Wednesday, February 6, 2019

40 Key Highlights of Interim Union Budget 2019


 


1.     Individual tax payers earning income up to Rs 5 Lac will get full tax rebate, ensuring if you invest in 80C like PPF etc you won’t be taxed up to Rs 6.5 Lacs.

2.    Standard Deduction for salaried class increase from Rs 40,000/- to Rs 50,000/-.

3.    TDS threshold on interest on bank and post office deposits rose from 10,000 to 40,000 rupees.

4.    No TDS on House Rent up to Rs 2.4 Lakhs.

5.    Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees; can be exercised once in a lifetime.

6.    Gratuity limit increased from 10 lakh to 30 lakh rupees for all.

7.    MSME registered under GST will get of 2 per cent interest subvention on the incremental loan of 1 Crore.

8.    NPS has been more liberalised. The government has increased its share to 14 per cent from the existing 10 per cent.

9.    Computerised system to be in place in next 2 years eliminating direct interference of officers and clients in Scrutiny of Income Tax Cases.

10. Businesses with less than Rs. 5 crore annual turnovers, comprising over 90% of GST payers, will be allowed to return quarterly returns.

11.  The Kisan yojana will be effective December 1, 2018, and the money will be directly transferred into their account.

12. Under Pradhan Mantri Kisan Samman Nidhi, 6000 rupees per year for each farmer, in three installments, to be transferred directly to farmers' bank accounts, for farmers with less than 2 hectares land holding.

13. 2018-19 Revised Fiscal deficits at 3.4% Current account deficit to be contained to 2.5%.

14. Rs 3 lakh crore recovered by banks through IBC.

15.  Rs 3 lakh crores loan defaults have already been recovered.

16. Close to 3 lakh crore already recovered in favour of banks and creditors, big defaulters are not spared by our government. Recapitalization of banks amounting to 2.6 lakh crore has been done.

17. Budget allocation of Rs 60,000 crore for National Rural Employment Guarantee Act in 2019-20.

18. FY19 Food Subsidy Spend Was Rs 1.7 Lakh Crore.

19. Rs 60,000 crores set aside for MGNREGA this year.

20.21 AIIMS operating in India now, 14 of which were announced from 2014, The 22nd AIIMS will be created at Haryana.

21. Mahatma Gandhi National Rural Employment Guarantee program’s allocation increased by Rs 5000 crore to Rs 60,000 crore.

22.Pradhan Mantra Gram Sadak Yojana allocation is set at Rs 19,000 crore.

23.Increased allocation for Rashtriya Gokul Mission to 750 crore in current year.

24.2% interest subvention to farmers pursuing animal husbandry and fisheries.

25.In place of rescheduling of crop loans, all farmers severely affected by severe natural calamities will get 2% interest subvention and additional 3% interest subvention upon timely repayment.

26.Without disturbing the existing reservation system, a 10% reservation for economically weaker sections in educational institutions and government jobs has been ensured.

27.New Pension Scheme has been further liberalized as Government's contribution has increased to 14%.

28.Mega Pension Yojana, namely Pradhan Mantri Shram Yogi Mandhan, to provide assured monthly pension of 3000 rupees per month, with contribution of 100 rupees per month, for workers in unorganized sector after 60 years of age.

29.For workers who receive grievous injuries, they will now get Rs 6 lakh from Rs 2.5 lakh through EPFO.

30.For workers and labourers, a new pension scheme will come up. The pension has been increased from Rs 3,500 to Rs 7,000.

31. 1 crore loan can now be obtained under 59 minutes.

32.Defence budget this year is over 3 lakh crore.

33.Allocation for the north eastern region has been proposed to be increased to Rs 58,166 crore in this year, it will be a 21% rise over the previous year.

34.Within almost two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by tax officials, Refunds to be processed within 24 hours.

35.Unmanned system to be created for scrutiny of income tax returns.

36.Exemption for GST for small business has been doubled to 40 lakhs - business having turnover upto 1.50 crores have been given an option under composition scheme to pay 1 per cent flat rate and to file one annual return.

37.Expenditure to rise by 13% from RE 2018-19 to BE 2019-20.

38.Centrally Sponsored Schemes To Get 3,27,679 Crore In FY20.

