What is NRI?

NRI or non-resident Indian is an Indian citizen who has spent less than 183 days of a financial year or tax year in India. For the uninitiated, the financial year starts from 1st April to 31st March in the succeeding year. A non-resident Indian is a citizen of India, but he or she does not pay any taxes in India. And thus, they struggle to make investments in India.

NRI money investment is allowed in real estate, mutual funds, and other industries. Nevertheless, suppose you want to know who is non-resident Indian in detail. In that case, you must understand that NRIs need to follow certain regulations under the FEMA or Foreign Exchange Management Act for all investments they make in the stock market.

Here, you will get a clear idea of the different options you have to make NRI investments in India. 

NRI Investment Policy in India

As a non-resident Indian looking to invest in India, it is quite likely for you to have several questions on your mind, like the NRI investment policy in India and the options available to you. You might also want to know the process of investing in India as an NRI.
To start with, the investment policy in India for the NRIs entails several products. These include:
- IPO
- Secondary market transactions or trades in the SEBI registered stock markets in India.
- Mutual funds
- Derivative trading
- PMS or Portfolio Management Services
- Bonds
- AIF or Alternative Investment Funds
- Real Estate

However, an NRI needs to have a savings bank account before investing in India. There are two different varieties of bank accounts that the NRIs can operate in India based on their earnings:
- NRO Bank Account or Non-Resident Ordinary Bank Account for income from India
- NRE Bank Account or Non-Resident External Bank Account for income out of India

Both are savings bank accounts maintained in Indian currency. As an NRI, you can remit your foreign earnings from outside India to your NRE bank account, which is completely repatriable. Your income in India is parked in the NRO bank account that is partially repatriable.

Types of investments in India

The financial market in India has greatly evolved over the years. And with this evolution, the financially savvy investors in India now have an assortment of long-term and short-term investment options to consider. The different types of investments in India are as follows:

Stocks: Investments in stocks or the equity markets offer avenues for creating wealth for a very long time. Stock investment in India offers good returns based on risk appetite.

Certificate of Deposit: A certificate of deposit is a money market tool issued against the funds deposited by an investor. Certificates of Deposit are deposited in banks in de-materialised form for a specific period.

Bonds: Bonds are one of India's most popular types of debt investment. The investors offer money to the issuer organisation in exchange for a bond, and in return for the bond, the issuer must pay interest on the principal amount.

Real Estate: Real estate investments involve buying commercial or residential properties allowing your capital to generate regular rental earnings.

FDs or Fixed Deposits: Fixed Deposits are provided by non-banking financial organisations or NBFCs and banks. They come as excellent options for growing funds while maintaining the highest levels of safety.

Mutual Funds: Investing in mutual funds involves investing in market-associated instruments like bonds, stocks or a blend of both debt and equity instruments.

PPFs or Public Provident Fund: PPFs are considered the safest option among India's different varieties of investment options. PPFs come from the government, and investments can be made in PPFs by opening an account with any post office or bank.

NPS or National Pension System is yet another investment policy in India supported by the Indian government. It involves long-term savings, making it the perfect addition to an individual's retirement investment plan.

ULIP or Unit Linked Insurance Plans: ULIP or Unit Linked Insurance Plans are investments added with tax benefits.

SCSS or Senior Citizens' Savings Scheme: These are government-supported investment schemes where residents above 60 years of age can open an SCSS account and invest in this policy for five years.

Investment Opportunities in India

The majority of the investors want good returns on their invested money without any danger of losing their principal amount. That's one of the reasons why many investors are on the lookout for the best investment opportunities in India. Further, they look for the top investment ideas in India that can enable them to double their amount in just a few months or years without any risk.

Nevertheless, the low-risk and high-return combination does not exist. The reality is that returns and risks have a direct link, which means that the risks are more if the returns are higher and vice versa. One of the best investment strategies in India is choosing the right investment avenue and then matching your risk profile with the related risks of the products before investing.

