MASTER UPDATE

Monthly Archives: May 2020

MASTER UPDATE

NEW UPDATES:*
_*✴️Income Tax:*_
## *TDS Rates have been reduced* w.e.f. 14.05.2020 by *25% of the existing* rates. Here are *some clarifications in this regard*:
*a. The reduction in rates* will not be applicable to *TDS on Non-Residents u/s 195*.
*b. The reduction in rates* will not be applicable in *Non PAN cases (20% FLAT Rate) u/s 206AA.*
*c. The reduction in TDS Rate* will be applicable on *invoices due or payments done on or after 14.05.2020* even if invoice date is before 14.05.2020. *What you have to see is “Due or Payment”.* If both dates fall on or after 14.05.2020, *reduced rate will be applicable.*
## *The due dates of ITR* for FY 2019-20 has been *extended to 30.11.2020 in case of ALL assessees*. Further, *The due date of Tax Audit* in case of *ALL assessees has been extended to 31.10.2020.*
*Note – In short, we can say* that irrespective of *assessee being subject to tax audit* or not OR *TP audit or not, the above* due dates are applicable.
Goods & Services Tax:_*
## *GST Portal enabled a facility* for Input *Service Distributor (ISD) to adjust* negative ITC to its Units in *case no ITC is to be distributed* for the month and *ISD have to distribute ITC reversal through CN.*
_*Corporate & Allied Laws:*_
## *In case of an entity where upto 100 workers* are employed AND out of which, *90% are with less than INR 15,000* wages, no need to pay any *Employer and Employee Contribution (24%) and the entire contribution* will be borne by Govt. *upto August, 2020*.
## *In case of other PF entities* (not covered above), *Employer and Employee contribution* will be required to be *paid @ 10% each (means 20% instead 24%)* for *June, July and August, 20*.
## *Govt. is planning to apply ESI* Act to ALL establishments *employing 10 or more workers and area wise* exemptions *earlier provided will be lapsed.*
*B. KEY PRACTICAL TAKE-AWAYS:*
*_✴️Income Tax:_*
## *In computation of depreciation* under the *Income Tax Act, 1961* for FY 2019-20, *consider the following:*
*a. Consider the impact of “Leap Year” (i.e. 29.02.2020)* to your computation for calculation *of 180 days. This time* take *100% depreciation for assets* put to use till “04.10.2019” instead *03.10 earlier and 50% depreciation for assets* put to use *after “04.10.2019”.*
*b. In case of a Company*, if you are *taking the “22% Tax Rate” u/s 115BAA*, then do not take *allowance of “additional depreciation”.*
*_✴️Goods & Services Tax:_*
## *Filing of GST Return is mandatory* along with *payment in case opting 15 days relaxation of GSTR-3B* filing for taxpayers with turnover *more than INR 5 crores*.
*Note – In case you pay the tax* under Cash Ledger and *do no file GSTR-3B within due date + such 15 days time*, you need to pay *Interest @ 9% till 24.06.2020.*
*_✴️Corporate & Allied Laws:_*
## *There is no need to file Form ADT-1* in case of *first auditor appointment* since filing of *ADT-1 is governed by Section 139(1) and first auditor* is appointed under Section 139(6) and *not under Section 139(1) of the Companies Act, 2013.*
## *In case of removal of auditor*, the *new auditor appointed in place* of previous can hold office upto *next AGM date only and not for 5 years*. You have to *appoint such auditor again in Next AGM.*
C. UPCOMING DUE DATES:*
_*✴️Income Tax:*_
## *31.05.2020 is the due date* to file *Form 61A (SFT Compliance)* in case *you have such Significant Financial* Transactions such as issuance of *equity shares for more than INR 10 lakhs.*
*Note – In case of no such SFT transaction*, *Tax Audit assessees are at a mandate to file “Preliminary SFT Reponse” at* e-filing portal by said due date.
## *07.06.2020* is the due date to *pay TDS/TCS for the month* of *May, 2020.*
## *30.06.2020* is the due date to *file TDS/TCS Returns* for *Q4 (F.Y. 2019-20).*
## *30.06.2020* is the due date to *file Belated ITR/ Revised ITR* for *FY 2018-19.*
*Note – ITR for FY 2017-18 cannot* be filed now as the *due date to file lapsed.*
*✴️Goods and Services Tax*_
## *04.06.2020 is the due date* to file *GSTR-3B for the month of April, 2020* in case of *taxpayers with aggregate turnover more than INR 5 crores* in previous FY.
*Note – You can delay filing* above GSTR-3B *till 24.06.2020 without* any late fees but with *9% p.a. Interest liability.*
_*✴️Corporate & Allied Laws:*_
## *MCA has announced a “Moratorium Period” from
* 01.04.2020 to *30.09.2020 for filing of ROC Forms
and *no additional fees will be charged* for such period *due to late filing of any form* due within this period.

