What are the steps in the liquidation process?

The liquidator is an insolvency professional on whom all the powers of the Board of Directors, key managerial personnel, and the partners, as applicable, of the Corporate Debtor are vested by the Adjudicating Authority upon Liquidation order being passed under section 33 of the Insolvency and Bankruptcy Code, 2016. 

Are you puzzled with due date of Q1 TDS statement of Financial Year 2020-21.

 

The Govt. vide the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 read with Notification No. 35 /2020, dated 24-06-2020 has extended various due dates of Income-tax compliances. It includes the extension of due dates for filing of Income-tax Returns for the Assessment Year 2019-20 and 2020-21, TDS/TCS statement of the 4th quarter of Financial Year 2019-20, etc.

Computation of profit or loss from sale of business property in an asset block

Unlike regular accounting where the depreciation is calculated with reference to the cost or written down value of each asset, the depreciation for a particular block of assets is computed in an aggregate manner. If there are more than one assets in one particular block of assets, the depreciation is calculated on the value arrived at after adding the cost of acquisition for the assets purchased during the year and falling under the same block of assets, to the written down value of the block at the beginning of the year and by reducing the sale price of one or more assets sold during the year.

Buy back - is still a tax efficient tool?

Buy-Back is one of the important provisions in the Companies Act, 2013, which enables a company to purchase its own shares. Amongst other host of reasons, a program of buy-back is resorted to by a company to distribute surplus cash to its shareholders or to even provide investors an opportunity to exit from their investment, especially in case of unlisted/private companies.

Sunset Clause for SEZ?

 NTRODUCTION TO SEZs

A Special Economic Zone (SEZ) refers to a limited geographical region set up by the government to incentivize fresh foreign direct investment (FDI) and enjoys relaxed economic laws. In the year 2000, the government had set a target of creating 100 million jobs and of  achieving 25% of the country’s GDP from manufacturing by the year end 2022. Thus, the government had set forth a SEZ policy as a part of it s EXIM policy.

Assessment of Non-Existing Entity or Dead Person

 

1.   The controversy with respect to the validity of the assessment in the hands of non-existing entity has been recently settled in favour of the Assessee by Hon’ble Supreme Court by passing a speaking order on the subject matter in the case of PCIT v. Maruti Suzuki India Limited, (2019) (SC).

ROC (ADJUDICATION) UNDER COMPANIES ACT 2013

This Article is an primitive attempt to highlight the procedural status of Adjudication before Registrar of Companies. At the threshold, it is imperative to note that the Registrar of Companies is an classic case of studying administrative law. Largely ROC performs three kind of functions namely:-

The new lower Income tax rate is just an eyewash.

 

In February 2020, when the Finance Minister of India announced the reduction in Income tax rates of Individuals & HUF  by the introduction of section 115BAC, the individual taxpayers assume that this new section will reduce their tax burden from the financial year 2020-21. However, when a fine print of the law was published, this taxpayer was confused as to how there is a reduction in their tax cost from the new lower tax rate. 

 

The benefit of the reduced tax rates is available only when the taxpayer forgoes all their exemptions & deductions. These exemptions & deductions are most commonly available deductions and the taxpayer actually has nothing to do extra to get all these exemptions & deductions. For example, standard deductions of Rs.50,000/-, deductions of Rs. 150,000/- under section 80C which mainly includes mandatory payment like, provident fund, school fees, Life Insurance, Home loan repayment etc, deductions for health insurance, House rent allowance for rent paid to the landlord, Interest on loan for self-occupied residence, etc.  Therefore it is very unlikely that taxpayers who are availing all these exemptions and deductions will get benefit from the new tax rate.

 

Further, Individual taxpayers have the choice to select between old and new tax rates and hence to do the correct selection, the taxpayer is required to first compute correct tax liability under both the tax rates and then only can decide which is beneficial to him. Thus, the process of computing income tax liability for individual taxpayers is more stressful & cumbersome.    

 

Also, the salaried individual taxpayers who are subject to  TDS, are required to inform their employer at the beginning of the year about their preference of tax rates and there is no option to change their preference during the financial year. Thus, these salaried taxpayers have been imposed with an additional burden to be extra cautious while intimating the employer regarding availing the option of tax rates.  The new tax rates are only beneficial to the taxpayer who doesn’t have any option to claim any deductions or exemptions.

