Section 28(iv) of the Income Tax Act 1961 provides as follows which is taxable as income under the head business or profession:
(iv)the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession.
If what is received either by way of benefit or perquisite is money, there is no question of considering the value of such monetary benefit or perquisite under clause (iv) and including the value of such benefit or perquisite under the head “profits and gains of business or profession”. It is only if the benefit or the prerequisite is not in cash or money but is a nonmonetary benefit or non-monetary prerequisite that the question of including the value of such benefit or perquisite would ever arise.- Vide CIT v. Alchemic (P) Ltd. (1981) 130 ITR 168 (Guj): 1981 TaxPub (DT) 0719(Guj-HC).
Since waiver of interest is a benefit received in cash, section 28(iv) would not be applicable.-Vide Asst. CIT v. Spel Semiconductor Ltd.(2013) 59 SOT 114 (Cheenn-Trib); 2013 Taxpub(DT) 2278(Chen-Trib). Also see, Dy CIT v. Parasar -Navnitlal Patel & Ors. (2015)65(II) ITCL 55 (Ahd ‘A’-Trib); 2015 Taxpub(DT)3451 (Ahd-Trib).
In CIT v. Mahindra and Mahindra Ltd. 2018 TaxPub(DT)2139 (SC): (2018) 404 ITR 1(SC): (2018) 302 CTR (SC) 213, assessee company, way back, deci-ded to expand its jeep product line by including FC-150 and FC-170 Models. In 1964 It entered into agreement with KJC, based in America, wherein KJC Agreed to sell dies, equipment and die model at a certain final price inclu-ding CIF. Further, For procurement of equipment KJC agreed to provide a loan to Assessee at a rate of 6% interest repayable after 10 years in instalments. The assessee took all requisite approvals from the concerned Government Depart- ments and RBI approved the loan agreement. Accordingly, Assessee obtained the loan. Later on, the assessee was informed that AMC had taken over KJC and also agreed to waive the principal amount of loan advanced by KJC to Assessee and to cancel promissory notes as and when they got matured. The Assessee filed its return showing a certain amount as cessation of its liability towards AMC. The assessing officer concluded that with the waiver of the loan amount, the credit represented income and not a liability. The assessing officer held that the loan waived off was taxable under section 28. It was held that in the instant case, the amount of ? 57,74,064 has been received in cash due to the waiver of the loan. Therefore, the very first condition of section 28(iv) which says any benefit or perquisite arising from the business shall be in the form of benefit or prerequisite other than in the shape of money, is not satisfied in the present case. Hence in no circumstances, it can be said that the amount of ? 57,74,064 can be taxed under section 28(iv), waiver of loan for acquiring capital assets could not be taxed as perquisites under section 28(iv) since receipts were in the nature of cash or money. Section 41(1) does not apply since waiver of loan does not amount to the cessation of trading liability.
Recently in Essar shipping Ltd .v. CIT 2020 TaxPub(DT) 1725 (Bom-HC) assessee claimed deduction of loan amount waived by Government. Assessing Officer disallowed the claim made by the assessee by observing that waiver of loan benefited assessee in carrying on its business and hence in terms of section 28, said benefit enjoyed by the assessee should constitute in income in the hands of the assessee.
On appeal before Commissioner (Appeals), it was held that waiver of loan could not be treated as benefit or prerequisite because it was a cash item. The amount would be includible under section 28(iv) only if it is a non-cash item and cash item cannot be treated as a prerequisite. The ITAT held that written off of loan was inseparably concerned with the business of the assessee and therefore benefit had arisen out of such business. The amount is written was nothing but an incentive for the assessee’s business. The benefit was received by the assessee in the form of writing of liability. Therefore, it could not be said that the assessee received cash benefits. Thus,
ITAT upheld the order by assessing the officer.
On further appeal, the Bombay High court held that the Supreme Court in the case of Mahindra and Mahindra v. CIT (2003) 261 ITR 501 (Bom):2003 Tax Pub(DT)0995(Bom-HC) has held that for applicability of Section 28(iv), income which can be taxed has to arise from the business and Profession. That apart, the benefit which is received has to be in some other form rather than in the shape of money. Therefore, The amount of loan waived was to be construed as cash receipt in hands of the assessee and could not be taxed under section 28(iv).
Where a waiver of loan cannot be treated as cash receipts on facts of the case the same cannot be treated as perquisite chargeable under section 28(iv).
i. Every Company, its holding company, its subsidiary Company
ii. Foreign Company having branch office or project office in India
having a net worth of INR 500 Crore or more, turnover of INR 1000 Crore or more, or a net profit of INR 5 crore or more during the immediately preceding financial year shall ensure that the company spends, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, or where the company has not completed the period of three financial years since its incorporation, the average net profits shall be calculated for the financial year since its incorporation. Activities that may be included by companies in their CSR spending are listed in schedule VII of the companies Act, 2013. With pandemic unfolding and resources running scares, the government has issued various clarifications to clarify that funds spent on covid relief are eligible as CSR activity.
Following is the summary of regulatory announcements regarding CSR Spending for COVID relief activities:
Funds spent on COVID-19 management would be treated as eligible CSR Activity.
CSR funds can be spent by the companies for various activities covered under item nos. (i) and (xii) of Schedule VII relating to the promotion of health care, including preventive health care and sanitation, and, disaster management.
MCA further clarified that items under schedule VII are broad-based and shall be interpreted liberally in the wake of the crisis.
MCA has clarified that all donations and contributions to the PM-CARES Fund will be counted and listed as a permissible CSR activity.
MCA has amended Companies (CSR Rules) 2014 to provide that any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to the conditions that-
(i) such research and development activities shall be carried out in collaboration with any of the institutes or organisations mentioned in item (ix) of Schedule VII to the Act.
(ii) details of such activity shall be disclosed separately in the Annual Report on CSR included in the Board’s Report”.
MCA has clarified that spending CSR funds for carrying out awareness campaigns/ programmes or public outreach campaigns on the COVID-19 vaccination programme is an eligible CSR activity.
MCA has clarified that spending CSR funds for setting up makeshift hospitals and temporary COVID-Care facilities is an eligible CSR Activity.
