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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Set Off and Carry Forward of Losses

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What is the meaning of Set Off of Losses?

Set-off means adjustment of losses against the profit or income of same Financial Year.

A set off could be an intra head set off or inter head set off.

Intra head Set-off means loss from one source of income can be set off against income from another source but in the same head of income.

Inter head Set-off means loss under one head of income can be set off against income from another head of income but in same financial year.

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Given below is the detailed guide to set-off of losses

Head of Income Set-off
Same source under same head Other source under same head Inter head
Salary N/A N/A N/A
House property Yes Yes Yes

(max limit

Rs. 2, 00,000)

PGBP Non-Speculation Yes Yes Yes (Except Salary)
Speculation Yes No No
Owing & Maintenance race horses Yes No No
Specified business under section 35AD Yes No No
Capital Gain Short term Yes Yes No
Long term Yes No No
Other Income Yes Yes Yes

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What is the meaning of Carry-forward of Losses?

If the losses cannot be set-off in the same year due to inadequacy of eligible profits, then such profits are carried forward to the next financial year for adjustment against the eligible profits.

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Head of Income Carry Forward Set off
For Assessment years
Salary N/A N/A
House property 8 years Under Same head
PGBP Non-Speculation 8 years Under Same head
Speculation 4 years Under Same source
Owing & Maintenance race horses 4 years Under Same source
Specified business under section 35AD Indefinite years Under Same source
Capital Gain Short term 8 years Under Same head
Long term 8 years Under Same source

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Key Notes

  • Any loss under the head ‘Other income’ cannot be carried forward.
  • Loss under the head ‘Income from Salary’ is not possible.
  • In order to carry forward the losses, it is mandatory to file return of income on or before the due date of filing of Income tax return.
  • House property losses and unabsorbed depreciation can be carry-forward even if return is filed after the due dates.
  • In case return is filed after due dates, set-off and carry forward of losses of previous years are allowed but further carry forward of current year losses is not allowed.
  • As per the provision of section 72(2), brought forward business loss is to be set-off before setting off unabsorbed depreciation.
  • The order to be followed:
    • Current year depreciation/ capital expenditure on scientific research & expenditure on family planning, to the extent allowed.
    • Brought forward loss from business /profession
    • Unabsorbed depreciation.
    • Unabsorbed capital expenditure on scientific research.
    • Unabsorbed expenditure on family planning.
  • If income from a particular source is exempt from tax, then loss from such source cannot be set off against any other income which is chargeable to tax. (For Example: Share of profit from a firm)

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Frequently Asked Questions

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Query 1: I have a loss from house property of Rs. 2.5 lakhs as I have paid interest on home loan taken for purchase of my own house. I have earned salary income of Rs. 8 lakhs. Can I reduce my loss from house property against income from salary?

Ans: Yes, you can reduce your taxable income and set off the loss from house property but up to Rs. 2 lakhs only as inter head adjustment of loss under house property is allowed up to Rs. 2 Lakhs only and further, carry forward of Rs 50,000 is also not allowed. Therefore, now taxable income is Rs. 6 Lakhs (i.e. 8 Lakh – 2 lakh) and loss of Rs. 50,000 will lapse.

Query 2: I own two houses – one is self-occupied and other is rented. On self-occupied house property, I have paid interest of Rs. 2.5 lakhs on home loan taken for purchase of house. From rented house, I have earned rental income of Rs. 4 lakhs. Can I adjust loss on interest paid from self-occupied with my rental income?

Ans: Yes, loss on self-occupied house property can be adjusted against rental income but up to Rs. 2 Lakhs only, remaining loss of Rs. 50,000 will lapse.

Query 3: I have earned a rental income of Rs. 1,20,000/- p.a. and paid interest on home loan of Rs. 2,30,000/- taken for purchase of the same house. I have also earned business income of Rs. 5 lakhs during the year. How can I adjust the loss of Rs 2,30,000/- against income earned?

Ans: Firstly, your interest of Rs. 2,30,000/- will get adjusted against the rental income under same head and the remaining loss of Rs. 1,46,000/- [Rs. 1,20,000 – 36,000 (30% Standard Deduction) – 2,30,000] will get adjusted against business income as inter head adjustment is allowed up to Rs. 2 lakhs.

Query 4:  I have earned rental income of Rs. 5 lakhs and interest paid on home loan taken for rented property is Rs. 4 Lakhs. Can I adjust full interest of Rs 4 Lakhs against my rental income or up to Rs 2 Lakhs?