TDS & TCS Rate Chart applicable from 14th May 2020

TDS & TCS Rate Chart applicable from 14th May 2020

In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the rates of Tax Deduction at Source (TDS) for the following non-salaried specified payments made to residents has been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:-

TDS Rate Chart applicable from 14th May 2020

S. No Section of the Income-tax Act Nature of Payment Existing Rate of TDS Reduced rate from 14/05/2020 to 31/03/2021
1 193 Interest on Securities 10% 7.50%
2 194 Dividend 10% 7.50%
3 194A Interest other than interest on securities 10% 7.50%
4 194C Payment of Contractors and sub-contractors 1% (individual/HUF) 0.75% (individual/HUF)
 2% (others) 1.5% (others)
5 194D Insurance Commission 5% 3.75%
6 194DA Payment in respect of life insurance policy 5% 3.75%
7 194EE Payments in respect of deposits under National Savings Scheme 10% 7.50%
8 194F Payments on account of re-purchase of Units by Mutual Funds or UTI 20% 15%
9 194G Commission, prize etc., on sale of lottery tickets 5% 3.75%
10 194H Commission or brokerage 5% 3.75%
11 194-I(a) Rent for plant and machinery 2% 1.50%
12 194-I(b) Rent for immovable property 10% 7.50%
13 194-IA Payment for acquisition of immovable property 1% 0.75%
14 194-IB Payment of rent by individual or HUF 5% 3.75%
15 194-IC Payment for Joint Development Agreements 10% 7.50%
16 194J Fee for Professional or Technical Services (FTS), Royalty, etc. 2% (FTS, certain royalties, call centre) 1.5% (FTS, certain royalties, call centre)
10% (others) 7.5% (others)
17 194K Payment of dividend by Mutual Funds 10% 7.50%
18 194LA Payment of Compensation on acquisition of immovable property 10% 7.50%
19 194LBA(1) Payment of income by Business trust 10% 7.50%
20 194LBB(i) Payment of income by Investment fund 10% 7.50%
21 194LBC(1) Income by securitisation trust 25% (Individual/HUF) 18.75% (Individual/HUF)
30% (Others) 22.5% (Others)
22 194M Payment to commission, brokerage etc. by Individual and HUF 5% 3.75%
23 194-O TDS on e-commerce participants 1% (w.e.f. 1.10.2020) 0.75%

2. Further, the rate of Tax Collection at Source (TCS) for the following specified receipts has also been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:-

TCS Rate Chart applicable from 14th May 2020

S. No Section of the Income tax Act Nature of Receipts Existing Rate of TCS Reduced rate from 14/05/2020 to 31/03/2021
1 206C(1) Sale of
(a) Tendu Leaves 5% 3.75%
(b)Timber obtained under a forest lease 2.50% 1.88%
(c) timber obtained by any other mode 2.50% 1.88%
(d) Any other forest produce not being timber/tendu leaves 2.50% 1.88%
(e) scrap 1% 0.75%
(f) Minerals, being coal or lignite or iron ore 1% 0.75%
2 206C(1C) Grant of license, lease, etc. of 2% 1.50%
(a) Parking lot
(b) Toll Plaza 2% 1.50%
(c) Mining and quarrying 2% 1.50%
3 206C(1F) Sale of motor vehicle above 10 lakhs 1% 0.75%
4 206C(1H) Sale of any other goods 0.1% (w.e.f 01.10.2020) 0.75%

3. Therefore, TDS on the amount paid or credited during the period from 14th May, 2020 to 31st March, 2021 shall be deducted at the reduced rates specified in the table in para 1 above. Similarly, the tax on the amount received or debited during the period from 14th May, 2020 to 31st March, 2021 shall be collected at the reduced rates specified in the table in para 2 above.

4. It is further stated that there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar. For example, if the tax is required to be deducted at 20% under section 206AA of the Income-tax Act due to non-furnishing of PAN/Aadhaar, it shall be deducted at the rate of 20% and not at the rate of 15%.

ITR & Tax Audit Due date for FY 2019-20 extended

ITR & Tax Audit Due date for FY 2019-20 extended

  • The due date of Income tax return (ITR) for FY 2019-20 has be extended from 31st July, 2020 and 31st October, 2020 to 30th November, 2020.
  • Similarly Tax audit due dates have been extended from 30th September, 2020 to 31st October, 2020.

