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.

Friday, December 29, 2017

CBDT amends Income Tax Rule 127 for available addresses of the tax payer for sending Notices, Summons and Orders

CBDT vide notification issued on 20/12/2017 amends Income Tax Rule 127 relating to service of notice, summons and orders
CBDT by amendment in Rule 127 has inserted new proviso under sub-rule(2) which provides that in case the communication or notice to be served cannot be delivered or transmitted to the taxpayer's registered office or at the address available in PAN database or income-tax return the communication shall be delivered or transmitted to the address of the assessee as available with the Banks or Post Office or Insurer or at address available in  Government/Local authority records or in Form 60 or Form 61A submitted to the department under Rule 114D and 114E . 
Now as per Rule 127 of the Income Tax Rules, the government may use the address mentioned in the following databases to deliver the communication at the address given to or available with:
a) The bank;
b) The insurance company;
c)  The post office while investing in the Post Office schemes;
d) In government records or in the records of local authorities;

f) Address of the assessee as furnished in Form 61 to the income tax department under Rule 114D or Form 61A to the tax department under rule 114E.

CBEC extends the due date of GSTR-1 vide Notification No.72/2017 issued on 29/12/2017

CBEC hereby extends the time limit for furnishing the details of outward supplies in FORM GSTR-1 for the months as specified in column (2) of the Table, by such class of registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year, till the time period as specified in the corresponding entry in column (3) of the said Table, namely:-
Table
SI No.
Months for which the details in FORM GSTR-1 are furnished
Time period for furnishing the details in FORM GSTR-1
(1)
(2)
(3)
1
July- November, 2017
10th January, 2018
2
December, 2017
10th February, 2018
3
January, 2018
10th March, 2018
4
February, 2018
10th April, 2018
5
March, 2018
10th May, 2018


The extension of the time limit for furnishing the details or return, as the case may be, under sub-section (2) of section 38 and sub-section (1) of section 39 of the Act, for the months of July, 2017 to March, 2018 shall be notified.

Thursday, December 28, 2017

INCOME FROM HOUSE PROPERTIES COMPUTATION AND DEDUCTIONS ( AS AMENDED BY FINANCE ACT,2017)

 As per Section 22 of Income Tax Act, 1961 Income from House property shall be taxable if income from property fulfils the following conditions:
a) Income from property where property means any building or land appurtenant thereto;
b)  Such property should be in the name of  the taxpayer i.e tax payer should be the owner of such property;
c) Such Property is not used for own business or profession. Here property owned by partner can be used by a firm as both are separate entities but in proprietary business one can not book expenses of rent paid and take rental income under the head of house property.
 DETERMINATION OF  INCOME FROM HOUSE PROPERTY :
Income from a house property shall be determined in the following manner:
The Gross Annual Value or Let Out Value is Income which is higher of following:
a) Expected rent. Expected rent shall be higher of municipal valuation or fair rent of the property, subject to maximum of standard rent;
b) Rent actually received or receivable after excluding unrealized rent but before deducting loss due to vacancy
Deductions against Rental Income:
-          Municipal Taxes paid ( Accrued taxes but not paid are not allowed. So if taxes are to be borne by the owner and actually paid during the year are allowed)
-          Deduction @30% of Net Annual Value under Section 24(a) ( Gross Rental Value less Municipal Taxes is Net Annual Value so after the vacancy allowance the Annual Let Out value less taxes paid is Net Annual Value )
-           Interest on Borrowed Capital as per Section 24(b)

Interest on Borrowed Capital as per Section 24(b):
a) For let-out property, actual interest incurred on capital borrowed for the purpose of acquisition, construction, repairing, re-construction is allowed as deduction.
 b) For Self-occupied residential house property, interest incurred on capital borrowed for the purpose of acquisition or construction of house property is allowed upto Rs.2 lakhs if
i) capital is borrowed on or after 01-04-1999 and
ii) acquisition or construction of house property is completed within 5 years.

c) For Self-occupied residential house property, interest incurred on capital borrowed for the purpose of reconstruction, repairs or renewals of a house property is deductible up to  Rs.30000 only. Deduction for interest on borrowed capital shall be limited to Rs. 30,000 in following circumstances if capital is borrowed :
a) Before 01-04-1999 for purchase or construction of a house property.
b) On or after 01-04-1999 for the re-construction, repairs or renewals of a house property;
c) On or after 01-04-1999 but construction of house property is not completed within five years from end of the previous year in which capital was borrowed.

