Friday, July 3, 2020

Deductions Allowed in New Tax Regime (Announced 26-Jun)

Section 115BAC was introduced in the Finance Act 2020, giving an option to individual and HUF assessees to opt for the lower tax rates as per the New Income Tax Regime.

Tax Rates as per New Tax Regime

Total IncomeRate of Tax
Upto Rs. 2,50,000Nil
From Rs. 2,50,000 to Rs. 5,00,0005 per cent
From 5,00,000 to Rs. 7,50,00010 per cent
From 7,50,000 to Rs. 10,00,00015 per cent
Rs. 10,00,000 to Rs. 12,50,00020 percent
Rs. 12,50,000 to R. 15,00,00025 per cent
Above Rs. 15,00,00030 per cent

Exemptions/Deductions Not Allowed

Under this regime, to compute the Total Income, the following exemptions and allowances as available in the old tax regime were not to be deducted.

a) Standard Deduction of Rs. 50,000/-
b) Deduction eligible up to Rs. 1,50,000 under section 80C for life insurance, PPF, ELSS, etc. 
c) NPS contribution as eligible up to Rs. 50,000 under section 80CCD(2)
d) House Rent Allowance (HRA)
e) Children Education Allowance
f) Conveyance Allowance
g) Leave Travel Allowance (LTA)
f) Professional Tax
g) Interest deduction in respect of income from house property
h) Any exemption or deduction for allowance or perquisite by whatever name called

Exemptions/Deductions Allowed

The government has issued Notification G.S.R. 415(E) dated 26-Jun-2020 by which the CBDT has allowed deduction with respect to the following:

a) Travelling Allowance: any allowance granted to meet the cost of travel on tour or on transfer;

b) Daily Allowance: any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty;

c) any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit: Provided that free conveyance is not provided by the employer;

d) Transport allowance granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.

Notes:

- This exemption is applicable to the whole of India and is restricted to Rs. 3,200 p.m.

- Free food and non-alcoholic beverages provided by the employer even during working hours at office or business premises shall be fully taxable in the hands of those employees who have opted for the new tax regime. Hence this benefit is only available to assessees opting for the old regime.

Saturday, June 27, 2020

GST Due Date Chart (Announced 24-Jun-20)

Reference to Notifications 51 to 54/2020 dated 24.06.2020 and Circular No. 141/1/2020-GST dated 24th June, 2020.

1. Late Fee Waiver Due Dates for GSTR-3B

a) For Turnover above Rs. 5 crores in preceding financial year, the late fee is waived if return filed before the below-mentioned dates.

Feb 2020         24.06.2020
Mar 2020         24.06.2020
Apr 2020         24.06.2020
May 2020         27.06.2020

b) For Turnover up to Rs. 5 crores in preceding financial year, the late fee is waived if return filed before the below-mentioned dates.

States: Delhi, Haryana, Uttar Pradesh, Chandigarh, Punjab, Rajasthan, Himachal Pradesh, Uttarakhand, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh

Feb 2020         30.06.2020
Mar 2020         05.07.2020
Apr 2020         09.07.2020
May 2020         15.09.2020
Jun 2020         25.09.2020
Jul 2020         29.09.2020

States: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep

Feb 2020         30.06.2020
Mar 2020         03.07.2020
Apr 2020         06.07.2020
May 2020         12.09.2020
Jun 2020         23.09.2020
Jul 2020         27.09.2020

For such taxpayers who are yet to file GSTR-3B for any month(s) from Jul-2017 till Jan-2020 can now file them from 01-Jul-2020 till 30-Sep-2020, without any late fee, for those months in which they did not have any tax liability. However, for the months they had a tax liability, their late fee is capped at Rs 500 per return.

2. Late Fee Waiver Due Dates for GSTR-1

Mar 2020         10.07.2020
Apr 2020         24.07.2020
May 2020         28.07.2020
Jun 2020         05.08.2020

Quarterly GSTR-1 Jan to Mar 2020 17.07.2020
Quarterly GSTR-1 Apr to Jun 2020 03.08.2020

3. Interest Waiver for GSTR-3B

a) For Turnover above Rs. 5 crores in preceding financial year, the late fee is waived if return filed before the below-mentioned dates.

