Form DIR 2 – Consent by a person to act as Director of a company

The Form DIR 2 acts as consent of the person that he/she is ready to act as the Director of a company.

Form DIR 2 – Consent by a person to act as Director of a company

 

Form DIR – 2 is prescribed under the Companies’ Act, 2013 and is required to be obtained by the company where it is going to appoint any person as director. The Form DIR 2 acts as consent of the person that he/she is ready to act as the Director of a company.

The form DIR 2 asks a person to give following declarations and particulars:

 

Declarations:

  • that the person is not disqualified to become a director under the Companies Act, 2013.
  • A person has to declare the following:

 

“I declare that I have not been convicted of any offence in connection with the promotion, formation or management of any company or LLP and have not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law in the last five years. I further declare that if appointed my total Directorship in all the companies shall not exceed the prescribed number of companies in which a person can be appointed as a Director.”

 

Particulars as required by Form DIR 2

S. No. Particulars Details Remarks for Understanding
1.                Director Identification Number (DIN):   In this the person who is going to be appointed should mention his/her DIN
2.                Name (in full):   Full Name of the person as mentioned in PAN Card
3.                Father’s Name (in full):   Father’s Name as mentioned in PAN Card
4.                Address:   Address of the person where he/ she is residing
5.                E-mail id:   Email id to be mentioned. Kindly note that this email id will be required every year for doing e-KYC of the Director
6.                Mobile no.   Mobile Number to be mentioned. Kindly note that this mobile number will be required every year for doing e-KYC of the Director
7.                Income-tax PAN   10 digits Income Tax Permanent Account Number (PAN)
8.                Occupation:   Current Occupation of the person to be appointed as Director
9.                Date of birth:   Date of Birth as mentioned in PAN Card
10.            Nationality:   Nationality of the person to be appointed as Director
11.            No. of companies in which I am already a Director and out of such companies the names of the companies in which I am a Managing Director, Chief Executive Officer, Whole time Director, Secretary, Chief Financial Officer, Manager:   Number of companies in which the person is already a director, i.e.  other than the one for which this DIR 2 is being submitted should be mentioned here
12. Particulars of membership No. and Certificate of practice no. if the applicant is a member of any professional Institute. Specifically, state NIL if none:   If the person to be appointed as Director is a Chartered Accountant or Company Secretary or Cost and Management Accountant or Actuary, etc., he/ she should mention the Membership number allotted by the respective Institute

 

The Self attested copy of the PAN card and the address proof becomes the enclosures of the form DIR 2. The Form DIR 2 is required to be printed on a normal paper and to be signed by the person to be appointed as the Director of the company. This is submitted to the company which further does all the formalities in relation to appointment of a director.

 

Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.

Director Identification Number

DIN is an identification number allotted by the Central Government to any person who is going to be appointed as director or to any existing director of a company.

Director Identification Number (DIN) [Section 152(3) and Section 153 TO 159]

 

DIN is an identification number allotted by the Central Government to any person who is going to be appointed as director or to any existing director of a company.

It is an 8-digit number and contains the detailed information about the director of the company.

Further the DIN shall be called as the Designated Partner Identification Number (DPIN) when it is referred to in relation to any Limited Liability Partnership.

 

Requirement of DIN

No person shall be appointed as a director of company unless he has been allotted the DIN.

 

Filing of Application for allotment of DIN [Section 153]

Every individual who is going to be appointed as director of a company shall make an application for allotment of DIN to the Central Government in the prescribed form with prescribed fees.

 

Procedure for making an application for allotment of DIN before appointment, Rule 9 of Companies Rule, 2014:

 

  • Every person who is going to be appointed as director of an existing company shall make an application electronically in Form DIR-3, to the Central Government along with prescribed fees.
  • The Central Government provides an electronic system for submission of application for allotment of DIN through the portal of Ministry of Corporate Affairs.
  • The applicant can download Form DIR-3 from the portal, fill in the required particulars, verify and sign it after attaching copies of the following documents, scan, and file all the documents electronically-
  • Photograph;
  • Identity proof;
  • Residence proof;
  • Signatures duly verified.

