Government has vided notification no 30/2016 dated 29.04.2016  has revised the due date for filing TDS statement by deductors as follows :   

Sl No	Quarter Ending	Due date
1	June 30.	July 31st of Financial Year
2	September 30.	October 31st of Financial Year
3	December 31.	January 31st of Financial Year
4	March 31.	May 31st of following Financial Year

1. INCREASE IN THRESHOLD LIMIT FOR TDS UNDER VARIOUS SECTION IS AS FOLLOWS :

Present Section	Heads	Existing Threshold Limit (Rs.)	Proposed Threshold Limit (Rs.)
1 92A	Payment of accumulated balance due to an employee	30,000	50,000
194BB	Winnings from Horse Race	5,000	10,000
194C	Payments to Contractors	Aggregate annual limit of 75,000	Aggregate annual limit of 1,00,000
194LA	Payment of Compensation on acquisition of certain Immovable Property	2,00,000	2,50,000
194D	Insurance commission	20,000	15,000
194G	Commission on sale of lottery tickets	1,000	15,000
194H	Commission or brokerage	5,000	15,000

 

2. REVISION IN TDS RATES :

Present Section	Heads	Existing Rate of TDS (%)	Proposed Rate of TDS (%)
194DA	Payment in respect of Life Insurance Policy	2%	1%
194EE	Payments in respect of NSS Deposits	20%	10%
194D	Insurance commission	Rate in force (10%)	5%
194G	Commission on sale of lottery tickets	10%	5%
194H	Commission or brokerage	10%	5%

 

 

 

 

 

 

 

 

 

 

3. EXEMPTION FROM REQUIREMENT OF FURNISHING PAN TO NON RESIDENTS:

Section 206AA provide that in case deductee doesnot furnish PAN, tax need to be deducted @ 20%. This provisions were applicable to payments to non resident and foreign companies as well. Hence taxes were required to be deducted @20 % on foreign remittance though DTAA provided for lesser rate as invariably the foreign companies did not have PAN.  Amendment to section 206AA provides much sort exemption to Non Residents and Foreign Companies from requirement of furnishing PAN. This exemption has come into effect from June 1st, 2016.

4.  Form 15G/ 15H made applicable to TDS on Rent under section 194I.

Till now a person receiving interest income was entitled to furnish form 15G/ 15H to payer of interest to avoid deduction of  TDS on interest. 15G/ 15H is declaration stating that total income of payee for the year will be below the threshold limit of income subject to tax and hence there will not any income tax liability.

From June 1st form 15G / 15H has been made applicable to deduction of tds u/s 194I, the receiver of rent can provide a declaration in form 15G/15H to payer of rent and claim exemption from deduction of tds from rental receipts.

5. CHANGES IN DUE DATES FOR FILING OF TDS RETURN AND ISSUE OF TDS CERTIFICATES :

This changes is effective for TDS return due after June 1st, 2016

6. TCS PROVISIONS EXTENDED TO SALE OF GOODS AND SERVICES  :

TCS @ 1% has been made applicable to below from june1st 2016:

a. Sale of Motor vehicle of the value exceeding Rs 10 lakhs whether amount is received in cash, cheque or any other mode.

b. Sale in cash of any goods ( other than Bullion and Jewellery) or providing of any services (  other than payments on which tax is deducted at source  under tds provisions)  of value exceeding Rs 2 lakh, where sale consideration has been received in cash .