 

Thus, complexities of exercising and evaluating the option itself make the change onerous for the taxpayer. Further, the scope of availing the exemptions and deductions are vast, it’s very unlikely that taxpayers will select a new tax rate and hence it can be concluded that new tax rate is just an eyewash.

 

     

 

How to Claim Medical Treatment Deductions u/s. 80DDB?

 

Most Taxpayee did not aware about claiming of Medical Treatment Deductions u/s. 80DDB, What are the conditions to claim deductions u/s. 80DDB and how much maximum amount to claim as well as diseases disability.

To claim deduction u/s 80DDB following condition should be satisfied.

Understanding Crypto-assets

 

The instant contest over the digital assets is effectively between accountholders with holding a positive coin balance; and the shareholders and creditors of Cryptopia. The question before the Court was that how the liquidators should distribute the digital assets? The creditors' position is that the digital assets, along  with  Cryptopia's  other remaining assets should be distributed on a pari passu basis, treating all accountholders and other unsecured creditors equally. However, the accountholders were arguing that digital assets belong to them and, the same are held by Cryptopia in trust for the accountholders.

GST ON WORKS CONTRACTS AND REAL ESTATE TRANSACTIONS

 

DEFINITION - Section 2(119) of CGST ACT, 2017 provides as follows:

 

“Works Contract” means a contract for:

building, construction, fabrication , completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning, of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.

 

Understanding re-domiciliation

Introduction :

Much in the way that a company can change its registered office/registered agent within the same jurisdiction, it can also “move” to a new jurisdiction.  Corporate re-domiciliation is the process by which a company moves its ‘domicile’ (or place of incorporation) from one jurisdiction to another by changing the country under whose laws it is registered or incorporated, whilst maintaining the same legal identity. The ease with which re-domiciliation may take place has increased in recent years.  

Further, not all countries allow re-domiciliation.  Those that do, tend to be Commonwealth “common Law” (as opposed to Civil law jurisdictions).  Notable exceptions are Cyprus, Austria, Hungary, Latvia, Luxembourg,  Liechtenstein, Mauritius, BVI, Delaware & Ireland   which are civil law but do permit re-domiciliation and conversely UK, Singapore, Hong Kong which are common law but do not generally allow re-domiciliation in or out. Notably, the Indian corporate laws currently do not permit either inbound or outbound re-domiciliation.

Imp Verdict On S. 147 Reopening To Tax Bogus Capital Gains (Penny Stocks)

S. 147 Reopening for bogus capital gains from penny stocks: The Dept's argument that though the assessee disclosed details of the transactions pertaining to purchase and sale of shares, it did not disclose the real colour / true character of the transactions and, therefore, did not make a full and true disclosure of all material facts which was also overlooked by the AO, is not correct. The assessee disclosed the primary facts to the AO & also explained the queries put by the AO. It cannot be said that the assessee did not disclose fully and truly all material facts necessary for the assessment

Aspects to be considered before filing GST Returns for September 2020

 

In view of the specific provisions of the GST law, following aspects need to be finalized before furnishing the returns for the month of September 2020:

 

GST on WHT paid u/s 195 - Query resolved.

The below opinion is in respect of applicability of GST on withholding tax payable under section 195 of the Income tax act, 1961. 

 

Given below the extract of  GST law relevant for the discussion & opinion to be formed.

GST on Factoring Arrangements

 

Receivables constitute a significant portion of current assets of a firm. But, for investment in receivables, a firm has to incur certain costs such as costs of financing receivables and costs of collection from receivables. Further, there is a risk of bad debts also. It is, therefore, very essential to have a proper control and management of receivables. In India, transfer of receivables arising out of sale or loan transactions takes place quite frequently. In such a case, a firm may avail the services of specialized institutions engaged in receivables management, called factoring firms.

Tax Withholding by Non-residents

Tax Withholding by Non-residents on Payments to Residents - Controversy Reignited!

Background

Whether a non-resident is also required to comply with the tax withholding obligations enshrined under Indian tax law has been a long-standing controversy. The issue arose because withholding tax provisions, such as Section 194J of the Income-tax Act, 1961 (‘the Act’) casts as obligation to withhold taxes on “any person responsible” for making the prescribed payments to a resident. Further, with no express or implied exemption or exclusion being provided for non-resident payers, the provisions appear to include them within the ambit and fasten withholding tax obligations upon non-residents responsible for making prescribed payments to residents in India.

