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GST ITC Rules | Input Tax Credit (ITC) Claimed Under GST

GST ITC Rules | Input Tax Credit (ITC) Claimed Under GST

Leave a Comment / GST / By / April 10, 2024

GST ITC Rules: What is the Input Tax Credit (ITC)? A tax credit means that a manufacturer was able to diminish while paying his tax on yield.

An input tax credit allows a producer to subtract the tax he paid on the input he bought as he pays the tax on his output. He will subtract or claim credit for the tax he settled on his inputs while paying the tax on his production.

At the end of the day, an input tax credit is a tax deducted from the output tax due on account of sales.

SGST, UTGST, CGST and IGST

The tax levied by the state government is known as the State Goods and Services Tax or SGST. Intrastate purchases of goods and services, i.e., sales made within a jurisdiction, are subject to the SGST.

On a product or service, SGST is paid in addition to and at the same rate as CGST.

All Indian governments impose this tax. Still, it has also been introduced by two Indian union territories of Puducherry and Delhi since each of these union territories has its legislature and council.

The Central Goods and Services Tax is a government-imposed indirect tax.

It is determined to the exchange of products and ventures embraced inside the state, i.e., intrastate. The assessment gathered under the head “CGST” is payable to the central government depository.

The CGST is levied to reimburse the government for previously levied indirect taxes, for example:

  1. Central Excise Duty,
  2. Service Tax,
  3. Duties of Customs

The UTGST or Union Territory Goods and Services Tax (UTGST) is somewhat similar to the State Goods and Services Tax. The main distinction is that the tax collection is directed to the treasury for the government of the union territories where the goods or services were ultimately used.

UGST is additionally charged at the same rates as that of CGST. Be that as it may, among UTGST or SGST, just each, in turn, will be imposed along with CGST for each case.

The Central Government levies Integrated Goods and Service Tax on all interstate supplies of goods and services. CGST, SGST, and UTGST, on the other hand, are imposed on the provision of goods or services within a jurisdiction.

The IGST has brought uniformity to the taxation of goods and services produced outside of the state. This holds for both supplies made within the state and those made outside the country.

The IGST rate will still be roughly equal to the sum of the CGST and the SGST rates.

People that are Eligible for the Input Tax Credit

Section 18(1) of the CGST Act, 2017 lists the following individuals:

  • An individual who was already in business prior to the implementation of GST and who is required to register under GST (Section 18(1)(a)).
  • An individual who, notwithstanding the fact that registration is not mandatory, opts for voluntary registration [Section 18(1)(b)].
  • An individual who stops paying tax under the composition scheme and switches to the standard scheme [Section 18(1)(c)].
  • A person whose exempt supply becomes a taxable supply [Section 18(1)(d)].

Based on either of the following tax-paying records, every registered person shall be entitled to take credit for input tax paid on any supply of goods or services used by him/her that are used or expected to be used in the course or furtherance of his/her business:

  • A tax invoice has been released.
  • Notice of debit
  • Bill of entry
  • Invoice produced on a reverse charge basis.
  • Input Service Distributor issues a document for credit delivery.

It’s critical to pay attention to the phrases “used by him/her” and “in his/her business.” These terms apply to the specific licensed taxable individual in question, not the whole legal body.

As a result, ITC charged in one state must not be related to a taxable person’s company in another state, even though the taxable person is the same.

Persons that are not Eligible for the Input Tax Credit

  1. Individuals that are not GST-registered
  2. Those who have signed up for the composition scheme

The Amount of Time You Have To Take ITC

Section 18(1) [Section 18(2)] specifies the period for claiming an Input Tax Credit (ITC).

Following a year from the date of issue of the tax invoice relating to such supply, a registered individual is not entitled to take input tax credit under section 18(1) for any supply of goods or services or both to him.

Prerequisites for Taking ITC

  1. At the time of credit, a licensed taxpayer must have a tax invoice on file.
  2. The goods or services must have been received,
  3. Within 180 days of the invoice date, the customer must have charged the invoice’s amount, as well as the tax, to the seller of products or services, or both.
  4. The seller would have paid the tax received via tax invoice and deposited it into the government’s account.
  5. The tax invoice information must also have been uploaded in the GST return by the seller.
  6. A bill of entry is a paper that may be used to obtain credit while buying goods. The invoice of entry may also have an IGST-paid challan for the shipment.
  7. In-service importation, the invoice, and IGST payment through table 3.1 of GSTR-3B form the basis for granting credit.
  8. A credit note is a piece of paper that allows a supplier to offset his tax burden. To reverse an already taken ITC, the retailer must copy the credit note to the buyer.
  9. A debit notice (also known as a supplemental invoice) is a statement that allows the buyer to claim ITC.
  10. A tax invoice on which credit has been granted must be forwarded to the area where the products or services are provided.

No Input Tax Credit is Available for the Following Cases

The following elements are not qualified for ITC under section 17 (5):

GST Prohibits The Use Of Motor Cars And Other Conveyance

The ITC on motor vehicles charged would not be offset against the GST Law’s output tax obligation. In other words, you can’t get credit for your car or different mode of transportation.

Club, Health, And Wellness Centre Membership

The ITC credit will not be allowed if you have paid for a gym card, yoga lessons, or membership in a club for some sport or other activity.

Travel Opportunities Such as Leave or Home Travel Concessions for Employees

If you have booked any travel packages, you will not claim ITC on the payment of the travel package.

However, if you book a travel package for business purposes, ITC would be allowed.

Goods, Services, or a Combination of the Two that are used for Personal Use

The ITC is not eligible whether the products or facilities are used for personal use. ITC is only available where tax is charged or charged on the external delivery of goods or services, according to the law’s simple reasoning.

When contract services are provided for building a movable house

This is perhaps the most contentious aspect of ITC. Job contract providers have long been a source of contention for taxpayers and the IRS. However, the works contract issue has been settled to some degree under GST.

ITC Subject to the Composition Levy

The ITC is not applicable on products or services on which the composition dealer has paid duty.

Itc On Items That Have Been Misplaced Robbed, Burned, Written Off, Or Given Away As Gifts Or Free Samples

If the items are missing, broken, or damaged, or if they are given out as free samples, ITC would not be usable.

ITC on Products or Services Rendered by a Real Estate Developer

Goods or services (other than plant or machinery) received by a taxable individual for the building of an immovable property (other than plant or machinery) on his own account, even where those goods or services (or both) are used in the course or furtherance of operation do not have ITC.

In the Case of a Nonresident Taxable Person, an ITC is Available

ITC would not be eligible if the nonresident taxing individual purchases any products or services. If an NRTP buys any products or services, however, he will be responsible for the ITC.

Besides, the IGST Act applies to imports and exports.

In the Case of Food and Drinks, Outdoor Catering, Health Care

Food and drinks, outdoor catering, beauty treatments, dental care, and cosmetic and plastic surgery would not be eligible for the input tax credit.

However, the input tax credit is applicable whether a licensed citizen requires an internal supply of products, services, or both to make an external taxable supply of the same type of goods, services, or both, or as part of a taxable combination or blended supply.

In the Event of willful Theft

In the event of theft, the input tax credit would not be eligible.

Reversal of Input Tax Credit

Reversal of Credit under GST has the same purpose as it does under the current tax system. In layman’s terms, reversal of credit refers to the reversal of a previously taken credit.

Reversal of credit refers to credit taken out and used when the final product is taxable but is only reversed as the final product becomes excluded.

ITC for GST paid on Reverse Charge

On the tax balance charged under reverse charge on goods and services, the service purchaser will claim Input Tax Credit. The only GST ITC rule is that the goods and services be used or used to benefit the business or organization.

If the composite distributor is subject to the reverse charge mechanism, he or she would be ineligible to receive any tax credit.

The tax would be collected at the ordinary rates, not the composition rates.

ITC on Capital Goods and Reversal on its Sale

It is possible to make it advantageous; tax credit for capital goods can be paid with one payment.

If the individual has asserted depreciation under the income tax act for the GST portion, an input tax credit for the tax component of capital goods is not permitted. In other terms, an individual may demand depreciation on the tax portion or take a GST input tax credit on capital goods.

If a taxable person buys capital goods on which an ITC was claimed, the taxable person is entitled to pay GST at a higher rate from the following sources:

  • I took on those capital products at a discount of 5% every quarter or half of a year from the invoice period.
  • GST rate multiplied by the selling price of capital goods

When refractory bricks, molds and dies, jigs and fixtures are sold as waste, the taxable individual may be required to pay tax on the transaction value of the product.

ITC in Respect of Inputs Sent for Job Work

The ITC provisions for inputs and capital goods sent for Job Work are specified in Section 19 of the CGST Act, 2017. On inputs or capital goods sent to a job worker, the principal or the registered individual may say ITC.

Furthermore, if those inputs or capital items are sent to the job worker for job work without first being taken to the principal’s place of business, the principal will claim ITC.

As a result, in Form GST ITC-04, a principal must disclose the specifics of the goods shipped or obtained from a job working within a particular quarter.

The Manner of Distribution of Credit

The Manner distribution of credit by Input Service Distributors is governed by Section 20 of the Central Goods and Services Tax Act 2017.

The Following are the Postulates

The Input Service Distributor shall administer the central tax credit as central tax or integrated tax, and the integrated tax credit as integrated tax or central tax, by issuing a paper containing the amount of input tax credit being allocated in the Manner specified.

The credit can be distributed by the Input Service Distributor if the following conditions are met:

  • Credit will be issued to credit recipients in exchange for a certificate containing the required information.
  • The credit sum circulated does not surpass the credit amount eligible for distribution;
  • The tax credit for input resources attributable to a credit receiver must be distributed exclusively to that recipient;
  • The tax credit for input services attributed to more than one recipient of credit shall be divided among those recipients to whom the input service is attributed, and such allocation shall be pro-rata dependent on such recipient’s turnover in a State or turnover in Union territory during the relevant period compared to the sum of all such recipients to whom such input service is attributable and who are active in the current year during the said relevant period;
  • The tax credit for input services charged attributable to all recipients of credit will be divided among them. Such allocation will be pro-rata dependent on the recipient’s turnover in a State or turnover in Union territories during the particular period according to all recipients’ turnover and operational in the same year during the relevant period.

An Explanation is given For the Purposes of this Segment

The “relevant period” will be as follows:

  • the financial year before the year in which credit is to be issued, whether the beneficiaries of credit had a turnover in their States or Union territories in the previous financial year; or
  • where any or more credit recipients have no turnover in their States or Union territories in the financial year prior to the year in which the credit is to be issued, the last quarter during which reports of all recipients’ turnover are available prior to the month in which credit is to be distributed;
  • The term “recipient of credit” refers to a seller of products or services, or both, with the same Permanent Account Number as the Input Service Distributor.
  • “turnover” refers to the value of turnover, less any duty or tax imposed under entry 84 of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the same Schedule, for any registered individual dealing with the supply of goods involving tax payment as well as goods not taxable under this Act.
  • ITC in special cases
  • The ITC in special cases is dealt with in Section 18 of the CGST Act.