Form DIR-3 can be submitted electronically by the applicant using his/ her Digital Signatures Certificate.

  • In case the name of the applicant does not have a last name, then his or her father’s or grandfather’s surname shall be mentioned in the last name along with declaration (explained in written about the surname) in Form DOR-3A.

 

Allotment of DIN

The Central Government shall allot the DIN to the applicant within one month from the receipt of application.

 

Procedure for rejection of allotment of DIN, Rule 10 of the Companies Rule, 2014:

  • Generation of application number: On the submission of the Form DIR-3 on the portal and on payment of the prescribed fees, an application number shall be generated by the system automatically.
  • Communication of issue of DIN: After generation of application number, the Central Government shall process the applications received and the decide for the approval or rejection for the DIN and thereafter communicate the same to the applicant along with DIN allotted on case of approval by way of letter by post or electronically or in any other mode within a period of 1 month.
  • In case of defective/ incomplete application: If the Central Government, on examination of the application finds it incomplete or defective, it shall give intimation of the same by placing it on the website and by sending an email to the applicant who has filed such application.

The applicant is given a period of 15 days to rectify the defects or incompleteness by resubmitting the application.

The Central Government shall also-

  • Reject the application and direct the applicant to file a fresh application with proper and correct information.
  • Treat and label such application as invalid incase the defects are not removed.
  • Inform the applicant either by way of letter or electronically or in any other mode.

 

  • In case of rejection or invalidation of application, the fees so paid with the application shall neither be refunded nor adjusted with any other application.

 

Prohibition on obtaining more than one DIN

No individual, who has already obtained a DIN, cannot apply for the DIN again.

 

Director to intimate DIN

Every existing director shall intimate his DIN to the company within 1 month of the receipt of DIN.

 

Company to inform DIN to registrar

Every company shall within 15 days of the receipt of intimation of DIN of all the directors shall provide the same to the registrar or any other authority as may be specified by the Central Government with the prescribed fees.

 

Punishment for failure to provide DIN to Registrar

If any company fails to provide the DIN to Registrar, it shall be liable to a penalty of Rs. 25,000. In case of continuing failure, penalty of further Rs. 100 for each day after the first. Penalty can reach to a maximum of Rs. 1,00,000.

Further every defaulting officer of the company shall be liable to a penalty of minimum Rs. 25,000 and in case continuing failure, penalty of Rs. 100 for each day after the first which may increase to a maximum of Rs. 1,00,000.

 

Obligation to indicate DIN

Every person filing return, providing information or particulars are required to mention the DIN in such return or information.

 

Punishment for contravention of Section 152, 155 and 156 [Section 159]

If any individual or director of a company makes any default in complying with any of the provisions in relation to having more than one DIN and does not intimate Din to the company is prescribed time limits, shall be liable to a penalty up to Rs. 50,000 and if it continues, penalty with increase up to Rs. 500 each after the first one.

 

Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.

 

 

 

 

Appointment of Directors [Section 152]

The procedure of appointing a director in the company.

Appointment of Directors [Section 152]

 

Many people want to start their own company and be a director in it. Who knows one day you also start thinking the same? And when the time comes you should be aware of the process involved in appointing the directors in your company. So, the procedure you would be seeking is here. Refer: Legal Position of Directors

 

  • Appointment of First Directors

There is no provision made in the articles of a company for the appointment of the first directors of the company.

In this case the Subscribers to the Memorandum (a person who is the first and the original shareholder of the company, whose details are mentioned as the subscriber to memorandum) are considered as first directors of the company.

In case of One Person Company, an individual being member shall be considered as the first director until the director or directors are duly appointed with reference to the provisions of this section.

 

  • Appointment of Subsequent Directors

Under this section, every director shall be appointed by the company in general meeting.

At the general meeting, the shareholders (the owners) gather and take decisions. Generally, every director shall be appointed by the company in general meeting except where the Companies Act specifically provides some procedure for appointment of directors.

 

  • Other requirements of Appointment

 

  • Allotment of Directors Identification Number (DIN): A person is appointed as a director of the company only when he has been allotted DIN or any other number as may be prescribed.