The revised tcs chart with effect from June 1st 2016, is as follows :

Nature of Goods	TCS Rate
Alcoholic liquor for human consumption	1%
Tendu Leaves	5%
Timber obtained under a Forest Lease	2.5%
Timber obtained by any mode other than Forest Lease	2.5%
Any other Forest produce not being forest timber or tendu leaves	2.5%
Scrap	1%
Minerals being Coal or Lignite or Iron ore	1%
Parking Lot, Toll Plaza, Mining and Quarrying	2%
Where ANY amount of consideration is received in cash on sale of :- Bullion (consideration exceeds Rs. 2 Lakhs), Jewellery (consideration exceeds Rs. 5 Lakhs), and with effect from June 1,2016,Any other goods and services (exceeding Rs. 2.00 Lakh) if TDS Provision is not applicable	1%
Where amount is received by cheque or any other mode on sale of :- Motor vehicle of the value exceeding Rs. 10.00 Lakh (applicable from June 1,2016)	1%

 

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Central Board of Excise and Customs had vide order no 1/2016- Service Tax Dated 25.04.2016 has extended due date for filing ST-3 Return for the period Oct to March 2016 period from 25.04.2016 to 29.04.2016. There has been difficulties in accessing return filing website www.aces.gov.in due to which this extension has been given.

CS Sweta Abhishek

This article is an attempt to share my experience and to provide a brief knowledge of Company Incorporation/Formation/Registration procedure not only to my professional colleagues/friends but also to the entrepreneurs looking to set up their businesses in India.

Table of Contents

1. Private company
2. Public company
3. Procedure for incorporation/registration/formation of a company
4. New incorporation method
5. Regular incorporation method

A Company is an Artificial person in the eye of law. A company need to get incorporated/Registered to get a position of legal entity.

As per Companies Act, 2013 Minimum requirement to incorporate a Company requires the following:

Private Company:

 A Private Limited Company is a Company limited by shares in which there can be maximum of 200 shareholders, no invitation can be made to public for subscription of share and debenture, there is restriction on transfer of shares and cannot accept deposits from public.

MINIMUM REQUIRMENT

• Minimum 2 Directors

           As per Companies Act, 2013, every company shall have atleast one Indian Director i.e. who has stayed in India for a period of 182 days or more in the previous calendar year.

• Minimum 2 Shareholders

           Directors and Shareholders can be the same persons

• Minimum Share Capital

          Minimum share capital shall be Rs. 1,00,000 (INR One Lakh)

• DSC (Digital Signature Certificate ) of  the Directors
• DIN(Director Identification Number) of the Directors

Public Company:

A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits.

MINIMUM REQUIRMENT

• Minimum 3 Directors

           As per Companies Act, 2013, every company shall have atleast  one  Indian Director i.e. who has stayed in India for a period of 182 days or more in the previous calendar year.

• Minimum 7 Shareholders
• Minimum Authorised Share Capital of Rs. 5 Lacs
• DSC (Digital Signature Certificate ) of  the Directors
• DIN(Director Identification Number) of the Directors

PROCEDURE FOR INCORPORATION/REGISTRATION/FORMATION OF A COMPANY

Obtain DSC (Digital Signature Certificate)

          Obtain a Digital Signature Certificate from Authorized DSC issuing Authority.

          Documents required for obtaining DSC :

•  Proof of Identity
• Proof of Residence
• One self attested passport size photograph

           Obtain DIN

          Application to be made in Form DIR-3 for obtaining the DIN no. of the Directors after obtaining the DSC.

         Documents required for obtaining Director Identification Number:

              1. Scanned copy of Passport-sized photograph (JPEG Format)

             2. Identity proof: Scanned copy of PAN card (passport if foreign national) and

            3. Address Proof: Driver’s License/Voter ID/ Utilities Bill not more than two months old from the date of filing. Documents should be  self-attested.

Note:

if DIN is applied for Foreign national: Details of a valid passport should be filled in form DIR-3 and a certified copy of same should be attached with DIN application. All supporting documents including photograph should be certified by the Indian Embassy or a notary in the home country of the applicant or by the Managing Director / CEO / Company Secretary of the company registered in India, in which applicant is a director. If a foreign director has a valid multiple-entry Indian visa or Person of Indian Origin card or Overseas Citizen of India card, then the attestation could also be done by Public Notary / Gazetted Officer in India or practicing CA / CS / CWA.

           Register DSC

          After obtaining the DIN No. register the DSC on MCA portal in the name of Director. In MCA portal go to MCA services-DSC Services-Register DSC.

