Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Tuesday, December 17, 2013

TDS on Immovable Property (Sec 194-IA)

What is TDS on Immovable Property?
As per Finance Bill 2013 Buyer of Immovable Property (Other than rural agricultural land) is required to deduct tax on the rates applicable from the sales consideration payable to RESIDENT Transferor provided the sales consideration is equal to or more than Rs.50 Lacs.
What is the applicability of Section 194IA?
Section 194IA would be applicable if any of the following conditions are satisfied:
1.       If the transaction of sale is occurred on or after 1st June 2013 & sales consideration is equal to or exceeding Rs. 50 Lacs.
OR
2.      If the advance consideration received before 1st June 2013 is equal to or exceeding Rs. 50 Lacs but sale agreement is made after 1st June 2013.

Whether Sec 194IA would be applicable on Non-Resident Indian [NRI]?
No, sec 194IA would not be applicable on Non Resident Indians [NRI’s]. For information on purchase of property from NRI’s, read our article here.

When is Tax to be deducted?
·         Tax shall be deducted at the time of payment or at the time of giving credit to transferor, whichever is earlier.
·         If any advance payment is being made, then tax is to be deducted at the time of such payment.
·         If the payment is made in installments then tax is to be deducted on payment of each installment.

What is the Rate at which the Tax is to be deducted?
The Tax is deductible @ 1% of the consideration payable to resident transferor [if valid PAN is quoted].
If the seller does not provide valid PAN, then the tax is deductible @ 20%.

What is the Due date for deposit of Tax Deducted?
The tax deducted is required to be deposited on 7th of the following month in which the tax is deducted except for the tax deducted in the month of March. In case the tax is deducted in the month of March then due date for deposit is 30th April.

How to Deposit the Tax deducted by the buyer?
The tax deducted is to be deposited by challan cum statement on Form 26QB. You can print the challan from here.

Whether the TDS is applicable if the Property is held by Joint Owners?
In case the property is held by joint owners, the provisions of Sec 194IA will still be applicable because the threshold limit of Rs. 50 Lacs is property-wise and not transferee-wise.

Whether PAN of Seller is mandatory?
Permanent Account Number (PAN) of the seller as well as buyer should be mandatorily furnished in the online Form for furnishing information regarding the sale transaction. If the PAN of seller is not filled or wrongly filled, then TDS would be deducted @20%.

What is the Procedure of depositing the Tax Deducted?
1.       The buyer has to fill the details of buyer and seller in Form No. 26QB.
2.       After that, the buyer has to remit the tax deducted electronically.
3.       On receipt of payment confirmation, a nine digit alpha numeric acknowledgement no. would be generated and such acknowledgement no. is to be kept by the buyer.
4.       On successful payment, a challan containing CIN and payment details would be generated. Print this as it will be required at the time of registration as Tax Payer.

What would be the implications if the Tax deducted is not deposited within due date?
In case of failure to deposit the tax deducted, interest and penalty would be levied on the purchaser.
Interest will be charged @ 1.5% per month or part of the month from the date of deduction to date of actual deposit. 

What is to be done after depositing the Tax deducted?
The buyer is required to issue Form No. 16B [TDS Certificate] to the seller of immovable property within fifteen days from the due date of deposit of tax, so that the seller would be able to take the credit of tax deducted.              

How to Download Form 16B?
Firstly the buyer is required to register himself as tax payer on TRACES [https://www.tdscpc.gov.in/]
The tutorial for registering on traces can be downloaded here.
The tutorial for downloading Form 16B can be downloaded from here.

What information is required for registration as Tax Payer on TRACES?
1)      PAN of Buyer
2)      Date of Birth/Date of Incorporation of Buyer
3)      Name of Buyer [Complete name including surname]
4)      Particulars of Tax Deducted*
(a)    TAN of Deductor
(b)   Type of Deduction
(c)    Month & Year of Deduction
(d)   TDS/TCS Amount
5)      Particulars of Challan Deposited*
(a)    Asst. Year in which Challan is deposited
(b)   Challan serial No.
(c)    Amount of Challan Deposited
6)      Complete Address of Buyer
7)      Mobile & Email id of Buyer
* The assessee may provide information for either Point 4 or 5.

What is the Information required to download Form 16B [TDS Certificate]? 
1)      User ID & Password of Tax payer
2)      TAN/PAN of Tax payer
3)      Acknowledgement No. of Buyer
4)      PAN of Seller


What is the Password to Open Form 16B?
The Password to Open Form 16B is Date of Birth/Date of Incorporation of Buyer.