MCA has clarified that spending of CSR funds for creating health infrastructure for COVID-Care, establishments of medical oxygen generation and storage plants, manufacturing and supply of Oxygen concentrators, ventilators, cylinders and other medical equipment for countering COVID-19’ or similar such activities are eligible CSR activities.
MCA has clarified spending of CSR funds for COVID-19 vaccination for persons other than the employees and their families, is an eligible CSR activity.
You are aware of the fact that GST (Goods and service tax) has replaced indirect taxes like excise duty, VAT, service tax, etc. This act was passed in the parliament on 29th March 2017 and was effective from 1st July 2017. Our previous blog discussed GST, its procedure, and what happens when your GST gets rejected.
Click on the link above to read more.
Now, what happens when the tax officer cancels the GST registration of a taxable individual? Is it possible for an individual to reverse this step? Yes, an individual can appeal for revocation of cancellation in GST to the officer within 30 days from the date of the cancellation order. You are required to follow the grounds of appeal for revocation of cancellation in GST, and this has been discussed in the blog. We understand that revocation is the official cancelling of a decision, and Revocation of cancellation of GST registration is the decision to cancel the registration has been reversed, and the registration is still valid.
The revocation of cancellation of GST registration can be done when the authorities cancel the GST certificate, and if you have cancelled your certificate yourself, you cannot revoke it. Revocation of cancelled GST registration is possible only if you appeal in the right format for revocation of cancellation in GST within the prescribed period. You are required to file a form for revocation within 30 days of cancellation.
Section 30 of the CGST Act 2017, read along with Rule 23 of CGST Rules, provides for GST registration revocations.
Section 30(1) states that a registered individual whose registration has been cancelled by the officer by his motion can apply to the officer for revocation of cancellation of the registration within the prescribed period of 30 days from the date of service of the cancellation order.
Thus, a registered person can apply for revocation if the officer cancelled the registration due to the reasons mentioned below :
(a) Contravened provisions of Act/rules made.
(b) The individual has not furnished returns for 3 consecutive tax periods.
(c) Any taxable person not furnished returns (other than composition) for a continuous period of 6 months.
(d) The voluntarily registered person has not commenced business within 6 months from the date of registration.
(e) Registration has been obtained through fraud, willful misstatement, or suppression of facts.
The first Provision to Section 30(1): The Additional Commissioner or the Joint Commissioner, on adequate reasons being shown, and for reasons to be recorded in writing, can extend the application submission for revocation of GST for a period not exceeding 30 days.
Second Proviso to Section 30(1): The Commissioner, on sufficient reasons provided and for reasons recorded in writing, can extend the GST revocation period for a further period not exceeding 30 days.
Rule 23: The registered individual can apply for revocation of cancellation of registration in FORM GST REG -21 to the concerned officer within 30 days from the date of the order of cancellation of registration at the common portal.
A registered taxable individual can apply for revocation of cancellation of registration within 30 days from the date of service of the order. The application for revocation can be made only when the registration has been cancelled by the proper officer. It cannot be used when GST registration was cancelled voluntarily by a taxpayer.
The application for revocation can be made both online and offline. You might wonder how to file an appeal for revocation of GST registration.
GST registration revocation process online
The registered person who is opting for revocation of GST registration online needs to follow the below procedure.
1. Log on to the Goods and Service Tax portal.
2. Enter the registered username and password.
3. In the GST Dashboard, select services, select registration and then choose the application for revocation of cancelled registration.
4. Select applying for revocation of cancelled registration and enter the reason for revocation of GST registration cancellation. Choose the appropriate file that has to be attached for any supporting documents. You need to select the verification checkbox, select the name of the authorized signatory, and fill up the place filed box.
5. Select the Verification Checkbox.
6. Choose the name of the authorized signatory in Name of Authorized Signatory drop-down.
7. Enter the place from where the application is being filled, in the Place field.
8. You have the option to save the application form and retrieve it later.
9. Click the Submit with DSC (select the registered DSC from the emSigner pop-up screen and then proceed from there accordingly) or the Submit with EVC button(Enter the OTP you received and click the Validate OTP button).
10. The GST Portal will send you a confirmation message on your registered mobile phone number and e-mail-ID.
11. The next step involves the concerned Tax Official reviewing the application and making a decision accordingly.
Below is the offline process of revocation of GST registration.
The registered individual should submit the FORM GST REG-21 application for the Revocation of Cancellation of Registration under GST directly or through a facilitation centre notified by the Commissioner. In order to appeal for revocation of cancellation in the GST letter, you can download Form GST REG-21 from the GST portal. You are required to submit this application within 30 days from the date of service of the cancellation order in the Common Portal.
The authorized officer will revoke the cancellation of the registration when valid reasons are judged through the Act.
The officer will respond with FORM GST REG-22 within 30 days from the date of receipt of the revocation application. The officer records the details in writing.
Suppose the GST officer isn't satisfied with the revocation application; he must issue a notice in FORM GST REG-23 before rejecting it. The applicant should furnish a satisfactory reply in the FORM GST REG-24 within 7 working days from the day of issue of the notice. Upon receiving a response from the applicant, the officer will pass an appropriate order in FORM GST REG-05. He will do this within 30 days from the date of receipt of the reply from the applied individual.
An individual should file a reply in Form GST REG-24 within 7 working days from the date of receiving the notice in Form GST REG-23.
The Form REG-24 contains the below information:
1. Reference Number and Date of the Notice.
2. Reference Number and Date of the Application.
3. GSTIN (If applicable)
4. Details of Information: The taxable person demands reasons for the revocation.
5. List of attached/filed documents.
The tax officer verifies the reply in Form GST REG-24.
Once the officer is satisfied, he will issue the order for the revocation of GST registration in the Form GST REG-22 within 30 days from the date of getting a reply in form GST REG-24.
If the officer is not satisfied, he will reject the application by issuing an order in Form GST REG-05.