Companies Act, 2013 provides two ways by which a Company can be incorporated:

1.  New Fast Track Company Incorporation method (Form INC-29 Integrated Form for Incorporation)
2. Regular Incorporation method (Form INC-1, Form INC-7, Form DIR-12 & Form INC-22)

 

NEW INCORPORATION METHOD:

MCA has tried to simplify the Incorporation procedure by introducing Form INC-29, an integrated form in which on a one go applicant can apply for the following:

1.Name Availability

 Form INC-29 allows to apply for only One name (Make sure that proposed name is available by checking Name availability in MCA portal and adhere to the Companies Act, 2013 and rules thereunder (Naming Guidelines) and Companies (Incorporation) Amended Rules, 2016)

2.Apply DIN for Maximum of 3 Directors

One of the Director of the proposed Company must contain DIN No. before filing and for other Directors (max 3 Directors) of the Company  can apply DIN in the integrated form.

Example: if there are 4 Directors in the proposed Company and none of the Director is having a DIN then out of 4 directors, 1 Director should apply DIN by applying in Form DIR-3 and rest of the 3 Directors DIN can be applied in the Form INC-29.

3. First Directors of the Company

4. Incorporation of Company

5.Situation of Registered office

6.Application of PAN

7.Application of TAN

8.Employer Registration under ESIC

Incorporation Documents to be attached in Form INC-29:

1. MOA (Memorandum of Association)

                  The Memorandum of a company shall be adopted in the specified form of Schedule I (Table A,B,C,D,E as applicable) of the Companies Act, 2013

2. AOA (Article of Association)

                  Article of the Company shall be adopted in the specified form of Schedule I (Table F,I,J as applicable) of the Companies Act, 2013

3. Identity proof and Residential Proof of the Directors who applied for DIN

4. Identity proof and Residential Proof of the Subscribers

5. Proof of Registered Office

       1.No Objection Certificate from the Owner

      2.Rent Agreement/Lease Agreement etc.

      3.Utility Bill (Not more than 2 months old from the date of filing)

6. Declaration by Professional- INC -8

7. Affidavits and Declaration by the First Subscribers and Directors:

• INC-9-Affidavit from the Subscriber to the Memorandum (MOA)
• INC-10-Verification of Signature of subscribers
• DIR-2-Consent to become a Director of the said Company
• Affidavit under Circular 11/2013

Note: The Memorandum of a company shall be adopted in the specified form of Schedule I (Table A,B,C,D,E as applicable) of the Companies Act, 2013 and Article of the Company shall be adopted in the specified form of Schedule I  (Table F,I,J as applicable) of the Companies Act, 2013.  

Subscriber Sheet of MOA & AOA: Last page of MOA and AOA consist of Subscriber sheet in which the  following details of the subscribers to the MOA and AOA need to be mentioned:

• The MoA and AoA shall be signed by each subscriber to the memorandum, who shall add his name, address, description and occupation in his own handwriting in the presence of at least one witness and shall contain photo of each individual subscriber.
• Witness Signature along with Name, Address, Occupation and Membership No. (if any). The witness shall state that:

“I witness to subscriber/subscriber(s), who has/have subscribed and signed in my presence (date and place to be given); further I have verified his or their Identity Details (ID) for their identification and satisfied myself of his/her/their identification particulars as filled in”

• If the subscriber is illiterate, he should affix his/her thumb impression or mark which shall be described as such by the person, writing for him, who shall place the name of the subscriber against or below the mark and authenticate it by his own signature and he/she shall also write against the name of the subscriber, the number of shares taken by him/her. Also such person shall also read and explain the contents of the MoA and AoA to the illiterate subscriber and make an endorsement to that effect on the MoA and AoA.
• Where the subscriber to the memorandum is a body corporate, the MoA and AoA should be signed by director, officer or employee of the body corporate duly authorized in this behalf by a resolution of the board of directors of the body corporate and where the subscriber is a Limited Liability Partnership (LLP), it should besigned by a partner of the Limited Liability Partnership, duly authorized by a resolution approved by all the partners of the LLP. However in either case, the person so authorized shall not, at the same time, be a subscriber to the memorandum and articles of Association.