 

       What is DIN number? Refer article on DIN – Director Identification Number (DIN)

It is an 8-digit identification number. Every director is allotted with DIN that contains all the details of the director.

 

  • Providing of DIN and furnishing of Declaration by the proposed Director: Every person appointed as Director by the company shall provide his DIN or such other number as may be prescribed. Further, he shall provide with a formal statement that he is not disqualified to become a director under the Companies Act.

 

  • Written consent to act as Director: A person appointed as director shall not act as a director unless he gives his written consent to hold the office as a director. The consent shall be provided to the company in Form DIR-2.

The company shall file the consent of the director with the Registrar within 30 days of such appointment in Form DIR-12 along with prescribed fees.

 

EXCEPTION: This provision shall not apply in case of Government Company where appointment of director is done by the Central Government or State Government.

 

NOTE: This exception is applicable only if the company has not committed a default in filing its financial statements under Section 137 and Annual return Under section 92.

 

  • Explanatory statement in case of appointment of Independent Director: In case of an independent director is appointed, an explanatory statement for such appointment shall be attached with the notice of general meeting including a statement of Board that he fulfills the conditions specified for such appointment.

 

Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.

Legal Position of Directors

Directors are the individuals who are appointed to manage the business affairs of the company.

Legal Position of Directors

 

Introduction

 

Directors are the individuals who are appointed to manage the business affairs of the company. A company is a separate legal entity who has legal existence of its own, but it cannot manage its activities on its own physically. So, it needs to be managed by someone who can take care of all the business activities.

Now you might be thinking that why do we need a director for all this as every company has its shareholders who are physically available to manage the company.

The answer to your question is here, that as the number of shareholders grow, all of them together may not be able to manage the affairs, and if do so it shall lead to mismanagement and nothing else. That’s why the concept of directors has emerged to handle all the activities of the business. The director of the company may be elected from among the shareholders or from outside.

 

Legal Position of Directors

 

Directors can be considered as both, Agents and Trustees.

As Agents, they bind the company as their principal with proper rules and regulations. Also, where directors are empowered to take decisions, the company means the shareholders cannot issue directions directing them to go and take a particular decision.

As Trustees, the directors are required to take care of the properties, money etc. belonging to the company. In fact, as trustee the directors are in fiduciary relationship (it is when a person has a duty to act for the benefit of the other) with the company and if it gets broken and the company suffers losses because of the illegal acts of the directors, they shall be required to compensate for the losses suffered by the company.

 

Collective Body of Directors

 

The collective Body of Directors simply means the “Board of Directors”.

It is the ‘Board of Directors’ who takes decisions at any Board Meeting and not any individual director. This is the reason why the presence of minimum number of directors at the Board meetings is prescribed so that decisions can be taken collectively.

 

Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.

 

How to E-Verify Income Tax Return

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How to E-verify Income Tax Return

There are different ways to do this given below:

1. Via Aadhaar- OTP based

To verify your ITR via aadhaar, your mobile number should be linked to the aadhaar card and your PAN should also be linked with the Aadhaar.

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Steps to be followed:

  • Login on Income Tax portal.

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  • Click on ‘View Returns/ Forms’

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  • Select ‘Income Tax Returns’ and ‘Submit’

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  • Click on “Click here to view your returns pending for e-verification”

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  • Click on ‘e-verify’

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  • Select the option “I would like to generate Aadhaar OTP to e-verify my return”

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  • An SMS with 6-digit OTP will be sent to your registered mobile number

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  • Enter the OPT received and click on “Submit”

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2. Generating EVC via Net Banking

You can e-verify your ITR with the help of net banking. But only few banks provide that facility.

Your PAN must be linked with the bank account.

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Steps:

  • Login to your bank account
  • Select the e-verify option under the ‘Tax’ tab. You will be directed to e-filing website.
  • Click on ‘Generate EVC’ option on ‘My account’ tab.
  • A digit alpha-numeric digit will be sent to your email or mobile number
  • Now go to ‘e-verify’ option under ‘My account’ tab
  • Click on the option ‘I have EVC already’
  • Enter the OTP you received on your mobile number & click on ‘Submit’.

