Author: Gapeseed Consulting

Mastering TDS Compliance: Your Path to Seamless Financial Operations

At Gapeseed Consulting, we believe that the cornerstone of successful financial management lies in impeccable compliance with Tax Deducted at Source (TDS) regulations. TDS is more than just a statutory obligation; it’s a strategic tool that ensures your business operates smoothly and maintains a strong relationship with regulatory authorities.

Unlocking the Power of TDS

Tax Deducted at Source (TDS) is a crucial aspect of the Indian taxation system, ensuring taxes are collected at the point of income generation. This not only streamlines the tax collection process but also helps in preventing tax evasion. By deducting tax at the source, businesses contribute to a more robust and transparent tax system.

The Critical Role of TDS Compliance

  1. Preventing Costly Penalties: Avoid hefty fines and interest charges that arise from non-compliance. Stay ahead of deadlines and regulations with Gapeseed Consulting by your side.
  2. Building Credibility and Trust: Consistent TDS compliance enhances your business’s reputation among investors, financial institutions, and regulatory bodies, fostering trust and credibility.
  3. Ensuring Smooth Financial Operations: With proper TDS management, you can focus on your core business activities, free from the worry of legal complications and financial disruptions.

Essential Elements of TDS Compliance

  1. Timely Deduction and Deposit: Accurate and prompt deduction of TDS ensures compliance and avoids unnecessary penalties.
  2. Precise Filing of TDS Returns: Quarterly TDS returns must be filed accurately to prevent notices and penalties. Our expertise ensures your returns are flawless and timely.
  3. Issuance of TDS Certificates: Providing TDS certificates like Form 16 and Form 16A to deductees is crucial for their tax filings and builds trust in your business practices.
  4. Comprehensive Documentation: Maintain meticulous records of all TDS-related transactions to ensure seamless audits and verifications.

TDS Compliance Calendar

Payment Due Dates:

  • 7th of Every Month: Payment of TDS deducted in the previous month.

Return Filing Due Dates:

  • 31st July: Filing of TDS return for Q1 (April-June).
  • 31st October: Filing of TDS return for Q2 (July-September).
  • 31st January: Filing of TDS return for Q3 (October-December).
  • 31st May: Filing of TDS return for Q4 (January-March).

TDS Certificate Issuance Due Dates:

  • 31st May: Issuance of Form 16 to employees for the financial year.
  • 15th June: Issuance of Form 16A for TDS deducted in Q4 (January-March).
  • 15th August: Issuance of Form 16A for TDS deducted in Q1 (April-June).
  • 15th November: Issuance of Form 16A for TDS deducted in Q2 (July-September).
  • 15th February: Issuance of Form 16A for TDS deducted in Q3 (October-December).

Overcoming TDS Compliance Challenges

  • Navigating Complex Regulations: Our experts stay updated with the latest TDS regulations, guiding you through any changes effortlessly.
  • Eliminating Calculation Errors: With precise interpretation and calculation, we ensure that your TDS deductions are accurate, minimizing risks.
  • Leveraging Advanced Technology: We utilize cutting-edge software to streamline TDS calculation, deduction, and filing, making the process hassle-free for you.

Gapeseed Consulting: Your Partner in TDS Compliance

At Gapeseed Consulting, we offer end-to-end TDS compliance solutions tailored to your business needs. Our services include:

  • Expert Advisory: Personalized advice on TDS applicability, rates, and deductions to ensure you’re always compliant.
  • Seamless Return Filing: We handle the complexities of quarterly TDS return filings, ensuring accuracy and punctuality.
  • Efficient Certificate Management: From issuing to managing TDS certificates, we make the process smooth and error-free.
  • Continuous Training and Support: Keep your team updated with ongoing training and support, ensuring they’re well-versed in TDS regulations and best practices.

Take the Next Step Towards Effortless Compliance

Don’t let TDS compliance be a burden. Partner with Gapeseed Consulting and experience the peace of mind that comes with knowing your financial operations are in expert hands.

Maximizing Your Wealth: Exclusive Insights on Capital Gains Accounts and Tax Exemptions

At Gapeseed Consulting, we believe in empowering our clients with knowledge and strategies that maximize their wealth while ensuring seamless compliance with tax laws. One of the sophisticated tools we leverage is the Capital Gains Account Scheme (CGAS). In this exclusive guide, we delve into the nuances of Capital Gains Accounts and the related tax exemptions, offering you a clear path to tax efficiency and financial growth.

The Capital Gains Account: Your Gateway to Tax Efficiency

Imagine selling a valuable asset and deferring your capital gains tax while you plan your next lucrative investment. With a Capital Gains Account, this becomes a reality. Designed for discerning investors, the CGAS allows you to park your capital gains securely, giving you the freedom to reinvest on your terms.

Unveiling the Benefits of a Capital Gains Account

  1. Strategic Tax Deferral: Seamlessly defer your capital gains tax by depositing your proceeds into a Capital Gains Account. This strategic move provides you with the flexibility to invest in a new asset without the immediate tax burden.
  2. Effortless Compliance: The CGAS offers a streamlined approach to meeting the Income Tax Act requirements. By utilizing this scheme, you can ensure full compliance while making well-thought-out investment decisions.
  3. Tailored Flexibility: Choose between a savings account (Type A) for short-term liquidity or a term deposit account (Type B) for long-term growth. This tailored flexibility ensures that your funds are aligned with your investment goals.