Subject to the Terms and Limitations that May be Imposed

  1. an individual who applies for registration under this Act within thirty days of being liable to registration and is granted registration is entitled to an input tax credit for inputs kept in stock and inputs found in semi-finished or finished products held in stock on the day exactly before the date on which he becomes liable to pay;
  2. An individual who obtains registration under section 25(3) is entitled to claim an input tax credit for inputs kept in stock and inputs found in semi-finished or finished products held in stock on the day immediately preceding the date of registration;
  3. On the day immediately preceding the day on which he becomes eligible to pay tax under section 9, any enrolled individual who ceases to pay tax under section 10 is entitled to take credit for input tax paid on inputs kept in stock, inputs found in semi-finished or finished products held in stock, and on capital goods

Provided, However, The Credit for Capital Goods Will Be Limited By The Percentage Points Specified

When a registered person’s exempt supply of products or services, or both, becomes a taxable supply, the registered person is entitled to input tax credit on inputs kept in stock and inputs found in semi-finished or finished goods held in stock that are related to the exempt supply, as well as on capital goods exclusively used for such exempt supply on the day immediately preceding the date when supply becomes taxable:

xProvided, However, The Capital Goods Credit Would Be Limited By The Percentage Points Specified

After one year from the date of issue of the tax invoice relating to such supply, a registered individual is not entitled to take input tax credit under subsection regarding any supply of goods or services or both to him.

Where a registered person’s constitution changes as a result of a sale, takeover, demerger, amalgamation, lease, or conversion of the company with particular arrangements for liability transfer, in such a manner as may be prescribed, the said registered entity may pass the input tax credit that remains unused in his electronic credit ledger to such sold, combined, demerged, amalgamated, rented, or transferred company.

The registered individual shall pay a sum equal to the input tax credit taken on the said capital goods or plant and machinery, decreased by such percentage points as may be required, or the tax on the transaction value of such capital goods or plant and machinery calculated under section 15, whichever is greater.

The taxable individual may pay tax on the transaction value of certain products calculated under section 15 if refractory bricks, moulds, and dies, jigs and fixtures are supplied as scrap.

Taxability of Salary Income, Perquisites and Allowances

Taxability of Salary Income, Perquisites and Allowances

Leave a Comment / Income Tax / By / April 10, 2024

Taxability of Salary Income, Perquisites and Allowance: Salary is the reward received by an individual periodically for their service due to an express or implied contract. The actual receipt of salary in the former year is not substantial as far as its taxability is concerned. The presence of the employer-employee relationship is the sine-qua-non for taxing a specific receipt under the title “salaries”. For instance, the salary paid to a partner by their partnership firm for carrying on a business is chargeable as “Profits and Gains from Profession or Business” and not as “Salaries”.

Similarly, the salary received by the MP or MLA is taxable as “Income from other sources”, but if the Minister of State or Central Government received the salary, it should be charged to tax under the title of “Salaries”. When an assessee receives his pension from his former employer, it is taxable as “Salaries” In contrast, the allowance received on their death by their family members, also known as Family Pension, is taxed under the pension title of “Income from other sources”.

The Term “Salary” Includes What?

Section 17(1) of the Income-tax Act gives an all-inclusive definition or explanation of the term “salary”, including

  • Wages
  • Annuity or pension
  • Gratuity
  • Fees, Commission, perquisites or profits instead of salary
  • Advance of Salary
  • Amount transferred from unrecognized provident fund to recognized provident fund
  • Contribution of an employer to a Recognized Provident Fund over the designated limit
  • Leave Encashment
  • Compensation as a result of variation in Service contract, etc.
  • The contribution made for the account of an employee by the Central Government under a notified scheme for pension.

Deduction from Salary

The following deductions from salary are permissible according to the Income Tax Act (Section 16).

  • Professional or Employment tax levied by the State Government
  • Entertainment Allowance- Deduction regarding Entertainment Allowance is provided to a government employee to the extent of rupees 5000/- or 20% of their salary or the actual amount received, whichever is less.

It is to be noted that the standard deduction of rupees 50,000/- is available from the salary income with effect from 1st April 2019, i.e., 2020-2021 onwards.

What is “Perquisite”?

“Perquisite” may be defined as any casual benefit attached to an office or position in addition to salary or wages.

“Perquisite” is defined in section 17(2) of the Income-tax Act comprising:

  • Value of rent-free accommodation and service provided by the employer [Section 17(2)(i)]
  • Any sum paid by an employer regarding a commitment which was owed or payable by the assessee [Section 17(2)(ii)]
  • Value of any benefit provided for free or at concessional rate to certain employees [Section 17(2)(iii)]
  • The value of any specified sweat equity shares or securities allotted, directly or indirectly, by the former employer or present employer, free of cost or at a concessional rate to the assessee [Section 17(2)(vi)]
  • The value of any contribution by the employer in respect of the assessee, to an established superannuation fund, to the extent it exceeds rupees one lakh [Section 17(2)(vii)]; and
  • The value of any other margin benefit as may be prescribed [Section 17(2)(viii)].

Valuation of Perquisites

As a general rule, in the hands of an employee, the cost paid to the employer is the taxable value of perquisites. However, certain specific rules for the valuation of certain perquisites have been laid down in Rule 3 of the IT Rules. These are summarily mentioned below:

Valuation Provided by Employer for Residential Accommodation

  • State or Union Government Employees- The value of perquisite is equal to the license fee, which the Government determines as reduced by the rent payable by the employee.
  • Non-Government Employees- The value of perquisite is equal to 15% of the salary of cities which have more than 25 lakh of the population (10% of wages in cities where the population according to 2001 census is surpassing 10 lakh but not surpassing 25 lakh and 7.5% of salary in areas where the population according to 2001 census is below 10 lakh or 10 lakh.) However, the accommodation provided is not owned by the employer but is taken on rent or lease. The perquisite value will be either 15% of salary or the exact amount of lease or rent, which the employer pays, whichever is lower. In both cases, the perquisite value would be reduced by the rent, if any, actually paid by the employee.

Furnished Accommodation Value

The value of furnished accommodation is the value of unfurnished accommodation raised by 10% p.a of furniture cost (including TV/ AC/ refrigerator/ radio/ and other gadgets). If the furniture is hired from a third party, then the value of unfurnished accommodation would be raised by the hire charges, payable by the employer. However, if any payment is recovered from the employee regarding the above, it would be deducted from this amount.

4.3 Valuation provided by the employer for hotel accommodation

The value of perquisite for hotel accommodation provided by the employer will either be the actual charges payable to the hotel or 24% of salary, whichever is lower. The above value would be reduced by any rent paid or payable by the employee. It may be noted that no prerequisite would arise if the employee is provided with accommodation for their transfer from one place to another for 15 days or less.

Perquisite Provided by the Employer of a Motor Car

With effect from 1st April 2008, if an employer granting such facility to his employee is not accountable to pay fringe benefits tax, the value of such perquisite shall be:

If the employer owns or leases a motor car; Exclusively used for official purposes: If the motor car is exclusively used for official purposes, it will not be taxable in employees’ hands irrespective of the engine’s cubic capacity.

Used for both personal and official purposes:

If the employer compensates running and maintenance cost

Within 1.6 liters, the cubic capacity is – Rs 1,800 p.m. + Rs 900 p.m. (Given that the driver is provided)

If it exceeds 1.6 liters, the cubic capacity is – Rs 2,400 p.m. + Rs 900 p.m. (Given that the driver is provided)

If the employer compensates running and maintenance

Within 1.6 liters, the cubic capacity is – Rs 600 p.m. + Rs 900 p.m. (Given that the driver is provided)

If it exceeds 1.6 liters, the cubic capacity is – Rs 900 p.m. + Rs 900 p.m. (Given that the driver is provided)

Exclusively used for the personal purpose

If the motor car is used exclusively for personal purposes, it will be fully taxable in employees’ hands irrespective of the engine’s cubic capacity.

The taxable value is as under

The actual cost of maintaining and running a motor car

  • Adding: Salary of the driver
  • Adding: Normal wear and tear @10% per annum of the actual cost of a motor car
  • Less: Any charges recovered from the employee

If a motor car is owned by the employee but running and maintenance and driver’s salary compensated by the employer:

Exclusively used for official purpose

If the car is exclusively used for official purposes, it will not be taxable in employees’ hands irrespective of the engine’s cubic capacity.

Used for both personal and official purpose

If the employer reimburses running and maintenance cost

Within 1.6 liters, the cubic capacity is – Actual expenses fewer than Rs 2,700 p.m.

If it exceeds 1.6 liters, the cubic capacity is – Actual expenses fewer than Rs 3,300 p.m.

If an employee owns any other automotive conveyance but running, an employer reimburses maintenance.

Exclusively used for official purpose

If the car is exclusively used for official purposes, it will not be taxable in employees’ hands if the engine’s cubic capacity is within 1.6 liters.

Used for both personal and official purpose

If the employer reimburses running and maintenance cost

Within 1.6m v liters, the cubic capacity is – Actual expenses fewer than Rs 900 p.m.

If it exceeds 1.6 liters, the cubic capacity is – Non-Applicable

Perquisite Arising from Supply of Electric Energy or Gas or Water

The perquisite value shall be settled as the value paid by the employer to the agency supplying electric energy or gas, or water. If the employer supplies from their resources, then the value of the perquisite will be the manufacturing cost incurred by the employer per unit. However, any payment received from the employee regarding the above would be deducted from the amount. [Rule 3(4)]

Free or Concessional Educational Facility:

The expenditure incurred by the employer would be the value of the prerequisite.

If the educational facility is owned and maintained by the employer, the value would be nil or zero if the value of the benefit per child is less than rupees 1000/- per month or else if the reasonable cost of such education is similar in an institution near the location. [Rule 3(5)].

Free or Concessional journeys provided by an undertaking engaged in the carriage of goods or passengers:

Ve the value at which such amenity is offered to the general public will be the value of the perquisite. Any payment received from the employee regarding the above will get deducted from the amount. However, these provisions do not apply to the airline or railway employees.

Provision for the gardener, personal attendant watchman or sweeper:

The actual cost borne by the employer will be the value of benefit resulting from the provision of any of these. Any payment received from the employee regarding the above will get deducted from the amount. (Cost to the employer about the above will be the paid or payable salary). [Rule 3(3)].

Value of some other fringe benefits: 

  • Concessional or Free of Interest loans: The perquisite value will be the excess of payable interest at the prescribed interest rate over interest if any, actually paid or payable by the employee or any member of their household. The specified rate of interest would be the rate charged by the State Bank of India as on the first day of the applicable former year regarding loans of the same type and purpose advanced by it to the general public. The prerequisite is to be calculated based on the maximum monthly outstanding balance method. However, loans up to rupees 20,000/-and loans for medical treatment specified in Rule 3A are exempt provided with the same are not compensated or refunded under medical insurance.
  • Free meals value: The perquisite value regarding free food and non-alcoholic beverages provided by the employer, not liable to pay fringe amenity tax, to an employee, will be the expenditure incurred by the employer. Any payment received from the employee regarding the above will get deducted from the amount. However, perquisite value will not be taken if, during working hours, food and non-alcoholic beverages are provided, and certain conditions particularised under Rule 3(7)(iii) are fulfilled.
  • Gift or voucher or token value: The perquisite value of any gift, or voucher, or token regarding which such gift or voucher or receipt may be received by the employee or member of their household from the employer, not accountable to pay fringe benefits tax, will be the sum equivalent to the value of such gift, voucher or token. However, perquisite value will not be taken if the value of such voucher or token is below rupees 5000 in the aggregate during the former years.
  • The credit card provided by the employer: The perquisite value concerning expenses incurred by the employee or any member of their household is charged to the credit card which is provided by the employer, not liable to pay fringe benefits tax, which is reimbursed to an employee by the employer will be taken to such amount paid or reimbursed by the employer. However, perquisite value will not be accepted if the expenses are incurred exclusively for official purposes and specific provisions mentioned in Rule 3(7)(v) are fulfilled.
  • Club membership provided by the employer: The perquisite value concerning the amount paid or reimbursed to an employee by an employer, not liable to pay fringe benefits tax, against the expenses incurred in a club by such employee or any member of his household will be taken to be such amount reimbursed by the employer as deducted by any amount recovered from the employee on such account. However, perquisite value will not be accepted if the expenditure is incurred exclusively for business purposes and specific provisions mentioned in Rule 3(7)(vi) are fulfilled.