Payment of ROC Fee & Stamp Duty

After Uploading the Form INC-29 , one need to make payment of RoC fees and Stamp Duty electronically as per  the Authorised Capital of the Company .

Verification of Documents

RoC scrutinises all the documents and forms and may suggest few changes as per the requirement. In such case, required changes has to be made by the Applicant and resubmit the form .

Incase of INC-29, only two resubmissions are allowed. If after two resubmission still some changes were found by RoC then fresh form need to be submitted along with RoC fee and Stamp Duty again.

Issue of Certificate of Incorporation

RoC approves the Incorporation of the proposed Company, when after scrutiny, RoC is satisfied with the Form and its attachments and issues "Certificate of Incorporation". Once the Incorporation Certificate is received , Company can start its Business.  

REGULAR INCORPORATION METHOD

1. DIN Application

Obtain Director Identification Number for all the Directors of the proposed Company. Apply In Form DIR-3.

2. Name Approval (FORM INC-1)

Apply in Form INC-1 for Name approval of the Proposed Company after drafting the Main Object/ nature of Business of the proposed Company. Maximum Six names can be given in order of preference. RoC will approve the available and suitable name among the given names for the proposed Company.

Note:

 Name should be selected as per the Companies Act, 2013 and Rules made thereunder. Applicants can themselves check the available names in MCA Website under the head MCA Services: Check Company Name. Name of the proposed Company should not fall under "Undesirable names" as mentioned in Companies (Incorporation) Rules, 2014 and Companies (Incorporation) Amendment Rules, 2016 .

Once name of the proposed Company is approved, it remains valid for 60 days from the date of approval.  Within the said period of 60 days, Company has to be incorporated otherwise again name approval in Form INC-1 is required to be filed with MCA.

3. Draft MOA & AOA

Before Incorporation, MOA (Memorandum of Association) and AOA (Article of Association) of the proposed Company is drafted and printed. The Memorandum of a company shall be adopted in the specified form of Schedule I (Table A,B,C,D,E as applicable) of the Companies Act, 2013 and Article of the Company shall be adopted in the specified form of Schedule I  (Table F,I,J as applicable) of the Companies Act, 2013.

Subscriber Sheet of MOA & AOA: Last page of MOA and AOA consist of Subscriber sheet in which the  following details of the subscribers to the MOA and AOA need to be mentioned:

• The MoA and AoA shall be signed by each subscriber to the memorandum, who shall add his name, address, description and occupation in his own handwriting in the presence of at least one witness and shall contain photo of each individual subscriber.
• Witness Signature along with Name, Address, Occupation and Membership No. (if any) of the witness. The witness shall state that:

“I witness to subscriber/subscriber(s), who has/have subscribed and signed in my presence (date and place to be given); further I have verified his or their Identity Details (ID) for their identification and satisfied myself of his/her/their identification particulars as filled in”

• If the subscriber is illiterate, he should affix his/her thumb impression or mark which shall be described as such by the person, writing for him, who shall place the name of the subscriber against or below the mark and authenticate it by his own signature and he/she shall also write against the name of the subscriber, the number of shares taken by him/her. Also such person shall also read and explain the contents of the MoA and AoA to the illiterate subscriber and make an endorsement to that effect on the MoA and AoA.
• Where the subscriber to the memorandum is a body corporate, the MoA and AoA should be signed by director, officer or employee of the body corporate duly authorized in this behalf by a resolution of the board of directors of the body corporate and where the subscriber is a Limited Liability Partnership (LLP), it should be signed by a partner of the Limited Liability Partnership, duly authorized by a resolution approved by all the partners of the LLP. However in either case, the person so authorized shall not, at the same time, be a subscriber to the memorandum and articles of Association.

