Thursday, September 17, 2020

Employee Stock Option Plans (ESOPs) for Start Ups

An Employee Stock Option Plan (ESOP) is an employee benefit that intends to give employees a share in the ownership of a company. The concept is more prevalent in start-ups, where the initial team works hard to create an intangible asset of high value in the long term, while agreeing to take relatively smaller remuneration packages in the first few years. In such cases, employee stock options become a good way to build ownership, and link employee compensation to the high value of the company or its product, which the business plans to achieve in a few years.

Contents

Definition & Validity of ESOPs in India
Eligible Employees
Important Terms used in ESOPs
Process for Implementing an ESOP Scheme
Compliance related to ESOPs
Valuation of ESOPs
Taxation of ESOPs for Employees

Definition & Validity of ESOPs in India

ESOPs can be issued by private limited companies, unlisted public companies, as well as listed companies.

As per Section 2(37) of the Companies Act, 2013, employees' stock option means the option given to the directors, officers or employees of a company or of its holding company or subsidiary company or companies, if any, which gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a predetermined price.

Further, Section 62(1)(b) provides that a company may, subject to compliance with conditions as prescribed under the Rules (in case of an unlisted company) and SEBI Regulations (in case of listed companies), offer shares to the employees under a scheme of employees' stock option.

Thus, an ESOP is an option or a right offered by a company to its employees to purchase its shares at a pre-determined price on a future date or event. Such event may be a specific date or achieving a certain milestone in terms of valuation or entry of a new investor.

Eligible Employees

An employee means a permanent employee of the company who has been working in India or outside India, or a director of the company, whether a whole time director or not but excluding an independent director.

Promoters and Founders of start-ups may not be eligible for ESOPs if they fall under the following restriction in the definition of employees eligible for ESOPs, as per the provisions of the Companies Act, 2013 read with the Companies (Share Capital and Debentures) Rules, 2014:

(i) an employee who is a promoter or a person belonging to the promoter group; or
(ii) a director who either himself or through his relative or through any body corporate, directly or indirectly, holds more than 10% of the outstanding equity shares of the company.

However, the Ministry of Corporate Affairs (MCA) vide Notification dated 19-Jul-2016 issued the Companies (Share Capital and Debentures) Third Amendment Rules, 2016 by which promoters and Directors of start-ups holding more than 10% of the shares were permitted to be issued ESOPs within the first 5 years from the date of incorporation. To be eligible for such exception, the company has to be an eligible and registered start-up under the DPIIT.

Wednesday, September 9, 2020

Important Compliance Before 30th Sep 2020

1. GST Rectifications for FY 2019-20

a) Reconcile and match all your sales for FY 2019-20 with sales reported in GSTR-3B and GSTR-1 for the year. In case of any errors, the GST Return for September 2020 is the last opportunity to pass rectification entries relating to the previous year in the returns as amendment.

b) Reconcile GSTR-2A with Input Credit Register on the basis of which ITC has been claimed in each month's GSTR-3B for FY 2019-20. Bifurcate differences into ITC reflecting in GSTR-2A but not availed, and ITC availed but not reflecting in GSTR-2A. Entries in the former category may be availed (if eligible) in the GSTR-3B of August/September. Errors falling in the latter category may require follow up with the vendor to show it in their GSTR-1 correctly to your credit, or reversal with interest liability @ 24% p.a., as the case may be.

c) GST Debit Notes or GST Credit Notes relating to your supplies for FY 2019-20 may be issued latest up to 30th September 2020.

d) Any ITC apportioned between exempt supplies and taxable supplies on provisional basis monthly, has to be finalized annually latest by the period of September.

e) Check if all expenses/purchases (being input goods or services) on which ITC has been availed, have been paid within 180 days. If not, the ITC on them may have to be reversed with interest payment. In case there is no reason to withhold such amounts as due on 31.03.2020, pay them off to avoid such reversals.

e) Such changes are allowed up to the due date of filing GST returns for September only. In case September GSTR-3B or GSTR-1 are delayed, such changes may not be allowed.

2. GSTR-9 & GSTR-9C for FY 2018-19

a) GSTR-9C (Reconciliation Statement; also called GST Audit) is due to be filed by 30th Sep for every registered person having aggregate turnover as per GST of Rs. 5 crore or more for FY 2018-19.

b) GSTR-9 (Annual Return) for FY 2018-19 for all other registered persons with turnover less than Rs. 5 crore to be filed by 30th Sep.

Tuesday, September 8, 2020

Extension of AGM Due Date by 3 Months

The Ministry of Corporate Affairs (MCA) directed all Registrar of Companies of various states on the 8th of September, 2020, to accord approval for a 3 month extension in date for conducting the Annual General Meeting for the year ended on 31st March, 2020.

