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Financial/Estate Planning
GST transition

GST transition

With the introduction and (Goods and Service tax) GST implementation, the Indian tax structure for goods and services has become much broader. Under GST, multiple taxes are admixed into one. Transition from traditional tax structure to GST needs careful exercise. Hence, it is vital to have rules ensuring smooth transition to GST in place. The 3 types of transitional provisions are:

  • Input tax credit (ITC)
  • Refunds and arrears
  • Other cases : Job work, Input Service Distributor(ISD), Composition scheme

Input tax credit (ITC)
Various provisions are made for the smooth ITC transition under VAT, excise duty or service tax to GST.  … Read more

New Taxation Rules

New Taxation Rules

Union Finance Minister Nirmala Sitharaman in her maiden budget speech announced some income tax-related changes which will come into effect from September 1, 2019. Cash withdrawals exceeding INR 1 crore in aggregate in a year from finance institutions will attract TDS while in case of property transactions, the definition of immovable property has been broadened to include charges like club membership fee and car parking fee for TDS levy. Also, in another income tax rule change, a higher TDS will be levied if life insurance maturity proceeds received are taxable in your hands. Here is a 5-point explainer of new Read more

Introduction to 15CA & 15 CB

Introduction to 15CA & 15 CB

When it comes to filing taxes, it is not only individuals who need to ensure that all the proper procedures are followed and forms are submitted. When a person makes any payment or remit any money to non-resident, the bank will need to check whether the tax was paid or not. Making payments outside India requires certain compliances. One such compliance is to submit Form 15CA and 15CBinstitutions have rules that must be followed, which helps the income tax department to determine the taxable amounts of NRI’s. Foreign remittances have tax implications, which may be missed out inadvertently by taxpayers. Read more

Time of Supply (TOS) of Goods under GST

Time of Supply (TOS) of Goods under GST

In order to calculate and discharge a tax liability, it is important to know the date when the tax liability arises i.e. the date on which the charging event has occurred. Point of taxation under GST is the point in time when goods are deemed to have been provided and services are deemed to be rendered. The concept of point of taxation is not new, a similar concept was also there in earlier tax regime. The point of taxation enables a person to determine the tax rate, value and due date for payment of taxes.
Under GST, time of supply … Read more

Decoding the Direct Tax Code

Decoding the Direct Tax Code

Over the period of 6 decades, the Income Tax Act of India has undergone various impediments. The judgments of the  courts or amendments by parliament has made the Act lengthy and hard to interpret as there was a need to ease up the provisions and make it shorter. It is expected that the government may introduce the country with the newly drafted Direct Tax Code (DTC) drafted by 8 members of the task force .The motive behind drafting the DTC includes simplifying the tax regime and provide relief to domestic and foreign companies. Below mentioned are the changes proposed by … Read more

Ambiguities in Goods & Service Tax

Ambiguities in Goods & Service Tax

Since the inception of the Goods and Service Tax in India, GST has been a matter of discussion for every layman and experts in the country. Like every coin has 2 sides, the implementation of GST in the country also has arguably many merits and demerits as compared to the earlier subsumed taxes. Moving on to the inch closer for unifying tax reforms, the holes in the implementation of the act are triggered along with some important observation of Comptroller Auditor General of India (CAG).

Observation of CAG on indirect tax collection
The CAG in the latest reports on indirect … Read more

Search and Survey operations

Search and Survey operations

Search and survey operations are conducted by the Income Tax Department defined as raid, where the department suspects an individual or business for hoarding illegal money. Powers to carry out search under section 132 and survey under section 133A are important tools in the armory of the Income Tax Department for detecting and preventing tax evasion. Though the need to have such tools cannot be grudged, the department has to use it sparingly and in deserving cases and after complying with necessary guidelines and safeguards. A search is violation of personal privacy and rights of a citizen and its use … Read more

FPIs exempted from super-rich tax

FPIs exempted from super-rich tax

India has quickly rolled back an additional levy on foreign funds and announced several measures to boost economic growth. The Finance Minister, Nirmala Sitharaman had proposed increasing the effective tax rate on individuals with taxable annual income of above 20 million rupees by about 3%, and for those earning above 50 million rupees by 7%. The tax proposal of higher surcharge on FPIs, along with a lack of measure to boost the economy in the July budget, led to foreigners withdrawing more than $3 billion from Indian shares, putting pressure on stocks and the rupee. Indian markets went down about … Read more

Financial responsibility of Broker-dealers in US

Financial responsibility of Broker-dealers in US

The Securities Exchange Act 1934 (“Exchange Act” or “Act”) governs the way in which the securities markets in United States and its brokers & dealers operate. Broker-dealers in US are required to meet certain financial responsibilities including maintaining minimum net capital or liquid assets; safeguarding the customer funds and securities; and making and preservation of accurate books and records.

The Act generally defines a “broker” broadly as any person engaged in the business of effecting transactions in securities for the account of others such as investment advisers, financial consultants, placement agents, independent contractors etc. Unlike a broker, who acts as … Read more

Incorporation of Section 8 companies

Simplified process of Incorporation of Section 8 companies

Section 8 Companies are the limited companies established under the Companies Act and granted an exclusive license by Government under Section 8 association. It is a non-profit organization acquiring numerous tax benefits which are availed under Section 80G of Income Tax Act, 1961. They delight in minimal stamp duty structure and do not require much share capital. Funding for such organizations comes from subscriptions or donations made to them.