Different investment schemes in India come with high risk but can produce greater inflation-adjusted returns compared to various long term asset classes. However, you can also find low-risk investment opportunities that bring lower returns. For the best and safe investment in India, it is important to make it a point to invest in both financial and non-financial assets.

Why should NRI invest in India?

Now that you have an idea of the different options for USA NRI investment in India, here are the reasons why NRI should invest in India:

To avail good returns: Regardless of what an NRI invests as per their pocket, it will result in the growth of India. The best thing for an NRI is that the more money they invest in the right direction at present will bring more money in hand when they need it.

For retirement planning: NRIs can secure their future by investing in India. NRI investments in India help NRIs in getting ready for old age. Investing in India is a secure and safe option for NRIs who want to stay close to their family members after retiring from work.

To create financial assets: Making the right investments in India can help the NRIs grow their financial wealth and eventually build up their financial assets. For example, NRIs can create financial assets by buying properties in India.

To get money in hand for the family: Extra NRI investments in India come to the rescue of the NRIs if they need to send money to their families back home. This offers extra money in the pockets of the NRIs, thus giving them the scope to help their families financially.

NRI Investment Options India

Speaking of the different NRI investment options in India, there are many. The best NRI investment options are as follows:

FD

NRI fixed deposit accounts are India's most common form of NRI investment. With NRI fixed deposits, the NRIs can deposit money into their accounts, and the money is kept safe for a pre-determined period. NRI funding for projects in India is also available depending on the interests the NRIs are willing to pay for the available funding.

Mutual Funds

NRI investment in mutual funds is also a good medium for the NRIs to invest money in India. Mutual funds are massive pools of money made through the investors' money and are managed by certified and qualified professional finance managers. Speaking of NRI mutual fund taxation, NRIs do not have to pay any taxes on investments in equity funds, while they have to pay 20% tax when they sell debt funds after owning them for more than three years.

Bonds in India for NRI

NRI bonds come with certain risks, but they also serve as the top investment option in India. The tax-free bonds in India for NRI include perpetual bonds and PSU or Public Sector Undertakings Bonds. There are no taxes on perpetual bonds, but with PSU bonds, the NRIs need to pay 20% tax if they sell the bonds after owning them for more than three years.

Pension Scheme for NRI in India

The pension scheme for NRI in India is one of the most reliable and best long term investment options backed by the government. By way of this scheme, the NRIs can invest either in debts, equities, or both. National Pension Scheme in India is for people between the ages of 18 and 60. The NRO and NRE bank accounts are generally used when investing in National Pension Scheme.

LIC Schemes for NRI

LIC schemes for NRI are compulsory savings leading to wealth creation. As these schemes mature, the family members of the NRIs and even the NRI policyholders can use the funds for different purposes like marriage, education of a child, repair of existing homes or acquisition of new homes and construction.

SIP Investment for NRI

Can NRI invest in SIP? If this question is lurking in your mind, you must know that the NRIs do not require any special permission to invest in SIP. SIP investment for NRI allows the NRIs to invest small fixed amounts of money regularly in their chosen or desired mutual funds. A certain fixed amount is deducted per month from the bank account of the investor NRI and invested in his or her preferred mutual fund for activating a SIP.

NRI Investment in Indian Share Market

If you are thinking about how can NRI invest in the Indian stock market, then you must know that aggressive investors can find it quite beneficial to invest in the Indian stock market. So, how NRI can invest in the Indian share market? NRIs need to have an NRO or NRE bank account, trading account and Demat account to invest in the Indian stock market.

Benefits of being NRI

There are large scale benefits of being NRI, but the best of NRI benefits in India is that you get the best of two worlds.
- You get a special bank account from an Indian bank.
- The earnings you make outside India are tax-free, provided you have paid all the concerning taxes in your country.

Conclusion

There are some of the greatest investment options available for NRIs in India. NRIs might be living outside India, but they can easily be a part of the economy back home through different investment options.