4.Incorporation of Company

For incorporation of the Company, applicant is required to submit  Form INC-7(Application for Incorporation of Company), Form DIR-12 (Appointment of Directors) & Form INC-22 (Situation of Registered Office of the Company) together.

Document to be attached in Form INC-7 (Application for Incorporation of Company)

            1. MOA (Memorandum of Association)

            2. AOA (Article of Association)

           3. INC -8-Declaration by Professional(CA/CS/CMA)

           4. INC-9-Affidavit from the Subscriber to the Memorandum (MOA)

           5. INC-10-Verification of Signature of subscribers

           6. Affidavit under Circular 11/2013

           7. Identity proof and Residential Proof of the Subscribers

          8. PAN Card of the subscribers

Document to be attached in Form DIR-12 (Appointment of Directors)

        1. DIR-2-Consent to become a Director of the said Company

        2. INC-9-Affidavit from the First Director in the AOA

Document to be attached in Form INC-22 (Situation of Registered Office of the Company)

         1. No Objection Certificate from the Owner

         2. Rent Agreement/Lease Agreement/ Sale Deed

         3. Utility Bill (Not more than 2 months old from the date of filing)

NOTE:  

• If the proposed Company registered office is same as any existing Company, NOC  in form of Board Resolution is required from the existing company.
• Form INC-22 to be filed within 15 days of incorporation of the company, either if, address of correspondence as mentioned in INC-7 is not the address of registered office of the Company or it has not been not filed along with incorporation form.

5.Payment of ROC Fee & Stamp Duty

After Uploading the Form INC-7, INC-22 & DIR-12 , applicant need to make payment of RoC fees and Stamp Duty electronically as per  the Authorised Capital of the Company .

6.Verification of Documents

RoC scrutinises all the documents and forms and may suggest few changes as per the requirement. In such case, required changes has to be made by the Applicant and resubmit the form .

 7.Issue of Certificate of Incorporation:

RoC approves the Incorporation of the proposed Company when after scrutiny RoC is satisfied with the Form and its attachments and issues "Certificate of Incorporation". Once the Incorporation Certificate is received, Company can start its Business.  

Legal Disclaimer:

The information/articles & any reply to the Comments in this blog are provided purely for informational and educational purpose only and purely based on my understanding/Knowledge. They do not constitute legal advice or legal opinions.

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You may end up saving more in the months ahead with the Employees Provident Fund Organization getting ready to re-notify a new definition of compensation that will include all your allowances, amid intense lobbying against the move by industry bodies. At present, employers get away by contributing only 12% of the basic salary and dearness allowance, which is not paid by most companies, towards their share of matching PF and Employees Pension Scheme contribution.So, for several thousand employees, the basic salary remains constant, while increments are passed by way of enhanced or new allowances. In most cases, the tax liability for the employee goes up due to the salary hike and companies earn tax credits on salary-related expenses but the statutory PF contribution remains unchanged. EPFO notified the changes last year but had to withdraw the circular following protests by employers.

MORE MOOLAH

EPFOs proposed move may help in increasing savings Employers will now have to contribute for the PF on all allowances EPFO had to withdraw the notification last year after protests CII has written to the labor minister arguing that the plan should be deferred

Allowance Definition irks Industry

Industry is resisting the move to define compensation as all allowances, but the Employees Provident Fund Organization is expected to go ahead with the plan as a panel set up by the labor ministry to vet the proposal has endorsed it. Government officials countered the industry argument on the new definition, saying EPFO membership was mandatory only for employees earning Rs 6,500 a month. Anyone beyond that level could opt out. Although it may be difficult for several employers to give the opt-out option, reworking of the salary structure to ensure that the wage bill doesn't shoot up can be on the cards. The report is pending with the ministry but sources said the government will go ahead and notify the norms. Confederation of India Industry has dashed off a letter to labor Minister Mallikarjun Kharge arguing that the plan should be deferred.