Prior Period Interest or interest during construction period:
 Any interest for the period prior to the year of acquisition/ construction of the house property is allowed as deduction in five equal installments, beginning with the year in which the property was acquired/ constructed but with the overall ceiling amount of interest on borrowed capital under Section 24(b)
Deduction for interest on housing loan under Section 80EE
Deduction of up to Rs 50,000 is allowed to an Individual for interest payable on loan taken for the purpose of acquisition of a house property subject to following conditions:
 a)  Loan sanctioned by Financial institution during the Fin.year 2016-17 and does not exceed Rs.35 Lakhs.
 b)  The value of residential property does not exceed Rs 50,00,000;
 d)  The assessee does not own any residential house property on the date of sanction of loan;
 e)  Where deduction under Section 80EE is allowed, then no deduction shall be allowed in respect of such interest under any other provision.
 COMPUTATION OF  INCOME FROM HOUSE PROPERTY AND AMOUNT OF DEDUCTION OF INTEREST ON BORROWED CAPITAL: 
One Self Occupied House Property or House property could not be occupied by the owner due to employment or business carried on at any other place :
-          No Deduction on account of Municipal Taxes or Standard Deduction or Vacancy Allowance as Gross Annual Value is NIL.
-          Deduction for interest on borrowed capital is allowed up to Rs. 30,000 or Rs. 2,00,000, as the case may be as detailed above.
More than one-self occupied property
-          Only one property on the choice by the taxpayer will be considered as self-occupied house property and
-           All other properties shall be deemed to be let-out for the purpose of computation of income under the head house property.
A self-occupied property let-out for the part of the year :
-          The house will be taken as let-out property and
-          No concession shall be available for the duration during which the property was self-occupied
One part of the property is let-out and other part is used for self-occupied purposes :
-           Each part of the property shall be considered as separate property and
-           Income of each part will be computed separately.
Let out property:
Income : Gross Annual Value to be computed as per provisions of Section 23(1) which is higher of following:
a) Expected rent. Expected rent shall be higher of municipal valuation or fair rent of the property, subject to maximum of standard rent;
b) Rent actually received or receivable after excluding unrealized rent but before deducting loss due to vacancy
Deductions :
-          Municipal Taxes actually paid if to be borne by owner.
-          Standard Deduction @ 30% of Net Annual Value i.e Gross Annual Value less Municipal Taxes Paid
-          Entire amount of interest paid or payable on borrowed capital shall be allowed as deduction. Pre-construction interest shall be allowed as deduction in 5 annual equal installments (Subject to certain conditions)
Composite Rent:
a)      If letting out of Building is with movable assets and transaction is inseparable:
            If income from letting out of building along with movable assets which may include          machinery, furniture or fixtures, etc. and transaction is inseparable then the composite rent is not taxable under Income from House property but taxable as Profits and gains        from business or profession / Income from other sources.
b)      If letting out of Building is with movable assets and transaction is separable:
-          Income from letting out of building is taxable as Income from house property and
-          Income from letting out of other assets is taxable as Profits and gains from business or profession/ Income from other sources.

