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How To Close Car Loan: Pre-closure/Foreclosure Procedure (All Banks)

How To Close Car Loan: Pre-closure/Foreclosure Procedure (All Banks)

Leave a Comment / CA Foundation / By / March 1, 2023

How To Close Car Loan? There are many banks in India that offer Car loans to purchase new Cars as well as old Cars. Any individual who cannot afford money to purchase their desired Car can apply for Car loans offered by various banks in India to purchase the same. Banks such as SBI, HDFC, Kotak Mahindra, etc., offer Car loans to any individual who has a steady and stable income. 

Individuals who are applying for Car loan must compare the interest rates offered by banks and choose the right bank to apply for a Car loan. Once the Car loan is processed by the bank, the individual will have to repay the loan. The repayment of the Car loan is paid through EMI (Equated Monthly Instalments). And most individuals will often get confused that paying the last EMI means closing the Car loan which is not true. In order to completely close a Car loan, one must take get the No Dues Certificate (NDC)/ No Du Form from the Car loan lender. So to help you with that, here is a detailed article on how to close a Car loan. Read on to find more.

Car Loan Repayment Method

Car Loan EMIs: Applying for a Car loan is easy, but one must think about the Equated Monthly Installments since Car loans are repaid to the lenders in the form of EMIs. Thus it is important for one to plan the necessary EMI repayment schedule before applying for a Car loan.

Car Loan Pre-closure/Foreclosure Procedure

Any individual would like to close their Car Loan if they have a sudden inflow of cash in their hands. Individuals can either make a partial or full payment of Car loan before tenure ends. But for those individuals who wish to prepay the Car loan before the tenure ends will have to pay pre-closure charges indicated by bank officials. 

The Car loan preclosure fee is a small percentage of the outstanding principal amount of the Car loan. The Car loan preclosure or foreclosure charges vary from bank to bank and thus it is important for individuals to check the preclosure clause of the particular bank before applying for the Car loan. 

Pre-Closing a Car Loan

Any individual who wishes to pre-close their Car loan will have to keep a note on the following things:

  1. Pre-closing the Car loan before the tenure ends will affect the credit score of the individual indirectly.
  2. Any lender will not allow to pre-close a Car loan, but still, if the individual wants to close the Car loan, then he/she will have to pay the penalty fees.
  3. Pre-closure of a Car loan will help individuals to save amount on interest rates.

 How To Close A Car Loan?

The steps to close a Car Loan is given below:

1st Step: Check If All Dues Are Paid

  1. Before closing the Car loan, check if you have paid all the EMIs as per the repayment schedule. For this, you will have to keep track of monthly EMI payment bills. 
  2. Upon paying the last EMI, collect all the loan documents and visit your concerned bank or lender.

2nd Step: Visiting Bank/Lender

  1. Following the successful payment of the last EMI, one must visit the concerned bank where they have applied for a Car loan.
  2. After visiting the bank, the individual must submit a request for loan closure.
  3. Make sure the bank is issuing you loan closure documents such as “Bank Closure Letter, NDC and NOC” (No Dues Certificate & No Objection Certificate respectively).
  4. After receiving the bank forms, fill out a form and submit the same to Regional Transport Office (RTO).

3rd Step: Remove Hypothecation 

  1. Hypothecation is the process of submitting an asset as collateral protection to the bank or lender.
  2. Thus when you were applying for a Car loan, your Car is hypothecated to the bank/lender. The details about the same will be indicated in your Car Registration Certificate (RC).
  3. This means that your lender or bank is the owner of the Car until and unless the Car loan is closed. So your bank name or lender name must be removed while closing the Car loan and that is where hypothecated removal comes into the picture.
  4. For this, you will have to get Form 35 which states that hypothecation has been canceled between the lender and borrower.
  5. Now you will have to submit the bank or lenders copies of the No Dues Certificate & No Objection Certificate to the RTO.
  6. And also the individual will have to submit copies of the bank/lender’s No Dues Certificate & No Objection Certificate to the insurance provider.

 4th Step: Request & Receive New Car Documents

  1. Before going to RTO make sure that you are carrying the original bank NOC, RC Book, Form 35 signed by bank officials, Car insurance documents, PAN card, and ID card stating your address proof.
  2. After successful submission of documents to RTO, the officials of RTO will issue a new RC Card in the form of a booklet or smart card. The main purpose of this card is to update the older card.
  3. The new RC card will contain all the details such as the buyer’s name and an RTO stamp indicating cancellation of hypothecation and endorsement.
  4. Now the next step is to obtain the insurance policy updated in your name.
  5. Also make sure you are receiving  Insurance documents, tax documents, and Emission Certificate from RTO without fail.

5th Step: Document Submission To Insurance Provider

After receiving the updated RC book, NOC documents, and other insurance files, ensure that you are submitting them to the insurance provider. So that the insurance provider will update their records as per the new RC book.

6th Step: Check Credit Report

The last and final step is to check the credit report. Usually, the bank officials inform CIBIL saying the loan is closed. However, if your credit is not updated in 60 days from closing the Car loan, you will have to check with the bank officials about the same.

FAQs on How To Close a Car Loan

The frequently asked questions on how to close a Car loan are given below:

Q. Is it good to foreclose a Car loan?
A. Paying EMI’s are off-putting and if you have surplus money then you can obviously go and foreclose a Car loan. However, foreclosing the Car loan will result in a negative credit score because whenever you pay your EMIs, the credit would be increasing.

Q. Is it good to close the Car loan early?
A. Before closing the Car loan early compare the penalty charges and interest charges. If you find the penalty charges are less than the interest charges then you can certainly close the Car loan. However, if the penalty charges are more than the interest charges, then it is a bad idea to close the loan early.

Q. How do I return a Car I can’t afford?
A. It is quite common we just desire to buy the expensive Cars which we cannot afford for. However, if you find that, you will no longer able to pay the EMIs, then you can ask the dealer to agree to Voluntary repossession. For this, you will have to tell the lender/bank that you won’t be able to make EMI payments and ask them to take the Car back through Voluntary repossession. 