The GST officer will issue a notice in FORM GST REG-23 if he isn't satisfied with the application for revocation of cancellation of registration GST. Upon receiving the notice from the concerned officer, the applicant should appeal against the GST registration cancellation order with a satisfactory response in FORM GST REG-24 in 7 working days from the date of issue of notice. On receiving a suitable reply from the applicant as the revocation reason in GST, the officer should pass an order in FORM GST REG-05 in 30 days from the date of receipt of a reply from the individual.
The following individuals cannot apply for the procedure for revocation of cancelled GST registration:
UIN Holders (i.e. UN Bodies, Embassies and Other Notified Persons)
If the registration is cancelled by the taxpayer or their legal heir
We at ADCA are committed to helping you with all your GST related queries.
Section 16 of the Central Goods and Service Tax Act, 2017 deals with eligibility and conditions for taking the input tax credit. Accordingly, every registered person shall be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business.
Section 17 of the CGST deals with apportionment of credit and blocked credit. Sub-section (5) of section 17 enumerates the goods and services in respect of which the input tax credit shall not be available.
Clauses (g) and (h) of sub-section (50 of section 17 envisages the following goods or services, namely;
(g) Goods or services or both used for personal consumption
(h) Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples.
The situations mentioned in the above clauses are of such nature where the events of non-eligibility of the input tax credit occur after the availment of credit under section 16. For e.g. a trader of electricity appliances purchases air-conditioners for sale and avails of the input tax credit of the same. At a later point of time, he puts one air-conditioner for his personal use. There may also be cases where the input tax credit is availed of on goods purchased for use in manufacture but the same is found ineligible at a later point of time due to unforeseen future events such as goods being lost or stolen before use in manufacture. In such cases, the assessee having availed the ITC at the time of receipt of such goods would be required to reverse the same in terms of section 17 (5).
In this regard the following issue arises namely;
(a)Manner of reversal under section 17(5)
(b) Applicability of interest under section 50 and
(c) Re-availment of credit reversed under section 17(5) where the events causing a reversal of credit gets nullified, for e.g. if the goods that were lost or stolen is subsequently traced.
The present write-up seeks to examine the above issued in its proper perspective.
Under the GST law, a specific procedure is prescribed for the manner of reversal of credit on account on non-payment of consideration to the vendor within 180 days in terms of the second proviso to section 16(2), or use of input or services in effecting exempt supplies under sub-section (2) of section 17. However, no specified mechanism is prescribed for the manner of reversal of credit for situations mentioned in section 17(5).
In the absence of any specific mechanism for reversal of such credit, debiting the restricted credit in the ineligible ITC Table of GSTR-3B would be sufficient for the purpose of section 17(5).
Sub-section (1) of section 73 provides that where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he may demand the tax so short-paid or not paid or input tax credit wrongly availed or utilised along with interest payable thereon under section 50.
Sub-section (1) of section 50 provides for payment of interest where any person who is liable to pay tax fails to pay the tax or any part thereof within the prescribed period.
Sub-section (3) of section 50 provides for a charge of interest on account of under or excess claim of input tax credit under sub-section (10) of section 42 (due to mismatch of credit) or undue or excess reduction in output tax liability under sub-section (10) of section 43.
A careful reading of section 50 suggests that no interest liability is provided where the wrongful availment of credit does not lead to a situation where there is short-payment of tax, due to accumulation of eligible credit.
It is also clear from the clear language of section 50 that even in cases where excess availment of credit is not due to mismatch under section 42 but on account of being an ineligible credit under section 16, no interest can be demanded under section50(3).
Under the GST law, re-availment of reversed ITC is envisaged under the third proviso to sub-section (2) of section 16 of the Act, where the recipient of goods or services makes payment of the amount towards the value of supply of goods or services or both along with tax payable thereon.
The GST Act or rules made thereunder, however, does not speak about the manner and time limit for re-availment of credit reversed due to the circumstance mentioned under section 17(5).
Though there is no specific provision for re-availment of credit under the above situation on the analogy of the third proviso to sub-section (2) of section 16, if the goods that were lost or stolen are subsequently traced and added back in inventory then the taxpayers become eligible for re-availment of credit as if they were always eligible to avail credit under section 16 of the CGST Act.
Hence, where an assessee is able to establish that the event leading to the reversal of input tax credit under section 17(5) has been nullified, it can be concluded that he would be entitled to re-avail the credit so reversed.
Further, no specific document is prescribed for reclaiming of credit earlier reversed. However, it is advisable to maintain a complete record so as to establish the fact of credit eligibility. It is also prudent to inform the Department about the fact of re-availment of the credit so as to avoid litigation in the future.
Sub-section (4) of section 16 envisages the time limit for taking of input tax credit in respect of any invoice or debit, not for the supply of goods or services or both. Accordingly, the input tax credit cannot be taken in respect of any invoice or debit note for the supply of goods or services or both after the date of furnishing of the return under section 39 for the month of September following the end of the financial year to which such invoice or debit note pertains or furnishing of the relevant annual return whichever is earlier.
As per sub-rule (4) of rule 37 of the CGST Rules, the time limit specified in subsection 94, of section16 shall not apply to claim for re-availing of any credit, in accordance with the provisions of the Act or the provisions of Chapter V of the CGST Rules, that has been reversed earlier.
It may be noted that rule 37 prescribes the manner of reversal of input tax credit in the case of non-payment of consideration. But sub-rule (4) of rule 37 speaks about there-availment of input tax credit generally. Hence in the opinion of the author, there is no time limit for re-availment of the credit that was reversed due to applicability of section 17(5). But the credit should be re-availed as soon as the event leading to there-availment occurs.
It is however advisable to keep complete track and documentation of the event leading to reversal as well as re-availment of the credit under section 17(5).
Read more about Input Tax Credit:
"The society we live in is blessed with an abundance of creativity & entrepreneurial spirit."
Having said this, with each passing hour, we are marching towards an AI-first world and this is a great time for tech startups to make their mark. The Venture Capital Firms & Investors are having a close eye towards all the novel ideas that can be turned into reality. As the new motto says - "Dream Big, Act Now."
In this blog, we will be discussing how to do a startup in India.
A start-up is defined as a company or a project initiated by an entrepreneur to seek, develop, and validate a scalable business model. Entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to become registered, whereas startups refer to the new businesses that intend to grow large beyond the solo founder.
