Master Update

Monthly Archives: July 2020

Master Update

1️⃣ Income Tax:*
 A functionality of *determine TDS rate u/s 194N* has been enabled in *e-filing portal* for Banks, co-operative society and post office
*Note:* *Deduction of TDS u/s 194N @2%* shall be made if *cash withdrawal* exceeding *Rs. 1 crore* during the previous year. if an assessee has *not filed the return for last 3 Years* in that case *deduction @2% on cash withdrawal* exceeding *Rs. 20 lakhs but does not exceed Rs. 1 crore* and *@5%* on cash withdrawal *exceeding Rs. 1 crore*.
2️⃣ */Goods and Services Tax:*
 Now *NIL return of GSTR-1* can be file through *SMS facility* from *1st week of July 2020*.
 *Maximum late fee* has been capped at *Rs. 500* for tax *period July 2017 to July 2020* if taxpayers have *any tax liability*. If Taxpayers does *not* have any *tax liability* in that case *no late fees* to be paid *subject to* returns of *GSTR-3B* being filed *before 30.09.2020*.
3️⃣ *Corporate & Allied Laws:*
 MCA has clarified w.r.t. *timelines and tenure* of name reservation, name change and resubmissions as under:
❇️ *Approved* NEW Names *expiring* between *15.03.2020 to 31.07.2020* will be *reserved till 20.08.2020*.
❇️ *Approved* CHANGE in Names *expiring* between *15.03.2020 to 31.07.2020* will be *reserved till 29.09.2020*.
❇️ *Resubmission* of any MCA form for which the *last date* for resubmission is *expiring* between *15.03.2020 to 31.07.2020* has been *extended till 15.08.2020*.
*B. KEY PRACTICAL TAKE-AWAYS:*
1️⃣ *Income Tax:*
*TDS Return format* has been *changed to give effect* of Section 194N. *three columns* pertaining to this section has been *inserted* from now onwards.
2️⃣ */Goods & Services Tax:*
## If you are *filing* your *GSTR-1 through SMS facility*, the taxpayer must *fulfil certain conditions*:
❇️ *No data* should be *saved or submitted* stage on the *GST Portal*, related to that *particular month*.
❇️ Taxpayer should have *opted for the filing frequency* as either monthly or quarterly (e.g: if you are *filing the return* for the month of *April-20*, you must *check on portal* for *frequency* of return filing as this is *1st month of FY 20-21*)
## *GST Tech* has been *clarified* that if you have *paid late fee* on GSTR-3B *in excess than prescribed in the notification* shall be *re-credited* in due course.
3️⃣ *Corporate & Allied Laws:*
 *Revised MSME classification* has been *effected* from 01.07.2020, *check* your *investment and Turnover* as per new classification and take *registration* under MSME *to take benefit of MSME*.
 *Listed Companies always* and *Private Companies never* require *Audit Committee*, *Nomination & Remuneration Committee* and *Independent Directors*. *Other Public Companies* require the same in case *Paid up capital exceeds INR 10 crores* OR *Borrowings exceeds INR 50 crores* OR *Turnover exceeds INR 100 crores*.
*C. UPCOMING DUE DATES:*
1️⃣ *Income Tax:*
## *belated/revised* Income tax return for *FY 2018-19* can be filed *till 31.07.2020*.
## *payment* for *deduction* u/c *Chapter -VIA* u/s 80C, 80D, 80G and etc. can be made for *FY 19-20 till 31.07.2020*.
## *TDS/TCS Return* filing for *Q-4 of FY 19-20* has been extended till *31.07.2020*.
2️⃣ *Goods and Services Tax:*
## *GSTR-3B Due Date:*
❇️ *06.07.2020/12.09.2020/23.09.2020/27.09.2020/01.10.2020* for *April, May, June, July and August* month for the taxpayers having *turnover upto Rs. 5 Crores* and the *principal place* of business situated in *west and south india*.
❇️ *05.07.2020/09.07.2020/15.09.2020/25.09.2020/29.09.2020/03.10.2020* for *March, April, May, June, July and August* month for the *taxpayers having turnover upto Rs. 5 Crores* and the *principal place* of business situated in *East and North india*.
## *10.07.2020/24.07.2020/28.07.2020/05.08.2020* is last date for the month of *March, April, May and June* month to file GSTR-1 for taxpayers is having *turnover exceeding Rs. 1.5 Crores*.
## *17.07.2020/03.08.2020* is last date for the Quarter of *March and June 20* to file GSTR-1 for taxpayers is having turnover *upto Rs. 1.5 Crores*.
*Note- Interest @ 9% shall be applied after passing above-mentioned due date till 30.09.2020*.
3️⃣ *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

