Income Tax case laws update.

 

·         Mumbai ITAT held that to opt for concessional tax rate Form 10-1C has to be filed within the due date.

Understand your CTC

 Do you know what lies behind those impressive CTC packages? Let me reveal the truth about inflated salaries and actual take-home pay.

Service of notice by AO by email:

1. Rule 127 of Income Tax Rules require that for communications delivered or transmitted electronically under section 282, the e-mail address to which a notice or summons or requisition or order or any other communication may be delivered or transmitted shall be –

Understanding Section 194O of the Income Tax Act

E-commerce operators facilitating electronic platforms for the sale of goods and services shall comply with Section 194O. This provision mandates the deduction of TDS on payments made to e-commerce sellers. It applies to e-commerce operators with an annual gross turnover of over Rs. 10 crores.

Transfer of Undertakings (Protection of Employment) Regulations

 

The Transfers of Undertakings Directive 2001/23/EC is a European Union law that protects the contracts of employment of people working in businesses that are transferred between owners It replaced and updated the law previously known as the Acquired Rights Directive 77/187/EC

Foreign Investment Reporting and Management System (FIRMS)

The Reserve Bank of India (RBI) has implemented its own Foreign Investment Reporting and Management System (FIRMS) to track foreign investments in the country. The system is an online portal that enables foreign investors to report their investments in compliance with regulations and allows the RBI to monitor and analyze foreign investment data.

Cost & Profit Optimization and Cost reduction.

 What is cost optimization?

Cost optimization is the process of finding the most cost-effective way to accomplish a particular goal or task. It involves identifying ways to reduce costs without sacrificing quality or efficiency. Cost optimization can apply to a wide range of industries and activities, from manufacturing and supply chain management to software development and cloud computing.

UNDERSTAND ZERO COUPON BOND

Generally, bonds are issued at face value and a fixed interest is paid on them. But in case of Zero-Coupon Bonds (ZCB), no interest is paid to the holder. Rather, such bonds are issued at a heavy discount on the face value of the bond. On maturity, the bondholder gets back the face value of the bond. These bonds are therefore, also known as ‘Discount Bonds’. For example: - Suppose Face Value of the bond is Rs. 150 to be matured after 5 years. It is issued at Rs. 100. Thus, the bondholder initially pays Rs. 100. After 5 years, he will get back Rs. 150 

𝘼𝙣𝙣𝙪𝙖𝙡 𝘾𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝘾𝙖𝙡𝙚𝙣𝙙𝙖𝙧 𝙛𝙤𝙧 𝙇𝙇𝙋

 

The Limited Liability Partnership (LLP) is a business structure that merges the characteristics of a conventional partnership with limited liability. The LLP is regulated by the Limited Liability Partnership Act of 2008.

EPFO: PENSION ON HIGHER WAGES:

 

OUR UNDERSTANDING AS PER EPFO NOTIFICATION DT.20.02.2023:👇🏻

Cash Ratio

“Cash is king” still holds. But how do you use cash to analyze your company’s financial health? Consider these seven ratios:

Tax efficient salary structure under old regime.

 

49th GST Council Meeting Recommendations

This is to update you regarding the 49^th GST Council Meeting concluded on February 18, 2023.  Kindly note that the below proposals/ recommendations shall be given effect by way of issuance of relevant notifications/ amendments in the GST law, which could be issued in due course of time.

International Tax update

·         In 2023 at Portugal, companies must print ATCUD and QR codes on all their invoices. They will need valid codes from the government and tax authority-certified software before they can start generating the invoices.

CBDT notifies income-tax return forms (ITR) for tax year 2022-23

 

This Tax Alert summarizes the key amendments made to the Income Tax Return (ITR) forms for tax year 2022-23, vide Notifications No. 4 and 5 of 2023 dated 10 and 14 February 2023 (Notifications) issued by the Central Board of Direct Taxes (CBDT).