Did you know that India is the 3rd largest startup ecosystem in the world? India is expected to witness year-over-year (YoY) growth of a consistent 12-15%.
The Indian government defines a startup as an entity less than seven years young with an annual turnover of less than 250 million rupees and headquartered in India.
Our beloved PM Narendra Modi announced the Start-up India campaign in 2016 to promote and encourage entrepreneurship. This mainly revolves around financing, incorporation, tax exemptions etc, to ease the functioning of startups. With these benefits being provided by the Government, the majority of the start-ups have young owners, this shows the diversity and volumes of talents that India has.
Now that you have a better understanding of a startup, let us look into the Startup in India scheme.
According to the revised announcement on 23rd May 2017, an organization will be considered as a Startup, if it is incorporated in India as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership corporation (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008).
An organization created by splitting up or reconstruction of existing commerce will not be considered a 'Startup'.
The following conditions must be fulfilled in order to be eligible as a Startup :
- Being incorporated or registered in India for less than seven years and for biotechnology startups up to 10 years from its date of incorporation.
- Annual turnover not exceeding Rs 25 crores in any of the preceding financial years.
- Aims to work towards innovation, development, deployment, or commercialization of new products, processes, or services driven by technology or intellectual property.
- It is not formed by splitting up or reconstructing a business already in existence.
- It must obtain certification from the Inter-Ministerial Board set up for such a purpose.
- It can be incorporated as a private limited company, a registered partnership firm, or a limited liability partnership.
The Indian Government has come up with various schemes to promote startups. The stated vision is to transform India from a nation of job seekers to job creators. To fulfil this vision the GOI has launched the scheme viz Startup India registration under DIPP (Department of Industrial Policy and Promotion) under the Ministry of Commerce and Industry.
This scheme supports Startups by providing various benefits to the registered entity. The benefits include financial as well as non-financial benefits. To register under this scheme the entity must fulfil the criteria specified.
The benefits include :
- Administrative and tax benefits.
- Capital gains exemption.
- Government help for startup funding.
Self- certification compliance framework with regard to labour and environmental laws. (startup's businesses would be excluded from any inspections of the place of business from up to 3-5 years.)
Qualified to incorporate 80% reduction in patent registration fees and 50% reduction in the trademark filing.
Benefited by free of cost legal help in conjunction with simplified entry and exit norms and protection of Intellectual Property Rights (IPR).
Read more → Startup India Tax Exemptions
The startup can be registered as:
Partnership Firm: To start a partnership firm, the parties have to draft a partnership deed where the terms and conditions of the partnership firm shall be mentioned. This partnership deed must be registered with the registrar of firms. We can assist you with partnership formation. Click below to know more https://adca.in/partnership-registration-bangalore.php
Limited Liability Partnership Firm: Limited Liability Partnership(LLP) as the name indicates, is a partnership firm with an additional feature of partner liability is limited. For income tax purposes LLPs and partnership firms are treated at par. The Ministry of Corporate Affairs is the registration authority for LLPs. For more details on LLP registration, click here. https://adca.in/llp-registration-bangalore.php
Private Limited Company: Private Limited Company is the most preferred structure for businesses that plan to grow big, get investments by way of equity, wish to offer sharing of ownership with employees by way of ESOP, wish to get FDI, etc. The major advantage of the Private Limited structure is the segregation of management from ownership. Directors form the management of the company, and Shareholders are the owners of the company.
1. Log on to Startup India Portal
2. Enter the required details
3. Enter the Details of Directors and Partners.
4. Upload the essential documents and Self-certification in the prescribed manner.
5. File the Incorporation/Registration certificate of the company.
- Memorandum of Association for Pvt. Ltd. / LLP Deed
- Board Resolution (If Any)
- Annual Accounts of the startup for the last three financial years
- Income Tax Returns for the last three financial years
Refer to your Dashboard on the Startup India Portal for the status of your application. This can be found on the top right of the page after you log in.
You can read more about startup registration here.
For any concerns related to the same, you can get in touch with us. Our team of experts will help you with the Startup Company Registration in Bangalore.
"Taxation is the price which civilized communities pay for the opportunity of remaining civilized."
- Albert Bushnell Hart
The above quote sums up a lot, doesn't it?
In a nutshell, your financial wisdom is decided by the timely filing of your ITR. Filing your ITR is not as burdensome as it seems to be. In this blog, we will be discussing in detail about ITR, its benefits, the documents required, on how you can go about filing your ITR with form 16 and without form 16.
An Income tax return (ITR) is a form used to file information about your income and tax to the Income Tax Department. The tax liability is calculated based on your income. In case the return shows that excess tax has been paid during a year, then you will be eligible to receive an income tax refund from the Income Tax Department.
As per the income tax laws, the ITR must be filed every year by you or your business that earns any income during that financial year. The income could be in the form of a salary, business profits, income from house property or earned through dividends, capital gains, interests etc.Tax returns have to be filed before a specified date. If you fail to abide by the deadline, then there is a penalty levied.
As per the Indian tax laws, it is compulsory to file your income tax returns if your income is more than the basic exemption limit. A delay in filing your ITR attracts not just a late fee but also hinders your chances of getting a loan or a visa.
According to the Income Tax Act, income tax has to be paid only by individuals or businesses who fall within certain income brackets. Mentioned below are entities or businesses that are required to compulsorily file their ITRs in India:
All individuals, up to the age of 59, whose total income for a financial year exceeds Rs 2.5 lakh. For senior citizens (aged 60-79), the limit increases to Rs. 3 lakh and for super senior citizens (aged 80 and above) the limit is Rs. 5 lakhs.
All registered companies that generate income, regardless of whether they’ve made any profit or not through the year.
Those who wish to claim a refund on the excess tax deducted/income tax they’ve paid.
Individuals who have assets or financial interest entities that are located outside India.
Foreign companies that enjoy treaty benefits on transactions made in India.
NRIs who earn or accrue more than Rs. 2.5 lakh in India in a single financial year.
It is important to have all the relevant documents handy before you start your e-filing process.