- Contributed by Ms. Shiwali Shukla (Article Assistant)

Saturday, December 14, 2013

Advance Tax Date Extended to 17th December 2013

The December instalment of Advance tax is required to be paid on or before 15th December, 2013 by the tax payers who are liable to pay advance tax. These taxpayers can make payments in the designated branches of the authorized banks, electronically or physically, as per law. The banks are closed on 15th December, 2013, being a Sunday. Accordingly, to facilitate payment of this instalment of Advance tax for the Financial year 2013-14, the Central Board of Direct taxes (CBDT) has issued an order to extend the time limit to make such payments of Advance Tax, from 15th December, 2013 to 17th December, 2013. Taxpayers, therefore, can now pay their advance tax instalment by 17th December, 2013 without entailing any consequential interest for deferment.

Wednesday, December 11, 2013

Gurgaon Property Tax Calculator & Form

The Municipal Corporation of Gurgaon saw a huge rush at their office on 10th December, 2013, which was the last day to pay property tax and avail a rebate of 30%.

To ease the pressure and give Gurgaon residents some more time to pay their taxes, the MCG extended the Property Tax deadline to 31st December, 2013.

You can calculate your property tax and pay the same using the following tools and links:
1. Gurgaon Property Tax Calculator
2. Property Tax Rates
3. Property Tax Form in pdf
4. Property Tax form in doc

Saturday, December 7, 2013

Mr. Sandeep Ahuja as Guest Speaker at Amity Law School, Noida

Amity Law School, Noida organized a workshop on Legal Entrepreneurship, initiated by the Ministry of Corporate Affairs on 26th February, 2013. The workshop was held to spread awareness among the students about investor protection measures in the financial markets, and to generate their interest in the field of taxation laws' practice.


Mr. Sandeep Ahuja was the guest speaker for the occasion and threw light on various provisions of the Direct Tax Laws, focusing on the scope of practice available in the field of direct taxation. He also answered queries related to investments and tax planning options available in the Income Tax laws.


Mr. Rajiv Bajaj, CFO of Panasonic AVC Networks India Co. Ltd. also spoke on the occasion about the various modes of raising finance in the Indian financial markets.

Image courtesy: www.amity.edu

Sunday, December 1, 2013

Loan to Directors: Section 185 of Companies Act 2013

Section 185 of the Companies Act, 2013
Applicable from: 12th September, 2013
Corresponding to: Section 295 of the Companies Act, 1956
Related to: Loan to Directors
Applicability: Both public and private limited companies

No company shall, directly or indirectly, advance any loan, including any loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person.

Therefore, no loan can be advanced by a company to the following persons:
-          Director
-          Director of Holding or Subsidiary company
-          Partner or relative of any such Director
-          Any firm in which such Director or relative is partner
-          Any other company in which such Director is a Director
-      Any company or LLP in which not less than 25% of the total voting power may be exercised individually or jointly by any such Director(s)
-     Any company or LLP, the Board of Directors of which is controlled by any of the Directors of the lending company

Exemptions:
-          Loans to Managing Director in accordance with the terms of his appointment
-        Loans to Director as a part of loan to employees in accordance with the conditions of service applicable to all employees of the company
-          Loan pursuant to any scheme approved by the members vide special resolution
-        A company which provides loans in the ordinary course of business and interest in respect of such loans is charged at a rate not less than the bank rate declared by RBI

Penalties:
-        The company shall be punishable with fine which shall not be less than Rs. 5 lakh but may extend to Rs. 25 Lakhs
-     The Director or the other person to whom any loan is advanced or guarantee or security is given or provided in connection with any loan taken by him or the other person, shall be punishable with imprisonment which may extend to 6 months or with fine which shall not be less than Rs. 5 Lakhs but may extend to Rs. 25 Lakhs, or with both

Note: Meaning of Relative: spouse, lateral ascendants up to two levels i.e. father (including step father) and grandfather, mother and grandmother; lateral descendants on the son’s side up to two levels i.e son and son’s children, daughter (including step daughter), her husband and siblings.

Registers to be Maintained under the Payment of Bonus Act, 1965

Every employer is required to maintain the following registers in the prescribed form:

1. Register showing the computation of allocable surplus (Form A)
2. Register showing the set-on and set-off of the allocable surplus (Form B)
3. Register showing the details of the amount of bonus payable to each of employees, the amount of deductions if any, and the amount actually paid. (Form C)

The employer is also required to send an annual return to the Inspector appointed under the Act within 30 days from the expiry of time limit specified in Section 19 for payment of bonus. (Form D)