Exclusive Tax Exemptions: Unlocking Wealth Opportunities

The Income Tax Act provides several sophisticated exemptions that can significantly enhance your financial strategy. Here’s a closer look at the key sections:

Section 54: Elite Exemption for Residential Property Sales

  • Eligibility: For individuals and HUFs selling a high-value residential property.
  • Exemption: Reinvest your capital gains in another premium residential property and enjoy significant tax benefits.
  • Time Limits: Invest in a new property within 1 year before or 2 years after the sale; complete construction within 3 years.
  • Capital Gains Account: Secure your gains in a CGAS if immediate reinvestment isn’t feasible.

Section 54F: Premium Exemption for Diverse Asset Sales

  • Eligibility: For individuals and HUFs divesting any long-term capital asset beyond residential properties.
  • Exemption: Proportionate tax benefits when investing in a new luxury residential property.
  • Time Limits: Acquire a new property within 1 year before or 2 years after the sale; complete construction within 3 years.
  • Capital Gains Account: Protect your gains by depositing them in a CGAS if reinvestment is deferred.

Section 54EC: Exclusive Bond Investment Opportunity

  • Eligibility: Available to all taxpayers selling high-value long-term capital assets.
  • Exemption: Invest up to Rs. 50 lakh in specified bonds (NHAI, REC) within 6 months to unlock tax-free growth.
  • Capital Gains Account: Not applicable, as the investment is directly in bonds.

Setting Up Your Capital Gains Account: A Seamless Process

  1. Visit Premier Banks: Open your CGAS at authorized nationalized banks known for their exceptional service.
  2. Submit Elite Documentation: Provide essential documents, including your PAN card, address proof, and detailed capital gains information.
  3. Select Your Account Type: Choose the account type that best suits your investment timeline: Type A for immediate liquidity or Type B for strategic long-term deposits.

Elevate Your Financial Strategy with Gapeseed Consulting

At Gapeseed Consulting, we offer bespoke services to set up your Capital Gains Account and provide expert guidance on managing your capital gains for optimal tax efficiency. Our dedicated team ensures that your wealth is not only protected but also strategically positioned for growth.

Contact Us Today

Ready to elevate your financial strategy? Contact us for personalized advice and let us help you unlock the full potential of your capital gains.

Common Queries of TDS compliance or Non Compliance and their Consequences

What will happen if-

  1. We do not deduct TDS?
  2. We deduct do not deposit the deducted amounts?
  3. We deducted and deposited the TDS amount but we do not file Return?
  4. We Filed TDS return but as per convenience not as per the due date prescribed?
  5. We Filed TDS return as per the due date prescribed but not Issued TDS/TCS certificates to deductees?

These are the common queries we encounter on daily basis in relation to TDS compliances, here in this Article I have tried to answer all the above questions and the Consequences in cases where question raised after the event of Non compliance occurred.  From the above Queries we have prepared a list of non compliances in relation to TDS and TCS which need to be taken care of in every organization where TDS or TCS is applicable.

Major TDS related Non Compliances:

  • Non Deduction or Short Deduction of TDS (Basically, Not As per TDS rates Prescribed),
  • Non Deposit of TDS by due date of Payment as Prescribed,
  • Non filing or late filing of TDS return or declaration of NIL return by due date of Filing of Return or filing within One year from the due date of filing of return,
  • Late filing of TDS return or declaration of NIL return after one year from the Due Date of Filing of Return,
  • Non Issuance of TDS Certificates by Due date as prescribed,
  • Wrong PAN or Invalid PAN or PAN not available in the Return but TDS deducted at Lower Rate of TDS (In such cases TDS @ 20% is required to be deducted, if TDS @ 20%is higher than Rate Prescribed)

Major TCS related Non Compliances:

  • Non Collection or Short collection of TCS (Basically, Not As per TCS rates Prescribed),
  • Non Deposit of TCS by Due date of Payment as Prescribed,
  • Non filing or Late Filing of TCS return or Declaration of NIL return by Due Date of Filing of Return or filing within One year from the due date of filing of return,
  • Late filing of TCS return or Declaration of NIL return after One year from the Due Date of Filing of Return,
  • Non Issuance of TCS Certificates by Due date as prescribed.

Following are the Major penalties, which are applicable in above mentioned cases of Non compliances:

  • Interest (If Not deposited TDS/TCS by the Due Date of Payment)
  • Late filing Fees (If Not filed TDS return by Due Date of Filing of Return)
  • Penalty (if Return is not filed within One year from the Due date of Filing of Return)

Interest

Under Section 201(1A) for late deposit of TDS after deduction, Deductor has to pay interest. Interest is @ 1.5% per month from the date at which TDS was deducted to the actual date of deposit. Note that Interest is to be calculated on a monthly basis and not based on the number of days i.e. part of a month is considered as a full month.