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List of banks that provide this facility:

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3. Generating EVC via Bank Account

In order to e-verify your ITR through this process, first you have to pre-validate your bank account.

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How to pre-validate your bank account

  • Go to the “Profile settings” in your e-filing account to pre-validate your account.
  • Enter the required details such as:
    • Bank’s name
    • Account number
    • IFSC Code
    • Mobile number (linked with the bank account)
  • The pre-validation will be successful, if all the information matches with the bank account records.

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Now, e-verify your ITR by following these steps:

  • Select “Generate EVC” option under the “My Account” tab.
  • An OTP will be sent on your registered mobile number
  • Select “E-verify” under “My Account” tab.
  • Enter the OTP & click on “Submit”

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List of banks provide this facility: 

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4. Verifying ITR through Demat Account

It is same as that of bank account. First you have pre-validate your demat account.

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How to pre-validate Demat account:

  • Go to “Profile settings” in your e-filing account.
  • Enter the required details:
    • Mobile number (linked to demat account)
    • Email ID (linked to demat account)
    • Depository name (NSDL or CSDL)

 Usually it takes 1-2 hours to pre-validate your demat account.

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Once your account is pre-validate, e-verify your ITR following the given procedure:              

  • Select “Generate EVC” option under the “My Account” tab.
  • Select “Generate EVC through Demat Account Number”
  • An OTP will be sent on your registered mobile number
  • Select “E-verify” under “My Account” tab.
  • Enter the OTP & click on “Submit”

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Section 115BAB – For domestic manufacturing company which is a New Company

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1. Applicability of Section 115BAB

This section is applicable w.e.f. 1st April 2019 [FY 2019-20 (A.Y. 2020-21)].

Benefit of lower tax rate is available to domestic companies who satisfying the specified conditions mentioned in point 2.

This section states that domestic companies have the option to pay tax at a lower rate of 15%.

2. Conditions specified under section 115BAB

A domestic company shall have an option to pay income tax at the rate of 15% (plus applicable surcharge and cess, effective rate of 17.16%), provided the following conditions are complied with:

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a. The company has been set up and registered on or after 1st October, 2019 and has commenced manufacturing on or before 31st March, 2023 and is

  • not formed by the splitting up and reconstruction of a business already in existence except in case of a business re-established, reconstruction or revival under section 33B
  • does not use any plant or machinery previously used for any purpose. However, the company can use plant and machinery used outside India and used in India for the first time and no depreciation in respect of such plant and machinery has claimed earlier.

Also, the company can use old plant and machinery, the value of which does not exceed 20% of the total value of the plant and machinery used by the company.

  • does not use any building previously used as a hotel or a convention centre, as the case may be.

‘Hotel’ means a hotel of two-star, three-star or four-star category as classified by the Central Government. ‘Convention centre’ means a building of a prescribed area comprising of convention halls to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed.

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b. The company should not engage in any business other than the business of manufacture or production of any article or thing and research in relation to, or distribution of, such article or thing manufactured or produced by it.

For clarification of doubts it has been clarified that, the business of manufacturing and production of any article or thing, does not include business of

  • development of computer software in any form or in any media;
  • mining;
  • conversion of marble blocks or similar items into slabs;
  • bottling of gas into cylinder;
  • printing of books or production of cinematograph film; or
  • any other business as may be notified by the Central Government in this behalf.

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c. Domestic companies should not claim any deductions/exemption mention below:

  • Deduction u/s 10AA especially available for units established in SEZ
  • Deduction u/s 32 (Additional depreciation) and 32AD (Investment allowance) available for investment in new plant and machinery made in notified backward areas in the states of Andhra Pradesh, Bihar, Telangana, and West Bengal
  • Deduction u/s 33AB for tea, coffee and rubber manufacturing companies
  • Deduction towards deposits made for site restoration fund u/s on 33ABA by companies engaged in extraction or production of petroleum or natural gas or both in India
  • Deduction u/s 35 for expenditure made for scientific research
  • Deduction u/s 35AD for capital expenditure incurred by any specified business
  • Deduction u/s 35CCC for expenditure incurred on an agriculture extension project
  • Deduction u/s 35CCD for expenditure on skill development project
  • Deduction under chapter VI-A in respect to certain incomes, which are allowed under section 80IA, 80IAB, 80IAC, 80IB and so on, except deduction under section 80JJAA and 80M (w.e.f A.Y. 2021-22)
  • Without set-off of any loss carried forward from earlier years, if such losses relate to the deductions mentioned above

d. In order to exercise this option new manufacturing domestic companies required to file their income tax returns on or before the due date of filing income tax returns i.e. usually 30th September of the assessment year.