The value of any other amenity or benefit provided by the employer will be determined based on the cost of the employer under an arms’ reach transaction as decreased by the employee’s benefaction.

The market value of any specified sweat equity share or security, being an equity share in a company, the date on which the option is exercised by the employee, will be determined as follows:

  • In a case where the date on which the exercising of the option takes place, the companies’ share is listed on a distinguished stock exchange, the fair market value will be the aggregate of the opening and closing price of the share on the date of the stock exchange.
  • In a case where the date on which the exercising of the option takes place, the companies’ share is not listed on a distinguished stock exchange, the fair market value will be such, as determined by a merchant banker on the mentioned date.
  • The just market value of any specified security, not an equity share in a company, the date on which the exercising of the option takes place by the employee will be such value as determined on the specific date by a merchant banker.

Perquisites Exempt From Income Tax

Some occurrences of perquisites exempt from income tax are mentioned below:

Perquisites allowed outside of India by the Government to a citizen of India for rendering services outside India (Sec. 10(7)).

The official rent-free residence is provided to an Official of Parliament, or Judge of High Court or Supreme Court, Union Minister or Leader of Opposition in Parliament.

Perquisite will not arise if concessional or interest-free loans for medical treatments of specified diseases are made available in Rule 3A or where the loan is trivial not exceeding in the aggregate rupees 20,000/-

Perquisite shall not arise in regards to expenses on telephones or a mobile phone which on behalf of the employee is incurred by the employer.

Allowance

Allowance is characterized as a fixed or definite quantity of money or other substance which is given routinely in addition to the salary for meeting certain specific requirements of the employees. As a general rule, allowances are to be incorporated in the total income unless specifically exempted. Exemption in respect of the particular allowances is allowable to the extent that is mentioned below against each of them:-

House Rent Allowance (HRA)

Provided that expense on rent is actually incurred, the exemption possible will be the least of the following:

  1. HRA received.
  2. The rent paid is less than 10% of the salary.
  3. 40% of salary (50% in case of Chennai, Kolkata, Mumbai, Delhi)

Salary here means Dearness Allowance + Basic if the terms of employment provide dearness allowance.

Leave Travel Allowance (LTA): The amount actually incurred on the travel on leave performance to any place within India by the shortest route is exempt. This is subjected to a maximum of the AC 1st Class fare or the air economy fare (if the journey is performed by any mode except air) by such route, provided that only in respect of two trips committed in a block of 4 calendar years that the exemption will be available.

Certain allowances given to the employee by the employer are exempt u/s 10(14). All these exempt allowances are in detail mentioned in Rule 2BB of Income-tax Rules and are briefly discussed below:

According to Section 10(14)(i), the following allowances are exempt, subject to actual expenses incurred:

  1. Allowance granted to meet the cost of travel on transfer or tour.
  2. Allowance granted on journey or tour connected with the transfer to meet the recurring charges incited by the employee.
  3. Allowance granted to meet the expenses incurred on a helper who is engaged for the performance of official duty.
  4. Allowance granted to meet conveyance expenses incurred in the performance of duty provided no free conveyance is provided.
  5. Allowance granted for academic research or training in research or educational institution.
  6. Allowance granted to meet expenditure on maintenance or purchase of uniform for the enforcement of official duty.
  7. Under Section 10(14)(ii), the following allowances have been prescribed as exempt:
Serial Number Allowance type Exempted amount
1. Special Compensatory Allowance: For areas with high altitude allowance or climate allowance, or hilly areas.

 

 For various regions of North East, Hilly areas of Uttar Pradesh, Jammu and Kashmir and Himachal Pradesh, Rs 800 is common.

For the Siachen area of Jammu and Kashmir, Rs 7000 per month is standard.

For places at the height of 1000 meters or more, Rs 300 is standard.
2. Border Area Allowance is also known as Difficult Area Allowance or Remote Area Allowance or Disturbed Area Allowance. For various areas mentioned in Rule 2BB, multiple amounts ranging from Rs 200 per month to Rs 1300 per month are exempted.
3. Tribal area or Schedule area or Agency area allowance is available in Madhya Pradesh, Assam, Uttar Pradesh, Karnataka, West Bengal, Bihar, Orissa, Tamilnadu, Tripura. Rs 200 per month
4. Allowance is granted to the employees working in any kind of transport system to meet their expenditure during duty to run of such transport from one place to another. 70% allowance up to a maximum of Rs 10,000 per month.
5. Children Education Allowance For each child Rs 100 per month up to a maximum of two children
6. Allowance granted to meet the expenditure of hostel for employee’s child For each child Rs 300 per month up to a maximum of two children
7. Compensatory Field Area Allowance available in different regions of Arunachal Pradesh, Manipur Sikkim, Nagaland, Himachal Pradesh, Uttar Pradesh and Jammu and Kashmir. Rs 2,600 per month
8. Compensatory Modified Field Area Allowance available in various areas of Punjab, Rajasthan, Haryana, Himachal Pradesh, Uttar Pradesh and Jammu and Kashmir, West Bengal and North East. Rs 1,000 per month
9. Counter Insurgency Allowance is granted to members of the Armed Forces. Rs 3,900 per month
10. Transport Allowance granted to physically disabled employees. This is allowed to employees, who are blind or deaf and dumb or orthopedically handicapped with disability of lower extremities, to meet their expenditure for the purpose of commuting between the place of their residence and their duty Rs 3,200 per month
11. Underground Allowances are granted to employees working in underground mines. Rs 800 per month
12. Special Allowance is allowed to members of the armed forces in the nature of high-altitude allowance For altitude of 9000-15000 ft. Rs 1060 per month

For altitude above 15000 ft. Rs 1,600 per month
13. Special Allowance is allowed to the members of the armed forces in the nature of special compensatory highly active field area allowance Rs 4,200 per month
14. Special Allowance is allowed to the members of armed forces in the nature of island duty allowance. (Andaman & Nicobar& Lakshadweep Group of Islands) Rs 3,250 per month

 

Section 148 of Income Tax Act | Income Tax Act Section 148, Assessment or Reassessment Notice

Section 148 of Income Tax Act | Income Tax Act Section 148, Assessment or Reassessment Notice

Leave a Comment / Income Tax / By / April 3, 2024

Section 148 of Income Tax Act: Section 148 of the Income Tax Act deals with issuing a notice when if any income has escaped assessment or taxation. This section also mentions that an Assessing Officer will reach out to the assessee who is being questioned by issuing him or her a notice wherein he or she will be needed to provide with the following documents –

  • His or her income returns;
  • The income returns of a person other than the assessee who is being questioned and is deemed to be assessable as per the provisions of the Income Tax Act during the year which was before the assessment year of relevance.

In this article, we will discuss in detail Section 148 of the Income Tax Act and its workings.

The Capacity of the Assessing Officer Under Section 148 of the Income Tax Act

As per Section 148 of the Income Tax Act, an Assessing Officer has the power to either assess or reassess any taxable income that may have escaped taxation and has not been assessed as per the guidelines laid down in the Income Tax Act. Suppose the Assessing Officer has any reason to suspect that the taxable income of an assessee may have avoided assessment. In that case, the Assessing Officer can exercise the right to carry out their powers of income Types of assessment or re-assessment as per the provisions laid out under Section 147 through to Section 153.

The Issuance of Notice by An Assessing Officer to An Assessee Under Section 148 of the Income Tax Act

  1. Before issuing a notice to an assessee based on the provisions under Section 148, an Assessing Officer should possess concrete evidence that the assessee who is being questioned has evaded assessment of income for the relevant assessment year. To put it another way, the Assessing Officer cannot issue a notice to an assessee based on trivial suspicion.
  2. Any solid link must be presently linking the material information provided to the Assessing Officer with the evidence to prove that the assessee has escaped income assessment for an assessment year.
  3. The information or data provided to the Assessing Officer must be of maximal relevance to the case and must not possess any irrelevant facts or figures.
  4. Before issuing any notice to an assessee, the Assessing Officer is compulsorily required to record and provide reasons in written form mentioning why they believe that the assessee is escaping assessment of income as per Section 148.
  5. Suppose the Assessing Officer states that the assessee has escaped assessing a large amount of income or that the assessee is to be investigated in further detail, with no material or information to back up these claims or allegations. In that case, it will not be considered a definite cause to issue a notice to the assessee under Section 148. Such causes will be termed to be ambiguous and vague.
  6. Until and unless new and relevant information or material is brought to the Assessing Officer, they cannot issue a notice to an assessee based on the differences in perspectives or opinions. The Assessing Officer will have no reasons to believe or suspect an assessee if the assessee who is being questioned has provided disclosure with regards to all the relevant things concerning his or her taxable income, as well as disclosed and provided documents, factual information, and data, which has led to the completion of his or her assessment or re-assessment.
  7. The Assessing Officer cannot issue a notice to an assessee just by reaching a new conclusion based on the documents and factual information that the assessee has already provided during the assessment. Issuance of notice can only occur if further information or material has been presented to the Assessing Officer.
  8. However, if any of the information or facts have either been concealed or not been disclosed by the assessee who is being questioned, and such details have come to the notice of the Assessing Officer at a later time, in that case, the Assessing Officer will have the complete authority to issue a notice to the offending assessee under Section 147 or Section 148.

Individuals Authorised to Issue Notice Under Section 148 of the Income Tax Act

As per the provisions under Section 148, only the following individuals are authorised to issue notices to an assessee who has escaped assessment or re-assessment of the taxable income under the following conditions –

  • Any Assessing Officer who is presently ranked below the position of an Assistant Commissioner or Deputy Commissioner is allowed to issue a notice to an assessee under Section 148. This is in line with Section 151(1) provisions regarding any assessment carried out for the assessment year of relevance under sub-section (3) of either Section 143 or Section 147. This issue can only be evaded by the Joint Commissioner, provided they are content that the reasons given by the Assessing Officer are valid enough for the issuance of any notice to an assessee.
  • No issuance of notice to an assessee can occur following the expiration of four years from the conclusion of the assessment year, which was being questioned. This issue can once again only be evaded by the Chief Commissioner of Commissioner, provided her or she is content that the reasons given by the Assessing Officer are valid and strong enough for the issuance of any notice to an assessee.
  • In a situation where the cases that are not covered under Section 151, sub-section (1), and Assessing Officer can issue a notice to an assessee as per Section 148 if:
    • His or her position or rank is below than that of a Joint Commissioner;
    • The four-year period which follows the conclusion of the assessment year of relevance has expired.