Ans: Limit of Rs 2 lakhs will not apply on interest paid on loan taken for rented property, this limit is for self-occupied property only. Hence, in case of rented property full interest of Rs 4 lakhs will get set-off against rental income.

Query 5: I have a loss from house property of Rs. 2.5 lakhs as I have paid interest on home loan taken for purchase of my own house. I have earned business income of Rs. 1.2 lakhs. Can I reduce my loss from house property against business income?

Ans: Yes, you can adjust your loss from house property against business income of Rs. 1.2 lakhs and remaining loss of Rs. 80,000/- will be carried forward to next year and can be adjusted against house property income only.

Query 6: I have earned a salary income of Rs. 65,000 and a loss from non-speculative business of Rs. 27,000?

Can I set-off the loss of non-speculative business with salary Income?

Ans: Business loss cannot be set off against salary income. So, the business loss of Rs. 27,000 cannot be set off against the salary income of Rs. 65,000 and hence, it will be carried forward to next 8 assessment years.

Query 7: I have made a gain from intraday trading of Rs. 1.5 lakhs and incurred a loss of Rs. 2.8 lakhs in my newly startup business. Can I adjust loss of Rs 2.8 lakhs with profit of Rs 1.5 Lakhs?

Ans: Yes, you can adjust your loss from normal business with speculative business. Hence, loss of Rs 2.8 lakhs can be adjusted with gain of Rs 1.5 lakhs and remaining will be carried forward to next 8 assessment years.

Query 8: I have incurred a loss from trading in future and options and earned a profit from my manufacturing business. Whether the loss from future and options is eligible to set off against manufacturing business?

Ans: Yes, as trading in future and options considered as non-speculative business (i.e. normal business) and loss from one normal business can be set off against another. Therefore, loss from future and options can be set off against gain from regular manufacturing business.

Query 9: I have a short-term capital gain of Rs. 50,000 and a long-term capital loss of Rs. 20,000. Can I claim a set-off of loss of long term with short term capital gain?

Ans: Long term loss can be set-off only from other long-term gain. We cannot set off long term capital loss against short term capital gain. So, the long-term capital loss of Rs. 20,000 cannot be adjusted for short term capital gain of Rs. 50,000. Hence, the same will be carried forward to next year.

Query 10: I have done both intraday and future & options trading this year and incurred loss in intraday and gain in F&O. can I set-off the losses with the profit?

Ans: No, in this case, set-off is not allowed because as per law, intraday trading is considered as the speculative business activity although trading in future & options is a normal business activity. Loss from speculative business can be set off against speculative profit only and hence, this loss should be carried forward to next 4 assessment years.

Query 11: I have sold debt mutual funds and made long term loss of Rs 60,000. I made short term gains of Rs 25,000 on sale of listed equity shares. Can I set off the long-term loss against the short-term capital gain and pay tax on the net amount.

Ans: You cannot set off the long-term loss against the short-term gain. You can carry forward the long term loss of Rs 60,000 for 8 successive years and need to pay tax on the entire short term capital gains of Rs 25,000.

Query 12: In case of change in the constitution of business, can the loss be carried forward by the reconstituted entity?

Ans: Generally, the person incurring the loss is only entitled to carry forward the loss in subsequent year(s). However, in certain cases of reconstitution of the business-like amalgamation, demerger, conversion of proprietary firm into company or conversion of partnership firm into company, etc., the reconstituted entity is entitled to carry forward the unadjusted loss of predecessor entity (provided that conditions specified in this regard are satisfied).

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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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Indirect Tax (GST and Custom) – Various due dates extended due to COVID 19

The Government of India through the Finance and Corporate Ministry has announced several measures to provide the relief to the Individuals and the companies. The individuals and the various businesses are required to comply with numerous statutory requirements time to time like filing of GSTR 3B monthly, Annual returns, compliance of laws for composite dealers, compliance with custom laws within a stipulated time, etc. In the light of this global pandemic COVID-19, the ministry has extended the date of compliance for various requirements falling within the period of March 20, 2020 to June 29, 2020. The extended date is June 30, 2020

 

Customs

S. No. Particulars Existing Due Date Extended Due date
1 Custom Clearance   24×7 Custom clearance till end of 30th June, 2020
2 Other Matters: Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing applications, reports, any other documents etc., time limit for any compliance under the Customs Act and other allied Laws. Due date falling and /or time limit expiring between March 20, 2020 to June 29, 2020 Extended to June 30, 2020

 

Goods and Service Tax (GST)

S. No. Particulars Existing Due Date Extended Due date
1 GSTR-3B for taxpayer having turnover less than 5 Crore for the month of February, March and April 2020 (i.e. the returns which are due to be file in the month of March, April and May 2020) February 2020 – March 20/22/24, 2020