Director Disqualification

 

 

 Director Disqualification: Retrospective or Perspective

Introduction

 

After  the  implementation  of  Companies  Act,  2013,  Ministry  of  Corporate  Affairs  have  been  knocking down  the  directors  by  the  virtue  of  Section  164.  Aggrieved  directors  have  been  knocking  the  doors  of various High Courts and even the Apex Court of the country. The bone of contention in Section 164 lies in  regards  to  its  implementation,  whether  the  section  is  retrospective  or  prospective  in  nature.  There have been various judicial pronouncements in regards to the same, but various courts tend to differ as to applicability  should  be  prospective  or  retrospective.  Under  the  old  regime,  Section  274  (1)  (g)  of Companies Act 1956, which  deals with  disqualification of directors, has reigned over public companies. However, the corresponding provision  under the new regime, Section  164 (2)  of the Act 2013 extended its  arms  to engulf both  private  and  public companies.  It  seems  Directors  are  victimized  u/s-164(2)  for default of corporate, disregarding the facts of separate legal entities attributing a Single Sweep u/s 164 for the disqualification of directors.

Know the changes introduced in new TDS Returns

 

The Finance Act, 2020 has made several changes to the Chapter-XVII (Collection and Recovery of Tax). Twenty-Five Sections of the Income-tax Act, 1961 have been impacted due to the Finance Act, 2020 either by way of amendment to the existing provision or by insertion of new provisions for deduction or collection of tax. E- Commerce operators, tour operators, Mutual Funds, domestic companies and authorized dealers have been entrusted with obligations of deduction or collection of tax at source from certain transactions. To incorporate the impact of recent changes, the CBDT has notified the amendment to Rule 31A and Annexure to Form 26Q and Form 27Q vide Income-tax (16th Amendment Rule), 20201.

GST on ROC Filing Fee paid by companies/LLPs

 

Introduction

The law relating to companies is laid down in Companies Act, 2013 and the rules made thereunder and the compliance required under the Corporate Law is under the jurisdiction of Registrar of Companies (ROC) under the Ministry of Corporate Affairs (MCA). After the initial registration, there are various other statutory compliances that are required to be complied by the companies such as filing of Annual Returns and AGM, appointment and resignation of Directors, appointment and resignation of Auditors, change in Registered Office, change in Authorized Share Capital and so on. While filing said the returns and documents in the MCA portal, the companies have to remit a prescribed fee.

Right from the Service Tax regime, levy of tax on the ROC filing fee has been a contentious issue. Even under the GST regime, the Department is issuing show cause notices to corporate taxpayers across the country demanding GST on ROC filing fee on reverse charge basis. Many companies have not paid GST on ROC filing fee and soon the issue will come up for judicial scrutiny. An attempt has been made in this article to understand the nuances in this issue in legal as well as judicial backdrop.

Supplies to SEZ Under GST: Rules and Provisions

GST, with the hope of billions to provide a better way to transact in a business and to eliminate the cascading effects under the previous tax system, it is the biggest tax reform in India ever. Although the system is very new to all and the taxpayers are not well-versed with the new indirect tax nomenclatures, we can expect that by the time it will go flawlessly. But, understanding the basics in detail about every aspect about GST is also important. So, today’s article is about how supply to Special Economic Zone (SEZ) takes place and what is the coverage of SEZ under GST regime.

Applicability of TAX AUDIT for Financial Year 2019‐20 (A.Y.2020‐21)

 

Business Assessee (INDI / HUF / Firm)

1st condition                             2nd Condition                         3rd Condition

Turnover	Net Profit > 8% or 6% of turnover (u/s 44AD)	All cash receipts > 5% of total Receipts	All cash payment > 5% of total payments	Audit U/s
* 6% net profit incase of amount of total turnover or gross receipts received through banking channel / digital means
Upto 1 Crore	No	NA	NA	Yes 44AD(e)
	Yes	NA	NA	No
1‐2 crore	Yes	No	No	No
	Yes	Yes	Yes	Yes 44AB(a)
	Yes	Yes	No	Yes 44AB(a)
	Yes	No	Yes	Yes 44AB(a)
	No	Irrelevant	Irrelevant	Yes 44AB(a)
2 ‐ 5 crore	NA	No	No	No
	NA	Yes	Yes	Yes 44AB(a)
	NA	Yes	No	Yes 44AB(a)
	NA	No	Yes	Yes 44AB(a)
More than 5 Crore	NA	NA	NA	Yes 44AB(a)