The Joint Commissioner can only evade this issue, provided he or she is content that the reasons given by the Assessing Officer are valid enough for the issuance of any notice to an assessee.

Time Frame Given for The Issuance of Notice to An Assessee Under Section 148 of the Income Tax Act

As per the provisions of Section 149, notices issued under Section 148 can occur over the following time frames –

  1. The Assessing Officer can issue the notice prior to the end or expiration of the four years from the conclusion of the assessment year of relevance, provided that the taxable income that evaded the assessment is not more than Rs 1 lakh.
  2. Suppose the taxable income that has evaded assessment is more than Rs 1 lakh. In such a scenario, the Assessing Officer can issue a notice within a time frame of six years from the conclusion of the assessment year of relevance. The issuance of this notice will take place in place of the provisions outlined under Section 151.
  3. However, the provisions mentioned under Section 147 state that if an assessment or reassessment has taken place and concluded under Section 143(3), then an Assessing Officer will not be authorised to issue any notices to an assessee under Section 147, which follows the expiration of the period of four years from the conclusion of the assessment year of relevance. A notice could be issued by the Assessing Officer only if any taxable income was proven to have evaded assessment for the relevant year for the following causes –
    1. The assessee has failed to provide his or her returns as per Section 139;
    2. The assessee has failed to provide his or her returns after the issuance of a notice under Section 142 and Section 148(1);
    3. The assessee has failed to provide complete disclosure with regards to any information, factual data, or particulars required to complete the assessment for that relevant year.

Duties and Rights of The Assessee After Receiving Notice Under Section 148 of the Income Tax Act

If an Assessing Officer issues an assessee a notice for the evasion of taxable income assessment, then the assessee is duty-bound to carry out the following measures –

  • The assessee will be required to file his or her tax returns for the evaded income for the assessment year of relevance.
  • After the filing of returns, the assessee can request a copy, which mentions the reasons for the Assessing Officer to issue a notice to him or her under Section 148 of the Income Tax Act.
  • If the assessee finds the reasons contained in the copy to be groundless or inadequate, in that case, the assessee has the right to file an objection challenging the issuance of such notice by the Assessing Officer.
  • The assessee must also provide valid reasons for filing the objection and challenging the legality of the issuance of the notice under Section 148 by the Assessing Officer.
  • The assessee also has the right to request the Assessing Officer to provide different reasons if he or she dismisses the assessee’s claims.
  • The assessee can also refer to the relevant High Court and file a writ petition. In this petition, the legality, legitimacy, and lawfulness of the notice issued under Section 148 can be challenged even before the conclusion or completion of the assessment or re-assessment that is taking place.
  • The assessee can then also file a writ petition with the relevant High Court, wherein the legality and lawfulness of the notice issued under Section 148 can be challenged even after the assessment has been completed and the case is under appeal.
  • The assessee will be required to provide evidence that he or she has –
    • Requested a copy of the reasons mentioned by the Assessing Officer for the notice issued by him or her under Section 148;
    • Filed an objection to the reasons stated by the Assessing Officer under section 148;
    • Requested the Assessing Officer to provide reasons for the rejection of the assessee’s objections;
    • Challenged the legitimacy of the issuance of the notice.

Provision of Section 148 if The Assessee Does Not Furnish Income Tax Return

Suppose the assessee does not furnish the Income Tax return within the timeframe underlined in the notice issued under Section 148 by the presiding Assessing Officer. In that case, the assessee shall be made to pay interest under Section 243(3) for late filing of Income Tax return or for not filing of Income Tax return, if the income has already been determined under Section 143(1) or if the income if the assessment has already been done under Section 144 or Section 147.

On the other hand, if the assessee does not furnish any return concerning any assessment year and no assessment of such year has been done under Section 144, then the interest of late filing of return in response to the notice under Section 148 will be levied on the assessee under Section 234(1) instead of Section 234(3) of the Income Tax Act.

FAQ’s on Section 148 of Income Tax Act

Question 1.
What are the different notices that are issued under the Income Tax Act?

Answer:
The various notices or assessments issued under the Income Tax Act are given below – 

  • Section 131(1A): Income is concealed or is expected to be concealed.
  • Section 139(9): Defective Income Tax Return.
  • Section 142(1): Preliminary Enquiry before an assessment.
  • Section 143(1): Letter of Intimation.
  • Section 143(2): Follow up on the notice under section 142(1).
  • Section 143(3): Scrutiny Assessment.
  • Section 144: Best judgment assessment.
  • Section 148 and Section 147: Income escaped assessment.
  • Section 156: Notice of Demand.
  • Section 245: Set off of refunds against tax remaining payable.

Question 2.
Can we revise the return filed under section 148 of the Income Tax Act?

Answer:
Return filed in response to notice under section 148 can also be revised. It is provided under section 148 that all the provisions of section 139 shall apply for such a return. It is to be noted that notice under section 148 is issued to assess the escaped income.

Question 3.
How many years can income tax go back?

Answer:
As per Section 149 of the Income-tax Act, 1961, the income tax department has the power to issue a notice to taxpayers for seven years from the end of the financial year. So, this would mean that if you have filed ITR for FY 2019-20, you must keep the related documents with you until the end of FY 2023-24.

Question 4.
What is income escaping assessment in income tax?

Answer:
Income Escaping Assessment under section 147 is the assessment done by the Assessing Officer if there is a reason for him to believe that income chargeable to tax has escaped assessment for any assessment year. It gives power to him to reassess or recompute income, turnover, etc.

Question 5.
What is the assessee required to do after receiving notice under Section 148?

Answer:
The assessee is required to produce the details of his or her income tax returns within a 30 days duration that the Assessing Officer has specified in the notice issued. In case the assessee needs to

provide income tax returns of any other assessable person, then he or she has to provide them in the format specifically as mentioned under the provisions of the Income Tax Act with any additional information deemed to be provided with the detailed information. Before issuing the notice, the Assessing Officer will not give the cause of the notice issued to the assessee in question.

 

How To Download Form 26AS And Password for Opening Form 26AS

How To Download Form 26AS And Password for Opening Form 26AS

Leave a Comment / Finance / By / March 20, 2024

What is Form 26AS?: Form 26AS is a combined annual statement that the Income Tax Department maintains. It contains the tax credit information of each Taxpayer against their PAN.

If one has paid any tax on their income or tax has been deducted from the income, then the Income Tax Department has these details in their Form 26AS database.

For NRIs, if any income in India such as Interest on the NRO account or any salary income and TDS has been deducted on it, then to claim the tax credit and to view the Form 26AS, one has to register themselves under the Income Tax Department and should have a PAN.

Details Included in Form 26AS

  • Information about the Tax Deducted at Source by deductors such as employers; [TDS]
  • Information about Tax Collected at Source by the collectors; [TCS]
  • Advance tax/self-assessment tax paid by the individual;
  • Details about the tax refund (if any) made by the department during the last financial year;
  • Details on Annual Information Returns (AIR), mostly of high-value transactions related to shares, mutual funds, etc.
  • Interest received from the bank or any others without deducting TDS in case of Form 15G/H.

How to Download Form 26AS?

One can download Form 26AS from the website of TRACES or by Net Banking Facility of authorized banks.

Go to the website – https://incometaxindiaefiling.gov.in and log in with your income tax department login & password. If one doesn’t have an account, they will need to Register first (see the button on top of LOGIN)—

Step 1: E-filing website.

Step 2:

  1. Enter the PAN number, password and enter the captcha code in the format – DD/MM/YYYY. Now select login.
  2. Enter PAN e filing website

Step 3:

  1. The following screen will appear. Go to ‘My Account’. Click on ‘View Form 26AS’ from the drop-down
  2. View Form 26AS

Step 4:

  1. Click on ‘Confirm’, and you will be redirected to the TRACES website. (This is a necessary step and is safe since it is a government website).
  2. TRACES Website

Step 5:

  1. You have now been redirected to the TRACES (TDS-CPC) website. b. Select the box on the screen and press ‘Proceed’.
  2. TRACES TDS-CPC Website

Step 6:

  1. Click on the link present at the bottom of the page. Now ‘Click View Tax Credit (Form 26AS) for viewing your Form 26AS’.
  2. View Tax Credit Traces

Step 7:

  1. Pick the Assessment Year and also the format in which you are willing to view Form 26AS. If you want to see the form online, leave the format as HTML. One can also choose to download the form as a PDF. After you have made a choice, enter the ‘Verification Code’ and click on ‘View/Download’.
  2. TRACES Verification code

Step 8: On downloading, you can view the form 26AS by opening it.

How to View Form 26AS?

Form 26AS can be viewed on the TRACES portal. This income tax Form 26AS is linked to the PAN. You can view Form 26AS from FY 2008-09 onwards – through net banking of your bank account.

This facility is available for a PAN holder with a net banking account with any of the authorized banks. You can view the Tax Credit Statement (Form 26AS) only when your PAN number is linked to that particular account. This facility is available for free. Banks registered with NSDL which provide a view of Tax Credit Statement (Form 26AS) are listed below:

  • State Bank of India
  • Axis Bank Limited
  • Bank of Maharashtra
  • Bank of India
  • Bank of Baroda
  • Citibank N.A.
  • City Union Bank Limited
  • Corporation Bank
  • IDBI Bank Limited
  • ICICI Bank Limited
  • Kotak Mahindra Bank Limited
  • Indian Overseas Bank
  • Indian Bank
  • Oriental Bank of Commerce
  • Karnataka Bank
  • State Bank of Mysore
  • State Bank of Travancore
  • The Federal Bank Limited
  • State Bank of Patiala
  • Union Bank of India
  • The Saraswat Co-operative Bank Limited
  • UCO Bank

Password for Opening the Form 26 AS Downloaded via Text or PDF

Earlier, the downloaded file (in any selected format) used to be password protected. The password for opening Form 26AS was/is the taxpayer’s Date of Birth in the format – DDMMYYYY.

For example, if the date of birth is 20th February 1997, then the password to open the file was/is 20021997. However, one need not have to enter any password to open the downloaded PFD file from now onwards.

NSDL, CAS, CDSL CAS Statement of Holdings in all Demat Accounts, Mutual Funds

NSDL, CAS, CDSL CAS | Statement of Holdings in all Demat Accounts, Mutual Funds

Leave a Comment / Saving Schemes / By / March 5, 2024

NSDL, CAS, CDSL CAS: CAS or Consolidated Account Statement is a financial account that contains all the details of the investments and transactions one does in any mutual funds.

It has all the details of the mutual fund transactions mentioning whether it is a sale or purchase. It further includes other information like the NAV details.

This statement comes in handy in predicting your funds’ long-term performance and determines the time at which they result in long-term investment.

Furthermore, since the CAS has records of all the transactions, it helps in calculating your taxes. CAS also assists keep track of all your redemptions and dividends that come with the mutual fund investments.

Why Does One Need CAS?