FAQs

Can NRI invest in PMVVY?
Yes, NRIs can invest in Pradhan Mantri Vaya Vanadana Yojana as there are no specific eligibility requirements for PMVVY except that the subscriber should be a senior citizen.

How to invest dollars in India?
The RBI has released proper guidelines under LRS or Liberalised revenue Scheme permitting Indian residents to invest dollars in India without special permission.

Can NRI invest in PPF?
No, NRIs cannot make investments in PPF, and PPF investments are only for Indian citizens.

Why Is It Important to Have CA

Having a well-educated and informed Chartered Accountant by your side when setting up a company or a startup can help at varying stages. Since CAs are experts in taxes, finance, agreements and laws, they can serve as integral parts in applying business plans, formulating strategies, deciding on software to be used, receiving subsidies and maintaining accounts.

Consulting a chartered accountant when planning to start a company can give you clarity on important aspects early on so you do not get trapped later on. CA experts prepare the proper accounting structure for your startup.  

Why Do Startups/Businesses/Companies Need Accounting?

Accounting is among the most significant business functions entrepreneurs need to understand when starting a new business. The entrepreneurs with plans of setting up startups often wonder why do we need accounting. Or if you think about why accounting is important for a new business, you must know that startups require solid accounting methodologies allowing their business leaders, financial managers and founders real-time visibility to the right picture of their financial health.

Since startups have an unpredictable nature, solid accounting for startups is a necessity. Access to proper accounting information is crucial for nimble analyses that help identify the scopes of growth and improvement. Accurate accounting for the startups also offers strategic decision-making insights.

So, what is accounting?  For the uninitiated, accounting is a business process to record, organise, and understand financial information. The different accounting processes summarise, report, project, and analyse business transactions using financial statements.

There are 4 types of accounting, and we will get into their details below:

Financial Accounting: This type of accounting summarises financial transactions from the accounting period of a business into financial statements, like cash flow statements, balance sheets, and P&L statements. At startups, the important external stakeholders like the board of directors and investors have these statements.

Cost Accounting: This form of accounting records financial details related to the cost of producing products and services. These details are used by startups for budgeting, making predictions, and analysing business performance.

Tax Accounting: This kind of accounting tracks incoming and outgoing finances related to the operations of a startup and concerning their effect on the startups' tax burden.

Managerial Accounting: This kind of accounting is also called management accounting, and it uses the same procedures as financial accounting. In this form of accounting, financial details are recorded solely for the internal stakeholders who use the details for making informed decisions to meet business objectives.

There are two accounting methods:

Accrual Basis Accounting: This is a method where expenses and revenues are recorded when their associated transactions occur regardless of when the original funds change hands. This is the most commonly used accounting method that offers the right picture of the financial health of a startup. It also makes way for planned decision-making.

Cash Basis Accounting: This accounting method creates a more instant recognition of expenses and revenues by recording them only when the funds for a particular transaction are exchanged. 

How Can CA Add to Your Startup's Growth in the Long Run?

For entrepreneurs with plans of setting up a business, wondering why CA is necessary right at the beginning is quite apparent. If you think you need to hire CA for tax filing only or go clear with the audit compulsory for companies, you are wrong.

There is a significant role of a chartered accountant in business, whether big or small. Be it any business that you are looking to set up, it will not be able to thrive well without chartered accountants and business advisors. It is not just necessary to get a chartered accountant for small businesses but even for the larger businesses that need to deal with a lot of finances and transactions.

When you start a company, as an employer, you can start with just one or two employees. But within these one or two employees, you must hire a CA to ensure you follow all the taxation policies such as Labour Laws, TDS and salary provisions.

There are a plethora of services provided by CA. Below, we will be having a look at some of the essential duties of a chartered accountant:

Helping in the management of expenses: Chartered accountants can help you save a lot of money as a business holder. They will ensure that your startup does not lose track of its direction because of extreme financial issues.

Assisting in proper investment: A qualified CA not only frames affordable business solutions but even offers advice on the most profitable investments. They help businesses grow and use the best methods for making startups profitable units.