Bank and post office savings account passbook, PPF account passbook
Form-16- TDS certificate issued to you by your employer to provide details of the salary paid to you and TDS deducted on it, if any Interest certificates from banks and post office
Form-16A, if TDS is deducted on payments other than salaries such as interest received from fixed deposits, recurring deposits etc. over the specified limits as per the current tax laws
Form-16B from the buyer if you have sold a property, showing the TDS deducted on the amount paid to you
Form-16C from your tenant, for providing the details of TDS deducted on the rent received by you, if any
Form 26AS - your consolidated annual tax statement. It has all the information about the taxes deposited against your PAN
a) TDS deducted by your employer
b) TDS deducted by banks
c) TDS deducted by any other organisations from payments made to you
d) Advance taxes deposited by you
e) Self-assessment taxes paid by you
Tax saving investment proofs
Proofs to claim deductions under section 80D to 80U (health insurance premium for self and family, interest on education loan)
Home loan statement from bank
Many people feel that filing tax returns is voluntary and therefore dismiss it as unnecessary and burdensome.
Filing tax returns is an annual activity seen as a moral and social duty of every responsible citizen of the country. It is the basis for the government to determine the amount and means of expenditure of the citizens and provides a platform for the assessee to claim refund, among other forms of relief from time to time. Filing returns is a sign that you are responsible. Not just that, it also makes it easier for individuals and businesses to enter into subsequent transactions since their income is recorded by the tax department with applicable tax, if any, having been paid.
Even if your income level does not qualify for mandatory filing of returns, it may still be a good idea to voluntarily file returns. In most states, registration of immovable properties requires advancing as proof of the tax returns of the last three years. Filing returns makes it easier to register the transaction.
Prompt processing: The acknowledgment of Income Tax Return (ITR) is quick. More importantly, refunds, if any, are processed faster than paper-filed returns.
Better accuracy: E-filing software with built-in validations and electronic connectivity is seamless and minimizes errors considerably.
Convenience: E-filing facility is available 24/7 and you can file anytime, anywhere.
Confidentiality: Your data is not accessible to anyone.
Accessibility to past data
Proof of receipt: You get a confirmation of filing, both at time of filing and subsequently, via email
Ease of use
Electronic banking: Convenience of direct deposit for a refund and direct debit for tax payments. You have the option to file now, pay later - decide what day to debit your bank account for tax payment.
The process to electronically file Income Tax Returns (ITR) by using the internet is called e-filing. The process is quick, easy.
Visit the e-filing website
Register or Login to e-file your returns
Select the User Type : In order to register yourself with the Income Tax Department, you will have to first choose your ‘User Type’. The options available to you include Individual, Hindu Undivided Family (HUF), Other than Individual/HUF, External Agency, Chartered Accountants, Tax Dedcutor and Collector, and Third Party Software Utility Developer.
Next, you will have to enter your current address and your permanent address before entering the Captcha code and hitting ‘Submit’.
Basic details must be filled up
Verification of PAN
Activation of Account
In the end you will have to activate your Income Tax Department account through the link sent to your email ID
In case you do not file your income tax returns, you will have to submit a response on the e-filing portal. Here are the steps to do it:
Log in to the e-filing website.
Click on the ‘Compliance’ tab and you will get two options. ‘View and submit my compliance’ and ‘View my submission’. The first option will display the information for the assessment years when the return was not filed as per the records of the Income Tax Department or if the department needs third party details.
You can then select one of the options on-screen, ‘the return has been filed’, or ‘the return has not been filed’.
If you select ‘the return has not been filed’, you will get the following options, ‘return under preparation’, ‘no taxable income’, ‘business has been closed’, and ‘others’.
Choose the relevant option and click on ‘Submit’.
Form 16 is an Income tax form used by the companies to provide their salaried individuals information on the tax deducted. It can be considered as your Salary TDS certificate.
Suppose the income from your salary for the financial year is more than the basic exemption limit of Rs. 2,50,000. Then your employer is required to deduct TDS on your salary and deposit it with the government. This can be a proof of filing their Income Tax Returns. And if your income does not fit the basic exemption limit, the employer does not deduct any TDS in that case.
In simple words, Form 16 is a certificate provided by your employer that certifies the details regarding the salary you have earned during the year and the TDS that has been deducted. It consists of two parts i.e. Part A and Part B, where part A consists of information of the employer & employee, like the PAN and TAN details, name and address, TDS deducted & deposited, etc. Part B consists of details pertaining to other income, deductions allowed, salary paid, tax payable etc.
Form 16 is annually issued by the employer on or before 15th June of the next year, where it immediately follows the financial year in which tax is deducted. Also, in case you lose Form 16, your employer can issue a duplicate one.
You can download form 16 from the income tax site here.
Refunds in any to the employee, or balance of taxes payable by the employee.
Details of the employer like collection Account Number (TAN), name, PAN, Tax deduction etc.
All details of the Tax Payment, like amount, Challan number, cheque number, Demand Draft number etc.
Personal details of the employee, like name, Permanent Account Number (PAN) etc.
Acknowledgement of number of the taxes paid by the employer.
Taxes deducted as per sections 191A.
Total income and tax deductions.
Details like salary, net salary, Gross salary, perks, deductions, etc.
TDS receipt paid.
Declaration of tax payments from the employer.
The employer generates and downloads this part of Form 16 through portal. Before issuing this certificate, the employer will authenticate for the correctness of its contents. It is vital for you to get a separate Part A of Form 16 for the period of employment if you have changed your job. Following are the components of Part A of Form 16:
PAN details of the employee
Employer Name and address
Summary of tax deposited and deducted quarterly, certified by the employer.
What is Form 16B or Part B of Form 16?