39.Amendments proposed to ensure streamlined system for levy of stamp duties, to be imposed and collected at one place, seamlessly Along with completion of fiscal deficit consolidation programme, we will now focus on debt-to-GDP ratio consolidation.


40.56,619 crore made in BE 2018-19 for welfare of SCs and STs, increased to 62,474 crore in RE 2018-19 has been further increased to 76,800 crore in BE 2019-20:

Wednesday, January 16, 2019

Declaration to be taken from employee for FY 2018-19



Furnishing of Evidence of Claims by Employee for Deduction of Tax under Section 192 [Rule 26c]:-

Employees usually orally submit declaration at the beginning of the year.

However as per new rules every employer has to collect following evidence with respect to deduction claimed by employee in form No. 12BB for the purpose of estimating or computing the tax deduction at source.

Sr. No.
Nature of Claims
Evidence to be Collected
1.
House Rent Allowance. (HRA)
Name, Address and PAN of the landlord where the aggregate rent paid during the previous year exceeds Rs. 1,00,000/-.
2.
Leave Travel Concession or Assistance.
Evidence of expenditure.
3.
Deduction of interest under the head “Income From House Property”.
Name, Address and PAN of the lender.
4.
Deduction under Chapter VI-A.
(Insurance/PPF/NSC/Tuition Fee/ULIPS/Mutual Funds/etc.)
Evidence of Investment or Expenditure

FORM NO. 12BB (RULE 26):-

Statement Showing Particulars of Claims by an Employee for Deduction of Tax under Section 192:
  1. Name and address of the employee         :Shivprasad Subudhi
  2. Permanent account number of the employee :ABCPS2512N
  3. Financial year                                 :2018-19

Sr. No.
Nature Of Claims
Amount (Rs)
Evidence
1.
House rent allowance:
(i) Rent paid to the landlord.
(ii) Name of the landlord.
(iii)Address of the landlord.
(iv) PAN of the landlord.

Note: PAN should be furnished if the aggregate rent paid during the previous year exceeds Rs. 1,00,000/-.


2.
Leave Travel Concession or Assistance.


3.
Deduction of interest on borrowing:
(i) Interest payable/paid to lender.
(ii) Name of the lender.
(iii)Address of the lender.
(iv) PAN of the lender.
(a) Financial institutions
     (if available)
(b) Employer (if available)
(c) Others.


4.
Deductions under chapter VI-A
(A) section 80C, 80CCC AND 80CCD
(i)  Section 80C
(a)     
(b)     
(c)         
(ii)   Section 80CCC
(iii)  Section 80CCD

(B) Other sections under chapter VI-A.
(i)   Section 80E
(ii)  Section 80G
(iii) Section 80TTA
(iv) 
(v)  



VERIFICATION:

I __Shivprasad Subudhi__ son/daughter of ____________ do hereby certify that the information given above is complete and correct.
Place ____________

Date ____________
(Signature of the Employer)
Designation ____________
Full Name: ____________