Thus, the due date for conducting the AGM has now been extended by 3 months from the erstwhile 30th September, 2020.

This extension is due to delays caused by the lockdown and other environmental hindrances to business caused by the Covid-19 pandemic.

On issue of such direction, the Registrars of various states, including for NCT of Delhi & Haryana have issued Orders of the same date.

Saturday, September 5, 2020

TCS on Sales Above Rs. 50 Lakhs w.e.f. 01-Oct-2020

Applicability

a) Turnover > Rs. 10 Crores: Person having sales turnover or gross receipts exceeding Rs. 10 crores in the immediately preceding financial year; and

b) Sale > Rs. 50 Lakhs: Receives any amount  as consideration for sale of any goods (excluding exports) of the value or aggregate of such value exceeding Rs. 50 lakhs.

c) Excluding:
- export of goods
- goods already covered under TCS provisions
- buyer is required to deduct TDS of the seller on such transaction
- if the buyer is Central Government, State Government, Local Authority, Embassy/ Consulate/ High Commission


TCS @ 0.1% w.e.f. 01-Oct-2020

a) Rate: From 01-Oct-2020, such seller will have to collect TCS at the rate of 0.1% on the sales consideration received from buyer exceeding Rs. 50 lakhs.

b) Reduced Rate up to 31-Mar-2020: Only for the period between 01-Oct-2020 to 31-Mar-2021, such TCS will be at the reduced rate of 0.075%.

c) No PAN Case: In case the buyer does not provide his PAN, TCS is to be charged @1% (reduced to 0.75% only up to 31-Mar-2020).

Thursday, September 3, 2020

No MEIS Incentive w.e.f. 01-Jan-2021

The Ministry of Commerce and Industry has released Notification No. 30/2015-2020 dated 01-Sep-2020, by which it has made the following changes to the Merchant Export Incentive Scheme (MEIS).

1) An exporter cannot claim a total reward under the scheme for exports made between 01-Sep-2020 to 31-Dec-2020 of an amount above Rs. 2 crore.

2) An IEC holder who has not made any exports for one year or more before 01-Sep-2020 or any new IEC registrant after 01-Sep-2020 would not be eligible for any claim under the MEIS scheme.

3) The scheme stands withdrawn with effect from 01-Jan-2021.

4) An exporter may also not be eligible for claim up to Rs. 2 crore, and the ceiling of such amount may further be dropped so as to ensure that the amount allocated by the government for this scheme from September to December 2020 does not exceed Rs. 5000 crore.

Wednesday, September 2, 2020

Legal Tools Available to MSMEs for Recovery of Dues

Briefly examining a few sections of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, to provide highlights on the legal tools available to MSMEs for recovery of long outstanding dues from its customers.

No Delay in Payment Beyond 45 Days

As per Section 15 of the MSMED Act, a person buying goods or services from an MSME shall make the payment for such purchase on or before the agreed on date (appointed date). Further, such agreed date of payment should not extend beyond 45 days from the day of acceptance or the day of deemed acceptance.

Interest Payable @ 3 Times the Bank Rate

As per Section 16 of the Act, where the buyer fails to make such payment to the supplier within the time period specified above, the buyer shall, regardless of any terms agreed on between the buyer and the seller, be liable to pay compound interest with monthly rests to the MSME supplier on the pending amount payable from the appointed day at the rate being three times the bank rate notified by the Reserve Bank.

The prevailing bank rate can be checked on the RBI's website under Policy Rates.

The Bank Rate at the time of writing of this piece is 4.25%. Thus, the prevailing rate as on 02-Sep-2020 for delay in payment to MSME is 12.75% p.a. compounded monthly.

Tuesday, September 1, 2020

FAQs on ITR Filing AY 2020-21

The Income Tax Returns for AY 2020-21 are due to be filed by 30-Nov-2020. The following are a few FAQs that may answer queries that are often raised with us.

Who is eligible to file their Income Tax Return in Form ITR-1?

Any Individual being an Ordinary Resident can file his ITR in Form 1 if his total income includes:
- Salary/pension
- Rent/loss from 1 house property
- Income from other sources such as interest, other miscellaneous income (other than income chargeable at special rates)
- Income of spouse or minor child clubbed in his income, if falling in any of the above heads, and no TDS to be claimed as appearing in such other person's PAN

However, the form cannot be filed by the following category of individuals:

- Non Resident or Not Ordinarily Resident
- Director of a company
- Total income exceeds Rs. 50 lakhs
- Has income from more than 1 house property
- Holds unlisted equity shares at any time during the year
- Earning royalty income and claiming deduction u/s 80QQB or 80RRB
- Claiming deduction therefor u/s 10AA or Part-C of Chapter VI-A
- Brought forward loss to be carried forward
- Claim relief of tax paid in another country under section 90 or 91
- Having assets (incl. financial interest in any entity, or bank accounts) outside India
- Income to be apportioned in accordance with provisions of Section 5A
- Income from Business or Profession
- Capital Gains
- Income under Other Sources, taxable at special rate
- Dividends exceeding Rs. 10 lakhs
- Unexplained income taxable at 60% u/s 115BBE
- Agricultural income exceeding Rs. 5,000
- Claiming deduction u/s 57 from income under the head ‘Other Sources’, other than for family pension
- Income from any source outside India

Saturday, August 29, 2020

Import Details, Eligibility Details in GSTR-2B

The CBIC has announced through a Press Release on 29-Aug-2020 that details of import of goods and the IGST paid thereon, which reflects on the Bill of Entry, will now be displayed in a new table in the GSTR-2A. This information will be taken from the ICEGATE System of the Customs Department.

Currently, the table is displaying information up to 06-Aug-2020 as filed at computerized ports only. Import information for Bills of Entry filed at non-EDI ports and imports through courier may not be displaying currently.

Further, information in Form GSTR-2B is also being made available on the GST portal, which shall display eligibility or ineligibility for ITC of all inputs that may be filed by a person's vendors/suppliers in their GSTR-1/GSTR-5/GSTR-6. This shall be available as static information on the 12th of every month after the respective filing has been completed by the suppliers on the due dates.

To access your GSTR-2B: Login to GST Portal > Returns Dashboard > Select Return period > GSTR-2B

It is recommended that you download your GSTR-2B and reconcile it with your ITC Register.

Tuesday, August 25, 2020

Labor Law Compliance in Haryana

The Haryana Labor Department's Portal can be accessed here. Your establishment should create an account on this portal for all eligible filing under various applicable laws online, and to access the latest notifications in their regard. The Ministry of Labor & Employment also has a Shram Suvidha Portal for all necessary information.



Applicability - For salaried employees with Basic Salary + Dearness Allowance less than Rs.15,000 per month, it is mandatory to open a PF account through the employer. Establishments with 20 employees or more are mandatorily required to register for the EPF scheme. Others can register voluntarily. Employees drawing a salary higher than Rs. 15,000 per month can also register voluntarily.

The employer's contribution is calculated as 12% of  Basic + DA. An equal amount is contributed by the employee as well. Out of the employer’s contribution of 12%, 8.33% is directed to Employees’ Pension Scheme. This amount is calculated on the salary of Rs 15,000. Thus, for every employee receiving a Basic amount equal to Rs 15,000 or more, Rs 1,250 each month is invested into EPS. The amount in addition to 8.33% is retained by the EPF scheme. On retirement, the employee receives his entire share plus the share retained to his credit. 

Registration - Online on the EPF Portal. The process for registering is given here and here. Employees have to obtain a UAN through their employers, which is their registration number with the EPF Scheme.

Returns - The amount is paid monthly before the 15th of the subsequent month through a challan online on the portal after logging in.

Forms - All other forms and processes are given on the official EPF website.

Penalty - Late payment invites interest @ 12% p.a. for every single day of delay. Further, penalty from 5% to 25% may be levied depending on the number of months of delay.

Monday, August 24, 2020

Application to ROC for Extension of AGM (Form GNL-1)

We have drafted an application format for filing in Form GNL-1 with the ROC so as to seek an extension for holding the AGM in case your company's financial statements are not prepared to be signed in September, 2020 due to delays that may be attributed to the coronavirus spread. We had written about it here. This has to be filed in e-Form GNL-1.

*******

To

The Registrar of Companies (RoC) 

NCT of Delhi & Haryana


Subject: Request for Extension of Annual General Meeting 2020


Dear Sir/Mam,

The ___th Annual General Meeting of the Members of the Company in respect of the year ended on 31st March, 2020 is required to be held on or before 30 September, 2020. The company is not in a position to hold its Annual General Meeting within the stipulated time period.

Despite the Company's best efforts to complete its books of accounts for FY 2019-20 in time for the statutory audit to be conducted, the spread of the Corona virus (COVID-19) pandemic has left the company's staff and officers in the lurch, and they have not been able to spend adequate time from their homes on completing the accounting records, all of which lay physically in the office location and the access to which is not available remotely to the staff.

The nationwide lockdown announced by the government w.e.f. 25th March, 2020, extended multiple times vide various orders of the Ministry of Home Affairs, Government of India, leading up to the 30th of June, 2020, has put the company's operations on a backlog of completion by 3 months.

