Punjab VAT – Input Tax Credit {{ITC}} w.e.f 01.04.2014

Input tax credit is a concession granted by the State Government against the output tax liability on the sale or purchase of goods within the State jurisdiction. To avail such concession one has to fulfill the conditions imposed by the statue subject to which such concession is available.
Amendment w.e.f. 01.04.2014: One of the most important conditions which has been recently introduced for availing input tax credit under Punjab VAT Act, 2005 is the first proviso to section 13(1) of the said Act.

 The first proviso to section 13(1) runs as under:
“Provided that the input tax credit shall not be available as input tax credit unless such goods are sold within the State or in the course of inter-state trade or commerce or in the course of export or are used in the manufacture, processing or packing of taxable goods for sale within the State or in the course of inter-state trade or commerce or in the course of export.”

The above proviso already existed since the original enactment of Punjab VAT Act, 2005, however earlier the condition contained in the said proviso was that input tax credit was available if the goods are “for sale” or are “for use” in manufacturing or processing of goods meant for sale. Now w.e.f. 01.04.2014 the condition is the input tax credit will be available when such goods are “sold” or are “used” in the manufacturing processing of goods meant for sale.
Implications of above amendment:
1. The above amendment has far reaching effects, its implications would be that even if you purchase taxable goods for sale or for manufacturing purposes, you will not get the input tax credit of tax paid unless such goods are sold or are used in manufacturing processing.
If such goods remain in stock you will not get the input tax credit of the tax paid on such stock of goods even though you are having VAT invoice.
2.  Another implication of such amendment would be every taxable person who wants to claim input tax credit would have to maintain stock register so as to know, which and how many goods he has sold for which he is eligible for input tax credit. For small scale dealers it would be undue harassment to maintain the account of their stock.
3.  Exporters will also be effected by this amendment. The exporters now would get input tax credit of tax paid on purchase of goods only when such goods are actually sold in the course of export. The input tax credit proportionately may be retained on the basis of closing stock available at the end of the year.
4. For manufacturers input tax credit of raw material purchased will be available only when the such material is used in the manufacturing processing. It would create problem for not only manufacturers to keep account of stocks but would also for the assessing officer to come to a conclusion when the raw material purchased by manufacturer was used in the manufacturing process.

MCA extends efiling date from 14th April to 28th April 2014

Form 24Q, Q4 TDS statements for Financial Year 2013-14 – Important Points

Due date for filing 24Q quarterly TDS statement for 4th quarter of FY 2013-14 is approaching fast. You are advised to file TDS statements well before due date (15th May, 2014).

It is also requested to refer to Circular 8 of 2013 dated October 10, 2013 in the context of Tax Deduction at Source on Salary Income (attached for your reference) for Computation of Incomeand Manner of deduction of tax at source.
In addition, please make note of the following key facts before filing the quarterly TDS statement:
Correct Reporting:
· Cancellation of TDS statement and deductee row is no longer permissible. Accordingly, it is very important to report correct and valid particulars (TAN of the deductor, Category (Government / Non-Government) of the deductor, PAN of the deductees and other particulars of deduction of tax) in the quarterly TDS statement.
· Validate PAN and name of fresh deductees from TRACES before quoting it in TDS statement.TAN-PAN Master can be downloaded from TRACES and be used to file statement to avoid quoting of incorrect and invalid PANs.
· Quote correct and valid lower rate TDS certificate in TDS statement wherever the TDS has been deducted at lower rate on the basis of certificate issued by the Assessing Officer. Pleaseraise Flag “A” in the statement for such instances.
· TDS statement must be filed by quoting challan(s) validated by CSI (Challan Status Inquiry) File and using correct Challan Identification Number (CIN)/ Book-entry Identification Number(BIN).

