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.

Monday, April 22, 2019

Changes in ITR Forms AY 2019-20

1. If the taxpayer is a Director in a Company at any time during the tax year, the following details need to be furnished (ITR 2, 3):
(i) Name and Permanent Account Number (PAN) of the Company
(ii) Whether shares of the Company are listed or unlisted
(iii) Director Identification Number (DIN) of such person

2. If the taxpayer is a Partner in a Firm, then the name and PAN of the Firm need to be disclosed separately (ITR 5, 7).

3. Enhanced Reporting in case of Transfer of Immovable Property - such as name and PAN of the buyer, address of property and in case of more than one buyer, percentage share and amount paid by each buyer needs to be reported (ITR 2, 3, 5, 6).

4. Break-up of Interest Income earned needs to be bifurcated into interest earned from savings bank, deposits, income tax refund, interest in the nature of pass-through income or others. (ITR 2, 3, 5, 6, 7)

5. Break-up of certain Specified Incomes such as dividend income, winning from lotteries, puzzle, races etc. which are taxed under Income from Other Sources - The break-up period is aligned to the due dates of payment of advance tax (ITR 2, 3, 5, 6, 7).

6. Break-up of monetary Donations made in cash and other mode - Monetary donations made by taxpayer and eligible for deduction under section 80G of the Income Tax laws need to be bifurcated between donation made in cash or in any other mode (like cheque or electronic mode). (ITR 2, 3, 4, 5, 6)

7. Enhanced reporting in relation to Foreign Assets located outside India - instead of information about foreign bank accounts held, the new ITR forms require details of following assets held by resident taxpayers at any time during the tax year in Schedule FA dealing with foreign assets and income from any source outside India (ITR 2, 3, 5, 6, 7)
(i) Details of Foreign Depository accounts
(ii) Details of Foreign Custodial accounts
(iii) Details of Foreign Equity and Debt interest
(iv) Details of Foreign Cash Value Insurance Contract or Annuity Contract

Under each asset category, there is further reporting requirement such as details of country name and code, name and address of institution, account number, date of opening the account, peak balance during the tax year, closing balance, amount of interest/ amount paid/ credit. In case of insurance contract, cash/ surrender value of contract needs to be reported.

8. Enhanced reporting in Exempt Income schedule
(i) If net agricultural income exceeds Rs. 5,00,000; the following details need to be reported separately for each agricultural land (ITR 2, 3, 5, 6)
- Name of district along with pin code where agricultural land is situated
- Measurement in acres
- Whether the land is owned or leased and whether it is irrigated or rain fed
(ii) income is not chargeable as per Double Taxation Avoidance Agreement (DTAA)
(iii) it is pass-through exempt income (ITR 2, 3, 5)

9. Furnishing of PAN/ TAN of Tenant is mandatory if TDS credit on rent income is claimed by the taxpayer (ITR 2, 3, 5, 6, 7)

10. Insertion of Manufacturing Account and Trading Account - Statement of Profit and Loss has been bifurcated into Manufacturing Account, Trading Account and Profit and Loss Account. Certain additional details need to be furnished in the Manufacturing Account such as details of direct wages, direct expenses and factory overheads. (ITR 3, 5, 6).

11. In case regular books of accounts are not maintained - details of Gross Receipts as bifurcated between receipts through specified banking modes and any other mode to be reported.

12. Date of Commencement of Business to be disclosed by Companies

13. In case of Companies, Loans and Advances given and received - party wise details along with opening and closing balance, amount received and repaid during the year, rate and amount of interest

14. In case of Companies, land or building or both (whether residential or not), other assets such as motor vehicle, aircraft, yacht, jewelry, archaeological collections, drawings, painting, sculptures or any work of art or bullion - date and cost of acquisition, purpose of use needs to be disclosed.

Saturday, April 6, 2019

New Method of Utilization of ITC under GST (w.e.f. 23-Mar-19)

With effect from 29th March, 2019, the manner of utilization of Input Tax Credit (ITC) has been amended vide Notification No. 16/2019-CT, following which Rule 88A has been introduced. It states as under:

“Rule 88A: Order of utilization of input tax credit – Input tax credit on account of Integrated Tax shall first be utilised towards payment of Integrated Tax, and the amount remaining, if any, may be utilised towards the payment of Central Tax and State Tax or Union Territory Tax, as the case may be, in any order:

Provided that the input tax credit on account of Central Tax, State Tax or Union Territory Tax shall be utilised towards payment of Integrated tax, Central Tax, State Tax or Union Territory Tax, as the case may be, only after the input tax credit available on account of Integrated Tax has first been utilised fully.”

Here’s breaking down the change for you.

1. If you have IGST Input Credit, first exhaust that for payment of IGST Output

2. If there is any IGST ITC left thereafter, use it for payment of CGST and SGST Output, now in no particular order, i.e. you can use the remaining IGST ITC to pay both CGST and SGST equally. It will not follow the sequence of first setting it off against CGST Output and then the remaining against SGST Output.

3. Credit can be taken in any order.

4. ITC of CGST and SGST can be utilized towards payment of IGST, CGST, SGST only after exhausting the ITC of IGST.

5. It still remains that the ITC of CGST cannot be used to pay SGST, and ITC of SGST cannot be used to pay CGST.

To put it simply, the following tables show how the manner of utilizing GST ITC has changed in the past few months.


Up to 31-Jan-2019
Payment For
First Set off From
Then Set off From
IGST
IGST
CGST and SGST
CGST
CGST
IGST
SGST
SGST
IGST

From 01-Feb-2019 due to Section 49A of CGST (Amendment) Act, 2018
Payment For
First Set off From
Then Set off From
IGST
IGST
CGST and SGST
CGST
IGST ITC left after setting off IGST
CGST
SGST
IGST ITC left after setting off IGST and CGST
SGST

From 29-Mar-2019 due to Rule 88A – Order of utilizing IGST ITC against CGST and SGST is done away with
Payment For
First Set off From
Then Set off From
SGST
IGST ITC left after setting off IGST
SGST
CGST
IGST ITC left after setting off IGST
CGST
IGST
IGST
CGST and SGST

Illustration 1: ITC Utilization in Case of No IGST Liability
w.e.f. 29-Mar-19
IGST
CGST
SGST
ITC Available
1000
1000
1000
Output Tax Payable
NIL
2000
2000




IGST Utilized
NIL
500
500
CGST Utilized
NIL
1000
N.A.
SGST Utilized
NIL
N.A.
1000




ITC Balance
NIL
NIL
NIL
Payment in Cash
NIL
500
500

Illustration 2: ITC Utilization in Case of IGST Liability
w.e.f. 29-Mar-19
IGST
CGST
SGST
ITC Available
1000
1000
1000
Output Tax Payable
500
500
500




IGST Utilized
500
250
250
CGST Utilized
NIL
250
N.A.
SGST Utilized
NIL
N.A.
250




ITC Balance Carried Fwd
NIL
750
750
Payment in Cash
NIL
NIL
NIL