For example, say TDS payable amount is Rs5000 and the date of deduction is 10th January. Say you pay TDS on 20th May. Then the interest you owe is Rs 5000 x 1.5% p.m. x 5 months = Rs 375.

“Month” has not been defined in the Income Tax Act, 1961. However, in number of cases at High Court, it has been mentioned that it should be considered as a period of 30 days and not as an English calendar month.

TDS amount is to be paid from the date at which TDS was deducted, not from the date from which TDS was due.

For example, let the due date of TDS payment be 7th June and you have deducted TDS on 20th May. Say you have not deposited TDS by 7th June. Then you will be required to pay interest starting from 19th May and not 7th June.

Also consider the case in which you deposit tax one month after the due date. Say you have deducted TDS on 1st July. Then the due date is 7th August. Now say you deposit tax on 8th August (i.e. one day after the due date). Then interest is applicable from 1st July to 8th August i.e. for a period of 2 months. You now have to pay interest of 1.5% p.m. x 2 months = 3%.

Late Filing Fee

Under Section 234E, Dedcutor will have to pay a fine of Rs 200 per day (two hundred) until the Date of filing of return. Dedcutor has to pay this for every day of delay until the fine amount is equal to the amount you are supposed to pay as TDS.

For example, say that TDS payable amount is Rs 5000 on 13th June and it is paid on 17th December (i.e. 189 days, counting 17th December). Then the calculation comes out to Rs 200 x 189 days = Rs 37800, but since this is greater than Rs 5000, Dedcutor will have to pay only Rs 5000 as the late filing fee. Added to this, Dedcutor also have to pay interest which is covered in the section 201(1A) mentioned above.

Penalty

Equals to the amount that was failed to be deducted/collected or remitted may be imposed.

Prosecution (Sec 276B): If a person fails to pay to the credit of the Central Government,—

The Tax deducted at source by him as required by or under the provisions of Chapter XVII-B, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with a fine.

Penalty for late filing of TDS return:

Penalty (Sec 234E): Deductor will be liable to pay way of fee Rs.200 per day till the failure to pay TDS continues. However penalty should not exceed the amount of TDS for which statement was required to be filed.

Penalty (Sec 271H): Assessing officer may direct a person who fails to file the statement of TDS within due date to pay penalty minimum of Rs.10,000 which may extended to Rs.1,00,000.  Penalty under this section is in addition to the penalty u/s 234E. This section will also cover the cases of incorrect filing of TDS return.

No penalty under section 271H will be levied in case of delay in filing the TDS/TCS return if following conditions are satisfied:

  • The tax deducted/collected at source is paid to the credit of the Government.
  • Late filing fees and interest (if any) is paid to the credit of the Government.
  • The TDS/TCS return is filed before the expiry of a period of one year from the due date specified in this behalf.

Penalty for Non Issuance of TDS/TCS Certificate or Late Issuance of TDS/TCS Certificate:

272A(2)(g) :shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues Penalty shall not exceed the amount of tax deductible or collectible, as the case may be.

Penalty for Quoting Wrong PAN / Invalid PAN:

272B. Penalty for quoting wrong or invalid PAN, penalty of Rs. 10000/- may be imposed as required under section 139A (5A).

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any agency of the Indian government. Examples of analysis performed within this article are only examples. Assumptions made within the analysis are not reflective of the position of any government entity of India.

Alert-2 Important Due Dates December 2017 and January 2018

IMPORTANT DUE DATES
For December 2017 & January 2018

The following are some of the important due dates for the coming 2 months related to payments and filing!

 

Due Dates December 2017
07th  December, 2017 TDS/TCS payment for November 2017
15th  December, 2017 Advance Tax (Income tax) 3rd (75% of Advance Tax Payable) Installment Y 2018-2019
Provident Fund payment for November 2017
20th December, 2017 GST Payment for November 17
GST Return (Form GSTR- 3B) November 17
21st December, 2017 DVAT payment for November 17
ESIC Payment for November 2017
31st December, 2017 FORM GSTR-1 (For Months from July to October, 2017)

(Monthly returns for registered persons having aggregate 7- turnover of more than 1.5cr in the preceding financial year or the current financial year )
FORM GSTR-1 (For Quarter-2 ending on 30th September, 2017)

(Quarterly for registered persons having aggregate turnover of upto 1.5cr. in the preceding financial year or the current financial year )

 

Due Dates January 2018
07th  January, 2018 TDS/TCS payment for December 2017
10th January, 2018 FORM GSTR-1 (For Month November, 2017)

(Monthly returns for registered persons having aggregate  turnover of more than 1.5cr in the preceding financial year or the current financial year )
15th January 2018 Provident Fund payment for December 2017
20th January, 2018 GST Payment for December, 2017
GST Return (Form GSTR- 3B) December, 2017
21st January, 2018 DVAT payment for December, 2017
ESIC Payment for December, 2017
25th January, 2018 DVAT Return Q3 (October – December 2017) FY 2017-2018
30th January, 2018 TCS Certificate (Form 27D) Q3 FY 2017-2018
31st January, 2018 TDS Return Q3 (October – December 2017) FY 2017-2018

 

If you seek any further clarity, feel free to write to us on, info@gapeseedconsulting.com or you can also call us at +91-9599444639.