Saturday, August 22, 2020

How To Get a Tax Residency Certificate (TRC) in India - Form 10FA / 10FB

Indian Residents carrying out business with foreign entities may at times be asked for an Indian Tax Residency Certificate (TRC) right before the customer can send the payment for work delivered, so as to avail the benefit as per the Double Tax Avoidance Agreement (DTAA) between India and that country.

Further, Non Resident Indians (NRIs) may also be asked to submit their TRC in the host country. Similarly, it may also be needed by foreign companies with offices in India.

It is issued for one financial year for which the application is made, and thus, may be required to be obtained in each financial year.

To obtain a TRC in India, the assessee must file an application in Form 10FA with the Assessing Officer (AO).

The TRC is given in Form 10FB.

The form is linked above and would require mentioning of the following:

- Full Name and address of the assessee 
- Status (Individual, HUF, Partnership Firm, Body of Individuals, Company, etc)
- Nationality (in case of individual)
- Country of Incorporation/Registration
- Address of the assessee during the period for which TRC is desired
- Email ID
- PAN/TAN
- Basis on which the status of being resident in India is claimed
- Period for which the TRC is applicable
- Purpose of obtaining TRC
- Any other detail

Friday, August 21, 2020

Aadhaar Authentication for GST Registration

Aadhaar Authentication for GST Registration

For any person applying for a fresh GST registration as a normal taxpayer, composition dealer, casual taxable person, input service distributor (ISD) or SEZ unit, a new Aadhaar authentication process has been introduced.

Individuals, being authorised signatories of all types of businesses, viz. partnership firms, HUF, etc. applying for new registration can opt to undergo e-KYC authentication through their Aadhaar.

In case of successful authentication of Aadhaar, registration will be deemed approved within 3 working days.

Site Verification in case of Failure to Authenticate through Adhaar w.e.f 21-Aug-2020

Applicants who do not provide Aadhaar while applying for registration or whose Aadhaar authentication fails in validation, may be subjected to site verification by the tax department.

Further, if no Show Cause Notice is issued within 21 days by the GST Department in such case, the registration will be deemed approved.

Reference

CBIC Notification No. 62/2020 – CT dated 20-Aug-2020

Tuesday, August 18, 2020

Balance Sheet Signing Due Date for Companies in 2020

The date for Annual General Meeting (AGM) for the Financial Year ended on 31-Mar-2020 has not been extended by the MCA as yet. Therefore, the AGM should be conducted on time (i.e. by 29-Sep-2020) to avoid penalties under the Companies Act, 2013.

Due to the pandemic outbreak, the AGM can also be held through video conferencing (VC) or other audio visual means (OAVM) the process for which has been detailed by us here. The recording of such meeting should be kept by the company.

As always, the meeting can be held by physical presence of the members as well.

There are 3 possible alternative available for holding of AGM, which are enumerated below.

Case 1: Conduct of AGM with Normal Notice Period of 21 Days

If you want to conduct the AGM with the normal notice period (i.e. clear 21 days’ notice before the date of AGM), the notice of the AGM should be given on or before 6-Sep-2020 and the board meeting should be conducted on or before such date for the approval of audited financial statements by the board of directors. Therefore, your signed audited financial statement should be ready before 06-Sep-2020.

Case 2: Conduct of AGM at Shorter Notice

You can conduct your AGM at a shorter notice period (i.e. less than 21 days) if the consent from not less than 95% of the members entitled to vote at such a meeting is available and a resolution of board of directors for taking note of above is also with minimum 95% consent. In such case, notice of AGM will be given on or before 29-Sep-2020 and board meeting should be conducted on or before such date for approval of audited financial statements by the board of directors. Therefore, your signed audited financial statement should be ready before 29-Sep-2020.

Excel Download for ITC Details in Form GSTR-9

At the time of filing of GSTR-9, the details of ITC as per GSTR-2A are auto-populated in Table 8A, the details of which, in a few instances, did not match with data downloaded and compiled from GSTR-2A by the registered persons.

The reason for such mismatch was that Table 8A is populated on the basis of documents in filed Form GSTR-1 or Form GSTR-5 of the supplier. Documents which are uploaded or submitted, but not filed are not accounted for credit in table 8A of Form GSTR 9.

To address this issue, a facility has been provided to the taxpayers to download document wise details of ITC as being auto-populated in Table 8A of Form GSTR-9, in an Excel spreadsheet.

A new option called ‘Document wise Details of Table 8A’ is now available on the GSTR-9 dashboard w.e.f. FY 2018-19.

Steps to Download Details in Excel

Services -> Returns -> Annual Return -> Form GSTR-9 (Prepare Online) -> Download Table 8A Document Details

Clarifications on Udyam MSME Registration

Has the Udyam Portal started working for registrations of Existing MSMEs having EM-II or UAM?