The Ministry of Corporate Affairs (MCA) vide its notification dated 7 June 2019 has amended the Companies Incorporation Rules, 2014 to simplify and fast track the incorporation procedure. This shall be … Read more

Slashed tax rates of electric vehicles

Slashed tax rates of electric vehicles

The decisions are in line with the government’s latest budget announcements to promote electric vehicles (EVs) and to reduce carbon footprints. In this landmark, the GST council brought down the GST rate on EVs to 5 % from 12 %. The move has come as a shot in the arm for the auto industry which has been pushing for a tax boost to promote the sale of EVs. This aimed at accelerating the adoption of eco- friendly mobility solutions which will be effective from August 1, 2019. Additionally, the tax rate on chargers or charging stations for EVs has been … Read more

Introduction to Ind AS 12

Introduction to Ind AS 12

Ind AS 12 prescribes accounting treatment for income taxes. The principal issue in accounting for income taxes is how to account for the current and future tax consequences of future recovery of the carrying amount of assets (liabilities) that are recognized in an entity’s balance sheet and transactions and other events of the current period that are recognized in an entity’s financial statements.

Notable changes were made in Ind AS 12 in comparison to AS 22. Considering the time constraint and for ease of understanding it is important to address only those issues which are imperative for the one’s understanding. … Read more

Employee stock option plan

Employee stock option plan

Employee stock option plan (ESOP) refers to the employee benefits scheme under which the employees are allowed to purchase the shares of their company. Most of the Indian and multinational companies use ESOPs as a compensation tool. The company encourages the employees to acquire firm ownership by offering the shares at a below-market rate in order to increase their involvement in the scheme. In many cases, the companies in India also offer the stocks as remuneration up to a specific percentage to employees. The compelling reasons for companies to implement ESOPs include wealth creators for its employees and retention. It … Read more

Long Term Capital Gains under section 112A of Income Tax Act 1961

Long Term Capital Gains under section 112A of Income Tax Act 1961

Central Government has inserted a new section 112A under Income Tax Act, 1961. The aim behind this section is to impose tax implications on the gains arising on account of transfer of equity share, units of equity oriented funds and units of the business trust. Before Assessment Year 2018-2019, long-term capital gain (LTCG) tax on transfer of equity share, units of equity oriented funds and units of business trust was exempted as per provisions of section 10 (38).

Applicability
Below mentioned is the applicability for long term capital gains under section 112A of Income Tax Act 1961:

  1. Section 112A shall
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Union Budget of India (2019-20)

Union Budget of India (2019-20)

Ms. Nirmala Sitharaman, Minister for Finance and Corporate Affairs, Government of India announced the Union Budget for 2019-20, in Parliament on July 05, 2019. The budget aimed at boosting infrastructure and foreign investment, the first since the Bharatiya Janata Party led by Prime Minister Narendra Modi returned for a second term in power. The main focus of this budget is reducing red tape, making best use of technology, building social infrastructure, digital India, pollution free India, make in India, job creation in Micro, Small and Medium Enterprises (MSMEs) and investing heavily in infrastructure making India, a US$ 3 trillion economy … Read more

Income Computation and Disclosure Standards

Income Computation and Disclosure Standards

Income Computation and Disclosure Standards (ICDS) have been notified u / s 145 (2) of the Income Tax Act, 1961 vide Notification No. S.O. 3079 (E) dated September 29th 2016. On 23rd March, 2017, certain clarifications were issued by CBDT by way of FAQs.

Below mentioned are the 10 ICDS that are notified up to the date:

  1. Accounting Policies
  2. Valuation of Inventories
  3. Construction Contracts
  4. Revenue Recognition
  5. Tangible Fixed Assets
  6. Effect of Changes in Foreign Exchange Rates
  7. Government Grants
  8. Securities
  9. Borrowing Costs
  10. Provisions, Contingent Liabilities & Contingent Assets

Applicability of ICDS:-
ICDS is applicable to all assesses having Income … Read more

Introduction to E-Way Bill

Introduction to E-Way Bill

Introduction of Goods and Service Tax (GST) across India with effect from July 1, 2017 was a significant step in the indirect tax reforms in India. For quick and easy movement of goods across India without any hindrance, check posts across in the country has been abolished. The GST system provides a provision of e-way Bill, a document to be carried by the person who causes movement of goods in charge of conveyance, generated electronically from the common portal. The e-way bill under GST regime became applicable from April 1, 2018 for the movement of goods from one state to … Read more

Apportionment of Credit & Blocked Credit under GST

Apportionment of Credit & Blocked Credit under GST

GST was made applicable from July 1, 2017 to all the persons making the taxable supply of goods and services wherein the aggregate turnover in financial year exceeds the threshold limit of 40 lakhs rupees (10 lakhs in other states).

Sec 17 of CGST Act, 2017 tells us about the apportionment of credit & blocked credit under GST. A registered person shall be eligible for apportionment of credits of goods & services in the following manner:

  1. Input shall be restricted to the use by business partly for business and partly for others.
  2. Input shall be restricted for the taxable &
Read more
Advance Ruling under GST

Advance Ruling under GST

A letter ruling is a written statement issued to a taxpayer by tax authorities that interprets and applies the tax law to a specific set of facts and an advance ruling is the written statement for interpretation of tax laws. It is issued to applicants when the tax payer is in doubt with regards to provisions of laws.

As per section 95 of CGST / SGST Law and section 12 of UTGST law, ‘advance ruling’ means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in section 97(2) or 100(1) … Read more

The Basics of Crowdfunding

The Basics of Crowdfunding

A small business can raise capital in a number of different ways, including by selling its securities. Under the federal securities laws, every offer and sale of securities, even if to just one person, must either be registered with the Securities and Exchange Commission (“SEC”) or conducted under an exemption from registration. One of the exempt offerings wherein SEC permit companies to offer and sell securities is through crowdfunding.

Crowdfunding is an evolving method of raising capital that has been used to raise funds through internet for a variety of projects.  Title III of the JOBS Act created a federal … Read more