e. Option once exercised by the domestic company cannot be withdrawn for same or subsequent years.

f. The domestic companies who do not wish to avail this concessional rate immediately, can opt for the same after the expiry of their tax holiday period.

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3. Tax liability under section 115BAB

Particulars Tax Rate
Income tax should be charged at 15% 15.00%
Add: Surcharge: 10% of tax amount (i.e.10% of 15%). 1.50%
Add: Health and Education cess: 4% of income tax plus surcharge [i.e. 4% of (15% plus 1.5%)]. 0.66%
Total 17.16%

 

MAT : Such companies will not be required to pay minimum alternate tax (MAT) under section 115JB of the act. Since MAT provision in itself will not be applicable for the companies, its credit will not be allowed to be set off against its profit computed under the regular provision.

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4. Applicability of transfer pricing provisions

In a case where due to a close connection between the company and any other person, or for any other reason, the business between them is so arranged such that the company earns more than ordinary profits, the assessing officer may ignore the excess profits. The Assessing Officer will take only the amount of profits reasonably deemed to be derived from the business.

In a case where the business transaction involves a specified domestic transaction referred to in section 92BA, the profits of the transaction will be determined having regard to the arm’s length price.

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The above information does not intend to give any opinion or advisory in relation to various alternatives of tax computation available in Income Tax Act. The readers are advised to please take help from Expert Tax Consultants with their specific facts and circumstances.

 

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Section 115BAA – Lower Tax Rate introduced for Domestic Companies

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1. Applicability of Section 115BAA

This section is applicable w.e.f. 1st  April 2019 [FY 2019-20 (A.Y. 2020-21)].

Benefit of lower tax rate is available to all domestic companies after they comply certain conditions.

Domestic Companies are given an option.

Option once exercised cannot be revoked (That is no coming back by choice). But if you do not comply certain conditions then you will not get this option.

A lower tax rate is prescribed which is 22% Plus 10% Surcharge Plus 4% Health and Education cess (applicable in all circumstances).

Effective rate of tax comes to 25.168%

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2. Conditions specified under section 115BAA

All domestic companies shall have an option to pay income tax at the rate of 22% (plus applicable surcharge and cess), provided the following conditions are complied with:

Domestic companies should NOT claim any deductions/exemption mention below:

 

S. No. Under Section Details
i Deduction u/s 10AA Available for units established in SEZ
ii Deduction u/s 32 (Additional depreciation) and 32AD (Investment allowance) Available for investment in new plant and machinery made in notified backward areas in the states of Andhra Pradesh,  Bengal

 

iii Deduction u/s 33AB For tea, coffee, and rubber manufacturing companies
iv Deduction u/s 35 For expenditure made for scientific research
v Deduction u/s 35AD For capital expenditure incurred by any specified business
vi Deduction u/s 35CCC For expenditure incurred on an agriculture extension project
vii Deduction u/s 35CCD For expenditure on skill development project
viii Deduction under Chapter VI-A Deductions in respect to certain incomes, which are allowed under section 80IA, 80IAB, 80IAC, 80IB and so on.
ix Deductions in respect of Section 33ABA Deduction towards deposits made for site restoration fund u/s on 33ABA by companies engaged in extraction or production of petroleum or natural gas or both in India
x Set off of Losses Without set-off of any loss carried forward from earlier years, if such losses relate to the deductions mentioned above

 

Domestic companies can claim the following deductions:

i Section 80JJA Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste
ii Section 80M Deduction in respect of certain inter-corporate dividends (Applicable for FY 2020-21 (AY 2021-22))

 

In order to exercise this option domestic companies required to file their income tax returns on or before the due date of filing income tax returns.