Other Important Point to be Kept in Mind before Deducting TDS on Salary

  1. No deduction under section 192 where salary not liable to tax in India.
  2. Where assessment of employee is completed, it puts an end to the liability of employer to deduct tax.
  3. No tax to be deducted at source on salary received from other employer unless the employee has submitted details.
  4. No employer or employee relationship in case of a consulting agreement.
  5. Remuneration paid to MP not taxable under the head “salaries”.
  6. Salary of a judge of the Supreme Court or high court is taxable under the head “salary”.
  7. Information to be asked for if there is any other income of employee from other heads like interest or income from house property
  8. Tips paid to employees by an outsider are not salary.
  9. Free Airline tickets provided to employee by other airlines is not a perquisite.
  10. Commission paid to non-executive directors could not be categorized as salary.
  11. Uniform allowance is not additional salary attracting and so TDS won’t be applicable to it
  12. Employer to preserve evidence for allowing exemption of LTC.
  13. Failure to verify actual proof/evidence of having incurred leave travel allowance travel, the assessee could not be treated s assessee in default.
  14. No TDS on conveyance allowance, etc if exempt under section 10(14).
  15. No TDS if employer makes a fair estimate of the exempt allowance.
  16. Employer not to enquire into the source of investments by the employee.
  17. Honorarium to part time teacher held as salary, if the employee is under the control of the employer.
  18. Section 192 is applicable only when there is a relationship of employer and employee between the payer and payee.
  19. Conveyance/additional conveyance allowance paid to development officer is taxable as perquisite.
  20. Rent paid to wife is eligible to exemption under section 10(13A).
  21. Fixed monthly medical expense and leave travel concession shall not be taxable perquisite, if exemption is eventually allowed only against submission of proof of actual expenses incurred.
  22. Normal dress worn by employees in office cannot be called uniform.
  23. Transport facility given to employees from their residence to office and vice versa is not a perquisite.
  24. Supporting evidence for utilization of leave travel concession/conveyance allowance not necessary.
  25. No TDS on salary paid to Indian crews if the ship is docked in Indian ports for a very short time.
  26. Provisions of section 40(a) (iii) are not attracted if the tax is deducted on payment basis in the subsequent year, although it was claimed as a deduction on due basis.
  27. Commission will become taxable when it is due.
  28. Private arrangements for making tax-free payment cannot discharge obligation to deduct tax at source.
  29. Mere declaration furnished by the employee is not sufficient for granting deduction/rebate.
  30. Consultant doctors are employees if there exists a relationship of employer and employee between the doctor and the hospitals.
  31. Employee not liable to pay tax if tax has been deducted by the employer, even though TDS certificate is not issued by the employer.
  32. Salary received abroad for services rendered in India is taxable in India.
  33. When non-resident employer is deducting tax, the resident employer to whom the services of the employee have been made available, not required deducting tax.
  34. Employer not responsible for TDS in case of misuse of meal coupons by some employees.
  35. Refund of salary not to be treated as income.

Deductions Which One Can Claim To Minimize Tax Burden in financial year 2018-19




a.  Deduction Under Section 80C –

-It allows a maximum limit of Rs 1,50,000/- across investments ranging from following:-

          -Provident fund,
          -PPF
          -Infrastructure bonds
          -Fixed deposits (5 years or more)
          -NSC
          -Insurance
          -Pension plans
          -Unit linked insurance
          -Equity linked savings scheme
          -Tuition fees of your children
          -Repayment of principal on your housing loan

b.  Deduction Under Section 80D –

1.     Basic deduction Under Section 80D:-
   -Mediclaim premium paid for Self, Spouse or dependent children. Maximum deduction Rs.25,000/-
   -In case any of the persons specified above is a senior citizen (i.e. 60 years or more)
   -And Mediclaim Insurance premium is paid for such senior citizen, deduction amount is Rs.30,000/-(This amount has been increased to Rs 50,000/- from A.Y 2019-20)
   -For uninsured super senior citizens (more than 80 years old) & senior citizen ( i.e. 60 years or more)
   -Medical expenditure incurred up to Rs 30,000/- shall be allowed as a deduction under section 80D. (This amount has been increased to Rs.50,000/- from A.Y 2019-20)

2.    Additional deduction Under Section 80D:

-Mediclaim premium paid for parents. Maximum deduction Rs 25,000/-.
-In case any of the parents covered by the Mediclaim policy is a senior citizen, deduction amount is enhanced to Rs. 30,000/-. (It has been increased to Rs 50,000/- from A.y 2019-20)
-This deduction is allowed only to an individual (resident / nonresident/Indian citizen/ foreign citizen) or a Hindu undivided family (resident/nonresident)

c.   Deduction Under Section 80DD–

-A person who has spent money on the maintenance (including medical treatment)  of dependent persons with disability could avail deductions.

d.   Deduction Under Section 80DDB –

-Deductions of expenses on medical treatment of specified ailments (such as AIDS, cancer and neurological diseases) can be claimed.         
-The maximum amount of deduction allowed from gross total income is restricted to Rs.40,000/-.
-But which goes up to Rs.60,000/- if the age of the person treated is 60 years or more.