Help in cutting down a company's costs: This is one of the most significant CA duties and responsibilities. Starting from tax returns to year-ending accounts, CAs are good at maintaining and rectifying the most minor details related to the financial flow within a company.

You must hire an accountant because only a well-educated and experienced accountant can serve as your best guide in understanding different salary payable procedures, the do's and don'ts of making payments, business revenue forecasts, and applying for different funds.

Introduction of CA Firm and How It Easily Deals With the Financial Stuff of a Company

So, what is a CA firm? It is a chartered accountant firm that offers financial advice for startups. CA firms in Bangalore help with company registration or startup registration. These firms audit accounts and offers trustworthy, precise and unquestionably crucial financial reports for the proper operation of a new company. Getting a CA on hire from these firms can help startups manage auditing, taxation, corporate economics, insolvency, legal accounting and company recovery.

Based on the requirements of a company, chartered accountant firms prepare the most suitable models for startup India registration. They also ensure that the financial structure and procedures of a business are efficient and duly support a company's operational efficiencies.

With time, your startup will grow and thus, it will encounter more complexities like business procedures and tax dealings. Therefore, it makes sense to hire CA online to take care of all such situations by offering effective solutions.

Conclusion

In the end, your main objective is to hire a chartered accountant with the quality of helping your company reach its goals within the shortest period. Whether you have already started business operations or you are still scribbling on the planning stage, having a CA can help you save money and time down the road.

A Non-Resident Indian's Guide to Buying Property in India

Indian residents like you and me have the right to property in India by any mode (gift, purchase, or inheritance). There might be some restrictions in a few states regarding purchasing agricultural or residential properties. Keeping this aside, an Indian resident can buy any number of properties (residential, commercial, or industrial land or properties).

In the last decade, the Indian property market has been booming with the rising interest in purchasing property in India from individuals residing outside India. This article will look at the rules and regulations surrounding the acquisition and transfer of immovable property in India by Non-Resident Indians [NRIs], Foreign Nationals, and Foreign Nationals of Indian Origin or, in other words, who can buy property in India.

Now let us understand who is a Non-Resident in India or an NRI.

Under FEMA Act (Foriegn Exchange Management Act),  1999, a person resident in India is defined as an individual residing in India for more than one hundred and eighty-two days (182 days) during the preceding financial year. The individual has come to India to either stay for employment, carry a business, or vocation in India or any other purpose, indicating his intention to stay in India for an uncertain period. A person who does not meet the above condition is considered a Non-Resident Indian. In simple, an individual has to meet both the requirements of 182 days stay in India and comply with the purpose/intention of staying a resident of India.

Which group of persons residing outside India can freely purchase property in India?

Non-Resident Indians (NRIs)(not currently a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan) who have held an Indian Passport or whose father or grandfather was an Indian citizen covered by the general permission. Those persons covered under the general license can freely purchase residential or commercial property in India.

Can an NRI buy property/land in India?

Non-Resident Indians (NRI) can purchase property in India. The Foreign Exchange Management Act (FEMA) authorizes the Reserve Bank of India (RBI) to structure the rules around prohibition, restriction, or regulation of acquiring or transferring immovable property in India by persons residing outside India.

As per this regulation, an NRI can purchase/acquire immovable property in India through:

Purchase: An NRI can purchase property from a builder, Indian resident, developer, or acquisition of property from an NRI. They can pay from their NRO/NRE account or transfer money from abroad through regular banking platforms or any loans from Indian Banks or Financial Institutions in India.

Gift: An NRI can receive a property as a gift from any Indian resident. A gift from a non-relative is subjected to Income tax. A relative is defined in section 56 of the Income-tax act. They can also acquire property from another NRI who is a relative (husband, wife, sister, brother, or any lineal ascendant or descendant)

Inheritance: An NRI can inherit from an Indian resident or an individual outside India if the person who has transferred it has acquired the property as per FEMA regulations when buying property in India as NRI.

How can a foreign national buy property/land in India?

