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Financial/Estate Planning
Taxes on Gifts in India

Taxes on Gifts in India

Indian culture is a blend of various religions and there are numerous events and celebrations when people express their love and affection by way of exchanging gifts with each other. There is a misleading contention that there are no taxes on gifts in India.

Gifts can be defined as any sum of money, movable or immovable property, which has been received by any person either without consideration or by way of inadequate consideration.

In order to curb the evasion of tax flow, the Gift Tax Act was enacted by Parliament of India in the year 1958 from the 1stRead more

Audit of Insurance Companies

Audit of Insurance Companies

The Insurance Act defines the Indian Insurance Company as the insurer being a corporation- which is formed and registered under the Companies Act, 2013; whose sole purpose is to continue life insurance business or general insurance business or reinsurance business; and in which collective assets of equity shares by an overseas company, either by itself or through its subsidiary corporations or its nominees, do not go beyond 26% of the paid-up equity capital of such Indian insurance corporation.

The following are the relevant points which an auditor should keep in mind at the time of conducting the audit of an … Read more

Authorized push payment fraud

Authorized push payment fraud

Authorized push payment fraud (or usually abbreviated as an APP Fraud) can be defined as a fraud in which victims are exploited in such a manner that they enter into making real-time payments to persons acting as shams. This kind of fraud is usually carried out in various ways which may include: social engineering attacks involving impersonation acts.

This kind of fraud came into light through a very recent incident that happened in the United Kingdom where fraud victims had authorized the payments fallaciously even after knowing the fact that such payments are not going to be reimbursed by their … Read more

What are Fringe Benefits?

Fringe benefits-Definition, Types, Examples and Tax treatment with an illustration

Fringe benefits may be defined as the additional benefits that are meant for supplementing the money wage or salary of an employee. There are certain fringe benefits that are offered to the entire workforce working in the company while there are specific fringe benefits that are only meant for offering to only those who are working at executive levels. It thereby means that some fringe benefits are statutory in nature while certain fringe benefits are provided voluntarily by the employer.

There are various types of fringe benefits that are generally offered to the employees which may include health insurance, subsidies … Read more

Changes in form GSTR-9C

Changes in form GSTR-9C

CBIC has issued Notification No. 56/2019–Central Tax dated 14th November, 2019 and has simplified Annual Return GSTR-9 & GST Audit GSTR-9C vide Central Goods and Services Tax (Seventh Amendment) Rules, 2019.

It notifies various changes in Form GSTR-9C to give effect to its applicability for F.Y 2017-18 and 2018-19. This notification provides substantial relief by making various mandatory fields ‘optional’ for the F.Y 2017-18 and F.Y. 2018-19.

Some significant fields which are made optional in GSTR 9C are listed below:

 

Reference Particulars before change Particulars after change
FORM GSTR-9C, in Paragraph 4-Table 5B Unbilled revenue which was recorded in
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Critical Audit Matters (CAMs)

Critical Audit Matters (CAMs)

The new requirement for auditors to report critical audit matters (CAMs) is the most significant change to the auditor’s report by the Public Company Accounting Oversight Board (PCAOB) in United States via its new standard AS 3101. The determination of CAMs is principles-based and depends on the facts and circumstances of each audit. To date, only a limited number of audits have been subject to the CAM requirements. The second effective date, which impacts audits of all other companies to which the requirements apply is for audits of fiscal years ending on or after December 15, 2020.

What is a Read more

benefits-of-team-collaboration

Collaboration Agreement

A collaboration agreement is an agreement between 2 or more parties looking to work together on a commercial project on a collaborative or cooperative basis. It involves participation by at least two parties who agree to share resources, such as finances, knowledge, and people. The essence of collaboration is for all parties to mutually benefit from working together. Collaboration agreement illustrates certain terms and conditions (T&C) of the parties’ working relationship including the allocation of responsibilities and division of revenues derived from the exploitation of the work. The agreement is made among the involved parties.

It is generally done when … Read more

TDS-Section-194M

Compliances of TDS under section 194M

The Union Budget 2019 for the FY 2019-2020 presented on 5 July 2019, inter-alia, introduced section 194M of the Income Tax Act. This section mandates every Individual / HUF, who are making payment for the use of service of a contractor or a professional but not required to get their books of accounts audited, to deduct tax at source.

Intent behind introducing this section
Prior to the amendment an individual / HUF covered under section 44AB i.e. who are required to get their books of accounts audited and were making payment to a contractor or a professional were required to … Read more

Intimation under section 143(1)

Intimation under section 143(1)

Section 143(1) refers to the intimation order given by the Income Tax Department of India to the assessee against a return filed for any assessment year. In India, it is mandatory for individuals with a specified amount of annual income to file for an Income Tax Return within a specified time limit. Thus, it is necessary to understand what happens after the taxpayer has filed the return of income.

Income tax return is a form wherein taxpayer reports his gross taxable income obtained from various sources, his deductions and the net tax liability.