No. Such service for registration of existing entities has not started on the UDYAM portal yet.

Is the old Udyog Aadhaar Memorandum (UAM) portal still working? If yes, what can it be used for?

Yes. The old portal is enabled for the following purposes till 31-Mar-2021.

- Updation of Udyog Aadhar with NIC codes, value of plant & machinery

- Printing of the Application

- Printing of the Certificate

- Verifying Udyog Aadhar Memorandum (UAM)

What is the validity of the existing MSME Registration in EM–Part-II or Udyog Adhaar Memorandum (UAM)?

The existing MSME registration and UAM registered till 30-Jun-2020 are valid up to 31-Mar-2021. Further, as per notification dated 26-Jun-2020, the time limit for registration is 01-Jul-2020 to 31-Mar-2021.

Monday, August 17, 2020

DIR-3 KYC by Directors on MCA Portal

Who needs to file Form DIR-3 KYC?

Every Director who has been allotted DIN on or before the end of the financial year, and whose DIN status is ‘Approved’ is compulsorily required to file Form DIR-3 KYC before 30th September of the immediately succeeding financial year. This KYC has to be done every year.

Such filing is also to be done by a person who may have a DIN but may not be a Director in a company during the year.

How is Form DIR-3 KYC Filed?

Persons who are allotted a DIN for the first time during the financial year, need to file e-Form DIR-3 KYC as downloaded from the MCA portal in the immediately succeeding financial years. 

For other Directors who have already submitted e-Form DIR-3 KYC previously and do not have any changes to report in their KYC details in the following year, may simply file a web services version of the form on the MCA portal that confirms the existing contact details using OTP.

Wednesday, August 12, 2020

Compliance Calendar [August 2020 - March 2021]