Now that you are provided with all the information about how to close a Car Loan and we hope this detailed article is helpful to you. If you have any queries ping us through the comment box below and we will get back to you as soon as possible.

Section 194J TDS on Fees for Professional or Technical Services | Check Limit Here

Section 194J TDS on Fees for Professional or Technical Services | Check Limit Here

Leave a Comment / Income Tax / By / March 1, 2023

Section 194J TDS Professional Technical Fees: The deduction of tax at source, or TDS, has proven to be quite effective in collecting taxes in the country by focusing on the source of income. It also makes paying tax easier for taxpayers when it comes time to file their income tax returns. This is due to the fact that they receive credit for taxes deducted at the source. In this article, let’s learn everything about Section 194J of the Income Tax Act 2020-21.

What is Section 194J?

When certain payments are made to a specific resident, a person must deduct their Tax Deducted at Source (TDS) solely at the rate of 10%, according to the norms and regulations of Section 194J of the Income Tax Act, 1961.

Types of Payments Covered under Section 194J

The following are the types of payments to residents mentioned under this section:

Professional Cases

Professional fees or fees for technical services are one of the most important and common types of payments that a corporate entity makes. Fees paid to a lawyer, doctor, engineer, architect, chartered accountant, interior decorators, advertisements, and others are examples of professional fees.

  • It refers to the services provided by someone who works in the medical, architectural, legal, medical, or engineering fields. Accountancy, interior design, advertising, technical consulting, and any other profession recognised by the Board under Section 44AA are examples of additional services.
  • Film artists, business secretaries, and approved representatives are among the other services permitted under Section 44AA.
  • It also includes athletes, event managers, commentators, anchors, umpires and referees, coaches and trainers, physiotherapists, team physicians, and sports columnists.

Section 194J TDS on Fee for Technical Services

It refers to the consulting, technical, or managerial services provided by an individual. Assemblies, mining, and building are not considered technical services because the income earned falls under the recipient’s head salary.

Non-Compete Fees

For the purposes of Section 194J, non-compete fees refer to the amount paid in cash or in-kind in exchange for an agreement prohibiting the person from sharing any patent, licence, franchise, trademark, know-how, commercial or business rights, technique, or information that could be used elsewhere for manufacturing, processing, or any other provisional service.

Royalty

For the purposes of this section, royalty refers to payment in exchange for:

  • Transfer of ownership of a patent, an innovation, a secret formula, a model, a design, or a trademark.
  • Making use of an invention, a model, a patent, and so on.
  • Sharing any information pertaining to the usage of an invention, patent, formula, or another such item.
  • Equipment is used or has the right to be used for industrial, scientific, or commercial reasons.
  • Transfer of rights to literary works, scientific results, films, or video recordings for radio broadcasting, with no regard for their sale, display, or distribution.

Specific Cases

TDS deduction is also available under Section 194J in the following instances, as determined by the department’s case laws and circulars:

  • In hospitals, medical services are available.
  • Film artists charge advertising companies professional fees.
  • Amount paid to staff agencies and HR consultants.
  • The payments are made by organizations to share registrants.

Rate of TDS under Section 194J

The rate of TDS under Section 194J is tabulated below:

Payment Type Threshold limit Rate of tax
Fees for professional services Rs. 30,000 10%
Fees for technical services and payment to call centres Rs. 30,000 2%
Remuneration or fees to Director (other than 192) NIL 10%
Royalty Rs. 30,000 10%
Non-compete fees Rs. 30,000 10%

Threshold Limit for Deducting Tax Under Section 194J

If the payment is more than Rs. 30,000 during the year, the tax must be deducted. However, there is no limit for payments made to the director. No matter how small the amount, the tax must be deducted.

Who is Liable to Deduct Tax Under Section 194J?

With the following exceptions, everyone who makes a payment in the type of fees for professional or technical services is required to deduct tax at source:

  • In the event of a sole proprietor or a HUF, when the preceding financial year’s turnover was less than Rs. 1 crore.
  • In the event of an individual or a HUF operating on a business: If the preceding financial year’s turnover was less than Rs. 50 lakh.
  • To put it another way, all entities (excluding people and HUF who were not subject to a tax audit the previous year) must deduct tax.

Rate of Deduction of Tax Under Section 194J

  • TDS will be deducted at a rate of 10% on any payment made under this section.
  • The payment of fees for technical services will be subject to TDS at a rate of 2% from April 1, 2020.
  • With effect from April 1, 2017, the tax on payments made to call centre operators will be deducted at a reduced rate of 2%.
  • In the event that the payee fails to provide his PAN, a 20% deduction will be made.

Time of Deduction Under Section 194J

The tax should be deducted if making the actual payment of the expense or making such an entry in the account whichever comes first.

Time Limit for Payment of Tax Under Section 194J

The time limit for submitting TDS under the section must be followed as follows:

  • The deposit must be made on the same day as the TDS deduction under Section 194J is made by the government or on behalf of the government.
  • TDS can also be deposited within a week after the end of the month in which the tax deduction was made.
  • If the payment is made on the last day of the fiscal year, the TDS deposit must be made within two months of the end of the fiscal year in which the payment was made.
  • If the assessing officer approves, some unusual instances may be allowed to deduct TDS on a quarterly basis.
Non–Government deductor Government deductor
Payment made before 1st March 7th day from the end of the month 7th day from the end of the month
Payment made in the month of March April 30th Tax is paid on the date of payment to the payee, but the challan must be deposited by the 7th day following the month’s end.

Consequences of Non-Deduction or Late Deduction under Section 194J

One will have to face the consequences for not deducting the tax or deducting the tax late:
Disallowance of a portion of the expenditure: In the year in which the expenditure is claimed (added to the profit and loss account), 30% of the expenditure is disallowed; however, the 30% disallowed is re-allowed in the year in which the TDS is paid to the government.Interest charges till the date of payment: If the tax is not paid on time, interest must be paid to the government together with the TDS. The following formula is used to calculate the interest rate:

  • Where no tax deduction has been made, interest at 1% per month/part of the month shall be levied from the date on which such tax was required to be deducted until the date of actual deduction.
  • Where tax has been deducted but not paid to the government, From the date on which such tax was deducted until the date of payment to the government, interest at 1.5% per month/part of a month shall be charged.