Accounting rules every new company should abide by

Every Startup needs to provide information regarding its financial estimates to banks, investors or lenders to obtain funds in return from them. Accounting helps the business to make a business plan which includes estimated monthly expenditure, economic forecast, projected rate of growth of the Startup. This information is really important for a Startup to lure more and more investors to invest in their idea. The investors also ensure that the entrepreneur has a reliable projection of its company’s financial expectations. The following are four practices every start up shall give immense importance to.

GST Registration Online:

GST is Goods and services tax which has substituted the old tax regime, where the ultimate tax burden and its cascading results have been lessened, with a concept of ONE INDIA ONE TAX.Under this model there is a single indirect tax, i.e GST which substitutes various indirect taxes levied on goods and services from manufacture till consumption.Under this tax regime the concept of origin based taxation has changed to consumption based taxation (or destination principle).Any person carrying on any business who has a taxable supply of over Rs.10 lacs in case of Northeastern States Of India and Rs. 20 lacs in the rest of India would be required for registration of GST in India. A mechanism is available for voluntary GST registration to help claim ITC(Input Tax Credit). It must be obtained under 30 days of exceeding the Rs.25 lacs turnover limit. A procedure would be announced for migrating the VAT or service tax registration as a GST registration.

GST Return Filing:

 An investor asks for GST Return Filing as it gives them an idea of your compliances status and revenue status of your private limited company registration or llp registration. It will ascertain your customers that your returns are filed regularly.

Record all Expense and Revenues of the Company:

Accounting must be given prime importance in any business entity as it is most required, especially for controlling and for providing financial reports at the end of the year. Accounting will help a Startup to determine its productivity and its profit from the initial stages of the company. This provides entrepreneurs a method for maintaining accounting information. The accountant hired by the company will keep track of the money spent for business use as well as for personal use, this will help in strategizing on how the money can be saved. In the initial stages of a Startup, the company must hire consultants or interim CFOs to maintain simple accounts rather than spending more on in-house professional resource.

Other Compliances:

One thing which investors avoid with a barge pole is investing in a company which has its legal compliances not in place.

TDS return filing,

Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the Indian Income Tax Act of 1961. Any payment covered under these provisions shall be paid after deducting prescribed percentage. Following are some of the compliances you need to take care of!

GST Return filing,

The following are included:

1. GSTR3B

GSTR 3B is a simple return form introduced by the CBEC for the month of July and August. You have to file a separate GSTR 3B for each GSTIN.

2. GSTR1

GSTR 1 is a monthly return that should be filed by every registered dealer. It contains details of all outward supplies i.e sales. GSTR 1 contains details of all the sales transactions of a registered dealer for a month.

3. GSTR2

GSTR-2 contains details of all the purchases transactions of a registered dealer for a month.

4. GSTR3

GSTR-3 captures the aggregate level outward and inward supply information which will be auto populated through GSTR 1 and GSTR 2.

ROC Compliances.

The Registrar of Companies (ROC) is an office under the Indian Ministry of Corporate Affairs that deals with administration of the Companies Act 1956 and Companies Act, 2013.

Most successful business owners understand that if they really want to manage their business, they need to get comfortable with the fundamentals of bookkeeping and accounting. A lot of Entrepreneurs who handled bookkeeping and accounting usually discover they weren’t doing nearly as well on their own as they thought they were.

Gapeseed offers recognized bookkeeping outsourcing services solutions that support end-to-end functions of bookkeeping services for Small Business & start-ups.

If you seek any further clarity , feel free to write to us on, info@gapeseedconsulting.com or you can also call us at +91-9599444639.

Conversion of Partnership firm into Private Limited Company

As we already know, a partnership firm has various limitations and the scope of expanding is very less as compared to a private limited company. Many partnership firms nowadays convert into Private Limited Companies for the various benefits that it offers like Limited Liability, Transferability of shares, easy access to funds, Perpetual Succession etc.

Benefits of conversion :-

 1. Goodwill: The goodwill of the Partnership firm is kept intact and continues to enjoy the same success story with the benefit of a better legal recognition.

2. Transfer of assets and liabilities:All the assets and liabilities of the firm immediately before the conversion become the assets and liabilities of the company.

3. Capital Gain Tax: No Capital Gains tax shall be charged on transfer of property from firm to Company. (uponfulfillment of certain conditions)

4. Stamp Duty: No instrument of transfer is required to be executed (since all the property of the firm will vest in the company) and hence no stamp duty is required to be paid.

5. Carry Forward and Set off Losses and Unabsorbed Depreciation: The accumulated loss and any unabsorbed depreciation of Partnership firm is deemed to be loss/ depreciation of the successor company for the previous year in which conversion was effected. Such loss can be carried for further eight years in the hands of the successor company.

Major Changes in Companies Act, 2013

A) The Concept of Joint Stock Company is Done Away.