Tax Period Due Date No interest payable till Interest payable @ 9% from & till Interest payable @ 18% from
Feb-20 20.03.2020 04.04.2020 05.04.2020 to 24.06.2020 25.06.2020
Mar-20 20.04.2020 05.05.2020 06.05.2020 to 24.06.2020 25.06.2020
Apr-20 20.05.2020 04.06.2020 05.06.2020 to 24.06.2020 25.06.2020
May-20 27.06.2020 27.06.2020 NA 28.06.2020


b) For Turnover up to Rs. 5 crores in preceding financial year, the late fee is waived if return filed before the below-mentioned dates.

States: Delhi, Haryana, Uttar Pradesh, Chandigarh, Punjab, Rajasthan, Himachal Pradesh, Uttarakhand, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh

Tax Period Due Date No interest payable till Interest payable @ 9% from & till Interest payable @ 18% from
Feb-20 24.03.2020 30.06.2020 01.07.2020 to 30.09.2020 01.10.2020
Mar-20 24.04.2020 05.07.2020 06.07.2020 to 30.09.2020 01.10.2020
Apr-20 24.05.2020 09.07.2020 10.07.2020 to 30.09.2020 01.10.2020
May-20 14.07.2020 15.09.2020 16.09.2020 to 30.09.2020 01.10.2020
Jun-20 24.07.2020 25.09.2020 26.09.2020 to 30.09.2020 01.10.2020


States: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep

Tax Period Due Date No interest payable till Interest payable @ 9% from & till Interest payable @ 18% from
Feb-20 22.03.2020 30.06.2020 01.07.2020 to 30.09.2020 01.10.2020
Mar-20 22.04.2020 03.07.2020 04.07.2020 to 30.09.2020 01.10.2020
Apr-20 22.05.2020 06.07.2020 07.07.2020 to 30.09.2020 01.10.2020
May-20 12.07.2020 12.09.2020 13.09.2020 to 30.09.2020 01.10.2020
Jun-20 22.07.2020 23.09.2020 24.09.2020 to 30.09.2020 01.10.2020


Friday, June 26, 2020

Take New Udyam Registration for MSME w.e.f. 1st July 2020

On the 26th of June, 2020, the Government has announced a new procedure to obtain a fresh Udyam Registration for MSMEs w.e.f. 1st July, 2020. Here are the details.

MSME Classification

a) Micro: Investment in Plant & Machinery or Equipment does not exceed Rs. 1 Crore, and Turnover does not exceed Rs. 5 Crores

b) Small: Investment in Plant & Machinery or Equipment does not exceed Rs. 10 Crore, and Turnover does not exceed Rs. 50 Crores

c) Medium: Investment in Plant & Machinery or Equipment does not exceed Rs. 50 Crore, and Turnover does not exceed Rs. 250 Crores

Calculation of Investment in Plant & Machinery or Equipment

a) The calculation of investment in plant & machinery or equipment will be linked to the Income Tax Return (ITR) of the previous year filed.

b) The definition and classification of plant & machinery will be the same as taken under the Income Tax Rules and shall include all tangible assets other than land and building, furniture and fittings.

c) In case of a new enterprise where no prior ITR is available, the investment will be based on self-declaration of the promoter. The purchase value of a plant & machinery or equipment, whether new or second-hand, shall be taken into account excluding Goods and Services Tax (GST) for such an enterprise.

Calculation of Turnover

a) Exports of goods or services or both, shall be excluded while calculating the turnover for MSME classification

b) Information as regards turnover and exports turnover for an enterprise shall be linked to declarations in Income Tax and GST. 

c) All units with Goods and Services Tax Identification Number (GSTIN) listed against the same PAN shall be collectively treated as one enterprise and the aggregate turnover and investment figures for all of such entities shall be seen together.