FAQ’s on TDS on Professional or Technical Fees

Question 1.
Which section of the Income Tax Act enlists TDS on technical fees?

Answer:
Section 194J of the Income Tax Act enlists TDS on technical fees.

Question 2.
How is TDS on professional fees calculated?

Answer:
TDS on professional fees will be deducted at a rate of 10% under this section. TDS will be deducted at a rate of 20% if the income recipient does not provide his PAN to the deductor. There will be no surcharge, education cess, or SHEC added to the above-mentioned rates.

Question 3.
What is the maximum limit under Section 194J on TDS?

Answer:
The maximum limit under Section 194J is Rs.30,000, which applies to each item or payment separately.

EPF Form 15G

EPF Form 15G Download: Sample Filled Form 15G For PF Withdrawal

Leave a Comment / EPF / By / February 17, 2023

What is EPF Form 15G? In the financial year of 2016-17, the officials of EPFO had issued a notice stating that Tax Deducted at Source (TDS) is applicable on EPF withdrawal above Rs.50,000. Thus any employee who wishes to withdraw PF money above 50,000 will have to pay the TDS charges. So if any individual’s EPF withdrawal limit is more than 50,000 and PAN Card is not verified at the EPF portal, then he/she can simply submit Form 15G/15H to the EPF officials requesting them not to deduct TDS (if applicable) on the PF withdrawal amount. 

On this page, we have provided all the details on how to withdraw the EPF amount by submitting Form 15G, along with instructions, documents required, and a detailed procedure on how to submit EPF withdrawal claim form 15G online. Read on to find out more.

Is Form 15G Mandatory For PF Withdrawl Less Than 50,000?

Individuals must note that Form 15G is not applicable if your withdrawal limit is less than 50,000. However, TDS is also not applicable for individuals who wish to withdraw the PF amount under the following scenarios:

  • If an individual is transferring his PF money from one account to another account
  • If the employee service is terminated due to health issues
  • If business by the employer is discontinued
  • If the employee service period is more than 5 years that is there is no TDS on PF withdrawal. Which also includes 5 years of employee service under one or multiple organizations.

When TDS Is Deduceted on PF Withdrawl?

If an employee withdraws 50,000 or more than that, the TDS will be deducted. The TDS charges applicable for the same are as follows:

  1. If an individual submits PAN Card and doesn’t submit Form 15G/15H, then 10% will be deducted.
  2. If the individual fails to submit the PAN Card, then TDS will be deducted at maximum marginal rate i.e, 34.608%.

EPFO Notification On No TDS For EPF Withdrawal

The official EPFO notification on No TDS deduction for EPF Withdrawal are given below:

no tds deduction on pf withdrawal

How To Submit Form 15G Online For EPF Withdrawal?

Many of the EPF members fail to get verify their PAN Numbers digitally in the EPFO portal because of personal details mismatch in UAN & PAN Card. And this is the main reason, the EPFO officials will impose TDS in EPF withdrawals. So one of the best ways to run off the TDS is by submitting Form 15G. 

How To Get Form 15G Online For PF Withdrawl?

The direct link to download Form 15G is given below:

Click Here To Download Form 15G PDF For EPF Withdrawl

You can either download EPF Form 15G ODF from the above link or also can check the procedure to download the same from the official website.

The steps to download 15G Form Online for PF withdrawal are listed below:

  1. Visit the official website of UAN Member Website: Click Here
  2. Now login with the help of your UAN Number & UAN Password.
  3. In the UAN dashboard, move to the Online Services tab.
  4. Now select Claim (Form 31, 19, 10C) from the drop-down menu.
  5. Verify your last 4 digits of your bank account number.
  6. EPF withdrawal form will be displayed on the screen. Below the EPF withdrawal form, the user will be able to “Upload Form 15G”.
  7. Click on it and From 15G will be downloaded to your device. 
  8. Two pages namely Part I & Part II will be there where you will have to fill out the details. 

Form 15G Download In Word Format

Many individuals will search for Form 15G in Word format since it makes one’s work easier. However, there is no option for individuals to download Form 15G in word format since the officials will give them only in PDF format. So individuals looking for Form 15G download link in Word format for PF withdrawal can follow the steps as listed below to get the same:

  1. Download Form 15G in PDF format.
  2. Now search “PDF to Word Conversion” in Google or search engine.
  3. Upload the PDF to any of the third-party websites and click on Convert.
  4. As soon as you click on Convert, the Form 15G PDF will be converted to Word Format which can be downloaded for free.

How To Fill Form 15G For PF Withdrawal?

As discussed above, there are 2 pages Part I and Part II in Form 15G. Only Part I needs to be filled by the individuals. The steps to fill Form 15G filed wise are given below:

  • Field 1 – Name: Enter your name as per your PAN Card
  • Field 2 – PAN: Enter your PAN number
  • Field 3 – Status: Mark your status such as Individual, HUF, or AOP as applicable for you.
  • Field 4 – Previous Year: Refers to the current financial year you are filling the form. For example, if you are filling for 1st April 2020 to 31st March 2021, then enter 2020-21.
  • Field 5 – Residential Status: Enter your nationality. Mostly Indian.
  • Field 6 to 12 – Address Details: Enter your current address details. 
  • Field 13 – Emai ID: Enter your valid email ID.
  • Field 14 – Telephone Number: Enter your mobile number, If the landline is available enter your landline number with the STD code. 
  • Field 15 (a) – Whether assessed to tax under the Income-tax Act,1961: Mention Yes or No.
  • Field 15 (b): If Yes, the Latest Assessment Year Which Assessed: If you have marked yes in Field 15 a, then mention the last filed ITR financial year. 
  • Field 16 –  Estimated Income for which this declaration is made: Calculate your total income which you have earned during the financial year excluding EPS or Pension.
  • Field 17 –the Estimated total income of the P.Y. in which income mentioned in column 16 to be included: Mention the total income along with EPF withdrawal amount.
  • Field 18 –Details of Form No. 15G other than this form filed during the previous year, if any: If you have filled Form 15G previously then mention those details.
  • Field 19 – Field 19. Details of income for which the declaration is filed: Mention the nature and amount of income here.