Form 16B is an annexure to Part A. In case you happen to change your job in one financial year, you will have to decide if you need Part B of the form from the last employer or from both the employers. Following are the components of part B of Form 16:
Relief under section 89
Detailed breakup of salary
Deductions that are allowed under the income tax act (under chapter VIA)
The details required for Form 16 while filing your Income Tax Return:
Tax Payable or Refund Due
Aggregate of Section 80C Deductions (Gross & Deductible Amount)
Breakup of Section 80C Deductions
TDS (Tax Deducted at Source)
TDS Deducted by Employer
Current Assessment Year
Name and Address of Employer
Taxpayer’s (your) Name and Address
Although Form 16 is important for filing your income tax return, however, if you do not have one you can still file your return. Please follow the below steps to file returns without Form 16:
Collect your payslips and figure out your Taxable Income
Your Tax Credit / 26-AS will help you find the exact Tax Deducted
If you are staying on rent, don't lose out on HRA if you're eligible
Claim your Deductions
Income from other sources
Pay additional tax if necessary
Finally, File your Income Tax Return
You can check your ITR status by following these steps :
Without login credentials
You can click on the ITR status tab on the extreme left of the e-filing website.
You are then directed to a new page where you have to fill in your PAN number, ITR acknowledgement number and the captcha code.
With login credentials
Login to the site
Click on the option 'View Returns/Forms'
From the dropdown menu, select income tax returns and assessment year
Once this is done, the status of your filing will be displayed on the screen.
The professionals at ADCA will assist you with all preparation of the documents to filing income tax returns for you. We also advise the best tax-saving investments.
In a developing country like India, MSME industries are the backbone of the economy. It is rightly termed as “the engine of growth” for India. The MSME sector contributes to 45% of India’s total industrial employment, 50% of India’s total exports and 95% of all industrial units of the country and more than 6000 types of products are manufactured in these industries (As per Ministry of Micro, Small & Medium Enterprises). When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries(SSI’s).
In this blog, we will discuss the process on how to get your MSME registration number/SSI registration in India.
The MSME registration is not yet mandatory by the Government but registering under it will help you reap several benefits from the government including credit at a low-interest rate, incentives on products for exports, excise exemption, statutory aid such as reservations and the interest on the payments delayed due to unavoidable circumstances. A government scheme called Udyog Aadhar registration has been helping MSMEs since 2015.
If your company is in the manufacturing line or service line, registrations for both can be obtained through the MSME act.
The MSME became operational on October 02, 2006. It was established to promote, facilitate, and develop the competitiveness of the micro, small, and medium enterprises.
The existing MSME classification was based on the criteria of investment in plant and machinery or equipment. If you want to enjoy the MSME benefits, you will have to limit your investment to a lower limit, as below :
< Rs.25 lakh
< Rs.5 crore
< Rs.10 crore
< Rs.10 lakh
< Rs.2 crore
< Rs.5 crore
These lower limits are limiting the urge to grow as a company is unable to scale their businesses further.
There has been a long-pending demand for the revision of MSME classification so that you can further expand your operations while you continue to avail the MSME benefits.
Under the Aatmanirbhar Bharat Abhiyan (ABA), the government revised the MSME classification by inserting composite criteria of both investment and annual turnover. Click Here to read more about ABA
The distinction between the manufacturing and services sectors under the MSME definition has been removed. This removal will create parity between the sectors. The following is the revised MSME classification, where the investment and annual turnover, both are to be considered for deciding an MSME.
Revised MSME Classification
< Rs.1 crore
< Rs.5 crore
< Rs.10 crore
< Rs.50 crore
< Rs.50 crore
< Rs.250 crore
*Subject to notification
You can apply online for MSME registration & verification.
Click Here to register as an MSME and fill the application form.
You can get an MSME certificate with lifetime validity in 2-5 working days and this certificate is for enterprises in both the manufacturing and service sectors. There is no limit with respect to the name used by you to register for new or existing businesses.
Your bank loans get cheaper as the interest rate is very low at around ~ 1 to 1.5%.
Various tax rebates are offered to MSME.
You are allowed a credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years.
Many government tenders are only open to the MSME Industries.
You can get easy access to credit.
Once you are registered, the cost of getting a patent done or the cost of setting up the industry reduces as many rebates and concessions are available.
You will be given higher preference for government license and certification.
There is a One Time Settlement Fee for non-paid amounts of MSME.
To do the registration for the small and medium scale industry, you have to fill a single form which you can do online or offline. Click Here to get the application.
If you want to do registration for more than one industry then you can do individual registration.
The document required for the registration is your Personal Aadhar number, Industry name, Address, bank account details and some additional information.
You can provide self-certified certificates.
There are no registration fees required for this process.
Post the documents are prepared and submitted to the MSME registrar; the experts will verify the submitted documents. This procedure requires 2 working days.
Once your MSME application is approved, your company gets registered and related documents will be sent to you.
You have to submit documents like business address proof, copies of purchase and sale bill, and licenses from regulatory bodies.
Business Address Proof
Copies of Sale Bill and Purchase Bill
Partnership Deed/ MoA and AoA
Copy of Licenses and Bills of Machinery Purchased
If the premise is self-owned – Allotment letter, possession letter, lease deed or property tax receipt. If there is a municipal license in the business name or in the name of the proprietor, partner or director of the business, no other possession document is required to be submitted.
If the premise is rented – Rent receipt and a no-objection certificate from the landlord is required. Any utility bill or document evidencing the landlord’s ownership is to be submitted.
Businesses are required to submit a copy of the sale bill related to each end product that it will supply. Also, for each raw material that it will purchase, a purchase bill has to be submitted.
If the business is a partnership firm, it has to submit its partnership deed. If the partnership firm is registered, it has to submit the registration certificate.
In case of a company, a copy of Memorandum of Association and Articles of Association, and certificate of incorporation has to be submitted. With it, a copy of the resolution passed in the general meeting, and the copy of board resolution authorizing a director to sign the MSME application is also to be submitted.
In rare cases, you have to submit a copy of an industrial license which is to be obtained by giving an application to Govt. of India. Further, all bills and receipts related to purchasing and installation of plant and machinery have to be kept safe and required to be submitted on demand.