Registration on Udyam Portal

a) All existing enterprises registered under Udyog Adhaar (MSME) shall register again on the Udyam Registration portal on or after 01-Jul-2020. An e-certificate named Udyam Registration Certificate shall be issued on completion of the registration process.

b) The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for
a period up to the 31-Mar-2021.

c) Registration shall be on the Udyam Registration Portal

d) Aadhaar number of the promoter is mandatory for registration

e) The organisation or its authorized signatory shall provide its GSTIN and PAN as well

f) No enterprise shall file more than one Udyam Registration and any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration

g) Misrepresenting facts during registration shall be liable to penalty.

Updation of Information on the Portal

a) An enterprise having Udyam Registration Number shall update its information online in the Udyam Registration portal, including the details of the ITR and the GST Return for the previous financial year and such other additional information as may be required, on self-declaration basis.

b) Failure to update the information online on Udyam Registration portal will render the enterprise liable for suspension.

c) In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, an enterprise will maintain its prevailing status till expiry of one year from the close of the year of registration.

d) In case of reverse-graduation, whether as a result of re-classification or due to actual changes in investment in plant and machinery or equipment or turnover or both, and whether the enterprise is registered under the Act or not, the enterprise will continue in its present category till the closure of the financial year and it will be given the benefit of the changed status only with effect from 1st April of the financial year following the year in which such change took place.

Wednesday, June 24, 2020

Extension of Tax Due Dates (Announced 24-Jun-2020)

The government has announced the extension of various statutory due dates on 24-Jun-2020. A brief summary of them all is as under.

Also summarizing a few date extensions announced previously for a quick view at one place.

1. ITR for FY 2018-19 (AY 2019-20): Due date for filing of original as well as revised ITRs has been extended to 31-Jul-2020.

2. ITR for FY 2019-20 (AY 2020-21): ITRs due to be filed by 31-Jul-2020 and 31-Oct-2020 can be filed up to 30-Nov-2020. The date for furnishing tax audit report is also extended to 31-Oct-2020.

3. Payment of Self Assessment Tax: Due date for payment of self-assessment tax in the case of a taxpayer whose self-assessment tax liability is up to Rs. 1 lakh has been extended to 30-Nov-2020. However, there is no extension of date for tax-payers having higher liability, and interest will be charged for delay in payment even if the ITR is filed up to 30-Nov-2020.

4. Tax Saving Investments: The due date for making various investments for claiming deduction under section 80C (LIC, PPF, NSC, etc.), 80D (Mediclaim), 80G (Donations), etc. has also been further extended to 31-Jul-2020 for FY 2019-20.

5. Purchase/Construction for Capital Gains Relief: The due date for construction/purchase of property/bonds for claiming rollover benefit/deduction in respect of capital gains under sections 54 to 54GB of the Income Tax Act has also been further extended to 30-Sep-2020.

6. TDS Returns for FY 2019-20: The due date for furnishing of TDS/TCS returns for FY 2019-20 has been extended to 31-Jul-2020, and the date for issuance of TDS/TCS certificates has been extended to 15-Aug-2020.

7. Income Tax Scrutiny Notices/Orders: The due date for passing of an order or issuance of a notice by Income Tax authorities which were required to be made by 31-Dec-2020 has been extended to 31-March-2021.

8. Expiry Date for Lower Interest Rate: The reduced rate of interest of 9% for delayed payments of taxes announced by the government earlier this year shall not be applicable for payments made after 30-Jun-2020.

9. Vivad Se Vishwas Scheme: The due date for making payment without additional amount under the “Vivad Se Vishwas” Scheme has been extended to 31-Dec-2020. The same has been clarified.

10. Registration of Charitable Organizations: The implementation of new procedure for approval/registration/notification of certain entities u/s 10(23C), 12AA, 35 and 80G of the Income Tax Act has been deferred to 01-Oct-2020.

The Press Release can be accessed here.

Tuesday, June 16, 2020

GST Reverse Charge on Payment to Directors

The CBIC has clarified that only payments made to non-employee Directors of a company will attract GST on the reverse charge basis.

Salary paid to full time employee directors will be subject to TDS u/s 192 of the Income Tax Act, and there shall be no requirement of payment of GST under reverse charge.

However, the part of employee director’s remuneration which is not ‘salary’ and is subject to TDS under Section 194J of the Income Tax Act as fees for professional or technical services will attract GST under reverse charge.