(This has been increased to Rs 1,00,000/- wef A.y 2019-20 and to Rs.80,000 for super senior citizen (that is,80 years or more)for A.y 2016-17 to 2018-19 and to Rs.1,00,000/-from A.y 2019-20 on condition that, no medical reimbursement is received from any insurance company or employer for this amount.)

e.    Deduction Under Section 80E–

-Interest on loan taken for higher education & vocational courses
-Taxpayers also tend to forget that the interest paid on an education loan    taken for higher studies or vocational curses qualifies for deduction under Section 80E.
-Deduction is also available where the loan is taken for the purpose of higher education of spouse or children of the individual or the student for whom the individual is a legal guardian.
-Also remember that the deduction benefit on interest is allowed for maximum eight years, or till the interest is fully paid.

f.   Deduction Under Section 80EE–

-Income Tax Benefit on Home Loan Interest
-Benefit of this section can avail by Individual assessee.
-Deduction under this section is not available for any other assessee (like HUF, firm etc.).
-Individual can claim benefit under this section only when all the following conditions are satisfied, these are:-
    *Purchaser should be first time buyer. i.e. he has never purchased any house and             now he is going to purchase a house.
    *Value of the house should not more than Rs.50,00,000/-.
    *Loan taken by Individual for the purpose of buy a house should not be more than             Rs.35,00,000/-.
    *On the date of sanction of loan individual does not have any own residential house           property.
    *Loan for this purpose taken by individual should be from the Financial Institution          or Housing Finance Company.
    *For this purpose, loan should be sanctioned between 01.04.16 to 31.03.17.
    *The Assessee can claim deduction under section 80EE on interest payable on home         loan.

-The amount deduction shall be the interest payable or Rs 50,000/-, whichever is less.
-The deduction is available for A.Y 2017-18 and subsequent assessment years till the loan are repaid.

g.   Deduction Under Section 80G –

-Charitable deduction is also available in respect of donations made by an individual to certain funds, charitable institutions and so on.
-There is no restriction on the amount of charity.
-The rate of deduction, however, is either 50 or 100 per cent.
-However, you cannot use this route to evade tax by bringing down your income tax slab.
-There is a ceiling on the deduction a taxpayer can claim in a year.
-The quantum of deduction is limited to 10% of the gross total income of the donor.
-Also, only cash donations are taken into account.
-Donations of food, clothes and medicines do not qualify for such a deduction.

h.    Deduction Under Section 80U –

-Person with disability.
-An individual who is certified by the prescribed medical authority to be a person with disability shall be allowed a deduction of Rs 75,000/-.
-An individual who is certified as a person with severe disability, shall be allowed a deduction of Rs 1,25,000/-.

Friday, December 21, 2018

CASES WHEN ITC IS NOT AVAILABLE UNDER GST





1. MOTOR VEHICLES & CONVEYANCES

-ITC is not available for motor vehicles and conveyances.

For example,
Chingudi & Co. buys a car for their business.
They cannot claim ITC on the same.

-Exceptions to ITC on motor vehicles

ITC will be available when the vehicle is used for the following.

a) Supply of other vehicles or conveyances
-If you are in the business of supplying cars then ITC will be available.

For example, a car dealer purchases a car for Rs.25 lakh plus 07 lakh GST (ignoring cess calculations).
The same car was later sold for 50 lakhs along with Rs.14 lakh GST.
Since he is a dealer, he can claim ITC of 7 lakhs and pay only Rs.7 lakh (14 – 7).

b) Transportation of passengers

If you are providing transportation of passengers then ITC will be allowed on the vehicle purchased.

For example, Chingudi Tours purchased a bus for inter-city transport of passengers from Bhubaneswar to Bhadrak.
ITC is available.

c) Imparting training on driving, flying, navigating such vehicle or conveyances

A driving school purchases a car to give training to students.
The school can claim ITC on the GST paid on the car.

d) Transportation of goods

ITC will be allowed on motor vehicles (and other conveyances) used to transport goods from one place to another.
However, this is concerning other transporters and not goods transport agencies (GTA).


2. FOOD, BEVERAGES, CLUB MEMBERSHIPS AND OTHERS

ITC is not for the supply of following goods or services or both:

*Food and beverages
*Outdoor catering
*Beauty treatment
*Health services
*Cosmetic and plastic surgery

However, ITC will be available if the category of inward and outward supply is same,
or the component belongs to a mixed or composite supply under GST.