March 2020 – April 20/22/24, 2020

April 2020 – May 20/ 22/24, 2020

(Depending upon state to state)

For all the months Due Date Extended to last week of June 2020

With No interest, late fee, and penalty to be charged

2 GSTR 3B for other taxpayers (i.e. having turnover 5 crores or more) February 2020 – March 20, 2020

March 2020 – April 20, 2020

April 2020 – May 20, 2020

For all the months Due Date Extended to last week of June 2020

With No late fee, and penalty to be charged if complied till June 30, 2020. Whereas Interest will be charged at reduced rate of 9% (currently 18%) if the payment is made after 15 days from the due date.

3 Relief for Composition dealers Date for opting for composition scheme – 31st March 2020

 

Date for opting for composition scheme – last week of June 2020

Date of Making payment for quarter ending March 31, 2020 – last week of June 2020

Date of filing of Return for 2019-20 – last week of June 2020

4 Annual Return of GST for FY 2018-19

 

March 31, 2020 Last week of June 2020
5 Other Matters: Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST laws. Due date falling and /or time limit expiring between March 20, 2020 to June 29, 2020 Extended to June 30, 2020
6 Sabka Vishwas Scheme Payment date extended to June 30, 2020.

No interest for this period shall be charged if paid by June 30, 2020.

Corporate Affairs – Various due dates extended for companies due to COVID 19

The Government of India through the Finance and Corporate Ministry has announced several measures to provide the relief to the companies. In the light of this global pandemic COVID-19, the ministry has extended the date of compliance for various requirements falling within the period of March 20, 2020 to June 29, 2020. The extended date is June 30, 2020

S. No. Particulars Earlier Position Current Position
1 Moratorium Period in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date Late fee would have been charged if the document, return, statement, etc. filed late during the period April 01, 2020 to September 30, 2020 Now, NO late fee will be charged if any document, return, statement, etc. filed late during the period April 01, 2020 to September 30, 2020
2 Board Meeting Maximum Interval period of 120 days allowed between 2 Board Meetings The period of Interval now extended to 180 days between 2 board meetings. This extension is available till September 30, 2020
3 Applicability of CARO 2020: The Companies (Auditor’s Report) Order, 2020 Applicable for Audit of Companies for FY 2019-20 Now, Applicable for Audit of Companies for FY 2020-21
4 Independent Director: As per Schedule 4 to the Companies Act, 2013, Independent Directors are required to hold at least one meeting without the attendance of Non-independent directors and members of management. Currently if they don’t conduct that meeting, it will be treated as a violation of the companies Act 2013. Now, this requirement has been relaxed and the non-conduct of this meeting will not be treated as the violation under the Companies Act 2013.

Also, MCA has given them directive to the Independent Directors, that they may share, amongst themselves, their views through any electronic medium like E-mail, Telephone, etc.

5 Deposit Reserves: Requirement to create a Deposit reserve of 20% of deposits maturing during the financial year 2020-21. Before April 30, 2020 Now, this should be complied with till June 30, 2020
6 Investment of Debenture maturity: Under the companies Act 2013, there is a requirement to invest 15% of debentures maturing during a particular year in specified instruments. This is to be done Before Aril 30, 2020 Now, this should be complied with before June 30, 2020
7 Newly incorporated companies are required to file a declaration for Commencement of Business within 6 months (i.e. 180 days) of incorporation. Within 6 Months of Incorporation An additional time of 6 more months shall be allowed
8 Minimum Residency in India for a period of at least 182 days by at least one director of every company is required under Section 149 of the Companies Act, 2013 in every Financial Year. If, for at least one director it is less than 182 days, it is treated as a non-compliance. Now, it shall not be treated as a Non-compliance for FY 2019-20
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Raising of threshold for default value in IBC and other matters: Due to the emerging financial distress faced by most companies on account of the large-scale economic distress caused by COVID 19, it has been decided to raise the threshold of default under section 4 of the Insolvency and Bankruptcy Code (IBC) 2016 to Rs 1 crore (from the existing threshold of Rs 1 lakh). This will by and large prevent triggering of insolvency proceedings against MSMEs.

If the current situation continues beyond 30th of April 2020, we may consider suspending section 7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default.