B) Definition of Company has wider Meaning and implication. (Part I, Chapter XXI of CA, 2013). I.e. word “company” includes any partnership firm, limited liability partnership, cooperative society, society or any other business entity formed under any other law for the time being in force which applies for registration under this Part.

C) Section 565 to 581, Part IX of Companies Act, 1956 is have been omitted. The Concept was famously know as PART XI companies.

Requirements 

a) Registered Partnership firm with minimum 7 Partners

b) Minimum Share Capital shall be Rs. 100,000 (INR One Lac) for conversion into a Private Limited Company

c) Minimum Share Capital shall be Rs. 500,000 (INR five Lac) for conversion into a Public Limited Co.

d) If the above requirement is not fulfilled by the firm, then the Partnership deed should be altered

e) Minimum 7 Shareholders

f) Minimum 2 Directors (for Private Limited Co.) and 3 Directors (for Public Limited Co.)

g) The directors and shareholders can be same person

h) DIN (Director Identification Number) for all the Directors

i) DSC (Digital Signature Certificate) for two of the Directors

 Mandatory conditions for Conversion :-

  • The partners shall become the shareholders of the newly formed company in the same proportions as their capital accounts stood in the book of the firm as on the date of conversion.
  • The only way by which partners receive consideration is by way of allotment of shares in company and the partners share holding in the company in aggregate shall be more or equal to 50% of its total voting power and continue to be as such for 5 years from the date of conversion.

Procedure of Conversion

1. Hold a meeting of the members

 Assent of majority of its partners is required ( as are present for the purpose of registering the firm under the Companies Act, 2013). Since the liability of the members of the firm is unlimited, when a firm desires to register itself as a company as a limited company, the assent of the majority is required, not less than ¾ of the partners should be present in person (proxies are allowed).

2. Obtaining the Name Approval in INC 1 for Proposed Company

 An application in Form needs to be filed with the Registrar of Companies (ROC) in Form INC-1 with various attachments stating the fact that the partnership firm is pro­posed to be converted under the Companies Act.

3. Publishing the Advertisement in Two Newspaper (English Daily and Vernacular)

For the purpose of clause (b) of section 374 of the Act, every ‘company’ seeking registration under the provision of Part I of Chapter XXI shall publish an advertisement about registration under the said Part, seeking objections, if any within twenty one clear days from the date of publication of notice and the said advertisement shall be in Form No. URC. 2, which shall be published in a newspaper, in English and in the principal vernacular language of the district in which Limited Liability Partnership is in existence and should be circulated in that district.

4. Affidavit

File an affidavit, duly notarised, from all the ] partners to provide that in the event of registration, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for its dissolution as partnership firm, limited liability partnership, cooperative society, society or any other business entity, as the case may be.

5. Filing of E form URC 1 with ROC with Following Attachments:- (For Companies limited by Shares)

a) A list showing the names, addresses, and occupations of all persons named therein as members with details of shares held by them respectively

b) A list showing the particulars of persons proposed as the first directors of the company, their names, including surnames or family names, the DIN , passport number(if any) with expiry date, residential addresses and their interests in other firms or bodies corporate along with their consent to act as directors of the company;

c) An affidavit from each of the persons proposed as the first directors, that he is not disqualified to be a director under sub section (1) of section 164 and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief;

d) A copy of the Act of Parliament or other Indian law, deed of partnership, bye laws or other instrument constituting or regulating the company and duly verified in the manner provided in sub-rule(4)

e) A statement specifying the following particulars:—

(i) the nominal share capital of the company and the number of shares into which it is divided;

(ii) the number of shares taken and the amount paid on each share;

(iii) the name of the company, with the addition of the word “Limited” or “Private Limited” as the case may require, as the last word or words thereof;

g) Written consent or No Objection Certificate from all the secured creditors of the applicant.

h) Written consent from the majority of members whether present in person or by proxy at a general meeting agreeing for registration under this part.

6. Certificate of Incorporation

If the Registrar in fully satisfied on the basis of documents and information filed by the applicants and decides that the applicant should be registered, he shall issue a certificate of incorporation in Form No. INC.11

 

*Where a firm has obtained a certificate of registration under section 367, an intimation to this effect shall be given within fifteen days of such registration to the concerned Registrar of firms under which it was originally registered, along with papers for its dissolution as a firm.

 Thus, with the need of the hour, more and more partnerships are expanding and turning into private limited companies for the purpose of corporisation for the various benefits that it offers.

 For help and assistance, visit us at www.gapeseedconsulting.com or call us at +919599444639.

INCREASE IN AUTHORIZED SHARE CAPITAL OF PRIVATE LIMITED COMPANY

The Companies Act 2013 defines that “Authorized capital” or “nominal capital” means such capital as is authorized by the memorandum of a company to be the maximum amount of share capital of the company.

The Companies Act 2013 allows the companies to alter its authorized share capital with certain procedures which are governed by Section 61-64 of the Act along with Section 13 and 14 of the act which governs the alterations to the Chartered Documents being the Memorandum Of Association and Articles Of Association of the company.

