that a Company cannot remain inactive for more than 5 consecutive years i.e. there are some rules given in which it is clearly written that a Company cannot remain inactive for more than 5 Consecutive years.

 

And is registrar has doubt that being a Dormant Company some transactions have been issued then the registar can take necessary steps or action to revert the status of an inactive company to a Active Company.

 

Want to register a company in India ? Hire #1 business consultant in India – BIATConsultant .

 

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How to file GST return in India?

GST Return Filing

After the introduction of GST in India from 1 st July, 2017, every registered taxpayer is required to file GST return in order to avoid levy on hefty penalty and fines. In this blog we will explain every aspect of GST returns including the meaning of GST returns, their type and procedure to file GST returns.

‘One Nation One Tax’ is the basic motive behind the introduction of GST regime in India. With the introduction of GST in India, the Government of India has made an attempt to streamline the taxation system of the country. Under the GST regime, the detailed information regarding the transactions is required to be submitted by the registered taxpayers. Moreover, under the new regime more stringent compliances are prescribed to avoid tax evasion. To ensure that the taxpayers are compliant with the regulations made the provision of hefty penalty and fines are also made by the Government.

To promote the ease of doing business in India the Ministry of Finance has developed a widespread IT system facilitating the recording of invoices and data of taxpayers at one place.

Further, under the GST regime, the taxpayers can easily obtain GST Registration, file returns and upload invoices on the online portal of Goods And Service tax.

What is GST return?

GST return is a document containing the details of sales and purchase undertaken by taxable person. Every specified person is required to file GST return with the department before the specified due date. the concept of GST returns has been crafted to make sure that all the transactions match with each other and there is no transaction left unnoticed.

There are multiple types of GST returns depending upon the category of taxpayer that is required to be filed by the registered taxpayer. Let us take a brief look at them.

For the normal taxpayers:

GSTR-1:- this return shall be submitted to provide the details of outward supplies of taxable goods or services affected during the previous month. The return should be filed by 10 th of succeeding month.

GSTR-2A:- it will be auto generated, and made available on 11 th of the succeeding month for the recipients to see and validate the information therein. The recipients are empowered o make any modification or amendment based on their books of accounts from 11 th to 15 th of succeeding month.

GSTR-2:- this return is the culmination of all inward supply of goods and services as approved by the recipients of the services. This form is required to be filed by 15 th of the next month. The details of GSTR-2A will be auto-populated into it.

GSTR-1A:- after filing GSTR-2 on the 15 th of the subsequent month, the details in the GSTR-1A will be auto generated. It will contain the details of all the modifications made. The supplier shall have the choice to accept or reject the changes made by the recipient. If the supplier accept the changes then GSTR-1 will stand revised.

GSTR-3:- Through this return the details of all outward as well as inward supply of goods and services as filed in GSTR-1 and GSTR-2 are furnished. The tax liability and input tax credit availability will be determined by GSTN after considering the details of both the months.

GSTR-3A:- through this return, a notice will be given to the person who fails to furnish the return within due dates. It will be generated after the 15 days from the default.

GSTR-9:- every registered taxpayer is required to file GSTR-9 by 31 st December of the succeeding month. It is a sum up of all 12 monthly GSTR-3 filed by the taxpayer and will contain the details of tax paid during the year along with the details of import and export.

GST ITC-1:– after the details filed under GSTR-3 are fully accepted, then final input tax credit shall be communicated through form GST ITC-1. The details of ITC-1 should be confirmed in due time to avail the credit for that month. If the same is not done in due time, then it will disallow the credit of the month and will be computed as a tax liability for the month instead.

GST returns to be filed by composite taxpayers:

GSTR-4A:- every taxpayer who is registered under he composition scheme is liable to file a quarterly return in GSTR-4A. it will contain the details of inward supplies as reported by suppliers in GSTR-1.

GSTR-4:- through auto generated details of GSTR-4A, the taxpayer can furnish all his outward supplies here. It will also contain the details of tax payable. It is required to be filed on quarterly basis and 18 th of the subsequent month.

GSTR-9A:- every composite taxpayer is required to file annual return by 31 st December of the subsequent fiscal year. It will contain the consolidated details of the quarterly returns filed along with the details of tax paid.

GST return to be filed by non- resident taxpayer:

GSTR-5:- every non resident taxpayer is required to file GSTR-5 containing the particulars of outward supplies, imports, tax paid, input tax availed and remaining stock. The due date for filing GSTR-5 is 20 th of the subsequent month or if the registration is given up, then within the 7 days within the expiry of registration.

Procedure to file GST return:

For filing the GST returns you can simply visit the official site of GST, login to your account, and simply upload the details of your invoices. If you are facing any kind of problems in filing your GST return you can easily get it filed by our  BIAT Consultant. One important thing to be noted here that it is very important to take utmost care while filing the return and file correct returns.

 

BIATConsultant is leading consultant in India providing GST Registration online and online GST return filing .