Examples-

Chingudi Enterprises arranges for an office party for its employees.
Chingudi Enterprises will not be able to claim ITC on the food & beverages served.


3. SALE OF MEMBERSHIP IN A CLUB, HEALTH, FITNESS CENTRE

No ITC will be allowed on any membership fees for gyms, clubs etc.

Example-

Miss N.N, a Managing Director has taken membership of a club and the company pays the membership fees.
ITC will not be available to the company or Miss. N.N.


4. RENT-A-CAB, LIFE INSURANCE, HEALTH INSURANCE

ITC is not available for rent-a-cab, health insurance and life insurance.

However, the following are exceptions,

i.e., ITC is available for-

a. Any services which are made obligatory for an employer to provide its employee by the Indian Government under any current law in force.

For example,
Assuming the government passes a rule for all employers to provide mandatory cab services to female staff in night shifts.

Nayak Ltd. hires a rent-a-cab to provide to transportation to its female staff on night shifts.
Then ITC will be available to Nayak Ltd. on the GST paid to the rent-a-cab service.

b. If the category is same for the inward supply and outward supply or it is a part of the mixed or composite supply.

For example,
Chingudi Travels lends out a car to Haathi Travels.
Then Haathi Travels can claim ITC on the same.


5. TRAVEL

ITC is not available in the case of travel, benefits extended to employees on vacation such as leave or home travel concession.

For example,

Nayak Ltd. offers a travel package to its employees for personal holidays.
ITC on GST paid by Nayak Ltd. for the holiday package will not be allowed.
ITC will be allowed for travel for business purposes.


6. WORKS CONTRACT

ITC shall not be available for any work contract services.

ITC for the construction of an immovable property cannot be availed,

except where the input service is used for further work contract services.

For example,

Mita Contractors are constructing an immovable property.
They cannot claim any ITC on the works contract.

However, Mita hires Bittu Contractors for a portion of the works contract.
Mita can claim ITC on the GST charged by Bittu Contractors.


7. CONSTRUCTING AN IMMOVABLE PROPERTY ON OWN ACCOUNT

No ITC is available for goods/services for construction of an immovable property on his own account.

Even if such goods/services are used in the course or furtherance of business,
ITC will not be available.

But this rule does not apply to plant or machinery.
ITC is available on inputs used to manufacture plant and machinery for own use.

Example-
*Nayak Steel Industries constructs an office building for its headquarters.
 ITC will not be available.

*Nayak Steel Industries also constructs a blast furnace to manufacture steel.
 ITC is available since it is a plant.


8. NO ITC ON RESTAURANTS

As per Notification No. 46/2017-Central Tax (Rate), dated 14th November 2017,
Standalone restaurants will charge only 5% GST but cannot enjoy any ITC on the inputs.

However, restaurants as part of hotels with room tariffs exceeding Rs. 7,500 still continue pay 18% GST and enjoy ITC.

-Domino's charges 5% GST and cannot claim any ITC.

-Hotel Holiday Resort by the Gajapati restaurant in Puri is a part of the Hotel Holiday Resort so it will charge 18% GST while enjoying ITC. 


9. COMPOSITION SCHEME

No ITC would be available to the person who has made the payment of tax under composition scheme in GST law.


10. NO ITC FOR PERSONAL USE

No ITC will be available for the goods/ services used for personal purposed and not for business purposes.


11. NO ITC FOR NON-RESIDENTS

ITC cannot be availed on goods/services received by a non-resident taxable person.
ITC is only available on any goods imported by him.


12. NO ITC IN FRAUD CASES

ITC will not be available for any tax paid due to fraud cases which has resulted into –

-Non or short tax payment or
-Excessive refund or
-ITC utilised or
-Fraud cases include fraud or willful misstatements or suppression of facts or confiscation and seizure of goods.

13. FREE SAMPLES AND DESTROYED GOODS

No ITC is available for goods lost, stolen, destroyed, written off or given off as gift or free samples.


40 Key Highlights of Interim Union Budget 2019

  1.      Individual tax payers earning income up to Rs 5 Lac will get full tax rebate, ensuring if you invest in 80C like PPF et...