Month   Due Date   Particulars   Head
Aug-20 03.08.2020 GSTR-1 Quarterly for Apr-Jun 2020 GST
05.08.2020 GSTR-1 Monthly for Jun 2020 GST
07.08.2020 TDS Deposit for Jul 2020 TDS
11.08.2020 GSTR-1 Monthly for Jul 2020 GST
14.08.2020 FLA Return for Foreign Liabilities & Assets as on 31.03.2020 FEMA
15.08.2020 Issue of TDS Certificates to employees in Form 16, others in 16A TDS
15.08.2020 PF & ESI Payment and Return for the previous month's salary Labor
20.08.2020 GSTR-3B for Jul 2020 (turnover > 5 crore) GST
31.08.2020 ITC-04 up to Jun 2020 GST
31.08.2020 GSTR-4 Quarterly for Apr-Jun 2020 (Composition) GST
31.08.2020 GSTR-6 of Mar-Jul 2020 for ISD GST
31.08.2020 GSTR-7 of Mar-Jul 2020 for TDS GST
31.08.2020 GSTR-8 of Mar-Jul 2020 for E-Commerce Operators GST
Sep-20 07.09.2020 TDS Deposit for Aug 2020 TDS
10.09.2020 GSTR-7 of Aug 2020 for TDS GST
10.09.2020 GSTR-8 of Aug 2020 for E-Commerce Operators GST
11.09.2020 GSTR-1 Monthly for Aug 2020 GST
12.09.2020 GSTR-3B of May 2020 for SS1* (turnover < 5 crore) GST
12.09.2020 Interest @9% starts on May GSTR-3B upto 30.09.20 SS1 (turnover < 5cr) GST
12.09.2020 Form PAS-6: Reco of Share Capital Audit Report (Unlisted Public Cos.) MCA
13.09.2020 GSTR-6 of Aug 2020 for ISD GST
15.09.2020 GSTR-3B of May 2020 for SS2* (turnover < 5 crore) GST
15.09.2020 2nd Installment for Advance Tax AY 2021-22 Income Tax
15.09.2020 Interest @9% starts on May GSTR-3B upto 30.09.20 SS2 (turnover < 5cr) GST
15.09.2020 PF & ESI Payment and Return for the previous month's salary Labor
15.09.2020 Financial Results filing with SEBI FY 2019-20 (Listed Cos.) SEBI
20.09.2020 GSTR-3B of Aug 2020 (turnover > 5 crore) GST
23.09.2020 GSTR-3B of Jun 2020 for SS1 (turnover < 5 crore) GST
23.09.2020 Interest @9% starts on Jun GSTR-3B up to 30.09.20 SS1 (turnover < 5cr) GST
25.09.2020 GSTR-3B of Jun 2020 for SS2 (turnover < 5 crore) GST
25.09.2020 Interest @9% starts on Jun GSTR-3B up to 30.09.20 SS2 (turnover < 5cr) GST
27.09.2020 GSTR-3B of Jul 2020 for SS1 (turnover < 5 crore) GST
27.09.2020 Interest @9% starts on Jul GSTR-3B up to 30.09.20 SS1 (turnover < 5cr) GST
29.09.2020 Interest @9% starts on Jul GSTR-3B up to 30.09.20 SS2 (turnover < 5cr) GST
29.09.2020 GSTR-3B of Jul 2020 for SS2 (turnover < 5 crore) GST
30.09.2020 ITR Filing for AY 2019-20 Income Tax
30.09.2020 Form DIR-3 KYC: Directors KYC for Companies MCA
30.09.2020 Form DPT-3: Return of Deposits for balance as on 31.03.2020 MCA
30.09.2020 Form MSME-1: Outstanding to MSME over 45 Days as on 31.03.2020 MCA
30.09.2020 Form BEN-2: Beneficial Owners Declaration in Companies MCA
30.09.2020 All pending MCA Forms for Companies without Additional Fees MCA
30.09.2020 Form LLP-11: Annual Return of LLP MCA
30.09.2020 E-Verification of ITRs pending verification since AY 2015-16 Income Tax
Oct-20 01.10.2020 New procedure follow for registration of not for profit entities Income Tax
07.10.2020 TDS Deposit for Sep 2020 TDS
01.10.2020 Interest @18% starts on GSTR-3B up to Aug 2020 SS1 (turnover < 5 cr) GST
01.10.2020 GSTR-3B of Aug 2020 for SS1 (turnover < 5 crore) GST
03.10.2020 GSTR-3B of Aug 2020 for SS2 (turnover < 5 crore) GST
03.10.2020 Interest @18% starts on GSTR-3B up to Aug 2020 SS2 (turnover < 5 cr) GST
07.10.2020 Equalization Levy payment for Jul-Sep 2020 TDS
10.10.2020 GSTR-7 of Sep 2020 for TDS GST
10.10.2020 GSTR-8 of Sep 2020 for E-Commerce Operators GST
11.10.2020 GSTR-1 Monthly of Sep 2020 GST
13.10.2020 GSTR-6 of Sep 2020 for ISD GST
14.10.2020 Form ADT-1: Auditor's Appointment (within 14 days of AGM date) MCA
15.10.2020 PF & ESI Payment and Return for the previous month's salary Labor
18.10.2020 GSTR-4 of Jul-Sep 2020 for Composition Dealer GST
20.10.2020 GSTR-3B of Sep 2020 GST
25.10.2020 ITC-04 of Jul-Sep 2020 GST
29.10.2020 Form AOC-4 for FY 2019-20 (within 30 days of AGM) MCA
29.10.2020 Form MR-3: Secretarial Audit (if paid-up cap > 50 cr; turnover > 250 cr) MCA
30.10.2020 Form LLP-8: Statement of Account & Solvency of LLP MCA
30.10.2020 GSTR-1 Quarterly of Jul-Sep 2020 GST
31.10.2020 Filing of Tax Audit Report AY 2020-21 Income Tax
31.10.2020 Form MSME-1: Outstanding to MSME over 45 Days as on 30.09.2020 MCA
Nov-20 07.11.2020 TDS Deposit for Oct 2020 TDS
10.11.2020 GSTR-7 of Oct 2020 for TDS GST
10.11.2020 GSTR-8 of Oct 2020 for E-Commerce Operators GST
11.11.2020 GSTR-1 Monthly of Oct 2020 GST
13.11.2020 GSTR-6 of Oct 2020 for ISD GST
15.11.2020 PF & ESI Payment and Return for the previous month's salary Labor
20.11.2020 GSTR-3B of Oct 2020 GST
28.11.2020 Form MGT-7: Annual Return FY 2019-20 (within 60 days of AGM) MCA
28.11.2020 MGT-8: CS Certificate (if listed, or paid up cap>10 cr, or turnover>50cr) MCA
30.11.2020 Filing of ITR AY 2020-21 Income Tax
30.11.2020 Payment of Bonus for FY 2019-20 Labor
Dec-20 07.12.2020 TDS Deposit for Nov 2020 TDS
10.12.2020 GSTR-7 of Nov 2020 for TDS GST
10.12.2020 GSTR-8 of Nov 2020 for E-Commerce Operators GST
11.12.2020 GSTR-1 Monthly of Nov 2020 GST
13.12.2020 GSTR-6 of Nov 2020 for ISD GST
15.12.2020 3rd Installment for Advance Tax AY 2021-22 Income Tax
15.12.2020 PF & ESI Payment and Return for the previous month's salary Labor
20.12.2020 GSTR-3B of Nov 2020 GST
31.12.2020 Application for Vivad Se Vishwas Scheme Income Tax
Jan-21 07.01.2021 TDS Deposit for Dec 2020 TDS
07.01.2021 Equalization Levy payment for Oct-Dec 2020 TDS
10.01.2021 GSTR-7 of Dec 2020 for TDS GST
10.01.2021 GSTR-8 of Dec 2020 for E-Commerce Operators GST
11.01.2021 GSTR-1 Monthly of Dec 2020 GST
13.01.2021 GSTR-6 of Dec 2020 for ISD GST
15.01.2021 PF & ESI Payment and Return for the previous month's salary Labor
18.01.2021 GSTR-4 of Oct-Dec 2020 for Composition Dealer GST
20.01.2021 GSTR-3B of Dec 2020 GST
25.01.2021 ITC-04 of Oct-Dec 2020 GST
30.01.2021 GSTR-1 Quarterly of Oct-Dec 2020 GST
31.01.2021 Annual Return/Form III under Minimum Wages Act Labor
Feb-21 07.02.2021 TDS Deposit for Jan 2021 TDS
10.02.2021 GSTR-7 of Jan 2021 for TDS GST
10.02.2021 GSTR-8 of Jan 2021 for E-Commerce Operators GST
11.02.2021 GSTR-1 Monthly of Jan 2021 GST
13.02.2021 GSTR-6 of Jan 2021 for ISD GST
15.02.2021 PF & ESI Payment and Return for the previous month's salary Labor
20.02.2021 GSTR-3B of Jan 2021 GST
Mar-21 07.03.2021 TDS Deposit for Feb 2021 TDS
10.03.2021 GSTR-7 of Feb 2021 for TDS GST
10.03.2021 GSTR-8 of Feb 2021 for E-Commerce Operators GST
11.03.2021 GSTR-1 Monthly of Feb 2021 GST
13.03.2021 GSTR-6 of Feb 2021 for ISD GST
15.03.2021 4th Installment for Advance Tax AY 2021-22 Income Tax
15.03.2021 PF & ESI Payment and Return for the previous month's salary Labor
20.03.2021 GSTR-3B of Feb 2021 GST
31.03.2021 TDS Returns for Apr-Dec 2020 TDS