After the e-filing process has been completed … Read more

Job Work under Goods and Service Tax

Job Work under Goods and Service Tax

A job work means processing or working on raw material or semi-finished goods supplied by a principal manufacturer to a job worker. Suppose there is a registered person Mr. A who manufactures bags and he sends his semi-manufactured bags to Mr. B, a job worker, without paying any tax on such removal for installing chains on the bags. Here Mr. A is the principal and Mr. B is the job worker. According to section 143 of the CGST Act,

  1. A registered person, hereinafter referred to as the principal, may send the inputs and capital goods, without paying tax on such
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Related Party transactions

Related Party transactions

A related party is a party related to a body corporate /company in any other way other than by the companies own transactions. It means that a special relationship persists between the parties even before the transaction takes place. Section 2(76) of the Companies Act, 2013 (“the Act”), defines a related party with reference to a company

  • director or a key managerial person or their relatives or,
  • a firm, private company in which the partner, director / manager or his relative is a partner or,
  • a private company or a public company in which a director or manager is a
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Tax Audit Report (Form 3CD)

Tax Audit Report (Form 3CD)

In order to get the various amendments made to Income-tax Act, 1961 and other laws (indirect taxes) within the format of tax audit report (TAR), the Central Board of Direct Taxes (CBDT) issued notification No. 33/2018  on 20 July 2018 amending the report format of tax audit. These amendments to TAR will come in force from 20 August 2018, which implies that the tax audits filed with the Income-tax on or after 20 August 2018 will have to be in the amended TAR. The point wise changes have been discussed in the ensuing paragraphs:

  1. Clause no. 4 of Form
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Section 194N

Section 194N

Tax Deducted at Source (TDS) is income tax reduced from the money paid at the time of making specified payments such as rent, commission, professional fees, salary, interest etc. by the persons making such payments. Usually, the person receiving income is liable to pay income tax. But the government with the help of TDS provisions makes sure that income tax is deducted in advance from the payments being made by you. The recipient of income receives the net amount (after reducing TDS). The recipient will add the gross amount to his income and the amount of TDS is adjusted against … Read more

GST Returns

GST Returns

A return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. This is used by tax authorities to calculate tax liability. In the GST regime, any regular business has to file two monthly returns and one annual return. This amounts to 26 returns in a year. One has to manually enter details of one monthly return – GSTR-1. The other returns GSTR 3B will get auto-populated by deriving information from GSTR-1 filed by you and your vendors. There are separate returns required to be filed by special cases such as … Read more

Reduced corporate taxes

Reduced corporate taxes

Various amendments to Income-tax Act, 1961 {Finance (no.2) Act, 2019} has been introduced vide Taxation Laws (Amendment) Ordinance, 2019. In order to boost growth in this period of sluggish economy and to promote “Make in India” initiative, Govt. of India has made series of announcements stated here as under:

  1. A new section 115BBA has been introduced, which gives domestic companies an option to pay tax at reduced rates from 30 per cent to 22 per cent. Effective tax rate, including surcharge and applicable cess reduced from 34.944 per cent to 25.168 per cent.
  1. Another section 115BAB has been introduced wherein
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Double-Taxation-Relief

Double Taxation Avoidance Agreement

Double Taxation means taxing the same income twice for the same purpose earned in same period and in the same tax jurisdiction. When such income is taxed in two countries, the aggregate of the tax liability will form substantial part of his total income.

Double Tax Avoidance Agreement (DTAA) is a tax agreement between two or multiple countries to prevent double taxation of income earned in both countries. DTAA is an agreement between two countries that the income of non-residents should not be taxed both in their country of origin and in the country in which they live.

In 1920, … Read more

3766_plate

Adoption of ASC: 606 Revenue from Contracts with Customers

ASC 606 is the new revenue recognition standard in US GAAP that has significantly affected the revenue recognition practices of most companies in United States. It provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries. The standard affects all businesses that enter into contracts with customers to transfer goods or services whether public, private and non-profit entities unless those contracts are within the scope of other standards (for example: leases and insurance contracts). Both the public and private companies should comply with be ASC 606. It focuses on recognizing revenue more consistently. … Read more

ppt-on-labour-laws-in-india-1-638-604x270

Labor Laws in India

In India, we have numerous laws which regulate the labor in the country and ensure to provide high degree of workers protection and manage the rules relating to the same. This blog describes the basic introduction and applicability of two most common and important funds to various organizations in order to ensure proper working of the system. These are Employee State Insurance (ESI) and Employee Provident Fund (EPF) schemes. ESI is a contributory fund whereby the employees in India are benefited through self-financing and healthcare insurance fund contributed by them and their employer. This scheme is administered and regulated as Read more

Place of supply of goods under GST

Place of supply of goods under GST

The Goods and Service Tax Act was introduced as a destination based tax i.e. the state in which the goods consumed have the right to collect the amount of tax so it becomes critical to decide in which state the goods have been consumed and consequently who should collect the amount of tax. For solving this issue the concept of ‘Place of Supply’ was introduced both for goods and services. 

Place of Supply when there is movement of goods

Supply Place of Supply
Involves movement of goods, whether by the supplier or the recipient or by any other person  Location
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Latest norms of differential voting rights

Latest norms of differential voting rights

In a fillip to startups, the Ministry of Corporate Affairs (MCA) recently amended the Companies (Share Capital and Debentures) Rules, 2014 (SCAD Rules) which are relaxed norms for shares with Differential Voting Rights (DVR) that will help such companies to retain control while raising equity capital. A differential voting right share is one with higher or lower voting rights but the same economic interest as ordinary shares. Shares with higher voting rights have been used by entrepreneurs around the world to retain control of their companies even while selling ordinary equity to investors to raise capital. The MCA move was … Read more