Deduction for unrealized rent in case of Income from House Property:
-          Unrealized rent is rental income which could not be realized from the tenant by the owner and in such case a deduction from actual rent received or receivable upto the amount of unrealized rent is allowed if the following conditions are satisfied:
a) The tenancy is bona fide;
b) The defaulting tenant has vacated, or steps have been taken to compel him to vacate the property;
c) The defaulting tenant is not in occupation of any other property of the same owner;
d) The owner of the property has initiated legal proceedings for the recovery of the unpaid rent or satisfies the Assessing Officer that legal proceedings would be useless.
Income from Arrears of rent or recovery of unrealized rent:
In case the arrears of rent received or any subsequent recovery of unrealized rent is taxable as Income from house property in the year of such actual recovery even if such owner of such property is not owner in the year of recovery and accordingly the standard deduction @30% of amount received is also allowed.

Income in case of property owned by co-owners:
-          In case house property is owned by co-owners and their share in house property is definite and ascertainable than the income of such house property will be assessed in the hands of each co-owner separately in the proportion of ownership and other deductions also as allowed under Income from House property as per law.
-          In case house property is owned by co-owners and their share in house property are not definite, the income of the property shall be assessed as that of an Association of persons.
Income in case of Deemed owners:
            Income from house property is taxable in the hands of its owner but sometimes legal         owner is not considered as the real owner of the property and any other person is            considered as the deemed owner of the property then such person is chargeable to tax on      income earned from such house property:
1.      A transferor is a deemed owner
-  In case any house property is transferred otherwise than for adequate consideration to his or her spouse and such transfer is not as per an agreement to live apart,
- In case property is transferred to a minor child not being a married daughter.
2. The holder of an estate shall be deemed to be the individual owner of all the properties comprised in the estate if such estate is not divisible;
3. A member of a co-operative society, company or any other association of persons if such property to whom allotment or lease is done under a house building scheme.
4. A person who is allowed to take or retain possession of any building or part thereof in part performance of a contract and shall be deemed to be the owner of that building or part thereof;
5. A person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof shall be deemed to be the owner of that building or part thereof.

 RESTRICTION ON SET OFF OF HOUSE PROPERTY INCOME:
As amended by Finance Act, 2017
-          In case the net result of computation of income under the head Income from House Property is negative or in other words there is loss from House property then such loss can be set-off against any other income but restricted to Rs. 2 Lakh in any assessment year from Assessment Year 2018-19 onwards.

-          However, the loss which couldn't be set off can be carried forward for set-off in subsequent years. It can be carried forward for 8 Assessment years for set-off.

Sunday, December 24, 2017

Filing ADT-1 for Auditor's Appointment after Casual Vacancy of Auditor

Qualifying your CA exams and filing of ROC forms is quite the same. You may have to give multiple attempts to complete it.

Here, I am going to give you a simple approach of filing ADT-1 in case of 'Casual Vacancy' of an auditor (pursuant to the Section 139(8) of the Companies Act, 2013.

Form ADT-1 is filed by the company within 15 days from the date of appointment of the auditor.

Step by Step guide to filing the form:

1) Keep the following documents/information handy. You will require:

a) Resignation Letter and No Objection Certificate from previous auditor.
b) Board Resolution to call an Extra-Ordinary General Meeting.
c) Notice for calling an EGM.
d) Ordinary Resolution passed at the meeting of shareholders.
e) Consent Letter and Eligibility Certificate from new auditor.
f) Appointment Letter/intimation sent to the New Auditor.
g) SRN of ADT-1 of the resigning auditor (important)

2) Now Merge the Board Resolution, Notice and Resolution into one PDF file.

3) Download the latest form from the MCA's site. Forms are regularly updated by the MCA. So make sure you download the latest form available before filling it (http://www.mca.gov.in/MinistryV2/companyformsdownload.html)

4) Now fill up the details of your company.

5) Mention the dates carefully as it should be in proper order.

a) First Should be the Board Resolution to call EGM
b) Then Notice for calling EGM (Please make sure there is a clear 21 days gap in between the date of Notice and the date of EGM. If not, then also obtain 'Consent for Short Notice from 95% of the shareholders'.
c) Consent and Eligibility from new auditor.
d) Then EGM.
e) Intimation sent by the company to the new auditor.