According to the Interim Budget announcement in 2014 to create one record for all financial assets of every individual, SEBI had extensive consultations with the Depositories, AMFI and RTAs of Mutual Funds (MF-RTAs) to implement the concept of CAS.

CAS offers you exceptional assistance in processing the record of all the investment holdings.

Furthermore, one can easily control the investments they hold, their value and portfolio composition.

The CAS is directly linked to the depository directory. As a result, it indicates the actual status of your investments. It will help you in developing a strategy to manage your assets better.

As the first step in this direction, it has been decided to enable a single consolidated view of an investor’s investments in securities held in Demat form with the Depositories and Statement of Account (SOA) form with Mutual Funds (MF).

When Does One Receive CAS?

As per SEBI guidelines specified in circular number CIR/MRD/DP/31/2014 issued on November 12, 2014, if there is any transaction in any of the Demat accounts of an investor or any of his/her mutual fund folios, then CAS will be sent to the investor next month regarding transactions executed in the previous month with the holdings.

Hence, if the investor has done transaction(s) every month, then he/she will get CAS every month.

CAS will be sent withholdings on March and September end in the next month viz., April and October, respectively.

If no transactions occur in any of the mutual fund folios and Demat accounts, then CAS withholding details will be sent to the investor on a half-yearly basis.

However, in Demat accounts with nil balance and no transactions in securities and mutual fund folios, the investor is entitled to receive one physical statement annually.

Further, customers will have an option to send such a physical statement only for one year.

What Happens When An Investor Has More Than One Demat Account Across The Depositories? Which Is Considered As The Default?

Under such circumstances where an investor possesses multiple Demat accounts across the two depositories (i.e., with NSDL and CDSL), the depository owning the Demat account, which has been opened earlier, shall be counted as the default depository.

Further, that depository will consolidate details regarding Demat accounts across depositories and MF investments and dispatch the CAS to the investor.

By reminding the Depository Participant (DP) of the default depository from which he is collecting the CAS, the investor may seek a change of default depository to receive the CAS.

What is a Depository?

The word depository typically signifies a place of accommodation or storage where something is cached for security purposes.

Therefore, a depository is basically an organization that accepts cash deposits from its clients. To put it in simple words, it is an economic intermediary whose main function is to provide Demate account services.

A depository provides opportunities for an investor to purchase or sell their securities.

Securities in depository accounts can be considered synonymous with cash in a bank.

A depository serves as a connecting bridge between the listed companies that issue shares and the various shareholders and investors.

The primary function of the depository is to keep the shareholder’s shares in the dematerialized form.

There are two principal depositories in India:

  • NSDL: National Securities Depository Limited
  • CDSL: Central Depository Services Limited

Explain the Meanings of NSDL and CDSL?

NSDL stands for ‘National Securities Depository’, and CDSL stands for ‘Central Depository Securities Limited’. These are national depositories managed by SEBI, i.e., the Securities and Exchange Board of India.

In India, we have primarily two exchanges

  1. National Stock Exchange (NSE)
  2. Bombay Stock Exchange (BSE)

NSDL is the depository for NSE and was established in 1996.

CDSL is BSE’s depository and was established in 1999.

However, for various transactions, both of them can use either of the depositories.

NSDL is promoted by IDBI Bank Ltd., Unit trust of India and NSE. The significant shareholders of this are HDFC bank, and Standard charted, Oriental Bank Of Commerce, Axis bank limited, Citi bank, Deutsche Bank, State Bank of India, HSBC, Canara bank and Dena bank to name a few.

CDSL

CDSL is supported only by BSE updated till December 2019. The significant shareholders of CDSL are HDFC Bank, Standard Charted Bank and Canara Bank.

A broker is responsible for opening a Demat account under a depository on the client’s part, and the securities are stored in that account in a dematerialized form.

Demat accounts maintained with CDSL have 16 numeric digits in them, and NSDL Demat accounts have two alphanumeric digits- ‘IN’, which signify INDIA and 14 numeric digits.

The active investor accounts in NSDL are 1.44 crores, in contrary to 1.06 crores of CDSL.

The online portal of NSDL is www.nsdl.co.in.

The website for CDSL is www.cdslindia.com.

The distinction between CDSL and NSDL include different Demat account number, their promoters, establishment years. However, their functions are the same, which include

  • Keeping of Demat accounts
  • Rematerialisation and dematerialization
  • Settlement of Trade
  • Transfers of shares
  • Market and off-market transfers
  • Distribution of non-cash corporate actions
  • Nomination/transmission
  • Account opening
  • Account statement
  • Editing account details

One must emphasize the duty of NSDL because the transformation from physical certificates to electronic certificates was, by and large, without any significant glitches.

What is the Demat Account Number, DP ID and Customer ID?

Every Demat account is assigned a unique 16-digit number called the Demat Account Number.

The Depository Participant or the DP is accountable for this purpose.

One must note that the Demat Account Number is also known as Beneficiary Owner ID or BO ID when it comes to CDSL.

CDSL Demat accounts have 16 numeric digits, while NSDL Demat accounts have two alphanumeric digits (‘IN’) and 14 numeric digits.

An example of a Demat Account Number of NSDL is IN12345678901234. Similarly, an example of a Demat Account Number of CDSL is 1234567890098765.

Although the Demat account number and the DP ID (Depository Participant Identification) are considered synonymous, they have a stark difference. The DP ID has nothing to do with the Demat Account.

The depositories CDSL and NSDL primarily assign the DP ID to a Depository Participant.

A Depository Participant is an intermediary between the various investors and a depository. They are the agents of NSDL and CDSL.

They may include vaults, financial institutions, any other establishment that guarantees security.

A Demat account number is a sequence of the DP ID and the customer ID of the Demat account holder. Usually, the first 8-digits of the Demat account number is the DP ID, where the last 8-digits of your Demat account number is the Customer ID of the account holder.

Considering CDSL, suppose your Demat account number is 1234567890654321; in such a case, 12345678 is the DP ID, and 90654321 is the customer ID.

Likewise, for NSDL, if a Demat account number is IN12345698765432, in that case, IN123456 is the DP ID, and 98765432 is the customer ID of the Demat account holder.

The Customer ID is the identification number that is unique for each individual and is assigned to you at the time of account opening.

Know more about NSDL and CDSL.

For any further queries regarding NSDL CAS, one can visit https://nsdlcas.nsdl.com.

You can also reach out to them at https://nsdl.co.in/contactus.php.

To register your feedback about CAS at NSDL, visit-CASfeedback@nsdl.co.in.

For any query about CDSL CAS, one can contact them through the Toll-free number 1800-22-5533. The official hours for contact are 10:00 A.M. to 6:00 P.M from Monday to Friday.

The official email address is complaints@cdslindia.com.

All about the Karvy Stock Broking pledging client’s shares

The NSE announced Karvy Stock Broking Limited (KSBL) on November 27, 2019, as a defaulter for non-compliance with various regulatory provisions of the bourse and suspended its membership.

The Securities and Exchange Board of India (Sebi) banned KSBL from carrying out any new transactions for supposedly stealing money and securities.

They misplaced the enormous amounts of the various investors to back its real estate arm, namely Karvy Realty.

SEBI had initially miscalculated the amount transferred by Karvy to be Rs 1,096 crore to its real estate business. However, the actual amount was approximate Rs.2,300 crore as per the reports by National Stock Exchange.

Since KSBL is expelled from the NSE membership and additionally, Sebi also banned the firm from taking new business, the exiting customers can’t carry out any further transactions through KSBL.

Stock exchange executives have notified that all the prior clients of KSBL have got their securities back and transferred to another brokerage firm.

They could also have possibly received the equivalent amount of their securities into their respective bank accounts.

Depositories and stock exchanges against Karvy will take disciplinary action.

How to Register for NSDL CAS?

To register for NSDL CAS, the following steps need to be carried out.

  • At first, the concerned person needs to visit the online portal of https://nsdlcas.nsdl. com from a suitable device.
  • After successful login, they need to select the NSDL E-CAS option to sign up for this facility.
  • There, they will need to enter their nine-digit CAS ID.
  • In case they are not aware of the CAS Id, they can avail the service ‘know your CAS ID’, which is available in the E-Cas section.
  • Then the candidate will have to enter a valid ten-digit PAN Number.
  • After entering the correct Captcha, they will have to Click Submit Button.
  • After selecting a suitable DP NAME & ID (Eg: XYZ Pvt. Ltd.(IN123456), the person will need to enter their Client ID (Eg: 09876543)
  • After entering the correct Captcha, they will have to Click Submit Button, and there will be successful registration.

How to Register for CDSL CAS?

  • At first, the concerned person will have to visit: https://www.cdslindia.com/cas/logincas.aspx.
  • After login, they will need to enter their Put in your PAN Card detail and BO ID.
  • Then they will have to enter their DOB and Click on the Submit option.
  • The portal will send a One Time Password (OTP) to their registered mobile number. After entering the OTP, they will click on the Submit button.
  • After successful submission, the candidate can download the e-CAS statement.

What does NSDL CAS Look Like?

The NSDL CAS is majorly a 7-page document with a high-quality display.

The first page is a welcome letter that contains the fundamental and essential details of the CAS statement.

The upper part of the page has access to five tabs, namely-

  • Summary
  • Holdings
  • Transactions
  • Your Account
  • About NSDL

Upon clicking on these options, the portal will redirect one to the appropriate pages.

The third page comprises the holdings’ essential details like how much amount has been invested in the stocks.

Besides, information about the mutual funds along with their NAV is also mentioned on page number 3.

Page 4 has the details of all the activities for the period for which the CAS is being created. This includes all the purchased and sold shares.

It summarizes all purchases or redemptions made in a specified period.

Page 5 is equipped with the customer care data with an exit option.

Page 6 and 7 have essential features about the NSDL and the CAS. They are informative pages.
What does CDSL CAS look like?

The CDSL CAS is not as illustrated as the NSDL CAS.

Although it not much beautiful, it serves its purpose.

All details about the Demat and Mutual Fund holdings are mentioned in an orderly manner. The presentation is a bit dull.

The details do not include the Folio number, unlike the NSDL CAS.
What is ISIN Code?

ISIN is the acronym for International Securities Identification Number.

Indian is part of the International Standards Organization or the ISO.

It sets the standards for the security possessions of the countries which fall under it.

ISIN is a 12-digit number identification number used for distinguishing the security of any country. The 12 digits are a series of alphanumeric numbers.

The whole number can be divided into three subsections:

  • prefix numbers
  • basic digits
  • suffix number

The prefix is a set of two letters that signify the country possessing security. The code for India is IN. Hence all the securities of the Demat start with an IN.

Furthermore, the basic digit comprises a string of nine alphanumeric numbers, which convey more details about the company and the type of security.

Lastly, the suffix number is a single digit used for authenticating the ISIN number.

In India, the ISIN number is assigned to the various securities by the Securities and Exchange Board of India, SEBI. The G-Sec RBI is responsible for authorizing the ISIN for Government securities.

ISIN number plays a very crucial role while transferring shares from one Demat to some other Demat.

How to Correct EPF Details like Name, Father Name, Date of Joining?

How to Correct EPF Details like Name, Father Name, Date of Joining?

