Government has vide 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

Limited Liability Partnership (LLP) is combination of Partnership and Company and is governed by Limited Liability Partnership Act, 2008. LLP is a special partnership that gives protection to each partner against any negligence on the behalf of the other partners.

Advantages of LLP

1. Liability Protection: The liability protection that comes with a LLP is a big advantage. The individual partners are not held personally responsible for any company debts or obligations. Any lawsuit or claim against the company cannot be held against the partners, protecting personal assets.

2. Flexibility: Partners have flexibility within business ownership under a limited liability partnership. Each partner in the business has the ability to decide how much they want to contribute and how much of a partner they truly want to be in the business. They are also not obligated to participate in business meetings or consultations with anyone that they do not feel the need to.

3. Tax Advantages: The individuals in the partnership are liable for filing their personal income taxes as well as self employment taxes for the Internal Revenue Service. The partnership is not held responsible for paying these taxes. The credits and deductions of the company are divided among the partners according to the amount of interest in the company.

Procedure of LLP Incorporation

MINIMUM REQUIRMENT

• Minimum 2 partners
• DSC (Digital Signature Certificate ) of  the Directors
• DIN(Director Identification Number) of the Directors

 

1. Obtain DSC

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:

• Scanned copy of Passport-sized photograph( JPEG Format)
• Identity proof: Scanned copy of PAN card (passport if foreign national) and
• 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.

Register DSC

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

Incorporation Method

Name Approval (Form 1)

Apply in Form INC-1 for Name approval of the Proposed LLP after finalizing the nature of business of the proposed LLP. Maximum Six names can be given in order of preference. CRC will approve the available and suitable name among the given names for the proposed LLP.

Note: Applicants can themselves check the available names in MCA Website under the head MCA Services: Check LLP Name.

Once name of the proposed Company is approved, it remains valid for 3 months from the date of approval.  Within the period of the said 3 months, LLP has to be incorporated otherwise again name approval in LLP Form 1 is required to be filed with MCA.

Requirements for filing LLP Form 1

• DPIN/DIN of two designated Partner
• Name of the Proposed LLP
• Description of proposed business activity

Proposed business activity filled in LLP form 1 will be prefilled in LLP Form 2 i.e incorporation form. Applicants are advised to finalise the business activity of LLP before filing LLP Form 1.

Proposed monetary value of partner's contribution

Once proposed monetary value of partner's contribution has been filled and filed in Form 1, the monetary value of contribution in Form 2 should not be less than the value mentioned in form 1.

For example: if partner's contribution in Form 1 was mentioned as Rs. 20 Lacs and after approval of Form 1, partners want to change and reduce the LLP contribution to Rs. 10Lacs, is not permissible. The Contribution can be more than the contribution stated in LLP Form 1 but cannot be less than contribution mentioned in LLP Form 1.

In case the Designated Partner is nominee of a body corporate, select the type of body corporate. Enter the corporate identity number (CIN) or foreign company registration number (FCRN) or Limited Liability Partnership Identification number (LLPIN) or Foreign Limited Liability Partnership Identification number (FLLPIN) or any other identification number, as applicable.

Details of minimum two designated partners of the proposed LLP, one of them must be a resident of India, is required to be filled in the application for reservation of name. Only individuals or nominees on behalf of the bodies corporate as partners can act as designated partners.

Ensure that correct details have been provided as the same shall be automatically pre-filled in Form 2 for incorporation of LLP.

LLP Form 2 (Incorporation Document and Subscriber's Statement)

LLP Form 2 within 3 months from the date of approval of LLP Form 1

Mention Total Number of Partners and Designated Partners. Fill up details of same. Enter the amount of proposed monetary value of partner’s contribution in figures and system will automatically display the amount in words. Attach details in respect of names of partners/ nominees/ witnesses and their signatures in the format as Subscribers’ sheet attachment. Attach proof of register office address of LLP. An individual has to give prior consent to become a designated partner and LLP to file consent in format prescribed. Select the state and office of registrar in which registered office of the proposed LLP is to be situated.

In case the name includes banking, insurance, venture capital, mutual fund, stock exchange, Chartered Accountant, Company Secretary, Cost Accountant, Advocate, CA, CS, CWA, asset management, non banking financial, architect, merchant  bankers, chit fund, securitization and reconstruction etc, a copy of the in-principle approval of the regulatory authority or council governing concerned profession should be attached with Form 2

Pay the prescribed registration fee as per LLP Rules, based on the total monetary value of contribution of partners in the proposed LLP

On submission of complete documents the Registrar after satisfying himself about compliance with relevant provisions of the LLP Act will register the LLP and will issue a certificate of incorporation

 Drafting of LLP Agreement

LLP agreement has to be drafted line with LLP Act. It is not mandatory to file LLP agreement at the time of registration and same can be file within 30 days. Designated partners are responsible for doing all acts, matters and things that are required to be done for complying with the provisions of the LLP act. They are liable to all penalties imposed on the LLP. So it is very important to draft LLP agreement with professional help.

The following clauses are important to be incorporated in agreement:

• Name, Object and Register Office of LLP
• The initial Contribution of the LLP by Partners
• Methodology of valuation of Non Monetary contribution
• The net profits or losses sharing ratios
• Detail of Designated Partners
• Interest payable on Capital Loan prescribed u/s. 40(b) of the Income-tax Act, 1961
• Remuneration payable to the working partners or as prescribed u/s. 40(b) of the Income-tax Act, 1961
• Mode of operation of Bank Accounts
• Maintenance of Book of Accounts
• Appointment of arbitrator
• Rights and Duties of Partners
• Rights and Duties of Designated Partners
• Indemnity clause
• Goodwill clause
• Procedure for change in name
• Procedure to appoint Auditor
• Admission of New Partner
• Meeting
• Cessation of Existing Partners
• Winding up of LLP
• Amendments of LLP
• Extent of Liability of LLP
• Liability of Partners in LLP
• Ancillary or other business carried over by LLP

 Filing of Form 3 – LLP Agreement

The LLP agreement has to be uploaded. Once it gets approved all the formalities for registration gets completed.

Note: Form 3 has to be uploaded within 30 days of incorporation of LLP otherwise penalty is Rs. 100/- per day.

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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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