Name of Entrepreneur as per Aadhaar card
Social category (General, OBC, SC/ST)
Name of Enterprise
Type of Organization (Proprietorship, Partnership Firm, Private Limited Company, Public Limited Company, Limited Liability Partnership, Cooperative Society, Hindu Undivided Family, Self-Help Group, Society or Trust)
Location/Address of Plant
Country, State, District, City, Tehsil, PIN Code
Mobile Number, Email ID
Date of Commencement of Business
Bank account number and IFSC code
Business Activity of Enterprise
NIC 2 Digit Code – choose a primary activity
Additional detail of the enterprise
Number of Employees
Investment Amount in Plant and Machinery
Declaration for registration under MSME :
Click Here to download the registration form
Declaration for non-registration under MSME:
The government has launched a number of schemes and support systems for enterprises.
Udyog Aadhaar memorandum:
Aadhaar card is a 12 digit number given to all individuals by the government. In this, the Aadhaar card is a mandatory requirement. The benefit of registering in this scheme is ease in availing credit, loans, and subsidies from the government. Registration can be done both online or offline.
Zero Defect Zero Effect:
Goods that are manufactured for export have to adhere to a certain standard so that they are not rejected or sent back to India. To achieve this the government has launched this scheme. Under this, if the goods are exported these are eligible for some rebates and concessions.
Quality Management Standards & Quality technology Tools:
Registering in this scheme will help the micro, small, and medium enterprises to understand and implement the quality standards that are required to be maintained along with the new technology. Under these activities are conducted to sensitize the businesses about the new technology available through various seminars, campaigns, activities, etc.
Grievance Monitoring System:
This is beneficial in terms of getting the complaints of the business owners addressed. In this, the business owners can check the status of their complaints, open them if they are not satisfied with the outcome.
This scheme helps innovators with the implementation of their new design, ideas or products. Under this from 75% to 80% of the project cost can be financed by the government. This scheme promotes new ideas, designs, products etc.
Credit Linked Capital Subsidy Scheme:
Under this scheme, new technology is provided to the business owners to replace their old and obsolete technology. A capital subsidy is given to the business to upgrade and have better means to do their business. The small, micro and medium enterprises can directly approach the banks for these subsidies.
This scheme is especially started for women who want to start their own business. The government provides capital, counselling, training, and delivery techniques to these women so that they manage their business and expand it.
Click Here to read the FAQs related to MSME registration.
We as your MSME Registration Consultants in Bangalore will help your business obtain MSME Registration to avail the benefits. MSME registration or SSI registration can be done through us in your city.
Step 1: You just need to fill our simple form which would ask about your basic information. It would be required while filing your application with the department.
Step 2: According to the details provided to us, we will draft your documentation accordingly. It would take around 1-2 working days.
Step 3: We will file your application along with the required documents to the MSME registrar. Before submission, our expert will verify all your documents properly.
Step 4: Once the application is approved and your MSME certificate is issued, we shall send it to you via email and courier.
GST is an indirect tax that was formed to abolish several other indirect taxes in India, to create a single taxation regime for ease of collection and to increase the efficiency of the process. It is mandatory for businesses with an annual turnover of Rs. 40 Lakh and above. In the North East and Hill states, registration is compulsory for companies earning more than Rs. 10 Lakh yearly revenue.
In this blog we are going to consider cases, wherein after submission of a GST registration application, additional documents are requested or the GST application is rejected.
But before that let’s discuss GST registration, its benefits, penalties associated, correct errors in GST registration, reregistration of GST.
GST eliminates the cascading effect of tax
Higher threshold for registration
Composition scheme for small businesses
The simple and easy online procedure
The number of compliances is lesser
Defined treatment for E-commerce operators
Improved efficiency of logistics
The unorganized sector is regulated under GST
According to the section 122 of CGST Act, if you are a taxable person and you fail to register under GST, then you are legally bound as per the GST Act and you need to pay the following amount of penalty:
10,000 INR or amount of tax evaded whichever is higher.
Case 1: If you fail to obtain GST registration and the total tax evaded amounts to 30,000 INR, the penalty applicable is 30,000 INR
Case 2: If you fail to obtain GST registration and the total tax evaded amounts to 8,000 INR, the penalty applicable is 10,000 INR
If you have any mistakes or errors in GST registration, you can rectify it in the application for registration either at the time of registration or even afterwards. You must submit FORM GST REG-14 along with documents. The GST officer will verify and approve within 15 days in FORM GST REG-15.
But if there is any mistake in PAN, you will have to file for fresh registration in FORM GST REG-01. This is because the GSTIN number is based on the PAN.
You can reach out to us for any further assistance related to the corrections in your GST Registration
After submitting for the registration, you will receive the GST registration certificate within 10 working days. However, some applicants may require to provide additional documents to the GST department for further clarifications. In rare cases, the application for GST registration could also be denied.
After submission of your GST registration application along with the list of documents required, you will be provided with an acknowledgement.
You can use the ARN number (Acknowledgement Reference Number) as mentioned in the GST registration application acknowledgement to track the status of your application.
It normally takes about 7 working days for the provisional GSTIN to be provided and an additional 2 days for providing final GSTIN with GST registration certificate. If the processing officer approves the application, you will receive the GST registration certificate as a soft-copy.
Your GST application can get rejected only if required data is not filled accurately, inadequate proof of identity or address of premises and if your PAN card number is not matching.
If the GST registration application does not contain all the necessary documents or information, then the GST officer processing the application would issue a notice seeking additional information or clarification or documents.
In such a scenario, you can submit the required information or documents as cited by the GST Officer on the common portal before the date mentioned in the notice. The authorized officer will approve the application once satisfied with the information provided by you for the GST certificate. However, the authorized officer has the power to reject the application for the GST certificate, if you failed to provide all the required documents or if you fail to submit it on time.
The GST Officer cannot order for a personal hearing for issuing a new GST registration certificate. The GST officer shall communicate any information regarding the process of the application or any concerns regarding the registration only through the GST forms.
If you fail to provide any reply, or if the authorized officer is not satisfied with the reply or if you fail to reply well within the time, the processing officer can reject the application.
If the officer is not satisfied with the reply, he can reject the application and pass an order in FORM GST REG -05.
On rejection of a GST registration application, the GST Officer would issue a notice to the applicant. As per the GST regulations, the authorized officer should convey to you in writing along with the reasons for rejection.
You can download the GST registration rejection form
If you have applied for GST registration and your application got rejected, you will get a chance to reply to the rejection letter.