6) In case of SRN of relevant form, please mention the SRN of ADT-1 of the 'Resigning Auditor'

7) Attach all documents carefully. Make sure the attachments are well compressed.

8) Click on 'Check Form'

9) Then digitally sign the form.

10) Click on 'Prescrutiny' and upload the form.

Disclaimer: This is not a professional advice. This article is solely meant for educational purposes. In case of doubt, please seek professional advice.


Contributed by:

Harshit Singh
Articled Assistant
Sandeep Ahuja & Co.

Saturday, December 23, 2017

MCA Introduces from 01.01.18 a Condonation of Delay Scheme to remove Director’s Disqualification

The MCA has now introduced the Condonation of Delay Scheme to provide an opportunity fodisqualified Directors to regularise compliance under the scheme by filing overdue documents with additional fee under E Forms with MCA.
Features of the COD Scheme, 2018
All companies registered in India are required to file annual return with the Ministry of Corporate Affairs each year and under the Companies Act, 2013, Directors of Companies which have defaulted in filing annual return continuously for a period of 3 years are liable to be disqualified and a disqualified Director would be unable to incorporate a new company or act as Director of an existing company for a period of three years.
The Directors associated with defaulting companies i.e the companies that failed to file financial statements or annual returns for a continuous period of three financial years 2013-14 to 2015-16 are disqualified by MCA and name of such companies are being struck off by MCA.
Ministry of Corporate Affairs has now introduced the Condonation of Delay Scheme to provide an opportunity for defaulting companies and Directors to who were disqualified to revive their names and regularise the compliance defaults from 01.01.2018 till 31st March, 2018.
Condonation of Delay Scheme,2018
-          During this period, the DIN of disqualified directors will be re-activated temporarily to facilitate Directors of defaulting companies to file all overdue annual returns.
-          After the end of the scheme which is open for three months, if the Director of a defaulting company failed to regularise compliance and revive their names, DIN of such directors associated with defaulting companies will be deactivated and such directors would be disqualified for a period of 5 years.
-          The defaulting Companies will be able to file the overdue documents i.e Annual Returns and Financial Statements in respective E Forms with additional fee with MCA.
-          In addition to the overdue documents, the company has to file under the Scheme a form e-CODS 2018 along with a fee of Rs.30,000 before 31st March, 2018.
-          On filing the overdue annual return and financial statements and form e-CODS 2018, the DINs of the disqualified Directors would be reactivated.
-          The Directors associated with such defaulting companies if  fail to file the overdue documents and E- COD form with additional fee and penalty till the end of such scheme  their disqualification will be made final for a period of 5 years and other penalties as prescribed under Companies Act 1956 and/or Companies Act, 2013 would apply.
 Summary of Circular by MCA for Condonation of Delay Scheme 2018
The companies registered with ROC / MCA  are required to file their Annual Financial statements and Annual Returns with the Registrar of Companies and non-filing of such reports is an offence under the said Act.
The Companies Act, 2013 effective from 01.04.2014, provide for disqualification of a director on account of default by a company in filing an annual return or a financial statement for a continuous period of three years.
Whereas, with a view to giving an opportunity for the non-compliant, defaulting companies to rectify the default, the Central Government has decided to introduce a Scheme namely “Condonation of Delay Scheme 2018” [CODS-2018] as follows.
1. The scheme shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018
2. ‘overdue documents’ means the financial statements or the annual returns or other associated documents, as applicable, in the case of a defaulting company.
3.“Defaulting company” means a company which has not filed its financial statements or annual return as required under the Companies Act, 1956 or Companies Act, 2013,
4.Applicability: – This scheme is applicable to all defaulting companies (other than the companies which have been stuck off/whose names have been removed from the register of companies under section 248(5) of the Act). A defaulting company is permitted to file its overdue documents which were due for filing till 30.06.2017 in accordance with the provisions of this Scheme.
5. Procedure to be followed for the purposes of the scheme:– (1) In the case of defaulting companies whose names have not been removed from register of companies,-
-  The DINs of the disqualified directors de-activated at present shall be temporarily activated during the validity of the scheme to enable them to file the overdue document.
- The defaulting company shall file the overdue documents in the respectively prescribed eForms paying the statutory filing fee and additional fee payable as per section 403 of the Act read with Companies (Registration Offices and fee) Rules, 2014 for filing these overdue documen
- The defaulting company after filing documents under this scheme, shall seek condonation of delay by filing form e-CODS 2018 attached to this scheme along with a fee of 30,000/- (Rs. Thirty Thousand only) as prescribed under the Companies (Registration Offices and Fee) Rules, 2014 well before the last date of the scheme.
- The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents and the eform CODS, and these are not taken on record in the MCA21 registry and are still found to be disqualified on the conclusion of the scheme in terms of section 164(2)(a) r/w 167(1)(a) of the Act shall be liable to be deactivated on expiry of the scheme period.
-  In the event of defaulting companies whose names have been removed from the register of companies under section 248 of the Act and which have filed applications for revival under section 252 of the Act up to the date of this scheme, the Director’s DIN shall be re-activated only NCLT order of revival subject to the company having filing of all overdue documents.
6. Scheme not to apply for certain documents – This scheme shall not apply to the filing of documents other than the following overdue documents:
(i) Form Number 20B/MGT-7- Form for filing Annual Return by a company having share capital.
(ii) Form 21A/MGT-7- Particulars of Annual return for the company not having share capital.
(iii) Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL) and AOC-4(non-XBRL) –  Forms for  filing Balance Sheet/Financial Statement and profit and loss account.
(iv) Form 66- Form for submission of Compliance Certificate with the Registrar.
(v) Form 23B/ADT-1- Form for intimation for Appointment of Auditors.
7. The Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s) for all documents filed under the scheme..