Notes

Specified States under GST
SS1 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
SS2 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
MCA Forms having due dates that may vary for each company
PAS-6 HY within 60 days of deployment of form
AOC-4 Within 30 days of AGM
MR-3 Submitted along with AOC-4
MGT-7 Within 60 days of AGM
MGT-8 Submitted along with MGT-7
ADT-1 Within 15 days of AGM or appointment of auditor
MGT-14 Within 30 days of GM
CRA-2 Earlier of 30 days from BM appointing Cost Auditor or within 180 days from 1st April
CRA-4 Within 30 days of receipt of Cost Audit Report
INC-20A Within 180 days of incorporation
BEN-2 Within 30 days of declaration in BEN-1
MCA - Original Due Dates
DPT-3 30th June
DIR-3 KYC 30th September
MSME-1 For HY ending 31st March, it is 30th April. For HY ending 30th September, it is 31st October.
LLP-11 30th May
LLP-8 30th October
FEMA Compliances - Original Due Dates
FLA 15th July
ECB 2 Monthly
FC-GPR Within 30 days of issue of capital instrument
FC-TRS Within 60 days of remittance of funds or transfer date, whichever is earlier
FDI LLP-I Within 30 days of receipt of consideration
FDI LLP-II Within 60 days of date of receipt of funds
Form DI Within 30 days from date of allotment of capital instrument

Tuesday, August 4, 2020

Start Up Dictionary / Glossary

A/B Split

1. A/B testing (also known as bucket testing or split-run testing) is a user experience research methodology. A/B tests consist of a randomized experiment with two variants, A and B. It includes application of statistical hypothesis testing or "two-sample hypothesis testing" as used in the field of statistics. A/B testing is a way to compare two versions of a single variable, typically by testing a subject's response to variant A against variant B and determining which of the two variants is more effective. - WeWork

2. The A-B split is a method of testing the effectiveness of marketing methods or media. Using A-B split marketing, a list of target names is split into two groups on a random basis, with one group designated as a control group and the other as a test or variation group. The objective of the A-B split is to determine which single variable is the most effective in improving response rates to a marketing campaign or achieving some other desired outcome. The A-B split is also referred to as "A/B testing," "bucket tests," or "split-run testing.” - Investopedia

Accelarator

An accelerator is a program intended to mentor and accelerate the growth and success of a startup company.