Leave a Comment / EPF / By / March 5, 2024

How to Correct EPF Details like Name, Father Name, Date of Joining: Most of the time, the date of birth and name details in the EPF account don’t resemble the details in the Aadhaar. If left unchanged, there can be undesirable annoyances during EPF amount withdrawal. It is crucial to update your EPF account with the correct details at the quickest to avoid any troubles later.

EPF benefaction into an employee’s EPF account is made each month in similar proportion, both by the employer as well as the employee. This is more of a kind of enforced savings scheme issued by the Government of India, which helps employees garner a retirement corpus.

Details of UAN

When we enter an organisation that offers EPF, then we have to fill Form 11. Form 11 is a vital declaration form that facilitates the provident fund department to sustain records of employees, helping them during inquiries and cross-checking of facts. It also contributes precious information about an employee to an employer. Our article EPF Form 11 on Joining a New Job explains it in detail.

Personal Information that is required to enters by the individual in Form 11 is as follows:

  1. Date of Birth of the employee
  2. Father’s/Husband’s name
  3. Gender
  4. Mobile number
  5. Marital status
  6. Date of joining
  7. Email ID
  8. Educational credentials

EPF UAN Details Correction

The features that you record can be checked in your UAN passbook or EPF passbook from the online portal of EPF services using the document number of the individual. This will help the person to get overall details such as date of Birth, Name of employee name, Date of Joining and EPFO office( or the SRO, which stands for Sub-regional office). This essential information will help the person to check their account details. The individual can check their name, their Father/Husband’s Name, Date of Birth, Date of Joining.

Most of the time, the date of birth and name details in the EPF account are incorrect, i.e. they don’t match with the details specified in the Aadhaar. If left unaltered, such flaws can cause unnecessary troubles during EPF amount withdrawal. Thus, it is crucial to update your EPF account with the correct details at the earliest to bypass any concerns later.

EPF name correction is a simple process that can be done online as well as offline with the help of EPF name correction form.

EPF Name Correction Online

To replace or renew your credentials online on the EPFO unified portal, one will require the subsequent details:

  • An active UAN-Universal Account Number
  • Correct Number of Adhaar.
  • Access to EPFO Unified Portal
  • An online request from your employer to the EPFO

Before embarking on EPF name correction, ensure that the information on their Aadhaar card is accurate. This is because updated details of the individual will get verified against their Aadhaar, and if the credentials don’t match, then the update won’t happen. So, make the corrections in the Aadhaar first and then update it with your EPFO account before altering your name and other credentials.

The online process for how to change the name in PF account online, which employees should follow, is described below:

  • Step 1: Go to the EPFO Unified Portal and log in with the UAN and the password.
  • Step 2: On the new page, go to the “Manage” option on the menu bar and select “Modify Basic Details” from the dropdown.
  • Step 3: When the new page will appear, then, as mentioned in the Aadhaar, enter all the right details. The system with the Aadhaar database would verify your entered details. After registering all the required details, click on “Update Details”.
  • Step 4: Once you click on “Update Details”, the request will get submitted to your employer for approval. Before the employer submits the request to the EPFO, the employee has the option to withdraw their request by hitting the “Delete Request” button.

EPF Name Correction Form

Name correction can be done by submitting the EPF name change form to the Regional PF Commissioner as well as offline. This method is more like a collective declaration letter between the employee and the employer, addressing the Regional commissioner of PF.

So, one must hold to the following EPF name change letter format in your EPF name correction form:

The letter ought to be delivered to the “Regional PF commissioner”. The subject of the letter ought to mention: “Joint declaration by the member and also the employer”.

The body of the letter should mention the wrong details in the EPF account that your employer has entered, and to make corrections to the existing details, you are writing this request letter.

Next, generate a table of three columns and implement particular details which you require to change. The table must specify the incorrect entry plus the corresponding right entry.

The EPF correction form is applicable for correcting the following types of errors:

  • Incorrect EPF or EPS account numbers
  • Incorrect date of birth
  • Incorrect name
  • Incorrect name of father or husband
  • Incorrect date of joining the company
  • Incorrect date of leaving the company

All these details will be designated in the form. You must only fill the required ones that need emendation. After filling the correction form, specify the list of documents you are presenting as proof to support your correction request.

Attestation Requirements

Please attach a copy of proof of your name and self-attest it with your sign.

Then, the name of the authorised signatory for the company must be mentioned.

The authorised signatory needs to sign the form followed by the company stamp.

How to Update Father’s Name in EPF?

In order to update or execute corrections of a person’s father’s name or date of birth in the EPF account or wondering about how to change father name in UAN, then with these simple steps, one can do it:

The process for updating the father’s name, date of birth or husband’s name is the same as that of the correction process of EPF name. An individual must fill the form of the joint declaration and enter the appropriate details required to be corrected.

After filling the form, it must be signed and stamped by your company’s authorised signatory. Then, the form is required to be submitted to the commissioner of Regional PF. You should also add the form with event documents as proof to verify the required correction.

Documents accepted as proof are:

  • Aadhaar card
  • PAN card
  • Voter ID
  • Ration Card
  • Copy of bank passbook
  • Driving licence
  • Passport
  • ESIC ID card
  • Date of birth certificate
  • Education certificate
  • Copy of electricity bill, water bill, telephone bill

Issues Caused by Errors in EPF Details

Usually, faulty EPF details form an issue during EPF withdrawal. When one files their claim for the withdrawal of their EPF money, their claim will be checked with the details presented by the individual during the registration of EPF. If the details are incompatible, their claim will not be recognised. This will result in a lot of annoyances, as the person would have first to change their credentials in the EPFO unified portal and then apply for their EPF withdrawal again.

So, let us check out the common mistakes or errors that can deny your EPF withdrawal application:

  • Any misspelled or incorrect data entry during the original registration can lead to the rejection of the EPF amount withdrawal application.
  • The member should present the nominee details. Nonexistence of nominee details can create troubles while appealing for EPF claims or lead to dismissal of claims application.
  • The date of joining should be specified correctly in your EPF account. This data is essential as it helps assess your EPS pension and the total months and years of EPFO contribution.

These factors are vital in determining if the withdrawal amount is free of taxes or not.

Thus, an incorrect date can produce hassles while withdrawing the EPF amount.

Correction in the name after marriage happens mostly with women, who adopt the title or surname of their husband’s family after marriage. Sometimes people intend to change their titles and surname, even without marriage. If a person has done so, then the individual must let the new name reflect in their EPF account. It will avoid any disputes later during EPF withdrawal.

An individual can change their name in their EPF account by filling the authorised form and submitting it to EPFO. If an individual has already changed their name in their testimony documents or even their bank records, then they must change their name with EPFO at the most immediate.

With the help of the EPF name correction form, one must also provide a copy of their marriage certificate as evidence. However, if someone has not made any changes to their linked bank account, then they don’t have to modify the name in the EPF account. Their bank details and their EPF account details should match to promote an easy withdrawal.

This is the process to change the name in the PF account, both online as well as offline, easily. You can follow either the online process or the offline process and submit the form of EPF name correction with the Regional PF commissioner.

Computation of Long Term Capital GainLoss

Computation of Long Term Capital Gain/Loss

Leave a Comment / Finance / By / March 5, 2024

Computation of Long Term Capital Gain/Loss: Profits extrapolated from the selling of capital assets are referred to as capital gains. Long-term capital gains and short-term capital gains are the two primary forms of capital profits. Long-term capital assets are those maintained for 36 months at least.

Long-term Capital Gains Tax Computation Formula

The following equation should be implemented to evaluate the long capital gains tax payable:

Long-term capital gain = total consideration received or accrued – (indexed cost of acquisition + indexed cost of improvement + cost of transfer), where:

Indexed cost of acquisition = price of acquisition * cost inflation index of the year of transfer or cost inflation index of the year of acquisition.

Indexed cost of improvement = price of improvement * cost inflation index of the year of transfer or cost inflation index of the improvement year.

When discussing long-term capital gains, the Cost Inflation Index (CII) comes into the equation. This index is clearly predetermined and announced by the government each and every year.

Note: Securities Transaction Tax (STT) is not tax-deductible as an expenditure for assessing capital gains, whether short or long term.

Section 115BAA – Lower Tax Rate on Domestic Companies

Section 115BAA – Lower Tax Rate on Domestic Companies

Leave a Comment / Income Tax / By / March 5, 2024

Section 115BAA – Lower Tax Rate on Domestic Companies: The new section – that has been inserted in the Section 115BAA of the Income Tax Act,1961 to provide the benefit of a reduced corporate tax rate for the domestic companies. Domestic companies have the option to pay the surcharge of 10% and cess of 4%tax and pay the tax at a rate of 22% plus as stated under Section 115BAA. The Effective Tax rate is 25.17% from the Financial Year 2019-20 (AY 2020-21) onwards if domestic companies adhere to certain conditions specified. If The company opts for Section 115BAA, then they need not pay tax under MAT.

Section 115BAA – Lower Tax Rate on Domestic Companies Introduction

The introduction of Section 115BAA in the Taxation Law (Amendment) Ordinance 2019 on 20th September 2019, relevant from the FY- 2019-20.

Lower Income Tax Rate

This section grants an alternative only to domestic companies to pay income tax at the rate of 22% (plus applicable cess and surcharge) starting from the financial year 2019-20. The domestic company can choose a lower-income tax rate during any financial year (2019-20 or after that). However, the selected choice, once exercised, shall apply to all the subsequent financial years but can not be subsequently withdrawn.

Note: – Under Section 115BAA, the flat surcharge of 10% (irrespective of turnover) along with a 4% cess is relevant to the companies choosing a lower tax rate.

Section 115BAA – Lower Tax Rate on Domestic Companies Eligibility Criteria

Any domestic corporations and companies have a choice to pay a lower income tax rate of 22% (plus applicable cess and surcharge), provided the following requirements are complied with: –

  • The gross income of the company should be calculated without giving any exemptions/deductions/benefits.
  • The Special Economic Zones (SEZ) relating to units established in Section 10AA of the Act.
  • For additional depreciation allowance under Section 32(1)(iia) of the Act.
  • The deduction for investment in new plant and machinery in the notified backward area in the states of Andhra Pradesh, West Bengal, Bihar, and Telangana referred under Section 32AD of the Act.
  • For tea/ coffee/ rubber development allowance that comes under Section 33AB of the Act.
  • For site restoration fund by companies involved in the extraction of natural gas or petroleum production or both in India that comes under Section 33ABA of the Act.
  • For certain scientific research expenditure that comes under Section 35(1) (ii), (iia),(iii) and 35(2AA), (2AB)of the Act.
  • Deduction in respect of total capital expenditure on specified business that comes Section 35AD of the Act.
  • Expenditure on an agricultural extension project that comes under Section 35CCC of the Act.
  • Expenditure on the skill development project that comes under Section 35CCD of the Act.
  • Other than section 80JJAA of the Act, Part C of Chapter VIA(deduction in respect of employment of new employees).
  • Without set-off, any loss sustained forward from an earlier year to the extent that such loss is attributable to any of the deductions specified above in point (a). However, no further deduction for such loss shall be granted for any succeeding year, and it shall be deemed to have been already mentioned.
  • Under section 32(1)(iia), Other than clause additional depreciation of the Act, by claiming the depreciation, if any, determined in such manner as may be prescribed under section 32. In other words, under Section 32, domestic companies can claim depreciation, but benefits for additional depreciation shall not be available.
  • The choice should be operated by the domestic companies in a directed manner on or before the due date according to Section 139(1) for furnishing the return of income for any financial year as specified, i.e. usually 30th September of the assessment year.
  • Under Section 115BAA, the Provision of Section 115JB relating to MAT shall not be suitable for domestic companies that exercise the option. It is also elucidated that the tax credit of MAT paid by the domestic company shall not be an available consequence to exercising such an opportunity.