8. At the conclusion of the Scheme, the Registrar shall take all necessary actions under the Companies Act, 1956/ 2013 against the companies who have not availed themselves of this Scheme and continue to be in default in filing the overdue documents.

Friday, December 22, 2017

TDS on Rent by Individual/HUF – Section 194IB for payment of rent above Rs50000/- per month

The CBDT amended the rules relating to TDS as “TDS on Rent u/s 194I” and inserted one more section “194IB” w.e.f 1st June 2017 to make provisions relating:
Deduction of TDS @ 5% on rent payable by an Individual or a HUF  Rs 50000/- or more per month to a resident for a month or part of the month.
The points to be noted here are:-

1.       TDS @ 5% is deductible from the rent paid or payable.

2.       The rate of TDS shall be increased to 20% if the person receiving rent doesn't furnish the details of his PAN, subject to maximum limit of amount of rent payable for the month of march (last month of the previous year) or last month of tenancy as the case may be.
3.       The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section.

4.       In a case where the tax is required to be deducted as per the provisions of section 206AA, such deduction shall not exceed the amount of rent payable for the month of March (last month of the previous year) or the last month of the tenancy, as the case may be.  
      Persons required to deduct TDS under section 194IB

·         Individual and HUF who are not required to get his books of accounts audited due to the turnover or gross receipts not exceeding Rs 1 crore or Rs 50 Lakh in case of business or profession respectively.
·         Individual and HUF who are required to get his accounts tax audited under Section 44AB. These cover individual and HUF who are reporting profit lower than the presumptive basis.

In other words only individuals and HUF who are required to get his accounts audited due to turnover or gross receipts higher than specified limits are not covered under this section, all other individuals and HUFs are covered in this section.
Other Points

·         Even salaried person or person who doesn’t have any income is covered under section 194IB.
·         Other Individuals and HUF which not covered under this section, company, partnership firm, AOP and BOI are required to deducted TDS from rent under Section 194I

Difference between section 194I and section 194IB

Basis
Section 194I
Section 194IB
Applicability
– Every person paying rent (except individual & HUF)
– Individual & HUF if doing business and covered in tax audit in last year immediately preceding the financial year in which income by way of rent is credited or paid.
Every Individual & HUF not covered in 194-I
Property Covered
Only Commercial property covered
Commercial and residential property both covered.
Applicable Threshold Limit
Rs. 1,80,000 Per annum
Rs. 50,000 per month or part of the month during financial year
TDS Rate
10%
5%
TAN requirement
TAN is required
TAN is not required. PAN is required.
Payment and Return
Monthly Payment and Quarterly Return in form 26Q for all payments other than salary are covered in one form.
Payment and Return once in a year but multiple forms are to be filed  as per number of Agreement, number of landlords.