PROCEDURE FOR INCREASING AUTHORIZED SHARE CAPITAL:

  • Check whether the company prima-facie authorized by the Articles of association to increase the share capital. If it does not authorize, the proceedings are to be completed with the objective of altering them.
  • To convene the board meeting for enabling the board to call for extraordinary general meeting (if not passed at Annual General Meeting) and to get approval from the shareholders for increasing the authorized share capital.
  • Call for an extraordinary general meeting of the shareholders of the company by sending a notice with clear agenda, explanatory statements and the resolutions to be passed to alter the Memorandum of Association and Articles of Association, which are to be altered for the purpose of increasing the authorized share capital.
  • Pass the resolutions for increasing the authorized share capital of the company and corresponding alterations in Memorandum of association and Articles of Association by special resolution.
  • Authorize the board to file necessary forms and resolutions with ROC having jurisdiction.
  • Filing the e- form SH7 with ROC by paying the requisite fee.

 

Altering the Memorandum of association and Articles of Association.

  • Section 61 of the Companies Act, 2013 states about Power of limited company to alter its share capital, sub-clause further states that a limited company having a share capital may, if so authorized by its articles, alter its memorandum in its general meeting to increase its authorized share capital by such amount as it thinks expedient.
  • A company can increase its authorized share capital by altering the Memorandum of association. Section 13 of the Companies Act deals with altering the memorandum of association and section 14 of the above-said act deals with altering the Articles of association.
  • Section 13 of the Act states that as provided in Section 61, a company may, by a special resolution and after complying with the procedure specified in this section, alter the provisions of its memorandum.
  • A company can alter its articles by passing a special resolution and every alteration of the articles under Section 14 and a copy of the order approving such alteration has to be filed with the registrar with a printed copy of altered articles within a period of fifteen days in a manner prescribed. Alteration of articles will be valid only if it’s originally in the articles.

List Of Documents Required As Attachments  For Filing SH-7

  • Certified true copy of the resolution for alteration of capital is mandatory in case of increase in share capital independently by company.
  • Copy of order of central government is mandatory in case of increase in share capital with central Government order.
  • Copy of the order of the tribunal is mandatory in case of increase in share capital with Central Government.
  • Certified true copy of board resolution authorizing redemption of redeemable preference shares is displayed and mandatory in case of redemption of redeemable preference shares.
  • Altered Memorandum of association is mandatory in case of increase in share capital independently or by order of Central Government or increase in number of members.
  • Altered Articles of association are mandatory in case the same are altered.
  • Working for calculations of ratios (in case of conversions) is mandatory in case of increase in share capital with central government order.

For more information about Increase in Authorized Share Capital of Private Limited Company , feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630

Reconciliation of GSTR 1 and GSTR 2 with GSTR 3B

What is GSTR 3B?

GSTR 3B is a simple return form introduced by the CBEC for the month of July and August. You have to file a separate GSTR 3B for each GSTIN. For uploading GSTR 3B you do not required to provide invoice level information. Only aggregatevalue of each rate of GST needs to be filled either of Inward Supply or Outward Supply.

What is GSTR 1?

GSTR 1 is a monthly return that should be filed by every registered dealer. It contains details of all outward supplies i.e sales. GSTR 1 contains details of all the sales transactions of a registered dealer for a month.

The GSTR 1 filed by a registered dealer is used by the government to auto populate GSTR 3 for the dealer and GSTR 2A for dealers to whom supplies have been made.

GSTR-1 should be filed even if there is NIL returns to be filed (no business activity) in the given taxable period.

What is GSTR 2?

Every registered taxable person is required to give details of Inward Supply, i.e., purchases for a tax period in GSTR-2.

GSTR-2 contains details of all the purchases transactions of a registered dealer for a month.

It will also include purchases on which reverse charge applies.

The GSTR-2 filed by a registered dealer is used by the government to check with the sellers’ GSTR-1 for buyer-seller reconciliation.

What is GSTR 3?

GSTR-3 captures the aggregate level outward and inward supply information which will be auto populated through GSTR 1 and GSTR 2.

Information would be updated in real time about Input Tax Credit ledger, Cash ledger and Liability ledger. Details of payment of tax and ITC under various tax heads of CGST, SGST, IGST and Cess would be auto-populated from the debit entry in credit/cash ledger, irrespective of mode of filing return.

Taxpayer will also have the option of claiming the excess payment of tax as refund for which there will be a field in this return. The return would also have a field to enable the taxpayer to carry forward the excess ITC balance.

CIRCULAR No. 7/7/2017

While filing GSTR 3B in August for the Month of July’17, a lot of mistakes were made, but not to worry the GST Department published a circular stating correction procedures to be followed in case of any error made while the filing of GSTR 3B ( July’17). The types of errors that could have been occurred with their respective correction procedures is as follows:

  1. Short/Excess Outward Supply Reported

In case the tax payer has filed GSTR 3B by reporting a Short/Excess Outward Supply, then the tax payer shall report the correct value of Outward Supply in Form GSTR 1. No details of Outward supply will be provided on Form GSTR 2 and after submitting both GSTR 1 and GSTR 2, Form GSTR 3 will be Auto Generated.