Note: – Under Section 115BAA, there is no time limit for the domestic company to opt for lower-income tax. So, according to Section 115BAA, the companies can opt for the benefit of once they set- all the brought forward losses and under the regular tax regime, the MAT credited.

Effective and Comparative Tax Rate for Financial Year 2019-20

  1. If the gross receipts or turnover of the company during the financial year 2017-18 Rs. 400 crore during financial year 2017-18 and during the financial year 2019-20, have income than Rs. 1 crore but upto Rs. 10 crore
    1. Tax Rate- Opt Section 115BAA- 22%, Doesn’t Opt Section- 115BAA-25%
    2. Surcharge- Opt Section 115BAA- 10%, Doesn’t Opt Section- 115BAA-7%
    3. Education Cess- Opt Section 115BAA- 4%, Doesn’t Opt Section- 115BAA-4%
    4. Effective Tax Rate- Opt Section 115BAA- 25.17%, Doesn’t Opt Section- 115BAA-27.82%
  2. If the gross receipts or turnover of the company during the financial year 2017-18 Rs. 400 crore during financial year 2017-18 and during the financial year 2019-20, have income more than Rs. 10 crore
    1. Tax Rate- Opt Section 115BAA- 22%, Doesn’t Opt Section- 115BAA-25%
    2. Surcharge- Opt Section 115BAA- 10%, Doesn’t Opt Section- 115BAA-12%
    3. Education Cess- Opt Section 115BAA- 4%, Doesn’t Opt Section- 115BAA-4%
    4. Effective Tax Rate – Opt Section 115BAA-25.17%, Doesn’t Opt Section- 115BAA-29.12%
  3. If the gross receipts or turnover of the company during the financial year 2017-18 Rs. 400 crore and during the financial year 2019-20, have income more than Rs. 1 crore but up to Rs. 10 crores.
    1. Tax Rate- Opt Section 115BAA- 22%, Doesn’t Opt Section- 115BAA- 30%
    2. Surcharge- Opt Section 115BAA- 10%, Doesn’t Opt Section- 115BAA- 7%
    3. Education Cess- Opt Section 115BAA- 4%, Doesn’t Opt Section- 115BAA-4%
    4. Effective Tax Rate- Opt Section 115BAA- 25.17%, Doesn’t Opt Section- 115BAA-33.38%
  4. If the gross receipts or turnover of the company during the financial year 2017-18 surpasses Rs. 400 crore and during financial year 2019-20, have income more than Rs. 10 crore
    1. Tax Rate- Opt Section 115BAA- 22%, Doesn’t Opt Section- 115BAA-30%
    2. Surcharge- Opt Section 115BAA- 10%, Doesn’t Opt Section- 115BAA-12%
    3. Education Cess- Opt Section 115BAA- 4%, Doesn’t Opt Section- 115BAA-4%
    4. Effective Tax Rate- Opt Section 115BAA-25.17%, Doesn’t Opt Section- 115BAA- 34%’
  5. If the gross receipts or turnover of the company during the financial year 2017-18 Rs. 400 crore and during the financial year 2019-20, have income more than Rs. 1 crore.
    1. Tax Rate- Opt Section 115BAA- 22%, Doesn’t Opt Section- 115BAA-30%
    2. Surcharge- Opt Section 115BAA- 10%, Doesn’t Opt Section- 115BAA-NA
    3. Education Cess- Opt Section 115BAA- 4%, Doesn’t Opt Section- 115BAA-4%
    4. Effective Tax Rate- Opt Section 115BAA-25.17%, Doesn’t Opt Section- 115BAA-31.20%
  6. If the gross receipts or turnover of the company during the financial year 2017-18 Rs. 400 crore and during the financial year 2019-20, have income more than Rs. 1 crore
    1. Tax Rate-Section 115BAA -22%, Doesn’t- Opt Section 115BAA-25%
    2. Surcharge- Section 115BAA -10%, Doesn’t- Opt Section 115BAA-NA
    3. Education Cess- Section 115BAA -4%, Doesn’t- Opt Section 115BAA-4%
    4. Effective Tax Rate – Section 115BAA -25.17%, Doesn’t- Opt Section 115BAA-26%

Note: – MAT is also applicable at a rate of 15% on the companies which do not opt for Section 115BAA.

Conclusion

A welcome move to boost the economy is introduced by the Government to reduce the tax rate on corporates. Whereas, on the other side, take our the various exemption\benefits available like supplementary depreciation etc. Every corporate has to acknowledge various factors before opting for Section 115BAA like: –

  • Available MAT credit
  • Current taxable income and projected income
  • Current turnover and projected turnover
  • Balance of brought forward losses
  • The pattern of investment in machinery and plant for additional depreciation
  • Cash flows
  • MAT applicability
  • Various exemptions not available under Section 115BAA

The end result of a corporation or company with a simple example. Assuming a domestic company during the financial year 2017-18, having the gross turnover less than Rs. 400 crore and during the financial year 2019-20 having a total income of Rs 20 lakh. Then their tax liability shall be as follow: –

  • Total Income- Opt Section 115BAA- 20,00,000, Doesn’t Opt Section- 115BAA-20,00,000
  • Tax Rate- Opt Section 115BAA- 22%, Doesn’t Opt Section- 115BAA-25%
  • Tax Amount- Opt Section 115BAA- 4,40,000, Doesn’t Opt Section- 115BAA-5,00,000
  • Add: Surcharge (10%)- Opt Section 115BAA- 44,000, Doesn’t Opt Section- 115BAA-NA
  • Tax After Surcharge- Opt Section 115BAA- 4,84,000, Doesn’t Opt Section- 115BAA-5,00,000
  • Add: 4% Cess 19,360 20,000
  • Total Tax Liability- Opt Section 115BAA- 5,03,360, Doesn’t Opt Section- 115BAA-5,20,000
  • Saving/Loss- Opt Section 115BAA- 16,640, Doesn’t Opt Section- 115BAA- N\A

In the above example, during the financial year 2018-19, if we assume that the company invested in machinery and plant of Rs. 10 lakh, then the tax calculation will be as follows: –

  • Total Income- Opt Section 115BAA-20,00,000, Doesn’t Opt Section- 115BAA- 20,00,000
  •  Under section 32(1)(iia) Less: Additional depreciation @ 20%- Opt Section 115BAA- –, Doesn’t Opt Section- 115BAA-2,00,000
  • Total Income- Opt Section 115BAA- 20,00,000, Doesn’t Opt Section- 115BAA-18,00,000
  • Tax Rate- Opt Section 115BAA-22%, Doesn’t Opt Section- 115BAA-25%
  • Tax Amount- Opt Section 115BAA- 4,40,000, Doesn’t Opt Section- 115BAA-4,50,000
  • Add: Surcharge (10%)- Opt Section 115BAA-44,000, Doesn’t Opt Section- 115BAA-N\A
  • Tax After Surcharge- Opt Section 115BAA- 4,84,000, Doesn’t Opt Section- 115BAA-4,50,000
  • Add: 4% Cess 19,360 18,000
  • Total Tax Liability- Opt Section 115BAA-5,03,360, Doesn’t Opt Section- 115BAA- 4,68,000
  • Saving/Loss- Opt Section 115BAA- (35,360), Doesn’t Opt Section- 115BAA- N\A

In the above example, the end result will be different for each and every corporate, as you can see. It’s a one-way road, one can opt for Section 115BAA any time, but there is no way to opt out.

How to Download & Install TRACES Web Socket Emsigner

How to Download & Install TRACES Web Socket Emsigner

Leave a Comment / TDS / By / March 5, 2024

How to Download & Install TRACES Web Socket Emsigner: TRACES is the online platform offered for the administration and implementation of TDS and TCS. For Registering DSC on TRACES or for the KYC validation using the DSC, it is compulsory to download and install the WebSocket emSigner. Thus, the deductor should download the WebSigner Utility from their account on TRACES.

What is TRACES Website?

TDS Reconciliation Analysis and Correction Enabling System, abbreviated for TRACES, is an online platform offered by the Indian Income Tax Department at the website – www.tdscpc.gov.in. The TDS return processing takes place online with a dashboard, and the status of filings and tremendous demand is shown therein. TRACES Emsigner – Download & Install

How to Download and Install Emsigner

The steps to download and install designer for digital signing on TRACES portal.

Step-1: Login to TRACES WEBSITE

Step-2: Fill in the User ID, the Password and the TAN number of the deductor.

Step-3: Go to the download tab, click on ‘Requested Download’. After that, the following screen appears. Select ‘Click here for downloading the utility.

Webdesigner Of TRACES Setup V2.0

Step-4: Click on the ‘Traces WebSigner Setup V2.0’ for downloading the Emsigner setup.

Step-5: Click on the ‘Run’ option. After the completion of the installation process, please click the ‘Finish’ option.

Installation Guide for TRACES EmSigner

Step-6: Complete the process of installation. Make sure that the following process is completed.

  • Download the WebSigner Setup on the local system
  • Please make sure to install the JRE 7 or above (version 32-bit only) on the machine
  • Make sure to Unzip the file that you have downloaded.
  • Click on the setup file and select the “Install” option in order to start the process of installation.
  • Finish the process step by step by clicking the ‘Next button
  • Click on Finish
  • Go to the start menu and click on emSigner to start the service

Error in Establishing a Connection with the TRACES Web-socket Designer

The above is going to be resolved if the TRACES EmSigner has been loaded. Before the digital signature, click on the option “Run as administrator” in the start-up panel of windows.

Step-7: After that, one can choose to register their DSC on the TRACES Portal. After Logging in to Traces and Click on the ‘Profile’ Tab and the ‘Signature’ Tab. Choose the DSC certificate and enter the DSC password.

 

TDS on Transportation Charges

TDS on Transportation Charges | Points Regarding TDS Under Section 194C

Leave a Comment / TDS / By / February 29, 2024

TDS on Transportation Charges: Confusion regarding the application of Section 194C has been observed amongst people. Section 194C focuses on TDS on the contract during payment to the transporter. This might result from various amendments through the years related to the specific points 194C(6) and 194C(7). The summarization of the details of Section 194C is discussed below.

Points Regarding TDS Under Section 194C

  • This revised sub-section is applicable with effect from April 1st, 2015.
  • The transporter for the sub-sections mentioned is the person handling plying, hiring, or leasing assets carriages.
  • The advantage of non-deduction of tax is available only for small transportation operators owning less than ten goods carriages.

Therefore, if the transporter having not more than ten goods carriages through the year, provides his PAN and the declaration, then, being a payer, they don’t have to deduct his TDS.

But suppose the transporter was owning more than ten goods carriages at any time during the year. Then, as payers, they must deduct TDS during payment of charges to goods transporter at the price of 1% or 2% depending on the case and status of the transport contractor.