Option once exercised by the domestic company cannot be withdrawn for same or subsequent years.

The domestic companies who do not wish to avail this concessional rate immediately, can opt for the same after the expiry of their tax holiday period.

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3. New Rate applicable to domestic companies

Particulars Tax Rate
Income tax should be charged at 22% 22.000%
Add: Surcharge: 10% of tax amount (i.e.22%). 2.200%
Add: Health and Education cess: 4% of income tax plus surcharge [i.e. 4% of (22% plus 2.2%)]. 0.968%
Total 25.168%

 

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4. Provision related to MAT

As per Section 115JB, Companies who are opting for section 115BAA will be exempt from computing MAT.

Since MAT provision in itself will not be applicable for the companies, its credit will not be allowed to be set off against its profit computed under the regular provision.

If the company is having MAT credit available for F.Y. 2019-20, they may opt for payment of taxes under regular provisions of income tax if they want to do so. They can opt for lower tax rate under section 115BAA from next Financial Year.

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The above information does not intend to give any opinion or advisory in relation to various alternatives of tax computation available in Income Tax Act. The readers are advised to please take help from Expert Tax Consultants with their specific facts and circumstances.

 

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Income Tax Rates for other than Individual for F.Y. 2020-21 (A.Y. 2021-22)

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1. Tax Rate for Companies:

Tax rates for domestic companies

Particulars Tax rates
Total turnover or gross receipts during the previous year 2017-18 does not exceed Rs. 400 Crore 25%
Other domestic companies 30%

 

Tax rates for foreign companies

The tax rate for foreign company is 40%.

In case foreign company received any royalty from Government/Indian concern or technical fees as per agreement approved by the Central Government, then tax rate applicable will be 50%.

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Surcharge:

Company Net total income is between Rs. 1Crore – 10 Crores Net total income exceeds Rs. 10 Crores
Domestic company 7% 12%
Foreign company 2% 5%

Health and Education cess: 4% of income tax plus surcharge.

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For domestic manufacturing company which is a NEW company under section 115BAB

Income tax should be charged at 15%

Surcharge: 10% of tax

Health and Education cess: 4% of income tax plus surcharge.

For more information in relation to 115BAB – click here

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Under section 115BAA – Tax for certain domestic companies

 Income tax should be charged at 22%

Surcharge: 10% of tax

Health and Education cess: 4% of income tax plus surcharge.

For more information in relation to 115BAA – Click here

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2. Income Tax Rate for Partnership Firm:

A partnership firm (including LLP) is taxable at 30%.

Surcharge: 12% of tax where total income exceeds Rs. 1 crore.

Health and Education cess: 4% of income tax plus surcharge.

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3. Income Tax Rates For HUF

HUF has an option to pay tax as per new tax regime or old regime, here given below are the tax rates for both the options available

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Under Old Tax Regime:

Net Total income Income-Tax rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,000- Rs. 5,00,000 5%
Rs. 5,00,000- Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

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New tax regime with no deduction and no exemption

Following conditions needs to be fulfilled:

Conditions Options Available
If assesee is not having business income in FY Have option to opt for any scheme every year
If assesee is having business income in FY Option once exercised for a Financial year shall be valid for all subsequent years and once the option is withdrawn, the same cannot be exercised again unless such business income cease to exist
If assesee fails to satisfy any condition (i.e. claimed any deduction or exemption not available) New regime option shall become invalid

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Net Total income Income-Tax rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,001- Rs. 5,00,000 5%
Rs. 5,00,001- Rs. 7,50,000 10%
Rs. 7,50,001- Rs. 10,00,000 15%
Rs. 10,00,001- Rs. 12,50,000 20%
Rs. 12,50,001- Rs. 15,00,000 25%
Above Rs. 15,00,000 30%

Note: List of Exemptions and deductions not available for availing benefit of new tax regime

 

Surcharge: 10% of income tax where total income exceeds Rs. 50 lacs but up to Rs.1 Crores.