Currently the Limit is INR 1,00,000 Limit Increased to INR 1,00,00,000

Income Tax – Various Due Dates Extended Due to COVID-19

The Government of India through the Finance and Corporate Ministry has announced several measures to provide the relief to the Individuals and the companies. The individuals and the various businesses are required to comply with numerous statutory requirements time to time like filing of tax returns, making some investments within a stipulated time, etc. In the light of this global pandemic COVID-19, the ministry has extended the date of compliance for various requirements falling within the period of March 20, 2020 to June 29, 2020. The extended date is June 30, 2020

 

The List of Changes in the Income Tax Act are given below:

 

S. No. Nature of Compliance Earlier Due Date/ Existing Provision Extended Due Date/ Provision after extension
1 Filing of Income Tax Return for FY 2018-19 (AY 2019-20) March 31, 2020 Extended to June 30, 2020
2 Aadhaar-PAN linking March 31, 2020 Extended to June 30, 2020
3 Vivad se Vishwas scheme March 31, 2020

Earlier: March 31, 2020 was the date for payment of undisputed taxes. There was another date June 30, 2020 for the payment of taxes with an additional payment of 10%.

Extended to June 30, 2020

Now: No extra 10% to be paid up to June 30, 2020

4 Delayed payments of

Advanced tax, TDS, TCS, Self-assessment tax, Regular tax, Equalization levy,  STT and CTT made between 20th March 2020 and 30th June 2020, the reduced interest rate at 9%   instead of 12 %/18 % per annum (i.e. 0.75% per month instead of 1/1.5 percent per month) will be charged for this period.  No late fee/penalty shall be charged for delay relating to this period.

Interest Rate on delayed payments @12%/ 18% per annum (i.e. 1%/ 1.5% per month) Now this interest has been reduced to 9% per annum (i.e. 0.75% per month instead of 1/1.5 percent per month) for this period.

No late fee/penalty shall be charged for delay relating to this period.

5 Investments Under Section 80C or investment in saving instruments March 31, 2020 Extended to June 30, 2020
6 Other Due Dates Extended

Due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority or investments for roll over benefit of capital gains under Income Tax Act,  Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act,  STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law where the time limit is expiring between 20th March 2020  to 29th June 2020 shall be extended to 30th June 2020.

Due date falling and /or time limit expiring between March 20, 2020 to June 29, 2020 Extended to June 30, 2020

 

 

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New Incorporation Form for Companies (Form SPICe+)

The Ministry of Corporate affairs have come up with New Forms for Incorporation of Companies in India. The form is named as SPICe+. The full form SPICe+ is a Simplified Proforma for Incorporating Company Electronically Plus’ (INC 32) is a web form designed for Incorporation of companies fast, without any hassle and having following features:

1. This form deals with the following aspects:

  • Reservation of name
  • Application for allotment of DIN
  • Incorporation of a new company
  • Allotment of PAN and
  • Allotment of TAN

2. SPICe+ Form e-MOA (INC 33), SPICe+ Form e-AOA (INC 34), Details of directors and subscribers will also be filed along with the INC 32.

3. SPICe+ has been divided into two parts viz.,

  • SPICe+ Part A and
  • SPICe+ Part B

SPICe+ Part A represents the section wherein all details with respect to name reservation for a new company are required to be entered.

SPICe+ Part B represents the section wherein all remaining details required for incorporation of a company are required to be entered.

4. SPICe+ Part A can either be submitted individually ONLY for name reservation or can be submitted together with SPICe+ Part B for both name reservation as well as incorporation.

5. In case SPICe+ Part A is submitted individually for name reservation; Part B and all other linked forms shall be enabled only after the SRN of SPICE+ Part A is ‘Approved’ i.e. the name is reserved.

6. The SPICe+ Part B is required to be submitted within the time allowed in the approval letter of SPICe+ Part A.

7. It is to be noted that you can apply only two names for the proposed company if Part A is submitted individually. In case complete SPICe+ is being submitted for name reservation as well as incorporation, only one name can be proposed.

8. Once the eForm is processed and found complete, company would be registered and CIN would be allocated. Also, DINs get issued to the proposed Directors who do not have a valid DIN.

9. Maximum three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company other than a Producer company.

10. In case of a Producer company, maximum of five directors are allowed to apply for allotment of DIN.

11. Also PAN and TAN would get issued to the Company.

12. Any user who intends to incorporate a company through SPICe+ can now also apply for GSTIN / EPFO/ ESIC/ Profession Tax/ Opening of bank account through web form AGILE-PRO (INC35).