This was announced by the FM today.

 

 

MASTER UPDATES

A. MASTER UPDATES OF THE WEEK:*
⇒ Income Tax:*
 *CBDT has clarified* that an individual visited *India before 22.03.2020* and *unable to leave* India *before 31.03.2020* or *quarantined* in india *on or after 01.03.2020* and *departed on or before 31.03.2020* or unable *to leave india till 31.03.2020*, due to COVID-19 lockdown, *such period shall not consider for determining residential status for FY 2019-20*.
GSTR-9
 Due date to file *GSTR-9 (Annual Return)* and *GSTR-9C (Audited Reco Statement)* for *FY 2018-19* has been *extended till 30.09.2020*.

*Note:* *GSTR-9 is* required to be *filed only by taxpayers* with aggregate *turnover more than INR 2 crores in FY 2018-19*. However, *GSTR-9C is required to be filed only* by taxpayers with aggregate *turnover more than INR 5 crores* in FY 2018-19.
 *Implementation of new procedure* for *approval/registration* of entities u/s 10(23C), 12AA, 35 & 80G of IT Act, 1961 has been *deferred till 01.10.2020*.
⇒ Goods & Services Tax:
 *CBIC has notified* that a registered person will be able *to file NIL return in Form GSTR-3B through a short messaging service* using the registered Mobile Number and shall be *verified by an OTP* received on registered mobile number.
 *CBIC has notified* that an *e-way bill* generated *on or before 24.03.2020* and *validity expires* during the period between *20.03.2020 to 15.04.2020*, such e-way bill shall be *valid till 31.05.2020*.
 Corporate & Allied Laws:*
 It has been clarified by MCA that *Companies are allowed* to hold *AGM* through *Video Conferencing (VC)* or *other audio visual means*. (for Detailed information refer MCA General Circular No. 20/2020).
B. KEY PRACTICAL TAKE-AWAYS:*
1️⃣ * Income Tax:*
 If the payer has *deducted TDS on your income* based on ACCRUALS but you have *booked such income in next year* as per Revenue Recognition Principles, u can *CARRY FORWARD* tax in relation to that in next year when the *income will be offered*.
2️⃣ Goods & Services Tax:*
CBIC has notified that *Company* shall be *allowed to file GSTR 3B* verified *through Electronic Verification Code (EVC)* during the period *from 21.04.2020 to 30.06.2020*.
## GSTR-9A *(Annual Return by Composition Taxable Person)* is *not required* to be filed in any case for *F.Y. 2018-19* since the same is “Optional”.
3️⃣ *Corporate & Allied Laws:*
 Applicability of *annexures to the Auditor’s Report*:
a. Annexure of *CARO Report is not required* in case of *Small Company, Banking Company, Insurance Company, Section 8 Company, One Person Company* and any *private company having Paid up Capital and Free Reserves upto INR 1 crores* as at balance sheet date and *borrowings upto INR 1 crores* ANY TIME DURING THE FY and *turnover upto INR 10 crores* as per financial statements of the concerned year.
b. *Annexure of “Internal Financial Control”* Report is not required in case of *Small Company*, *One Person Company*, AND any *Private Company with Turnover upto INR 50 crores* as per financial statements of the concerned year and *borrowings upto INR 25 crores* AT ANY TIME DURING THE FY.
C. UPCOMING DUE DATES:*
  • *Income Tax:*
## *30.06.2020* is the due date *to file TDS/TCS Returns for Q4 (F.Y. 2019-20)*.
## *30.06.2020* is the due date *to file Original/Revised Income Tax Return for FY 2018-19*.
  •  Goods and Services Tax:*
## *30.06.2020* is the new due date *to Opt in Composition Scheme* by Regular taxpayers for *FY 2020-21* by filing *Form GST CMP-02*.
Note – Taxpayers wanting *to shift* SHALL NOT *file any GSTR-3B or GSTR-1* for the months of *April, May and June, 2020*.
## Existing Composition Taxable Person to *file CMP-08 for Q4 (2019-20) by 07.07.2020* instead 18.04.2020 and *file GSTR-4 for FY 2019-20 by 15.07.2020 instead 30.04.2020*.
  • *Corporate & Allied Laws:*
## MCA has announced a *“Moratorium Period”* from 01.04.2020 to 30.09.2020 for *filing of ROC Forms and no additional fees will be charged* for such period due to late filing of any form due within this period.
MLG TEAM♥