Sample Filled Form 15G For PF Withdrawal

The sample filled Form 15G is given below:

EPF Form 15G

How To Upload Form 15G for PF Withdrawl?

The steps to upload Form 15G in the portal are given below:

  1. After filling out Form 15G, convert it to PDF format.
  2. Make sure your Form 15G is less than 1 MB.
  3. Now login to the UAN website with the help of your credentials.
  4. Click on the “Online Services” tab and select Claim Form 31, 19, 10C.
  5. Now choose Form 19 from the dropdown menu.
  6. Click on Choose File and Upload the PDF. 

Difference between Form 15G and 15H

The main difference between form 15G and 15H is that the 15H form is applicable for senior citizens only. Because the interest rates differ from individuals to senior citizens, Form 15H can be submitted by senior citizens whose is eligible for TDS but also 60 years old.  

FAQs on Form 15G

The frequently asked questions on Form 15G are given below:

Q. Is 15G form required for PF withdrawal?
A. Yes, if you are an individual below 60 years and want to withdraw more than 50,000 then Form 15G can be submitted.

Q. How can I download Form 15G for PF?
A. You can either download From 15G from this page or also from the officials EPFO Portal under ONLINE SERVICES >> Claim (Form 31, 19, 10C).

Q. What happens if 15G not submitted?
A. If form 15G is not submitted then TDS charges will apply for your PF withdrawal amount.

Now that you are provided all the necessary information on Form 15G and we hope this article is helpful to you. If you have any questions ping us through the comment box below and we will get back to you as soon as possible.

Transfer Actionable Claims

Transfer of Actionable Claim Under Property Act, 1882

Leave a Comment / Finance / By / July 20, 2021

Transfer Actionable Claims, 1882: Section 3 of the Transfer of Property Act, 1882, which was amended by the Amending Act II of 1990, defines an actionable claim. It is a mobile intangible asset whose transfer is covered in Chapter VIII of the Act.

What is an Actionable Claim?

Actionable claim means a claim to any debt, other than a debt secured by mortgage of immoveable property or by hypothecation or pledge of moveable property, or to any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accuring, conditional or contingent.

As a result, a legally actionable claim could be:

  • A claim to an unsecured obligation that is not secured by a mortgage, hypothecation, or pledge of immovable property.
  • Beneficial ownership of moveable property is referred to as a beneficial interest in movable property.

Because debts secured by the mortgage, pledge, or hypothecation do not manifest as claims to property, but rather as the property itself, they are not included in the definition of “actionable claims.”

Except for demands for payment of a sum of money, debt, or price, all claims under a contract are barred. Similarly, a right to sue based solely on the fact that it is non-transferable is not regarded as an actionable claim.

Examples of Actionable Claims

  • Rental arrears
  • In a dissolved partnership, the partner’s interest
  • Annuities under a waqf deed
  • Reimbursement for items sold
  • A claim for unpaid dower by a widow of a mohammadam
  • A rent claim that will be due in the future

Exceptions of Actionable Claims

  • Debts covered by an immovable property mortgage
  • Contract damages
  • Tort damages
  • A claim for mesne profits
  • Company ownership
  • Copyright protection is a claim made by some people

Unsecured Debt

Debt can be defined as an obligation to pay a liquidated sum of money in a few words.

A monetary commitment that is not secured by a mortgage, pledge, or hypothecation is referred to as an unsecured debt. As a result, for a transaction to be classified as unsecured debt, three conditions must be fulfilled:

  • A monetary obligation is a debt that is owed to a third party
  • Inadequate security
  • Confidence in the amount of money owed

Beneficial Interest in Movable Property

If a person has the right to possess the movable property but does not have constructive or actual possession of it, that person is said to have a beneficial interest in it. As a result, the following are the essential elements:

  • The property must be moveable;
  • The property is not in the claimant’s possession, and
  • The claimant has the legal right to own the property in question.

Transfer of Actionable Claims

Transfer of Actionable Claims Definition: The transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorized agent, shall be complete and effectual upon the execution of such instruments, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not:

Except where the debtor or other person is a party to the transferor has received express notice thereof as hereinafter provided) every dealing with the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or another actionable claim shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided)

  • Section 130: The transfer of actionable claims, with or without consideration, is effected by written document, according to Section 130 of the Transfer of Property Act. The transferor or his representative must sign the instrument. The transfer of a claim occurs only once the instrument has been signed and executed.
  • Section 131: The transferor or his agent must sign every notification of the transferable claim, according to Section 131 of the TP Act.
  • Section 132: The act’s section 132 addresses the liability of a transferee of an actionable claim.
  • Section 133: The transferee is not obligated to furnish any warranty as to the debtor’s solvency under Section 133.
  • Section 134: If a transfer of an actionable claim is made by means of mortgage for the purpose of securing a current or future obligation, Section 134 states that the money should be used first to pay for the cost of such realisation and then to satisfy the amount guaranteed by the transfer.
  • Section 135: The transfer of rights under an insurance policy is covered by Section 135 of the law.
  • Section 136 & 137: Officers associated with the court of justice are ineligible under Section 136. Saving of negotiable instruments is governed by Section 137.

Negotiable instruments are governed by Negotiable Instrument Act 1881 which, by approval and/or delivery or mere delivery, shall be assigned or transferred to them. A negotiable tool may also be transferable, however, as well as a shareable claim. The assignee shall not acquire more than the customer’s right, title, and interest under the Transfer of Property Act of 1881, but the customer shall in due time have the same rights and advantages as a customer as a holder under the Negotiable Instrument Act of 1881.