Accredited Investor

1. The SEC (Securities and Exchange Commission ) defines an accredited investor as, “A natural person with income exceeding $200,000 in each of the two most recent years or joint income with spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person.” In layman’s terms, it is a rich individual potentially interested in investing in your company. - Medium
     
2. An accredited investor is a person or entity who is allowed to deal, trade and invest in financial securities as long as they satisfy one (or more) requirements regarding income, net worth, asset size, governance status or professional experience. - Investopedia

Saturday, August 1, 2020

Summary of Important Changes in Income Tax

Here's a summary of a few important changes in Income Tax that are applicable in the current year.

S.No. Head Details of Change Period
1 Depreciation on Motor Cars Motor cars acquired between 23-Aug-2019 and 31-Mar-2020 and put to use before 01-Apr-20 would be depreciated @30% p.a. for Income Tax purposes. However, those used for business of running them on hire to be depreciated @45% p.a. This increase is due to one time additional depreciation offered. Only for AY 2020-21
2 Tax Audit Turnover Threshold Tax Audit turnover threshold u/s 44AB increased to Rs. 5 crore from Rs. 1 crore only for businesses that have cash receipts or payments less than 5% of total sales or expenses, respectively. w.e.f. AY 2020-21
3 Due Date of Filing ITR for Audit Cases The due date for filing of Tax Audit Report (TAR) for audit cases is 30-Sep. The ITR for such cases is to be filed by 31-Oct. w.e.f. AY 2020-21
(Note though that the one time extension given for AY 2020-21 to 30-Nov is only due to the pandemic)
4 Self Occupied House Property A person can claim 2 house properties as self-occupied instead of only 1 as was allowed earlier, thus avoiding deemed rent on the second such property. w.e.f. AY 2020-21
5 Capital Gain on Property Older than 01.04.2001 For indexation of acquisition cost, the FMV as on 01-Apr-2001 will be capped at the stamp duty value as on that date, wherever available. Thus, FMV, if greater than stamp duty value, would not be considered for indexation. w.e.f. AY 2020-21
6 LTCG Exemption on Sale of House Property To save LTCG on sale of house property, investment u/s 54 can be made in 2 residential house properties. This option can be exercised only once in the lifetime, and the LTCG should not exceed Rs. 2 crores. w.e.f. AY 2020-21
7 Dividends Dividends are now taxable in the hands of shareholders w.e.f. AY 2021-22
8 TDS on Dividends TDS @10% will be deducted if an investor receives dividend above Rs. 5000 w.e.f. AY 2021-22
(All TDS rates to be 75% of declared rates only till 31-Mar-21 due to the pandemic)
9 Rebate on income up to Rs. 5 lakh The rebate from tax u/s 87A for income up to Rs. 5 lakh has been extended to Rs. 12500 instead of the earlier Rs. 2500 w.e.f. AY 2020-21
10 New Tax Regime & Old Tax Regime New tax slabs have been announced under a New Tax Regime, which can be opted for if the assessee does not claim any other deductions. For people taking deductions of HRA, 80C, 80D, etc., the old tax slab may be beneficial subject to comparative computation of tax under both regimes. w.e.f. AY 2021-22
11 PF, NPS Taxable if in excess of 7.5 Lakhs If the employer contributes to the retirement funds such as NPS + EPF + any super anuation fund in excess of Rs. 7.5 lakhs for an employee, such amount in excess will be taxable as perquisite in hands of the employee w.e.f. AY 2021-22
12 Standard Deduction Standard Deduction from Salary is increased to Rs. 50000 from Rs. 40000 w.e.f. AY 2020-21
13 TDS on Cash Withdrawal TDS @2% will be deducted by the bankers in case cash withdrawal in a year from all accounts exceeds Rs. 1 crore. The threshold is Rs. 20 lakhs if ITR not filed in previous 3 years. w.e.f. AY 2021-22
14 TCS on Sales above Rs. 50 Lakh For a person with annual turnover above Rs. 10 crore, on sale of above Rs. 50 lakh in a year to a single buyer, TCS of 0.1% on sale value is to be collected from such buyer. This does not apply to export sales. Further, TCS is @1% in case of no PAN. w.e.f. 01-Oct-2020
15 Mandatory ITR Filing ITR Filing is mandatory even if total income is less than Rs. 2.5 Lakhs, but if the person has had foreign travel costing above Rs. 2 lakh during the year or has had electricity bill of over Rs. 1 lakh in the year. w.e.f. AY 2020-21
16 Reduced Corporate Tax Rates For corporate assessees, the tax rate has been reduced to 22% + surcharge + cess in case no deductions or MAT credit or additional depreciation is claimed u/s 115BAA w.e.f. AY 2020-21
Similarly, the tax rate is reduced to 15% + surcharge + cess for a new manufacturing company that also meets the requirements as set out u/s 115BAB
17 MAT Rate The rate of Minimum Alternate Tax (MAT) has been reduced to 15% from 18.5% w.e.f. AY 2020-21