  1. Short/Excess Inward Supply Reported

In case the tax payer has filed GSTR 3B by reporting a Short/Excess Inward Supply, then the tax payer shall report the correct value of Inward Supply in Form GSTR 2. No details of Inward supply will be provided on Form GSTR 1 and after submitting both GSTR 1 and GSTR 2, Form GSTR 3 will be Auto Generated.

  1. Short Tax Payment- Due to Short Reporting Of Outward Supply

In case there is a short Payment of Tax By the Taxpayer due to short reporting of Outward Supply in GSTR

3B, then he can make the appropriate corrections in Form GSTR 1and after that the short tax paid will need to paid in Form GSTR 3 along with the Late Payment Of Tax Interest.

  1. Short Tax Payment- Due to Short Reporting Of Outward Supply

In case there is a Short Payment of Tax By the Taxpayer due to excess claim Of ITC in GSTR 3B, then he can make the appropriate corrections in Form GSTR 2 and after that the short tax paid will need to paid in Form GSTR 3 along with the Late Payment Of Tax Interest.

  1. Short ITC Claimed

In case there is a Short Claim of ITC by the Taxpayer in GSTR 3B, then he can make the appropriate corrections in Form GSTR 2 and after that the excess tax paid will be shown in the credit ledger after submission of Form GSTR 3.

  1. Excess Output Tax Liability

In case there is a Excess Output Tax Liability reported By the Taxpayer in GSTR 3B, then he can make the appropriate corrections in Form GSTR 1 And Form GSTR 2 and after that the excess tax paid can be utilized for decreased ITC as per Form GSTR 3B or it can be carry Forwarded to the next month return.

  1. Non Submission Of GSTR 3B/ NON Payment Of Tax Liability

In case the Tax Payer fails to file GSTR 3B or doesnot pay the tax liability, then the tax payer must furnish details appropriately in form GSTR 1 and GSTR 2. Then while filing Form GSTR 3 the tax payer should pay the Tax Liability along with the interest on Late Payment of Tax. As per Notification 28/2017 dated 01/09/2017, no Late Charges shall apply for Non Filing of GSTR 3B.

GSTR 3B GSTR 1 GSTR 2 GSTR 3
Short/Excess Outward Supply Reported FILL CORRECT VALUE NA AUTO FILL
Short/Excess Inward Supply Reported NA FILL CORRECT VALUE AUTO FILL
Short Tax Payment- Due to Short Reporting Of Outward Supply CORRECTIONS CORRECTIONS PAY TAX PLUS INTEREST
Short Tax Payment- Due to Short Reporting Of Outward Supply NA FILL CORRECT VALUE
Short ITC Claimed NA FILL CORRECT VAULE After Submission of GSTR 3, it will reflect in Credit Ledger
Excess Output Tax Liability FILL CORRECT VALUE FILL CORRECT VALUE C/f to next Month return ( Or can be utilized for decreased ITC as per GSTR 3B)
Non Submission Of GSTR 3B/ NON Payment Of Tax Liability FURNISH DETAILS FURNISH DETAILS PAY TAX PLUS INTEREST

 

NOTE: Calculation Of Interest On Late payment of Tax Liability shall be calculated @ 18% on daily basis. The interest shall be calculated from 26th August’2017 for the month of July’ 17

For more information, feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630

Input Tax Credit Under GST

What is Input Tax Credit?

Input credit implies that at the time of paying tax on output, you can reduce the tax you have already paid on inputs and pay the balance amount.

When you buy a product/service from a registered dealer you pay taxes on the purchase. On selling, you collect tax. You adjust the taxes paid at the time of purchase with the amount of output tax and the balance liability of tax has to be paid to the government. This mechanism is called utilization of input tax credit.

What is the time limit to avail GST ITC?

ITC can be availed by a registered taxable person in a specific manner and within a specified time frame. The following are the different situations wherein the inputs can be claimed for semi-finished goods or stock or finished goods.

1. If a person has applied for registration or is liable to register or is granted registration then – Day from when he is liable to pay taxes.
2. When a person takes voluntary registration – Registration day.
3. When a taxable registered person stops paying taxes in composition levy scheme then day from when he is liable to pay tax normally u/s 7.

Input tax credit for these situations can be claimed only if it doesn’t exceed one year from the tax invoice date of issue related to supply.

For other cases, ITC should be claimed:

Before you file a valid return for the September month u/s 27 days after the end of financial year to which the invoice is related, or
Before you file the annual return, as u/s 30 days, the due date to file the annual return is December 31 after the end of the financial year.

The pre-requisites for availing credit by registered person are:

a. He is in possession of tax invoice or any other specified tax paying document.
b. He has received the goods or services. “Bill to ship” scenarios also included.
c. Tax is actually paid by the supplier.
d. He has furnished the return.
e. If the inputs are received in lots, he will be eligible to avail the credit only when the last lot of the inputs is received.
f. He should pay the supplier, the value of the goods or services along with the tax within 180 days from the date of issue of invoice, failing which the amount of credit availed by the recipient would be added to his output tax liability, with interest [rule 2(1) & (2) of ITC Rules]. However, once the amount is paid, the recipient will be entitled to avail the credit again. In case part payment has been made, proportionate credit would be allowed.