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Contact ADCA if you are looking for Provident fund and ESI registration in Bangalore.

Public Law 114-113, Division Q (The Protecting Americans from Tax Hikes (PATH) Act of 2015), section 112 extends tax-free distributions from individual retirement plans for charitable purposes beginning  after December 31, 2014.  There is no special reporting of these distributions on Form 1099-R.

To assist taxpayers, CPC has established a Customer Care Helpline at ITD-CPC, Bangalore for queries related to ITR-V Receipt Status, Refund/Refund re-issue, Rectification, Income Tax/PAN/TAN, e-Filing of returns, e-Filing Login, Form 26AS, and Form 16.

Helpline Numbers based on Type of Queries:

Queries	Customer Care
ITR-V Receipt Status, Refund / Refund Re-issue, Rectification, Notification & Processing	1800 103 4455 / +91 80 46605200
Income Tax / PAN / TAN	1800 180 1961
General Queries	1800 180 1961
e-Filing of Returns, e-Filing Login	1800 103 0025 / 1800 419 0025 / +91 80 46122000 / +91 80 61464700
PAN / TAN Updation	+91 20 2721 8080
Form 26AS, Form 16	1800 103 0344

Taxpayer queries at CPC, Bangalore will be answered between 8:00 AM to 8:00 PM. The service is available in English, Hindi, and Kannada.

For additional details, you can refer to the official Income Tax Department website.

The following clarifications are given in this matter:-

(i) The purpose of this reform of making the change in tax regime is to encourage more private-sector employees to go for pension security after retirement instead of withdrawing the entire money from the Provident Fund Account.

(ii) Towards this objective, the Government has announced that Forty Percent(40%) of the total corpus withdrawn at the time of retirement will be tax-exempt both under-recognized Provident Fund and NPS.

(iii) It is expected that the employees of private companies will place the remaining 60% of the Corpus in Annuity, out of which they can get regular pension. When this 60% of the remaining Corpus is invested in Annuity, no tax is chargeable. So what it means is that the entire corpus will be tax free, if invested in an annuity.

(iv) The Government in this Budget has also made another change which says that when the person investing in Annuity dies and when the original Corpus goes in the hands of his heirs, then again there will be no tax.

(v) The idea behind this mechanism is to encourage people to invest in pension products rather than withdraw and use the entire Corpus after retirement.

(vi) The main category of people for whom EPF scheme was created are the members of EPFO who are within the statutory wage limit of Rs.15,000 per month. Out of around 3.7 crores contributing members of EPFO as on today, around 3 crore subscribers are in this category. For this category of people, there is not going to be any change in the new dispensation.

(vii) However, in EPFO, there are about 60 lakh contributing members who have accepted EPF voluntarily and they are highly – paid employees of private sector companies. For this category of people, amount at present can be withdrawn without any tax liability. We are changing this. What we are saying is that such employee can withdraw without tax liability provided he contributes 60% in annuity product so that pension security can be created for him according to his earning level. However, if he chooses not to put any amount in Annuity product the tax would not be charged on 40%.

(viii) There is no change in the existing tax treatment of Public Provident Fund (PPF).

(ix) Currently there is no monetary ceilings on the employer contribution under EPF with only ceiling being that it would be 12% of the salary of the employee member. Similarly, there is no monetary ceiling on the employer contribution under NPS, except that it would be 10% of salary.

(x) Now the Finance Bill 2016 provides that there would be monetary ceiling of Rs1.5 lakh on employer contribution considered with the ceiling of the 12% rate of employer contribution, whichever is less.

(xi) We have received representations today from various sections suggesting that if the amount of 60% of corpus is not invested in the annuity products, the tax should be levied only on accumulated returns on the corpus and not on the contributed amount. We have also received representations asking for not having any monetary limit on the employer contribution under EPF, because such a limit is not there in NPS. The Finance Minister would be considering all these suggestions and taking a view on it in due course.