15% of income tax where total income exceeds Rs. 1 Crore but upto Rs. 2 Crores

25% of income tax where total income exceeds Rs. 2 Crore but up to Rs. 5 Crores

37% of income tax where total income exceeds Rs. 5 Crores

Health and Education cess: – 4% of income tax and surcharge.

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4. Income Tax Rates For AOP/BOI/Any other Artificial Juridical Person:

Net Total income Income-Tax rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,000- Rs. 5,00,000 5%
Rs. 5,00,000- Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

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Surcharge: 10% of income tax where total income exceeds Rs. 50 lacs but up to Rs.1 Crores.

15% of income tax where total income exceeds Rs. 1 Crore but upto 2 Crores

25% of income tax where total income exceeds Rs. 2 Crore but up to Rs. 5 Crores

37% of income tax where total income exceeds Rs. 5 Crores

Health and Education cess: – 4% of income tax and surcharge.

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5. Income Tax Slab Rate for Co-operative Society:

Co-operative society has an option to pay tax as per new tax regime or old regime, here given below are the tax rates for both the options available

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As per Old Tax regime

Net Total income Income-Tax rate
Up to Rs. 10,000 10%
Rs. 10,000 to Rs. 20,000 20%
Above Rs. 20,000 30%

Surcharge: 12% of tax where total income exceeds Rs. 1 crore.

Health and Education cess: 4% of income tax plus surcharge

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As per New Tax Regime subject to some conditions: A resident Co-operative Society is taxable at 22%.

Surcharge: 10% on such tax

Health and Education cess: 4% of income tax plus surcharge.

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6. Income Tax Slab Rate for Local Authority:

A local authority is taxable at 30%.

Surcharge: 12% of tax where total income exceeds Rs. 1 crore.

Health and Education cess: 4% of income tax plus surcharge.

 

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TDS Rate chart for F.Y. 2020-21 (A.Y. 2021-22)

Section*

Nature of Payment* Threshold Limit* TDS Rates for Indian Residents*
192 Salaries Income tax slab Slab rates
192A Payment of accumulated balance due to an employee (EPF Premature Withdrawal) Rs. 50,000 10%
193 Interest on Securities Rs. 10,000 10%
194 Dividends (Other than listed company) Rs. 5,000 10%
194A Interest other than “Interest on securities” from post offices, co-operative societies and bank deposits

Interest from others

Rs. 40,000 (For senior citizen Rs. 50,000)

 

Rs. 5,000

 

10%

 

10%

194B Interest by way of winning from lotteries, crossword puzzles, games etc. Rs. 10,000 30%
194BB Income by way of winning from horse race Rs. 10,000 30%
194C Payment to contractor/ subcontractor

a)      HUF/Individual

b)      Others

Rs. 30,000 for single payment & Rs.1,00,000 for aggregate payment during the F.Y.  

1%

2%

194D Insurance Commission Rs. 15,000 5%
194DA Payment in respect of life insurance policy Rs. 1,00,000 1%
194EE Payment in respect of deposits under National Savings Scheme Rs. 2,500 10%
194F Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India NA 20%
194G Commission etc. on sale of lottery Rs. 15,000 5%
194H Commission or brokerage Rs. 15,000 5%
194I Rent of land, building or furniture Rs. 2,40,000 10%
194I Rent of Plant and Machinery Rs. 2,40,000 2%
194IA Payment/credit of consideration to resident transferor for transfer of any immovable property (other than rural agricultural land) Rs. 50 Lakhs 1%
194IB Payment/credit of rent by an individual/HUF (if not subject to tax audit under section 44AB in the immediately preceding financial year) Rs. 50,000 per month 5%
194IC Payment under joint development agreement to a resident individual HUF (who transfers land/ building) NA 10%
194J

 

Payment for fees for Technical services, Professional services or royalty etc.

a)      Fees for technical services not in nature of nature of professional services or royalty in consideration of sale

b)     All others (including Professional fees, royalty etc.)