1. A foreign national can purchase one immovable property (other than agricultural land/ farmhouse/ plantation property jointly with a foreign spouse. The wedding should be registered and exist for no less than two years immediately preceding the acquisition of such property.
2. Foreign Nationals (other than NRI or OCI) living in India can buy property in India. They can purchase with or without RBI permission.
3. Foreign nationals of non-Indian origin residing outside India cannot acquire property in India. 
4. Long-Term Visa holders may purchase only one residential immovable property in India.

A document checklist for NRIs for purchasing property in India is mentioned below:

- title deed (in the name of the seller) 
- building plan sanctioned 
- certificate of commencement 
- certificate of occupancy 
- receipts paid for tax 
- certificate of encumbrance 
- documents of khata/mutation

The list of documents required during the registration process:

- Pan Card  
- PIO or OCI card 
- Passport 
- Passport size photograph 
- Address proof 

In case you have any queries regarding an NRI buying or selling property in India, you can reach out to us @ info@adca.in.

Waiver of Loan by Government

1. Section 28 (iv) of Income Tax Act :

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.

2. Only non-monetary benefits or perquisite is covered under section 28(iv)

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).

3. Supreme court verdict in Mahindra v. CIT 2003 TaxPub (DT) 0995 (Bom-HC): (2003)261 ITR 501(Bom)

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.

4. Recent decision of Bombay High court

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).

Conclusion

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).

CSR spending on Covid Activities – Regulatory Announcements

Section 135(1) of the Companies Act,2013 mandates that:

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:

Circular No 10/2020 dated 23rd March 2020

MCA Clarified the following:

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.

Office Memorandum dated 28th March 2020

MCA has clarified that all donations and contributions to the PM-CARES Fund will be counted and listed as a permissible CSR activity.

Notification no CSR526(E) dated 24th August 2020

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”.

Circular No 01/2021 dated 13th January 2021

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.

Circular No 05/2021 dated 22nd April 2021

MCA has clarified that spending CSR funds for setting up makeshift hospitals and temporary COVID-Care facilities is an eligible CSR Activity.

Circular No 09/2021 dated 5th May 2021

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.

Circular No 13/2021 dated 30th July 2021

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.

Revocation of cancellation of GST registration

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. 

Table of Contents

1. Overview
2. Revocation Of Cancellation Of GST Registration
3. The Time Limit For Revocation Of GST Registration
4. The Steps Involved To Apply For Revocation Of Cancelled GST Registration
5. How To Apply For Revocation Of Cancellation Of GST Registration Offline?
6. How To Go About The Form GST REG-24?
7. Rejection Of GST Revocation Application
8. Ineligible Applicants For Application For Revocation Of Cancelled GST Registration

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 registration, 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.

Revocation of cancellation of GST registration

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.

The time limit for revocation of GST registration

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 steps involved to apply for revocation of cancelled GST registration:

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.

How to apply for revocation of cancellation of GST registration offline:

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.

How to go about the Form GST REG-24?

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.

Rejection of GST Revocation Application

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.

Ineligible Applicants for application for revocation of cancelled GST registration

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)

GST Practitioners 

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.

FAQs

1. Appeal format for revocation of cancellation in GST

GST registration revocation process online The registered person 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.

2. How to file an appeal for revocation of GST registration?

GST registration revocation process online The registered person 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.

3. What are the reason for revocation of cancellation?

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.

4. How to renew cancelled GST registration?

A taxpayer can fill the form GST REG -21 if the proper officer cancels their registration can apply for reversal of such cancellation. GST REG-21 has to be filed within 30 days of receiving the notice for the cancellation of GST registration.

5. What are the procedure for revocation of cancelled GST registration?

The registered person opting for revocation of GST registration online must follow the procedure below.
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.

6. How do I revoke my GST registration after 180 days?

The GST registration can be revoked after 180 days of cancellation only by filing an appeal with the Commissioner GST of the specified area.

7. Can we revoke Cancelled GST registration?

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.