MASTER UPDATES

➡️ Note:*_
*05.05.2020* is the due date to *file GSTR-3B* for taxpayers with *aggregate turnover* of more than *INR 5 crores* for the month of *March, 20.*
  • *Note – Filing GSTR-3B* by the above date will *not give you extra cost burden* of Interest and Late Fees. *However, you can file above GSTR-3B till 24.06.2020* with *9% Interest and Zero Late Fees*.
*A. MASTER UPDATES OF THE WEEK:*
  • 1⃣ Income Tax:*_
## *CBDT has issued order* u/s 119 of the Income tax Act, 1961 to *provide that Form 3CD Clause 30C* (GAAR Provisions) and *Clause 44* (GST Expense Details) will *not be applicable in case* of Tax Audits *for F.Y. 2019-20.*
  • _2⃣ Goods & Services Tax:_*
## *CBIC has notified FORM GST PMT-09* for transfer of *balances in Cash Ledger* from *one head (Tax/Interest/Fee,CGST/SGST/IGST) to another head* (Tax/Interest/Fee, CGST/SGST/IGST). The form *has been enabled on GST Portal* and can be filed if required.
  • 3⃣ Corporate & Allied Laws:*_
## *MCA has extended* the due date for “Registration *at Independent Directors’ Databank” of existing* Independent Directors from *30.04.2020 earlier to 30.06.2020.*
*B. KEY PRACTICAL TAKE-AWAYS:*

*_1⃣  Income Tax:_*

 *Declaration by employee* for opting in taxation scheme (Old/New) *for FY 20-21 for TDS deduction* to employes *must follow following test*:
✳
  • Á *In case the tax amount* saved due to *reduced rate of tax in New Scheme* is less than the *tax saving amount* due to *“Salary Standard Deduction + HRA Exemption + LTC Exemption + Interest on Housing Loan + 80C amount + 80D”* amount *under Old Scheme, employee* shall go for *Old Scheme or vice-versa*.
_2⃣ Goods & Services Tax:_*
✳
  • *Annual Return and GST Audit*
 *GSTR-9 (Annual Return)* is required to be filed *only by taxpayers* with aggregate turnover *more than INR 2 crores* in FY 2018-19.
  • *GSTR-9C (Audited Reco. Statement)* is required to be filed *only by taxpayers* with aggregate turnover *more than INR 5 crores* in FY 2018-19.
  •  *GSTR-9A (Annual Return by Composition Taxable Person)* is *not required* to be filed in *any case for F.Y. 2018-19* since the same is “Optional”.
_3⃣Corporate & Allied Laws:_*
  •  *Companies getting ESI and PF* registration *within the SPICE+ Package* do not require to *comply with ESI and PF laws till the time* threshold of *applicability is not triggered.*
  •  *Status of GSTIN applied* through *AGILE-PRO* can be *checked at GST Portal* from *SRN of MCA Forms*.
*C. UPCOMING DUE DATES:*
  • _*1⃣ /Income Tax:*_
*07.05.2020* is the *due date to pay TDS/TCS* for the month of *April, 2020.*
*_Note – Interest @ 0.75% p.m. or part will be charged in case of delay till 30.06.2020._*
## *30.06.2020* is the due date to *file TDS/TCS Returns* for *Q4 (F.Y. 2019-20).*
*2⃣ Goods and Services Tax*_
  •  *30.06.2020* is the new due date to *Opt in Composition Scheme* by Regular *taxpayers for FY 2020-21* by filing *Form GST CMP-02.*
*_Note – Taxpayers wanting to shift SHALL NOT file any GSTR-3B or GSTR-1 for the months of April, May and June, 2020._*
  • *Existing Composition Taxable Person* to file *CMP-08 for Q4 (2019-20)* by *07.07.2020 instead* 18.04.2020 and file *GSTR-4 for FY 2019-20* by *15.07.2020 instead 30.04.2020.*
*3⃣ Corporate & Allied Laws:*_
  •  *MCA has announced a “Moratorium Period” from* 01.04.2020 to *30.09.2020 for filing of ROC Forms* and *no additional fees will be charged* for such period *due to late filing of any form* due within this period.
➡️*ESIC has extended* the due date of payment of *ESI Contribution* for the month of *Feb, 20 and Mar, 20 to 15.05.2020.*
➡️ *EPFO has extended* the due date of payment of *PF Contribution* for the month of *Mar, 20 to 15.05.2020.*
MLG TEAM
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