Documents on the basis of which credit can be availed are:

a. Invoice issued by a supplier of goods or services or both
b. Invoice issued by recipient alongwith proof of payment of tax
c. A debit note issued by supplier
d. Bill of entry or similar document prescribed under Customs Act
e. Revised invoice
f. Document issued by Input Service Distributor

The protocol to avail and utilise the credit of these taxes is as follows:

Sl. No. Nature Of ITC First Utilized Against Remaining Utilized against
1. IGST IGST CGST
SGST
(in above order)
2. CGST CGST IGST
3. SGST SGST IGST

Conclusively, credit of CGST cannot be utilized for paying SGST/UTGST and credit of SGST/UTGST cannot be utilized for paying CGST.

There are certain Items prescribed in the GST Law on which ITC cannot be claimed:-

• Motor Vehicle (Except when supplied in the usual course of the business or used to provide services of transportation)
• Capital Goods as described under Chapter 82,84,85,90 of the GST Law.
• Following Goods/Services when used for personal consumption:-
 Food & Beverages
 Outdoor Catering
 Beauty Treatment
 Health Services
 Cosmetics & Plastic Surgery
 Membership Of a Club
 Health &Fitness Centre
 Life Insurance
 Health Insurance
 Travel benefits
• Goods/Services on which Tax Levy has been paid by the supplier

 

For more information on Income Tax Credit under Goods and Services Tax (GST), feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630

 

ONLINE INCOME TAX RETUN

Income Tax Return is defined under Section 139(1) of the Income Tax Act, where an Income Tax Return is required to be submitted by every Individual where his income exceeds the minimum income chargeable to Income Tax.

E-filing or electronic filing is submitting your income tax returns online, using tax preparation software that has been pre-approved by the relevant tax authority.

 

WHO IS REQUIRED TO FILE INCOME TAX RETURN?

  • An individual, if gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs 2,50,000/-.
  • There is a limit ofRs 3,00,000 for senior citizens ( who are more than 60 years old but less than 80 years old) or Rs 5,00,000 for super senior citizens (who are more than 80 years old).
  • A company irrespective of whether there is any income or loss or NILincome during the financial year, it is mandatory to file income tax return.
  • A firm irrespective of whether there is any income or loss or NIL income during the financial year, it is mandatory to file income tax return.
  • E-filing of Income Tax return is compulsory if you want to claim income tax refund.
  • If one wants to carry forward loss under any head of income, it is mandatory to file IT Return.
  • Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India.
  • One is required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
  • If tax has been deducted from your income, then you must file income tax return to avoid notice from the income tax department as it has information about your income.

PROCESS OF FILING INCOME-TAX RETURN

  • For any queries and any FAQs while filing Income tax return please feel free to contact Gapeseed Consulting Pvt. Ltd.

www.gapeseedconsulting.com

 

TYPES OF FORMS FOR DIFFERENT ASSESSEES

 

FORM SOURCE OF INCOME DUE DATES FOR FILING
ITR-1(SAHAJ) ·         INCOME FROM SALARY

·         OTHER INCOME SUCH AS INTEREST

·        INCOME FROM ONE HOUSE PROPERTY

 ·         31ST JULY
ITR-2 FOR INDIVIDUALS AND HUFs ·         INCOME FROM SALARY

·         OTHER INCOME SUCH AS INTEREST

·         INCOME FROM ONE HOUSE PROPERTY

·         INCOME FROME CAPITAL GAINS

·        INCOME FROM BUSINESS OR PROFESSION FOR HUFs, INDIVIDUALS AND PARTNERSHIPS

 ·         31ST JULY
ITR-3 FOR INDIVIDUALS  AND HUFs ·         INCOME FROM BUSINESS ·         31ST JULY
ITR-4 (SUGAM) ·         INCOME FROM SALARY/PENSION

·         BUSINESS INCOME WHERE INCOME COMPUTED ON PRESUMPTIVE INCOME BASIS

·         INCOME FROM NOT MORE THAN ONE HOUSE PROPERTY

·        INCOME FROM OTHER SOURCES

 ·         31ST JULY
ITR-6 ·         INCOME OF COMPANIES ·         30TH SEPTEMBER
ITR-7 ·         INCOME OF CHARITABLE AND RELIGIOUS INSTITUTE

·         INCOME OF POLITICAL PARTY

·         PERSONS CLAIMING EXEMPTIONS UNDER SECTION 10.

·         INCOME OF UNIVERSITY, COLLEGE OR INSTITUTION.

 ·         30TH SEPTEMBER

 

 

CONSEQUENCES OF NON-FILING OF RETURNS

Filing of Income Tax Returns helps an Individual to establish a standard proof of Income with the Income tax department. But there are certain consequences of Non-filing: –

  • Losses of business or profession and capital loss cannot be carried forward in the next year if one fails to file an income tax return for the same year.
  • Due to Non filing of return the assessee has to bear a penalty of Rs. 5000.
  • The Assessee will also be liable to charge Interest @ 1% for non-filing of return.
  • Company assesses are liable to prosecution as well in case of non-disclosure of income and non-filing of Income tax return.