Right to Freedom Article 19 Article 22

What is the Right to Freedom | Article 19 to Article 22 in Indian Constitution

Leave a Comment / Companies Act / By / July 20, 2021

Right to Freedom Article 19 Article 22: One of the basic rights enacted in India’s constitution is the right to freedom. For the functioning of Indian democracy, the six fundamental rights set out in the Constitution are considered essential. The right to freedom gives citizens the basic freedom of expression, forming associations, freedom to liberty, freedom to live a dignified life and so on. The scope and any exceptions to these provisions are explained in detail on this page.

Overview of Right To Freedom

The right to freedom ensures citizens with the freedom to live dignified life. Articles 19, 20, 21A and 22 of the Indian Constitution make provision for this.

Article Name Overview of the Article
Article 19 Protection of 6 rights concerning the freedom of:

  1. Speech and expression
  2. Assembly
  3. Association
  4. Movement
  5. Residence
  6. Profession
Article 20 In the event of a conviction for a crime, you will be protected.
Article 21 Personal liberty and the right to life
Article 21A The right to a basic education
Article 22 In certain circumstances, you may be protected against arrest and detention.

Importance of Right To Freedom

It is important to have the right to freedom because it is a human right. The struggle for freedom from foreign imperialism in India is a struggle to live a life of respect for freedom and freedom and to choose how to live according to the law, to take up employment and business, to speak up and move forward, to live in every area of India and to live safely. India is a national fight against colonialism.

Article 19 Under Right To Freedom

Article 19 guarantees six freedoms and they are

  1. Freedom of Expression: The government ensures that everyone in India has freedom of expression. However, in the name of integrity, security, sovereignty, foreign-friendly relations, public policy, defamation or neglect of the Courts the State may restrict freedom of speech.
    Forbidden.
  2. Freedom of Association: the government ensures everyone’s freedom to meet peacefully without arms. However, the sovereignty, integrity and interests of the State’s public order may have reasonable restrictions.
  3. Freedom to form Associations/Unions/Cooperative Societies: Free trade union/co-operative organisations: State sanctions can be imposed on integrity, security, foreign-friendly relations, public order, slander, and country crimes. This Law provides workers with a fundamental right to form trade unions.
    • The Police Law of 1966 prohibits the formation of syndicates by police officers.
    • Laws limiting the right of employers to form political organisations, including members of the military, intelligence and telecommunications systems.
  4. Freedom of Movement: Indian citizens are free to walk about the country. This right can also be restricted in order to protect national security, public order, or potential tribal interests.
  5. Housing Freedom: Indian citizens have the freedom to live anywhere in the country. In reality, limits may be applied to safeguard security, public order, or the prospective tribe’s interests.
  6. Workplace Freedom: All citizens have the right to work / work / continue working, regardless of whether the work or trade is illegal or immoral. Furthermore, the law does not exclude the enforcement of laws requiring technical or professional qualifications for business or professional training.

Article 20 Under Right To Freedom

  • The protection of civilians in punishing criminal crimes is governed by Article 20. It provides the state with three types of personal protection.
  • The former criminal code is otherwise known as the former secondary penal code. A person cannot be convicted of an act until the crime is declared legal. This means that this legislation cannot prevail.
  • Immunity against preventive containment cannot be used and does not involve testing.
  • The law also says that no person can be punished for anything other than the crime laid down by law.
  • Multiple Threats: This means that a person can’t be convicted of the same offence more than once.
  • Self-repression is prohibited, which means the government will not force a person suspected of a crime to testify against them.

Article 21 Under Right To Freedom

  • Without compliance with the procedures provided for in Article 21, nobody may lose his life or freedom. This article offers various options and over the decades, many changes have occurred in the interpretation.
  • The right to live in dignity is the Supreme Court.
  • In a sense, this is the main right, because all other rights are null and void without this right to life.
  • The differences between the police state and a rule of law are clearly demonstrated.

Article 21 (a) Under Right To Freedom

With the 86th amendment to the Constitution, this article was first introduced in 2002. It mandates that all children between the ages of 6 and 14 get free and compulsory education.

Article 22 Under Right To Freedom

  • In a few cases, Article 22 provides for protection from arrest and detention. This article covers both citizens and nationals of the country. In the case of arrests, this provision extends certain processes.
  • It appears following the arrest of a man. This is not a basic right to arrest or detention.
  • This right has the idea of limiting both arbitrary arrest and detention.
  • The following protections are provided in this article:
    • Article 22 (1): Each prisoner needs to explain why he is arrested. Furthermore, it cannot be denied the right to consult a lawyer.
    • Article 22 (2): Anyone apprehended shall be taken into custody and placed before a judge within 24 hours.
    • Article 22 (3): No one may be detained for more time than the judge determines.

FAQ’s on Right To Freedom

Question 1.
What are the six rights to freedom?

Answer:
The 6 basic fundamental rights are:
1. Right to equality
2. Right to freedom
3. The right against exploitation
4. The right to freedom of religion
5. Cultural and educational rights
6. The right to constitutional decisions

Question 2.
What are the six freedoms guaranteed by the right to freedom?

Answer:
The 6 freedom that is guaranteed by the right to freedom is Language and performance, Assembly, Association, Protest, Accommodation, Company.

Question 3.
Which article is right to life?

Answer:
Article 21 covers the right to life which states that “no person shall be deprived of his life or personal liberty except according to procedure established by law“.

Factors Affecting Investment Under Section 80C

Factors Affecting Investment Under Section 80C | LIC, PPF, ELSS, NPS

Leave a Comment / Income Tax / By / July 20, 2021

Factors Affecting Investment Under Section 80C: One of the best ways when it comes to saving income tax is to declare all the investments under Section 80C. Any individual or HUF can save up to 1,50,000 just by declaring all the investments and expenses under section 80C of the Income Tax Act.