GST on RWA

GST is payable only if the aggregate turnover including exempt supplies like property tax and water tax and also third-party goods/ services exempt up to Rs 7500 per month per member exceed Rs 20 Lakhs annually. Even in cases where the monthly receipts are below Rs 7,500 but the annual turnover of the society crosses Rs 20 Lakhs, in such cases GST is payable. Tax is payable at @18% on the entire taxable proceeds. For example, in cases where monthly proceeds exceed Rs 8000, GST is payable on the entire 8000 Rs and not just on 500 Rs as clarified by CBI&C circular dated 22-7-2019. Corpus, contribution to repair fund, and sinking fund collections are viewed as advance for future contingencies which may lead to the rendering of services and hence may be argued as taxable. There are few contrary advance rulings where the view taken is that these do not lead to a supply of services and hence should not be taxable. Many societies contribute heavily to repair funds to be future ready and as such, there is no service involved by way of value creation/addition. Also if we compare this entry on the monthly maintenance bill with others, all the others that are taxable also have associated input tax credit opportunity. Since this is merely a deposit, taxing this would mean taxing non-profit making societies @18 % without any input tax credit which seems unfair. Since the corpus and sinking fund contributions are mandatory in nature, taxing these would mean it is mandatory to pay 18% tax on the members own funds. It would still be acceptable if the interest earned by society from the repair and sinking fund deposit are charged GST instead of the principal.  

Conditions for availing ITC in GST- A small note.

 

1.   Goods or services brought should only be used for further business purposes.
2.   Buyer shall retain such tax invoice, debit note, or other documents as evidence of such payment.
3.   Such tax invoice or debit note is filed by the supplier in Form GSTR-1, and it appears in the Buyer’s GSTR-2B form.
4.   The goods or services must have been delivered to the buyer.
5.   The buyer must furnish the GST returns in Form GSTR-3B.
6.   Where the goods are received in lots or installments, ITC will be allowed to be availed when the last lot or installment is received.
7.   The buyer must pay towards the supply of goods and/or services within 180 days from the invoice date. If they fail to do so, then the ITC already claimed will be added back to output tax liability and interest must be paid on such tax. ITC claim will be reinstated once the payment is made to the supplier.
8.   If depreciation has been claimed on the tax portion of a capital goods (Assets) purchase, no ITC will be permitted.
9.   Input tax credit can be claimed only before 30th November of the following year or before the filing of Annual GST returns whichever is earlier. That means to avail of the Input tax credit for Financial Year 2022-23, ITC for this year can only be claimed on or before 30th November 2023.
10. If Goods are lost or stolen or confiscated after the purchase, then ITC on such inward supply of goods are not eligible for an Input tax credit.

In house tax department – Mission & Vision.

The mission of an in-house tax department is to ensure compliance with all tax laws and regulations, minimize tax liability, and identify and manage tax-related risks.

The vision of an in-house tax department is to become a trusted partner to other departments within the company and provide strategic tax planning guidance to help the company achieve its business goals.

CBDT notifies Centralised Processing of Equalisation Levy Statement Scheme, 2023

 The Finance Act, 2016 introduced Equalisation Levy (EL) at the rate of 6 per cent on the amount of consideration for online advertisement, any provision for digital advertising space or any other facility or service for the purpose of online advertisement with effect from 1 April 2016. This EL is applicable on the consideration received by a non-resident, from a person resident in India and carrying on business or profession or a non-resident having a Permanent Establishment in India.

The Finance Act, 2020 expanded the scope of the EL and introduced a 2 per cent levy on the amount of consideration received or receivable by an e-commerce operator from e-commerce supply or services. An ‘e-commerce operator’ is defined to mean a non-resident who owns, operates or manages a digital or electronic facility or platform for the online sale of goods or online provision of services or both.

Section 167 of the Finance Act, 2016 provides that the assessee or e-commerce operator should furnish a statement with the Assessing Officer. Further, Section 168 provides for a processing of such statement. However, the Scheme for processing of such statement was awaited.

Recently, the Central Board of Direct Taxes has notified the Centralised Processing of Equalisation Levy Statement Scheme, 2023 (the Scheme). The Scheme shall come into force on the date of its publication in the Official Gazette i.e. 7 February 2023.

India Budget 2023 first cut

Personal Tax

Ø  No change in tax rate under the old regime.

Ø  Receipts from Life insurance are taxable if the gross annual premium payment exceeds Rs. 5 Lakhs. The net amount is taxable under the head Income from other sources for new policies taken after March 23.

Ø  Limit of Leave encashment of Rs. 3 Lakhs increase to Rs. 25 Lakhs. (to  be verified not available in the Memorandum but was there in the budget speech)