Part A of SPICe+ Consists of following details:

i. Type of company (Private Co, OPC, Producer Company etc)

ii. Class of Company

iii. Category of Company

iv. Sub Category of Company

v. Main division of industrial activity of the company and description of the main division

vi. Proposed Name of the company

Part B of SPICe+ Consists of following details:

i. Articles of Association (AOA)

ii. Memorandum of Association (MOA)

iii. Capital Structure of the company

iv. Details of number of members

v. Registered address of the proposed of the company

vi. Number of first subscriber(s) to MOA and directors of the company

vii. Number of non-individual first subscriber(s)

viii. Total number of directors (director(s) who is/are not subscriber(s) plus subscriber(s) cum director(s))

ix. Particulars of non-individual first subscriber(s)

x. Particulars of individual first subscriber(s) (other than subscriber cum director) Having DIN

xi. Particulars of individual first subscriber(s) (other than subscriber cum director) Not Having DIN

xii. Particulars of individual first subscriber(s) cum directors Having DIN

xiii. Particulars of individual first subscriber(s) cum directors Not Having DIN

xiv. Particulars of directors (other than first subscribers) Having DIN

xv. Particulars of directors (other than first subscribers) Not Having DIN

xvi. Business/ Profession Code

xvii. Source of Income

xviii. Particulars of payment of stamp duty

xix. State or Union territory in respect of which stamp duty is paid or to be paid

xx. Details of stamp duty to be paid

xxi. Provide details of stamp duty already paid

xxii. Additional Information for applying PAN and TAN like Area code, AO etc

xxiii. Details of nominee required in case of OPC

It is to be noted that the SPICe+ Part B is required to be attested by a Practicing professional (like Chartered Accountant/ Company Secretary/ Cost Accountant/ Advocate).

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All about One Person Company (OPC)

All about One Person Company

A new concept has been introduced in the Companies Act 2013, about the One Person Company (OPC) to support those entrepreneurs who wants to start a venture on their own by allowing them to create a single person entity.

What is One Person Company?

One-person company is a company that has only one person as its member.  

In a Private Company – a minimum of 2 Directors and 2 Members are required

In a Public Company – a minimum of 3 Directors and 7 members

In One-person Company – Only 1 director and 1 member is required.

Such companies are generally created when there is only one founder/promoter for the business. Entrepreneurs who are in early stages of their business prefer to create OPCs instead of sole proprietorship business because of the several advantages that OPCs offer.

Difference between OPCs and Sole Proprietorships

Sole proprietorship seems very similar to one person companies because in both, there is a single person owning the business, but actually there is a huge difference between them in terms of “Nature of Liability”.

An OPC is a separate legal entity distinguished from its promoter; it has its own assets and liabilities and promoter is not personally liable to repay the debts of the company. On the other hand, sole proprietorship and their proprietors are the same persons and hence attachment and sale of promoter’s personal assets is allowed in case of non-fulfillment of the business’ liabilities.

Features of a One Person Company

1. Considered as a Private company:Section 3(1) (c) of the Companies Act says that a single person can form a company for any lawful purpose. It further describes OPCs as private companies.

2. Single member: OPCs can have only one member or shareholder, unlike other private limited companies.

3. Nominee: A unique feature of OPCs that separates it from other kinds of companies is that the sole member of the company must mention a nominee while registering the company.

4. No perpetual succession:Since there is only one member in an OPC, his death will result in the nominee choosing or rejecting to become its sole member. This does not happen in other companies as they follow the concept of perpetual succession.

5. Minimum one director: OPCs need to have minimum one person (the member) as director. They can have a maximum of 15 directors.

6. No minimum paid-up share capital: Companies Act, 2013 has not prescribed any amount as minimum paid-up capital for OPCs

7.Special privileges: OPCs enjoy several privileges and exemptions under the Companies Act that other kinds of companies do not possess.

Privileges of One Person Companies

Privileges and exemptions enjoyed by One Person Companies are:

i. They do not have to hold annual general meetings.

ii. Their financial statements need not include cash flow statements.

iii. A company secretary is not required to sign annual returns; directors can also do so.

iv. Provisions relating to independent directors do not apply to OPCs.

v. Their articles can provide for additional grounds for vacation of a director’s office.

vi. Several provisions relating to meetings and quorum do not apply to OPCs.

vii. They can pay more remuneration to directors than compared to other companies.

Threshold limits for an OPC to mandatorily get converted into either private or public company

In case the paid-up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crores rupees, then the OPC is required to mandatorily convert itself into a private or public limited company. Also, in case of mandatory conversion, OPC shall inform Registrar of Companies (ROC) by filling Form INC – 5 within sixty days of exceeding threshold limits.

Voluntary Conversion of OPC to Private Limited Company

An OPC after its incorporation cannot get converted into Private or Public limited company before expiry of its two years from the date of incorporation. After completion of this time span, an OPC can apply for converting itself to Private Limited Company or Public limited company.

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