In the process of saving income tax, many taxpayers end up with so many other problems by investing in too many instruments such as LIC, Bonds, Stocks, FDs and so on. On this page, let’s understand what are the factors that affect investments under Section 80C.

Factors Affecting Investment

New investors are currently making a choice from a wide range of investment opportunities through financial institutions and online investment companies. Irrespective of whether you decide on an investment yourself or using a professional, a number of factors are necessary to take your investment options into consideration.

Some of the factors affecting investment are:

  • Rate of interest (the cost of borrowing)
  • Economic changes
  • Confidence/expectations
  • Environmental developments (productivity of capital)
  • Financial availability by banks
  • Depreciation wage costs, inflation, government policy

Factors Affecting Investment Under LIC

  • Policyholders have ignored some current policy premiums expenditures. In addition, life insurance is typically bought only indirectly for others and for the insured person.
  • Cash surrender values are usually less than the premiums paid over the first several years of policy and, if the policy is surrendered, a policyholder can sometimes not redeem the premiums paid.
  • In particular, the decision on life insurance purchases and placement of the life insurance can be complex when it is used for estate planning, business or complex family situations.
Return on cashback policy 8% to 10% (approx.)
Return on term insurance 0%
Lock-in period for 80C in single premium policy under 2 years from the date of commencement
Lock-in period for 80C in any other policy 2-year premium
Receipt Exempted (any cashback as well as maturity amount)
Liquidity The surrender option is available only after paying a premium for three complete year

Factors Affecting Investment Under Tax Saving Term Deposit

  • Fixed Returns: Although returns do not proceed south, and a certain percentage of returns is guaranteed, the concept prevents greater returns.
  • Lock-in period: FD accounts have a specified lock-in period selected by customers. Prior to maturity, the investment can only be liquidated at the cost of a rate penalty promised, which is only a loss.
  • Limited tax benefits: Although individuals choose to save tax in a safer manner on a five-year tax saver account, the returns from the account are taxable in accordance with the Income Tax Act.

Factors Affecting Investment Under PPF

  • The fact that PPF has a 15-year lock-in period is a major disadvantage. During the first six years, you are unable to withdraw even partially from it.
  • By investing in PPF, you lose your liquidity due to the lock-in period.
  • It is not suitable for those wishing to make significant investments. With a PPF investment, there is a limit of 1.5 lakhs every year.
  • The PPF interest rate may not be able to protect your invested capital in the event of high inflation in the economy.
  • Market-linked products, such as mutual funds, are traditionally considered to deliver higher returns, despite the fact that they give a consistent rate of interest.
  • You can only use PPF in an individual capacity if you want to. Only in the case of a minor can a joint PPF account be formed.

Factors Affecting Investments Under Mutual Funds

  • No Portfolio Control: Investors in the portfolio of mutual funds have no control over their investment funds. Professional fund managers manage and manage mutual funds.
  • Fees for Management: For their management services, investors must pay a charge to fund managers. The charges will increase investors’ expenses.
  • No Return Guarantee: There is no guarantee for investors’ returns from mutual funds. Market risk shall apply to investments in mutual funds.
  • Lock-in-period: Mutual funds will be locked for longer periods of 4 to 6 years. Investors cannot withdraw their funds prior to the maturity period of such investment.
  • About Divergence: The over-diversification of the portfolio is another disadvantage of investing in mutual funds. Portfolio diversification can spread the risk, but it cannot maximise the return. In other words, it is quite difficult to manage a very diverse Portfolio.

FAQs on Factors Affecting Investment Under Section 80C

Question 1.
What are the investments eligible under 80C?

Answer:
Some of the investments which can be made under Section 80C of the income tax act are PPF, NSC, NPS, Tax saver FDs, Post Office Term Deposit, ELSS, ULIP, Senior Citizens Savings Scheme, Sukanya Samridhi Account.

Question 2.
How can I save tax on 2020-21?

Answer:
The best way to save tax is to invest in various tax saving schemes such as Equity-Linked Saving Scheme, NPS, SSY and so on. But one must also be smart enough to know when to opt for the new regime.

Question 3.
Is it good to invest in Post office savings schemes?

Answer:
The rates available under post office savings schemes for various savings instruments vary between 4% and 9%. The fixed deposit interest ranges from 6 to 8%. The interest rate on the fixed deposit of the major banks is currently low in comparison with various saving schemes offered by the Post Office. However, the interest offered by the banks on PPF and SSY schemes is the same as the government determines their interest rate.

E-way Bill GST

What Is Eway Bill GST | E-Way Bill Login, Registration, Rules, Generation

Leave a Comment / GST / By / July 20, 2021

E-way Bill GST: The GST Eway Bill was introduced on 1st April 2018. The e-Way Bill GST is an electronic document that needs to be generated before the goods are transported or shipped in excess of INR 50.000 within the state or intrastate. The transporter or the person in charge of the transport must have a physical copy of the GST electronic bill and should contain all the information such as goods, the recipient, consignor or transporter. On this page, let’s learn everything about e way bill registration and its purpose in detail.

Who Can Generate Eway Bill Under GST?

Before starting the transport of goods from place to place, the Eway bill must be generated. The E-Way bill GST is generated for:

  • Supply of goods with regard
  • Supply of goods regardless
  • Supply received from a non-registered person

The supply covers the movement of goods not only due to sales but also due to any other reason such as cross-branch transfers, unregistered purchase and trade in goods. However, in some cases, an Eway bill is also generated even though the goods’ value does not exceed INR 50,000.

  • Transfer of goods between states by the principal to the worker by the principal or by the registered worker.
  • The transfers of handicraft products between states by a dealer are exempt from GST registration

The following people can generate the Eway Bill:

  • Registered Person
  • Unregistered Person
  • A Transporter

However, if goods are supplied to a registered individual by an unregistered person, the beneficiary shall ensure the creation of an Eway bill. If the supplier has not produced the same, a carrier shall generate an E-way bill. For unregistered transporters, a Transporter ID will be provided on the registration portal for the Eway bill.