Note: The TDS rate of 1% and 2% will decrease to 0.75% and 1.50%, respectively, through the period from the month of May 14th, 2020, to the month of March 31st, 2021.

  • The person accountable for paying or charging any amount to such transporters shall furnish a declaration along with their PAN to the income tax authority.

Under Section 194C, the specified persons must deduct income tax:

  • Central/State Government employee
  • Co-operative society/Statutory corporation
  • Housing/Town development authority
  • Registered society
  • Trust/Local authority
  • University
  • Foreign Government/Enterprise/Association
  • Individual/Association of persons gross receipts Rs. 1 crore during the preceding financial year.

Is TDS applicable on transportation charges?

What is TDS on Transportation (Freight)? According to Section 194C, any payment made to a transporter is subject to TDS deduction on freight charges. The payer must reduce the income tax amount before transferring the fee.

What is the TDS on transportation?

Section 194C of Income Tax Act is amended to include TDS deduction of 1 % for individuals and Hindu Undivided Families owning more than 10 goods carriage, and at the rate of 2% in case of other payees.

What is the TDS limit for transporter?

TDS on transporter

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Is transporter in TDS return?

As per Income tax act 194C, TDS is not required to be deducted on payments made to transporter If PAN number has been provided to the deductor. To incorporate nil rate transporter entries in E-TDS return by inserting a tag “T” in remarks in 26Q.

Is TDS applicable on vehicle insurance?

Most times people choose their insurance via agents, brokers, etc. In such cases, the insurance commission or any other remuneration/reward received by such agents, brokers etc., are subjected to Tax Deducted at Source (TDS) as dictated under Section 194D of the Income Tax Act.

How to get Capital Gain Statements for Mutual Funds CAMS, Karvy etc

How to Get Capital Gain Statements for Mutual Funds, CAMS, Karvy etc

Leave a Comment / Finance / By / February 21, 2024

How to get Capital Gain Statements for Mutual Funds, CAMS, Karvy etc: When an investment (for example, Stocks, Bonds, Mutual Funds, Real estate) is sold, the profit portion of the deal esteem is called Capital Gains. In such a circumstance, capital increases are taxable in the year they are acknowledged or in the financial year when you made the deal.

In this manner, to survey the tax liability and document the tax returns effectively, the citizen or the taxpayer must think about their income from the capital increases during the financial year. This data is, for the most part, contained in a Capital Gains statement for their investments. There are various approaches to get your Capital Gains statement for the financial year on the off chance that you are investing in Mutual Funds in a non-Demat structure. We will talk about the technique to get the combined capital additions to report from CAMS for this situation. Investors investing using multiple stages or potentially investing via offline modes can utilize the combined Capital Gains statement mail-back administration given by RTAs like CAMS and KARVY.

Capital Gains of Tax, ITR, Mutual Funds

Capital Gain Statement is needed for both Regular and Direct Plans. Sample Capital Gain Statement for Equity(which incorporates grandfathering) and Non-Equity/Debt Mutual Funds(which contains Long term capital Gain with Indexation) is shown underneath. Likewise is shown a picture showing Capital Gain in Debt Mutual Funds in ITR.

Capital Gains

The capital increase is indicated as the net benefit that a financial investor makes after selling a capital resource surpassing procurement costs. The whole worth acquired from selling a capital resource is considered as taxable income. To be qualified for tax collection during a financial year, the exchange of a capital resource should happen in the past financial year. Monetary profits against an offer of help are not relevant to acquired property. It is seen as just if there should be an occurrence of the move of proprietorship. As per The Income Tax Act, resources got as endowments or by legacy are excluded in estimating pay for a person.

Structures, Houses, lands, vehicles, Mutual Funds, and gems are a couple of examples of capital resources. Likewise, the privileges of the executives or legitimate rights over any organization can be considered capital resources.

Coming up Next are Excluded Under Capital Resources

  • Any stock, crude materials or consumables that are held with the end goal of business or calling.
  • Products, for example, garments or furniture that are held for individual use.
  • Land for farming in any piece of country, India.
  • Extraordinary carrier bonds were given in 1991.
  • Gold awards gave by the Central Government, for instance, the 6.5% gold reward of 1977, 7% gold reward of 1980 and protection gold reward of 1980.
  • Gold store bonds that were given under the gold store plot (1999) or the store testaments were issued under the Gold Monetization Scheme (2015).

Kinds of Capital Gain

Contingent upon the residency of holding a resource, gains against speculation can be extensively separated into the accompanying sorts –

Short term capital increase 

Assuming a resource is sold within a day and a half of obtaining, the benefits acquired from it is known as momentary capital additions. For example, if a property is sold within 27 months of procurement, it will go under transient capital additions: Notwithstanding, tenure shifts on account of various assets. For Mutual Funds and recorded shares, Long term capital increase occurs if a resource is sold in the wake of keeping down for one year.

Long terms capital addition 

The benefit procured by selling a resource held for over three years is known as long-haul capital increases. After 31 Mar 2017, a holding period for non-moveable properties was changed to two years. Notwithstanding, it isn’t pertinent if there should be versatile resources like gems, obligation arranged Mutual Funds, and so on.

The benefit acquired by selling a resource held for over three years is known as long-haul capital increases. After 31 Mar 2017, a holding period for non-moveable properties was changed to two years. Notwithstanding, it isn’t material if there should be an occurrence of versatile resources like adornments, obligation situated Mutual Funds, and so on. Moreover, a couple of resources are considered transient capital resources if the holding time frame is under a year. Here is a rundown of resources that are considered by the standard referenced above –

  • Value portions of any association recorded on a perceived Indian stock trade.
  • Protections like bonds, debentures, and so forth are registered on any Indian stock trade.
  • UTI units, paying little heed to be cited or unquoted.
  • Capital addition on Mutual Funds that are value arranged, if they are mentioned.
  • Zero-coupon bonds.

R&T Agents of various Mutual Funds

RTAs or Registrar and Transfer Agents are SEBI-approved intermediaries in charge of the paperwork or back-office operations of Mutual Funds like folio statements of units bought and sold by the investor that Mutual Funds can focus on the investment management and marketing portions. Most Mutual Fund has either KARMY or CAMS as their RTA. The only exception is Sundaram MF, who does it by itself. That is, they are their RTAs. Mutual fund investors do several transactions on any day like buy, sell or switch units. They can also request an address change or a bank mandate change.

Karvy

  • Axis Mutual Fund
  • Baroda Pioneer Mutual Fund
  • BOI AXA Mutual Fund
  • Canara Robeco Mutual Fund
  • DHFL Pramerica Mutual Fund
  • Edelweiss Mutual Fund
  • Essel Mutual Fund
  • Franklin Templeton Mutual Funds
  • IDBI Mutual Fund
  • India Bulls Mutual Fund
  • INVESCO Mutual Fund
  • JM Financial Mutual Fund
  • LIC Mutual Fund
  • Mirae Asset Mutual Fund
  • Motilal Oswal Mutual Fund
  • Principal Mutual Fund
  • Quantum Mutual Fund
  • Reliance Mutual Fund
  • Taurus Mutual Fund
  • UTI Mutual Fund

CAMS

  • Aditya Birla Sun Life Mutual Fund
  • DSP BlackRock Mutual Fund
  • HDFC Mutual Fund
  • HSBC Global Asset Management
  • ICICI Prudential Mutual Fund
  • IDFC Mutual Fund
  • IIFL Mutual Fund
  • Kotak Mutual Fund
  • L&T Mutual Fund
  • Mahindra Mutual Fund
  • PPFAS Mutual Fund
  • SBI Mutual Fund
  • Shriram Mutual Fund
  • TATA Mutual Fund
  • Union Mutual Fund
  • Yes Mutual Fund

Others

  • Sundaram BNP Paribas Fund Services
  • Sundaram Mutual Fund
  • BNP Paribas Mutual Fund

Get Combined Capital Gains Statement

You can utilize Capital Gains Reports mail-back service given by RTAs like CAMS and KARVY on the off chance that you have put finances into Mutual Funds. It doesn’t make any difference in the off chance you have put resources into Regular funds or direct Fund. You have contributed straightforwardly or through the intermediary, or you have contributed on the web or offline. All it requires is your email id. You can get it from the individual Mutual Fund organization as well. The benefit here is that you get Gain Statement for every Mutual Fund administration by that RTA in one spot. If you don’t have any ventures with Sundaram, you need to get the Capital Gains report from two places – CAMS and KARVY. How To Get Capital Gain Statement from HDFC Securities.

How to get Combined Capital Gains Report of Mutual Funds from CAMs

  • Step 1: Go to the CAMS online webpage and then click on the option to accept T&Cs and then click on “Proceed.”
  • Step 2: Realized Gain Statement: Click on the recognized gain statement option.
  • Step 3: Enter the necessary details: In the case of the period, select the default option of the current FY and previous FY. Enter the email ID registered in the investment folios. Moreover, PAN is elective, but if you provide your PAN number, it will also incorporate those investments under your PAN where you might not have registered your email id. Lastly, choose “All Funds” and “email an encrypted attachment” for the delivery option.

For the period, you can select

  • Current FY and Previous FY (the default option). When you get it, there would be two Capital Gains statements (both with the same password) – one for the previous FY and one for current FY.
  • It would help if you had a Previous Financial Year for Income Tax.
  • It would help if you had the Current Financial Year for Advance Tax.
  • Second Last FY
  • Third Last FY.

Step 4: Consolidated Capital Gains Statement: Give the password for encrypting the mail. It’ll take about 30 minutes till you get the mail once you submit the form. You will get two Capital Gains Statement files in the mail. One for the previous FY and one for the current FY. Usually, you would utilize the last FY statement since you would be filling returns in June/ July for the previous FY. Furthermore, both the files can be opened with the same password you had set in earlier.

How to get Consolidated Capital Gains Report of Mutual Funds from Karvy

Step 1: Go to KARVY Investor Mailback Service for Capital Gains

Step 2: You will get a screen like this. Fill out the needed details as given below:

  • For email, enter the email id registered in your investment folios. The report will be sent to this email only.
  • Password: this is the password for opening the attachment.
  • Select from and to date: for filing for ITR for AY 2019-20 or FY 2018-19, the dates to be entered are From 1 Apr 2018 to 31 Mar 2019.
  • Click on submit button.

How to get Capital Gain Statement for Shares from Sundaram Mutual Fund

The way toward getting Capital Gain Statment from Sundaram Mutual Fund House is equivalent to other Mutual Fund organizations. It is unique concerning that of CAMS and Karvy as it requires the Folio Number.

When a shared asset financial backer buys an asset, a folio number is allotted by the board organization’s resource to your speculation. You are needed to cite the folio number to discover the worth of your premises or at the hour of any exchanges. Even if that is the case, there is no limitation on the number of folios. A financial backer can likewise have diverse folio number for various assets inside a similar asset house.

Visit the Mutual Fund website, for example, for Sundaram: https://www.sundarambnpparibasfs.in/web/service/estatements/.

We hope that this aids you in understanding how mutual funds are taxed, how to get the capital gain statement of mutual funds from CAMS, Karvy and Sundaram Mutual Funds.