The TDS deducted by tenants u/s 194IB shall be deposited through a challan-cum-statement in Form No.26QC electronically in accordance with the procedures, formats and standards specified under sub-rule (5) within 30 days from the end date of tenancy period or March 31 whichever is earlier.
The tenant would also be required to issue a Tax Withholding Certificate, Form 16C, to the landlord, as a proof that taxes have been deposited in his name. Form 16C, TDS Certificate  To be provided within 15 days from the due date for furnishing Form 26QC.

Friday, December 8, 2017

CBDT further extends the time for Aadhar linking till 31st March,2018

CBDT extends the time for linking Aadhaar with PAN till 31st March,2018

As per section 139AA of the Income-tax Act, 1961 from 01.07.2017, all taxpayers having Aadhaar Number or Enrolment Number are required to link it with PAN Number for filing the tax return. The said provision was relaxed by the CBDT and  the time limit for the linking of Aadhar with PAN was 31st December, 2017 but  now  further CBDT has extended the same till 31st March, 2018. 

Monthly Compliance Calendar for December 2017

Date
Statutory Act
Applicable Form
Obligation
07/12/2017
Income tax
Challan no 281
Due date for deposit of tax deducted /collected for the month of November, 2017
11/12/2017
GST
GSTR -5
·         Due date of GSTR-5 for Non-resident Taxable person for the months of July, Aug, Sep & Oct 2017 

15/12/2017
Income tax
Form 24G
Due date for furnishing of Form 24G by an office of the Government where TDS for the month of November, 2017 has been paid without the production of a challan
15/12/2017
GST
GSTR -5A
Due date of GSTR-5A for Non-resident Taxable person to supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient for the months of July, Aug, Sep & Oct 2017
15/12/2017
Income Tax
Challan no 280
Third installment of advance tax for the assessment year 2018-19

15/12/2017
Income Tax
Form 16
Due date for issue of TDS Certificate for tax deducted under section 194-IA – for purchase  of immoveable property in the month of October, 2017

15/12/2017
Income Tax
Online
PF Payment for m/o November.
21/12/2017    
Income Tax
Online
ESIC Payment for m/o November
20/12/2017
Income Tax
GSTR-3B
GSTR-3B for the m/o November
24/12/2017   
GST
GSTR-4 
·         Due date of GSTR-4 for Composition Dealers under GST for the quarter July-September, 2017 is extended to 24th Dec 2017

30/12/2017
Income Tax
Online
Due date for furnishing of challan-cum-statement in respect of tax deducted under Section 194-IA for purchase of Immoveable property  in the month of November, 2017

31/12/2017
GST
 GSTR-6 
·         Due date of GSTR-6 (filed by an input service distributor) for the month of July 2017 has been extended to 31st  Dec 2017

31/12/2017  
GST
ITC 04
Goods dispatched to a job worker or received from a job worker or sent from one job worker to another for the period from the month of July to Sep 2017
27/12/2017
GST
Online
Due date for submission of original GST TRAN-1
31/12/2017
GST
 GSTR -1 
Due date for filing GSTR -1 for the Quarter ending Sep 2017- Applicable for taxpayers with Annual Aggregate turnover up to 1.50/- Crore
31/12/2017
GST
 GSTR -1 
Due date for filing GSTR -1 from the month of July to Oct 2017 —à Applicable for taxpayers with Annual Aggregate turnover More than 1.50/- Crore