8. What is the time limit for revocation of GST registration?

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.

9. How do I write a revocation letter for GST?

An individual should file a reply in Form GST REG-24 within seven 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.

 

reversal of input tax credit under gst

Introduction

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.

Reversal of input tax credit under section 17(5)

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).

Applicability of interest under section 50

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).

Re-availment of Credit-Conditions and limitations

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.

Limitation period for re-availment of the credit

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:

Admissibility Of Input Tax Credit - Motor Vehicles

how to register a startup in india

Table of Contents

1. Startups & Small Business Statistics In India
2. What Are The Eligibility Criteria For Startup Registration In India?
3. Benefits Of Startup India Scheme
4. Startup Company Registration Process In India
5. The online registration process of a startup in India
6. Documents required for a startup registration in India
7. How to check your startup India registration status

"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 register a startup company in India.

A start-up company 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. 

Startups & Small Business Statistics In India

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'.

What Are The Eligibility Criteria For Startup Registration In India?

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.

Benefits Of Startup India Scheme

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

Startup Company Registration Process In India

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.

The start-up registration process online in India:

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.

Documents required for a startup registration in India: 

- 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

How to check your startup India registration status

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.

how to file itr with or without form 16

Table of Contents

1. Income Tax Return - What Is It?
2. Who Is Eligible To File Income Tax Returns?
3. The Documents Required To File ITR
4. Why Should You File Your Income-Tax Return?
5. What are the Advantages of filing an Income tax return?
6. How to file ITR online
7. Have you not filed Your Income Tax Returns? Here’s What You Can Do
8. Now let us understand what a Form 16 is
9. The components of Form 16
10. What is Form 16A or Part A of Form 16?
11. How do you file ITR if you don’t have your Form 16
12. How do you check ITR status online?

"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 ITR, its benefits, the documents required, on how you can go about filing your ITR with form 16 and without form 16.

Income Tax Return -  What is it? 

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. 

Now you might wonder if it is mandatory for you to file your Income Tax Return.

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.

Who is eligible to file Income Tax Returns?

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 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.

The documents required to file ITR

documents required for filing income tax return india

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

  • Salary slips

  • Aadhar Card

  • PAN card

  • 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

Why should you file your Income-tax return?

Why should you file your Income-tax return

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.

What are the Advantages of filing an Income tax return?

Advantages of filing an Income tax return

  • Prompt processing: The acknowledgement 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.

How to file ITR online

How to file ITR online

The process to electronically file Income Tax Returns (ITR) by using the internet is called e-filing. The process is quick, easy. 

  1. Visit the e-filing website 

  2. Register or Login to e-file your returns

  3. 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.

  4. Next, you will have to enter your current address and your permanent address before entering the Captcha code and hitting ‘Submit’.

  5. Basic details must be filled up

  6. Verification of PAN

  7. Activation of Account

In the end you will have to activate your Income Tax Department account through the link sent to your email ID

Have you not filed Your Income Tax Returns? Here’s What You Can Do

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’.

Now let us understand what a Form 16 is :

form 16

Form 16 is an Income tax form used by 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 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.

The components of Form 16:

  • 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.

What is Form 16A or Part A of Form 16?

The employer generates and downloads this part of Form 16 through the 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

  • PAN & TAN of the employer

  • 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

  • Taxable Salary

  • Aggregate of Section 80C Deductions (Gross & Deductible Amount)

  • Breakup of Section 80C Deductions

  • TDS (Tax Deducted at Source)

  • PAN

  • TDS Deducted by Employer

  • Current Assessment Year

  • Employer PAN

  • Name and Address of Employer

  • Taxpayer’s (your) Name and Address

  • Employer TAN

How do you file ITR if you don’t have your Form 16?

how to file itr without form 16

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

How do you check ITR status online?

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.

Read More

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2. TDS on maintenance & repair charges will fall under section 194c or 194j?

3. Check Your Income Tax Outstanding Amount E Filing portal


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.

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