Rs. 30,000  

 

2%

 

10%

194K Payment of any income in respect of

a) Units of a Mutual Fund as per Section 10(23D)

b) Units from the administrator

c) Units from specified company

Rs. 5,000 10%
194LA Payment of compensation on acquisition of certain immovable property Rs. 2,50,000 10%
194LBA Certain income distributed by a business trust to its unit holder NA 10%
194LBB Payment in respect of units of investment fund specified in section 115UB NA 10%
194LBC

 

Payment in respect of an investment in a securitization trust specified in clause (d) of the Explanation occurring after section 115TCA-
– if recipient is an individual or a Hindu undivided family
NA 25%
194LBC Payment in respect of an investment in a securitization trust specified in clause (d) of the Explanation occurring after section 115TCA-
– if recipient is any other person
NA 30%
194M Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J. Rs. 50 lakhs 5%
194N Cash withdrawal in excess of 1 crore during the previous year from one or more account maintained with bank or co-operative society Rs. 1 Crore 2%
194O Applicable for E-Commerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform.  Rs. 5 lakhs 1%

*Disclaimer: The below mentioned TDS Rate chart is just for ready reference of tax rates and threshold limits and does not intend to give any guidance on applicability of these provisions on any transaction. For getting guidance on applicability of TDS provisions on any transaction we request you to please take help from Expert Tax Consultants.

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Direct Tax Vivad se Vishwas Scheme 2020

Currently, there are more than 4.5 Lacs cases of Direct tax related disputes are pending at various appellant authorities which results in locking of tax arrears and consumption of time, energy and resources on the part of both Government and Taxpayers.

In order to resolve these pending disputed cases, The Hon’ble Finance Minister on 1st February 2020 introduced “Vivad Se Vishwas Scheme” with an aim of settlement of direct tax cases pending in multiple forums as on 31st January 2020.

Applicability

Under this scheme, taxpayer whose Direct tax related dispute is pending before

  • Supreme Court
  • High Court
  • ITAT
  • CIT(A)

as on 31.01.2020 against an assessment/reassessment order or in respect of TDS/TCS is eligible to make a declaration under this dispute resolution scheme.

An “appellant” is eligible to apply for the scheme irrespective of the fact whether the demand in such case is pending or has been paid.

Who is Appellant?

Here “Appellant” is a person in whose case an appeal or a writ petition or special leave petition has been filed either by him or by the income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on 31st January 2020.

Last date to file declaration under Vivad Se Vishwas scheme

As per the scheme, the taxpayer should opt and deposit the disputed dues by June 30, 2020 (This is an extended date due to COVID-19, earlier date was March 31, 2020), in order to get 100% relief from interest, penalty and fees. In case it is just penalty and interest which is in dispute, the taxpayer will have to pay only 25% of the disputed amount.

Procedure of opting the Scheme

1. An appellant can file a declaration to the designated authority to initiate resolution of pending direct tax disputes.

2. Based on the declaration filed, the designated authority within 15 days will determine the amount payable by the appellant and grant a certificate.

3. The appellant must pay this amount within 15 days of the receipt of the certificate and inform the designated authority of such payment.  

4. Such amount will not be refundable.

5. On receipt of the amount, the designated authority shall pass an order in writing, stating that the due amount has been paid.

6.The order passed by the designated authority shall be final and after that both the taxpayer and Government shall be barred from any further proceedings.

Key points of Vivad se Vishwas Scheme that a taxpayer must know:

1. For dispute resolution, the appellant is required to furnish an undertaking stating that he waives all his rights to seek any remedy or claim in relation to that dispute under any law.

2. All such claims already filed in relation to the dispute must be withdrawn before filing the declaration.

3. Once a dispute is resolved, the designated authority cannot levy interest or penalty in relation to that dispute.  

4. No appellate forum can make a decision in relation to the matter of dispute once it is resolved.  

5. Such matters cannot be reopened in any proceeding under any law, including the IT Act.

6. Once the designated authority issues the certificate, appeals pending before the Income Tax Appellate Tribunals and the Commissioner (Appeals) will be deemed to be withdrawn.

7. In case of appeals or petitions pending before the Supreme Court and High Courts, the appellant is required to withdraw the appeal or petition.

8. The declaration filed by an appellant will become invalid if

  • its particulars are found to be false
  • he violates any of the conditions referred to in the IT Act
  • he seeks any remedy or claim in relation to that dispute.  

 

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