However, if you wish to apply for a new application then you would have to wait for a final rejection which will take around 10 days.
Once the application is fully rejected you can apply again.
You can access the GST Portal using your login credentials by clicking here
Click Services > Registration > Application for Revocation of Cancelled Registration option
Your GST registration can be cancelled for the below reasons :
1. Cancellation by Taxpayer
A taxpayer opts in for cancellation of registration on the grounds of:
Liability: GST registration is mandatory for every business exceeding the threshold limit. However, if the annual turnover of the business drops below the given threshold limit, the registered person can opt-in for GST cancellation.
Merger: The taxpayer has transferred or merged the business with another organization or vice versa). In this case, the transferee (or the new company from amalgamation/ demerger) has to get registration under GST.
Dissolution: The taxpayer has discontinued the business.
Constitution: There is a change in the constitution of the business
For cancellation, the taxpayer will have to submit an E-application in FORM GST REG-29 through the GST Portal. An authorised officer, upon proper enquiry, shall provide cancellation of the registration.
(Login to the GST Portal with your user-ID and password.
Then navigate to the Services > Registration > Application for Cancellation of Registration option.)
2. Cancellation by Legal Heirs
If a registered person is deceased, the family or the legal heir of the taxpayer can apply for cancellation of GST registration in FORM GST REG 16.
The legal heirs are required to provide the following details in FORM GST REG 16
Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied;
Details of the payment.
3. Cancellation by Authorised Officer
An Authorised officer can cancel GST registration of a taxpayer if,
The registered person does not conduct business from the place as declared during registration.
The registered person issues invoices without any supply of Goods and/or Services.
The registered person violates anti-profiteering provisions
To cancel the registration of a given business, the authorised officer is required to follow the below-given process
Authorised notifies the concerned person by sending show cause notice in FORM GST REG -17
For any disagreement, the registered person is required to reply in FORM GST REG -18 within 7 days of issuance of the notice.
If the authorised officer finds the reply to be satisfactory, he can drop the proceedings and pass an order in FORM GST REG –20.
However, you fail to justify why your registration should not be cancelled, the authorized officer will issue an order in FORM GST REG-19. The order will be sent within 30 days from the date of reply to the show cause
In case of cancellation imposed by an authorized officer, you can apply for revocation of cancellation within 30 days from the date of the cancellation order.
The process you need to be aware of:
You can submit an application for revocation of cancellation through FORM GST REG-21 on the GST portal.
If the authorised officer is satisfied with the reason you provide, the registered office is required to,
1. Record the reasons for the revocation of cancellation of registration in writing.
2. Reverse the cancellation of registration.
3. Pass an order of revocation in FORM GST REG-22.
However, if the reason is not found satisfactory to the authorised officer, he can reject the application for revocation. The officer is required to order in FORM GST REG-05 and communicate the same.
Before rejecting, the proper officer must issue a show-cause notice in FORM GST REG–23 for you to show why the application should not be rejected. You must reply in FORM GST REG-24 within 7 working days from the date of the service of the notice.
The proper officer is required to take a decision within 30 days from the date of receipt of clarification in FORM GST REG-24.
If you don’t apply for revocation of cancellation, it shall be deemed to be a ‘deficiency’ within the meaning of rule 9 (2) of the Central Goods and Service Tax Rules, 2017 and can be considered as a ground for rejection of the application for fresh registration.
On the other hand, if you continue to trade goods and supplies with GST registration, it shall be considered as an offence under GST law and you shall be liable to heavy penalties.
In order to avoid application of fresh registration of businesses, who have had their registration cancelled by an officer, on account of non-compliance of the statutory provisions, CBIC (Central Board of Indirect Taxes and Customs)(released Vide circular no. 95/14/2019-GST dated March 28th, 2019, wherein the officials have clarified the consequence the taxpayer has to face in case of non-revocation of cancelled registration.
In cases where a registered taxpayer applies for another registration within the same state, the authorised officer is required to analyse whether existing registration continues or is being cancelled;
In case of cancelled registration, the further analysis shall commence on whether the registration is cancelled on account of violation of provisions of section 29 (2) (b) [composition dealer has not furnished returns for 3 consecutive tax period] or section 29 (2) (c) [registered taxpayer has not furnished returns for a continuous period of 6 months].
In case you need any further assistance regarding your rejected GST application, please feel free to get in touch with us. Our team of GST Consultants in Bangalore will do the required to ensure your GST application processes further.
Govt vide notification no 38/2020 dated 05.05.2020 had notified the fifth amendment to CGST Rules containing two amended.
1. Inserting the second proviso to Rule 26(1) providing for the filing of GSTR 3B by companies with EVC without use of Dsc during the period 21.04.2020 to 30.06.2020.
2. Inserting Rule 67A providing for NIL GSTR 3B by SMS. It was notified that this will be effective form a date notified later.
Govt vide notification 44/2020 dated 08.06.2020 has notified 08.06.2020 as the date for coming into effect of rule 67A. Following is the procedure for filing NIL GSTR3B through SMS.
Who have not made any sales (outward supply) for the period
Who doesn't have any Reverse Charge (RCM) Liability.
Who not intend to take any input tax credit for the period
Who don't have any late fee or other liability of the earlier period to be paid in this period.
Following is the procedure to be followed for filing NIL GSTR 3B through SMS.
SMS in the following format needs to be sent to No 14409 from the Registered Mobile Number.
space space space
For example, if you wish to file NIL GSTR 3 for the month of May 2020 for GTIN 29AJBPLD2419C1ZT, the format of the message shall be as follows
NIL 3B 29AJBPD2419C1ZT 052020
If the SMS is validated, you will receive the 'Validation Code' on the same mobile number. The validation code needs to sent to the same number 14409 to complete the filing. Validating message should be in the following format
space space .
For example, if the validation code received is 56789, validation SMS should be in the following format - CNF 3B 56789
Validation code received is usable only once, and shall be valid for 30 minutes.
In case SMS fails validation, instead of validation code Error Message will be received, which needs to look into and addressed.
In case you need any further assistance regarding GSTR 3b return filing, please feel free to get in touch with our team of GST Consultants in Bangalore.