E Way Bill Registration Documents Required

An e-Way bill can be registered either through an SMS facility or through the official website. However, before applying for GST e-Way Bill, one will have to keep the following documents handy to generate the E-Way bill:

  • Invoice/Supply Bill / Challan concerning goods shipment
  • Road Transport: ID or number of transporters
  • Rail, Air or Ship transport: Transport ID, Document date and document transport number

How To Generate Eway Bill Through Online?

Follow the steps as listed below to generate the E-Way Bill online:

  • Step 1: Visit the official website of E-WayBill System – Click Here
  • Step 2: Click on the tab “Registration” and select “e-way Bill Registration” from the drop-down menu.

eway bill

  • Step 3: Enter your “GSTIN” number.
  • Step 4: Enter the Captcha Code as displayed on the screen.
  • Step 5: Click on the “Go” button.
  • Step 6: The user will then be forwarded to the registration form of the e-Way Bill. The registration form will look like the following image.

eway bill system

  • Step 7: This information will be automatically repleted with the name, trade name, address, mail identification and mobile number of the applicant.
  • Step 8: If you have changed the details or if they are incorrect, click on the GST Common Portal Update button to pull the latest GST Common Portal data.
  • Step 9: Click on “Send OTP” to receive the OTP.
  • Step 10: Enter the OTP and click “Verify OTP” to validate it.
  • Step 11: Next, enter the user ID or Username to operate this system’s account. The username should be unique. It should contain approximately 8 to 15 alphanumeric characters and special characters.
  • Step 12: The system validates the entered values when a request has been submitted for registration.
  • Step 13: Now the password and username with the e-Way Bill System are also created and registered.

Now one can use this registered username and password for operating the E-Way Bill.

Eway Bill Registration Methods

Other ways to register for E-Way Bill are:

  1. By SMS
  2. Android application
  3. Web-based mode
  4. API based and
  5. GST Suvidha Providers.

The user must first log on to the web-based system for all these modes.

When Eway Bill Is Not Necessary?

In accordance with Rule 138 of the CGST rules, in the following situations an e-way should not be generated:

  • Transport by Custom: Transport of goods to an inland container depot or freight container station from a customary port, airport, air freight facility and customs station to clearance.
  • Non-motorized Transport: Goods carried through non-motorized transport do not require an automatic payment.
  • Transportation of Goods in Customs Bonds: Transportation of the goods under customs bonds to a customs port, airport, air cargo complex and land customs station by intra-Container Depot or container freight station from one customs station to another or customs port to another.
  • Rail transport: Transportation of goods by rail where the central, state or local government acts as the consignor.
  • Defense Ministry: movement of goods incurred as a consignor by the Ministry of Defense.
  • Unoccupied Cargo Container: Empty containers without an Eway bill can be transported.
  • Using the Challan Delivery: The transport of products between the consignor’s place of business and the weighbridge for cargo weight and distance is less than 20 km. During transportation, a delivery challan is made and transported.

GST Eway Bill Format

The GST Eway Bill format is explained below:

  • Recipient’s GSTIN: Mention the recipient’s GSTIN number.
  • Place of Delivery: The place where the goods are delivered must be indicated here by the Pin code.
  • Check the invoice or the Challan number for which the goods are delivered.
  • Goods value: the shipment value of goods should be noted.
  • HSN Code: Enter the transported HSN goods code. You need to specify the first two digits of the HSN code if your turnover reaches INR 5 crores. If there are more than INR 5 crores, 4 HSN code digits are necessary.
  • Transportation Reason: The reason for the transport is defined and the most appropriate option from the list needs to be selected.
  • Transport Document Number: This includes either the number receiving the goods, the number receiving the railway, the number of the billing airway or the bill of loading.

Validity of E-Way Bill GST

The validity of an Eway bill or a consolidated e-Way bill is dependent on the distance of transport of the goods. The validity of the bill is determined from the date of generation of the Eway bill.

Conveyance Type
 Distance
Validity Period
Non Over dimensional cargo
 Less Than 100 Km 1 Day
For every additional 100 Kms or part thereof
additional 1 Day
Only For Over dimensional cargo
 Less Than 20 Km 1 Day
For every additional 20 Kms or part thereof
additional 1 Day

FAQs on EWay Bill

Question 1.
What is the purpose of E way Bill?

Answer:
E-way bills are an effective tool in monitoring goods and in checking tax evasion, ensuring that products are being transported comply with the law on GST.

Question 2.
Is E way Bill print out mandatory?

Answer:
Yes, the E-Way bill is necessary to carry the charges with the goods when the value of the goods exceeds Rs. 50,000.

Question 3.
Can we generate an Eway bill without a GST number?

Answer:
No, an E-Way bill cannot be generated without a GST number.

Basics GST

Basics of GST | Understanding Components, Types, Examples of GST

Leave a Comment / GST / By / July 20, 2021

Basics GST: The full form of GST is Goods and Services Tax. It is an indirect tax that has substituted many of India’s indirect taxes, including excise duties, VAT, services tax, etc. On 29 March 2017, the Goods and Services Tax Act was adopted in Parliament and entered into force on 1 July 2017.

The Goods and Service Tax (GST) is in other words charged for the provision of products and services. In India, the Goods and Services Tax Law is a full, multi-stage destination tax, which is charged on every added value. For the whole country, the GST is one national indirect tax law. In this article, let’s learn everything about h3the basics of GST in detail.

Who Does GST Apply To?

The GST is applicable for individuals who fall under the following categories:

  • Every person that provides goods and/or valuable services in a financial year exceeding Rs 20 lakhs. For certain special category countries, the limit is Rs 10 lakhs.
  • If the turnover exceeds Rs 20 lakhs, GST must be paid
  • Any person who supplies goods and/or services taxable across states
  • Each operator of e-commerce
  • Anyone who provides goods or services through e-commerce operators other than branded services
  • Aggregators that provide services with their own brand name
  • Taxable Non-Resident
  • Distributor of Input Service
  • A person providing services such as online information, database access and recovery services from outside India to the person in India.
  • Reverse charge person who has to pay income tax
  • The person on behalf of another taxable person who supplies the goods such as agents.