“Income Tax Changes” – Announced by CBDT:*

*. Income Tax New disclosures asked in the new ITR forms 1to7 are:
1. House ownership: Individual taxpayers who are joint owners of house property cannot file ITR 1 or ITR4.*
*2. Passport: One needs to disclose the Passport number if held by the taxpayer. This is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, it will be made mandatory in other ITR Forms as and when they are notified.*
*3. Cash deposit: For those filing ITR 4-Sugam, it has been made compulsory to declare the amount deposited as cash in a bank account, if such amount exceeds Rs 1 crore during the FY.*
*4. Foreign travel: If you have spent more than Rs 2 lakh on travelling abroad during the FY, you need to disclose the actual amount spent.*
*5. Electricity consumption: If your electricity bills have been more than Rs 1 lakh in aggregate during the FY, you need to disclose the actual amount.*
*6. Investment details:  Details of investment qualifying for deduction under chapter VIA with bifurcation of details of investment made during the period from April 1, 2020 to June 30, 2020.*
*7. For every assessment year, the last date for filing tax returns is July 31, However, this year ITR filing date has been extended till November 30, 2020 due to pandemic Covid-19.*
*8. Income Tax Exemptions and Deductions that you can claim under the New Tax Regime for FY 2020-21 (AY 2021-22): Withdrawal by an employee from the Employees’ Provident Fund (EPF) is not taxable after 5 years of continuous service.*
*9. Withdrawal from National Pension Scheme (NPS) on maturity or premature closure up to 40% of the amount received on such withdrawal remains tax free for all. In case of partial withdrawal from NPS, up to 25% of the contributions made by the individual will be tax free. Employer’s contribution to NPS up to 10% of their basic salary and dearness allowance also remains tax free.*
*10. Under Section 10 (10D) of the Income Tax Act, the sum assured and any bonus paid on maturity or surrender of the life insurance plan is tax free. Maturity proceeds continue to be exempt under Section 10(10D) even in the new regime. The maturity amount including interest received on the Sukanya Samriddhi Yojana will not attract any tax.*
*11. Conveyance Allowance granted to meet expenditure incurred on conveyance in performance of duties of an office and any allowance granted to an employee to meet the cost of travel on tour or on transfer (including relocation) are tax free.*
 *Interest received from post office savings account balance up to ₹3,500 annually per individual will remain free from tax.*
*12. Any scholarship granted to meet education costs is tax exempt under Section 10 (16) of the Income Tax Act. Gratuity received from the employer up to ₹20 lakh after rendering 5 years of continuous service. Leave encashment received at the time of resignation or retirement up to ₹3 lakh.*
*13. Form 26AS will now be a complete profile of the taxpayer w.e.f. 01.06.2020, CBDT vide Notification dated May 28, 2020 amended Form 26AS in Sec 285BB w.e.f. 01.06.2020. Key takeaways are:*
*14. New form 26AS will also provide information in respect of “Specified financial transactions” which include transactions of purchase/ sale of goods, property, services, works contract, investment, expenditure, taking or accepting any loan or deposits of such value as may be prescribed but not less than of Rs 50,000.*
*15. Information about income tax demand, refund, proceedings pending, and proceedings completed which may include assessment, reassessment under section 148,153A 153C, revision, appeal will also be shared in this form 26AS.*
*16. Information on this form 26AS will not be a one-time affair at year end. This will be a live 26AS, as this will be updated regularly within 3 months from the end of the month in which such information is received.*
*17. Form 26AS will now be a complete profile of the taxpayer for that particular year as against earlier form 26AS which just provided the information about taxes paid by way of TDS/TCS or self-assessing. This form will also have mobile no, email I’d and Aadhar no. of the taxpayer.*
*18. Further an enabling provision has been notified empowering the CBDT to authorise DG Systems or any other officer to upload in this form, information received from any other officer, authority under any law. Thus any adverse action initiated or taken or found or order passed under any other law such as custom , GST , Benami Law etc. including information about Turnover , import , export etc. will also be put in this form 26AS so that not only the concerned taxpayer but  also all the Income Tax authorities will  know and have access to such information.*
*19. This form 26AS will also provide information received by Tax Deptt from any other country under the treaty /exchange of information about income or assets of the taxpayer located outside India.*
*20. The implication of this new form 26AS will be that banks , financial institutions or any other authority or customer , buyer etc. while carrying out due diligence of the person/ corporate concerned will now ask for form 26AS  so as to be sure that there are not any major issues about such person/corporates.*
*21. This will now make difficult for any taxpayer to hide information from any bank / financial institution/ authority about any proceedings against under any law or tax demand, tax disputes etc.*, So mandatorily passport no. is to be mentioned, applicable for all.

TDS UNDER SECTION 194N-NEW CHANGES

 

The Govt.of India through Finance Act 2019 had introduced a new section 194N in the Income Tax Act 1961, to provide for levy of Tax Deduction at Source (TDS) @ 2% on Cash payments in excess of One Crore Rupees in aggregate made during the year, by a Banking Company or cooperative Bank or post office, to any person from one or more accounts maintained with it by the recipient. This came into effect from 1st September 2019.

There were certain changes made from the Financial Year 2020-21 with effect from July 1, 2020:

In case the recipient has not filed the income tax return for preceding 3 financial years: TDS will be deducted at 2% on Rs.20 lakhs to 1 crore amount withdrawn and 5% on the amount exceeding Rs.1 crore during the financial year

In case the recipient has filed the income tax return for preceding 3 financial years: TDS shall not be deducted up to Rs. 1 crore of the amount withdrawn and 2% on the amount exceeding Rs.1 crore during the financial year.

Conditions to get the benefit of lower deduction under section 194N:

1. Assessee should not only have filed the income tax returns for preceding 3 financial years but also returns should be filed within the due dates as given in section 139(1)

2. Newly incorporated entities may not be able to take the benefit of lower deduction who have not filed the income tax returns for the preceding 3 financial years

3. Assessee has to provide a declaration to the banker/co-operative society engaged in carrying on the business of banking/post office for filing the income tax returns for preceding 3 financial years

Exemption from TDS section 194N:

  • The Government
  • any banking company or a co-operative society engaged in carrying on the business of banking or a post office
  • any business correspondent of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the guidelines issued in this regard by the Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of 1934)
  • any white label automated teller machine operator of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the authorization issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007)
WordPress Image Lightbox