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What Are The Consequences Of Not Filing Annual Return?

non filing of return

According to the Rules and Regulations of Companies Act, 2013, every company registered in Ministry Of Corporate Affairs is required to file Annual Returns in order to avoid hefty penalties for the Directors as well as for the Company.
An Annual Return is a document that is required to be filed by every company with the Ministry of Corporate Affair office on the close of each financial year. Annual Returns shall be filed within 60 days from the date of Annual General Meeting or if it is not held in any particular year from the date at which this meeting shall have been conducted. As per Companies Act, 2013,any
company failing to do so within the prescribed time period will be considered as an offence for which the punishment will be levied. Thus, it is imperative to file the accurate and timely returns for every company. With this blog we will discuss the consequences of not filing Annual Return.

What is the Punishment for Directors?
Directors are Responsible for managing the functions of the company. Thus, filing timely returns is also responsibility of Directors only. If they will fail to file the return on time then they will have to face the punishment for it depending upon the days for which filing is delayed. Here are some cases of penalty to be levied on the Directors:-

Case 1- Non filing of return within 270 days:
If the Director has not filed return within 270 days when it should be filed originally then it

Directors would be liable to pay an Additional Penalty. The Directors will be imprisoned for the term exceeding 6 months and the fine not less than 50K which can extend upto 50 lacs or with both.

Case 2- non-filing of returns for 3 years:
If the return is not filed for the period of 3 years then the Directors have to face severe consequences. They will no more be eligible to be appointed as Director for the same Company for the total period of 5 year from the date from the date on which the company fails to file the return.

Case 3- false statement filed:
In case the return of the company is filled with false or omitted facts the Director or any other person responsible will be imprisoned for the time period of 6 months that may be extended to 10 years. Also he shall be liable for the fine that would not be less than the amount involved in
fraud and can extend up to three times the amount involved in fraud.

What is the punishment for the Company:
The company is treated as a separate legal entity in the eyes of law. Thus, apart from the Directors, the company will also be held responsible for the non-filing of Annual Returns by MCA. Following is the amount of fine that the company is required to pay in different cases:

Case1- Period of delay of 15 days:
The amount of penalty would be 1 time of the number of fees normally charged.

Case 2: More than 15 days but not more than 30 days:
The amount of penalty would be 2 times of the number of fees normally charged.

Case 3- More than 30 days but up to 60 days:
The amount of penalty would be 4 times of the number of fees normally charged.

Case 4- More than 60 days but up to 90 days:

The amount of penalty would be 6 times of the number of fees normally charged.

Case 5- More than 90 days but up to 180 days:
The amount of penalty would be 10 times the amount of fees normally charged.

Case 6- More than 180 days but up to 270 days:
The amount of penalty would be 12 times the amount of fees normally charged.

Case 7- More than 270 days:
The penalty would be 100rs per day after the expiry of 270 days.

Case 8- for 2 years:
If the company fails to file the return for last 2 financial years consistently then the company would be regarded as inactive. Further, the bank account of the company would freeze and the notice of strike off will be issued by the company.

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BRUTAL MISTAKES WHICH INVESTORS MAKE THAT CAN DESTROY THEIR LIFE

deadly mistake biatconsultant

 

Investing is a tricky concept. It can lead you to huge business revenues.
However, if proper steps are not followed while investing, it can lead to huge
losses. It has the ability to completely destroy someone’s life if investing is not
done cautiously. Let us look at some of the mistakes which investors make that destroy their lives:
 Depending too much on the company’s health cover
There are some people who depend too much on the company’s health
cover. If a person is caught up with a very serious disease, it may
happen that the cost of the medication is too much. The bank will be
pay only a part of the patient’s expenses which can lead to huge
financial trouble. This results in huge financial loss and will eat away all
your savings. So it is better to have ‘personal’ health cover rather than
depending on company’s health cover.
 Excessive use of credit card and loans
Sometimes people are so involved in taking loans that they end up in
deep trouble. Their saving becomes nil and they become bankrupt.
People are attracted towards various schemes to buy things in low cost
EMIs and using credit card to pay for things. Excessive use and addiction
of these things may lead you into big debts which are difficult to pay
later on. So it is very essential to makes proper and judicial use of the
credit card and loans.
 Overspending due to social pressure
People have the trait to show off. This can be very dangerous
sometimes. People spend so much in buying big houses, big cars and in
weddings just to show off. They do it to feel superior over the others.
This can lead to the downfall of a person and make his finances go down
sharply. So we must invest in only those things which are productive in
future or in those things which we need. Spending just to show off is
stupidity.

 Heavy spending problems
Some people are so much addicted towards spending that they do not
even calculate the future savings. If you spend on unrequired things,
then one day you may have to sell things you need. This is very essential
to see whether buying something is valuable to you or not. If it is
essential, then only we must buy it, otherwise not as it may drain all
your savings.
 Attracted toward free advice
People have the tendency to get easily attracted towards the free
advice. In India, everyone has an advice for you. Even the person who
doesn’t have any knowledge about a certain profession will have advice
for you. These advices may cost you deeply. So, it is always better to
take advice from the professionals.
As we have observed that there are certain mistakes which investors make
that destroys their lives. So it is better to have some precautions while taking
an investing decisions or you will fall into dept. Advice must be taken from
professionals like chartered accountant who will give you the best advice
although every advice is subject to market risk. But mostly they will show you
the right way and process to invest.

 

Consult BIATconsultant to get best investing guide for your business .

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