Who is Exempt From GST?

  • If the annual turnover is less than 20 Lakhs, then they are exempt from GST.
  • For some special category states, if the annual turnover is less than 10 Lakhs, then they are exempt from GST.
  • For farmers, GST does not apply. Which means farmers are exempt from GST.
  • GST does not apply to any person engaged exclusively in the supply of non-taxable or fully exempt goods and/or services under this Act.

GST Registration

Under the GST regime, companies whose turnover is greater than Rs. 40 lakhs are subject to registration as ordinary taxable individuals. Whereas for the North East and Hills state, the threshold limit is 10 Lakhs. This registration process is known as the GST registration process.

Registration under GST is compulsory for certain companies. If the organisation does business without GST registration, it is a GST offence and heavy penalties apply. It normally takes 2-6 business days for GST registration.

Components of GST

Under this GST system, three taxes apply and they are CGST, SGST & IGST.

  1. CGST: The tax charged for intra-state sales by the Central Government (e.g., a transaction happening within Maharashtra)
  2. SGST: It is the intra-state sale tax collected by the state government (e.g., a transaction happening within Maharashtra)
  3. IGST: Tax collection for inter-state sales by the Central Government (e.g., Maharashtra to Tamil Nadu)

In most cases, under the new system, the tax structure is the following:

Type of Transaction
 Type of GST Applicable Example
Intra-state (i.e. sale within the same state) CGST + SGST A Tamil Nadu dealer is going to sell to another Tamil Nadu dealer. The GST rate is 18%, which means that the CGST rate is 9% and the SGST rate is 9%.
Inter-state (i.e sale outside state) IGST A dealer is selling to a dealer from Tamil Nadu to Andhra Pradesh. The rate of GST is 5%, so 5% of IGST applies.

Calculation of GST

In order to calculate the GST, you will have to simply multiply the Taxable amount by the GST rate to compute GST. If CGST and SGST/UTGST are used, the CGST and SGST amounts are equal to half of the total GST payment.

GST = GST Rate X Taxable Amount 

If you have an amount that already includes GST, you can use the formula below to compute the GST-free value.

GST Amount Excluded = GST Amount Included/(1+ GST Rate/100)

GST Rates

The GST council has classified roughly 1300 items and 500 services into four tax brackets: 5%, 12%, 18%, and 28%. This is in addition to the 3% tax on gold and the 0.25% special rate on rough precious and semi-precious stones under the GST.

GST Rates Products
0%

 

 Milk

Kajal

Eggs

Educations Services

Curd

Health Services

Lassi

Children’s Drawing & Colouring Books

Unpacked Foodgrains

Unbranded Atta

Unpacked Paneer

Unbranded Maida

Gur

Besan

Unbranded Natural Honey

Prasad

Fresh Vegetables

Palmyra Jaggery

Salt

Phool Bhari Jhadoo
5%

 

 Sugar

Packed Paneer

Tea

Coal

Edible Oils

Raisin

Domestic LPG

Roasted Coffee Beans

PDS Kerosene

Skimmed Milk Powder

Cashew Nuts

Footwear (< Rs.500)

Milk Food for Babies

Apparels (< Rs.1000)

Fabric

Coir Mats, Matting & Floor Covering

Spices

Agarbatti

Coal

Mishti/Mithai (Indian Sweets)

Life-saving drugs

Coffee (except instant)
12%

 

 Butter

Computers

Ghee

Processed food

Almonds

Mobiles

Fruit Juice

Preparations of Vegetables, Fruits, Nuts or other parts of Plants including Pickle Murabba, Chutney, Jam, Jelly

Packed Coconut Water

Umbrella
18%

 

 Hair Oil

Capital goods

Toothpaste

Industrial Intermediaries

Soap

Ice-cream

Pasta

Toiletries

Corn Flakes

Computers

Soups

Printers
28%

 

 Small cars (+1% or 3% cess)

High-end motorcycles (+15% cess)

Consumer durables such as AC and fridge

Beedis are NOT included here

Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess)

Advantages of GST

The cascading effect of GST on the sale of goods and services has mainly been removed. Cascading effect removal has affected goods costs. The cost of goods decreases because the GST regime eliminates taxation. Moreover, GST is driven mainly by technology. An online GST portal that accelerates processes is necessary for all activities such as registration, return file, reimbursement and reply to notices.

The main benefits of GST are:

  • Indirect single tax for India as a whole
  • Credit for input taxes paid in a different country can be taken.
  • Easy goods transfer from state to state

New Compliances Under GST

The GST system introduced several new systems alongside the online filing of GST returns.

E-Way Bills

By introducing the “E-way bills,” GST introduced a centralised system of travel documents. Under the E-way billing system, producers, traders and carriers can produce e-way bills for goods transported easily on a common portal from the place of origin to their destination. This system has also reduced the time of the checkpoints and helps to reduce tax evasion, benefitting tax authorities.

E-Invoicing

E-invoicing enables invoice interoperability and helps to reduce errors in data input. It aims to pass the invoice data directly on the GST website and e-way account portal from the IRP. This eliminates the manual information input requirement when submitting GSTR-1 and also assists with the generation of e-way bills.

FAQ’s on Basics of GST

Question 1.
What are the 3 types of GST?

Answer:
There are total 4 types of GST and they are:
1. SGST: State Goods and Services Tax
2. CGST: Central Goods and Services Tax
3. IGST: Integrated Goods and Services Tax
4. UGST: Union Territory Goods and Services Tax

Question 2.
How GST has helped in price reduction?

Answer:
The GST has helped in reducing the Central and State Indirect tax, which in turn helped in the price reduction.

Question 3.
What is a ‘Person’ in GST?

Answer:
Anyone who operates a company at any place in India and who is registered or must be registered in conformity with GST Act shall be a ‘taxable person’ under GST. Everybody, including trade and commerce, engaged in economic activity is treated as a person in GST.