Complete Reporting:
· Please also complete Annexure II for all employees who work or have worked for any period of time during the current financial year, including Annexure I for TDS details.TDS Certificates will not be generated for deductees, for whom Annexure II has not been completed.
· For employees who are employed with more than one employer/ different branch offices,during the financial year, employee should declare previous salary and TDS details, if any, with the current employer and the same should be considered by the current employer while deducting TDS on salary. If taxes have been deducted by previous employer(s)/ branch(es), CPC(TDS) will issueForm 16 Part A to respective employer(s)/ branch(es) during the Financial Year. Part B is to be issued by the employer(s)/ branch(es).
· Completeness of statement will ensure that a C5, C3 or C9 correction can be avoided. It may be noted that CPC (TDS) does not encourage C9 corrections by addition of a new challan and underlying deductees.

Mandatory Downloading of TDS Certificates from TRACES:
· On the basis of information submitted by the deductor, CPC(TDS) will issue TDS Certificates that can be correct depending on correct and complete reporting by deductors.
· Your attention is invited to CBDT circulars 04/2013 dated 17.04.2013, No. 03/2011 dated 13.05.2011 and No. 01/2012 dated 09.04.2012 on the Issuance of certificate for Tax Deducted at Source in Form 16/16A as per IT Rules 1962. It is now mandatory for all deductors to issue TDS certificates after generating and downloading the same from TRACES.
· Please note that under the provisions of section 203 of the Income Tax Act, 1961 read with rule 31A, Certificate of tax deducted at source is to be furnished within fifteen (15) days from the due date for furnishing the statement of tax deducted at source.
Please submit the statement within due date to avoid Late filing fee, which, being statutory in nature, cannot be waived. It is therefore, suggested to take appropriate action with respect to the above while filing TDS statements.

Post Office Saving A/c- ATM Card, Online Payment, Account Statement instead of Passbook

NOTIFICATION NO. GSR 219(E), DATED 13-3-2014
In exercise of the powers conferred by section 15 of the Government Savings Bank Act, 1873 (5 of 1873), the Central Government hereby makes the following rules further to amend the Post Office Savings Bank General Rules, 1981, namely :—
1. (1) These rules may be called the Post Office Savings Bank General (Amendment) Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Post Office Savings Bank General Rules, 1981, hereinafter referred to as the said rules in rule 2, after clause (v), the following clause shall be inserted, namely:—
(w) “Post Office with Core Banking Solution platform” means Post Office Savings Bank working on Core Banking Solution software.
3. In the said Rules, in rule 4, after sub-rule (4), the following sub-rule shall be inserted, namely:—
“(5) In case, of an account standing at any Post Office with Core Banking Solution platform, deposit may be made at any other post office with Core Banking Solution platform within the limits prescribed and by paying such fee as may be specified by the Central Government by notification in the official Gazette.
4. In the said rules, in rule 5, in sub-rule (1), after clause (e), the following clause shall be inserted, namely:—
“(i) (f) in the accounts standing in post offices with Core Banking Solution platform, the deposit may be made by any electronic mode.”
(ii) for sub-rule (2), the following sub-rule shall be substituted namely:—
“(2) Each deposit shall be accompanied by a pay-in-slip provided that at any Post Office on Core Banking Solution platform, the deposit shall be accepted by any electronic mode.”
5. In the said rules, in rule 6, sub-rule (3) shall be numbered as clause (i) thereof and after clause (i) as so numbered,
The following clause shall be inserted namely:—
“(ii) In case of an account standing at any post office with Core Banking Solution platform in place, the Post Office Savings Bank shall on the request from the depositor or otherwise may issue Automated Teller Machine or debit card to the savings account holder on payment of such fee as may be specified by the Central Government by notification in the official Gazette” and the account holder having account in Post Offices with Core Banking Solution Platform may also withdraw money by using any electronic mode.”
6. In the said Rules, in rule 8 in sub-rule (i), the following provisos shall be inserted, namely:—
(i) “Provided that in post offices working on Core Banking Solution platform, a statement of account may be issued in lieu of passbook at the option of the customer on payment of such fees specified by the Central Government by notification in the official Gazette.
Provided further that balance and transactions shown in the Passbook or statement of account shall be for the information of the depositor.”
(ii) for sub-rule (4), the following sub-rule shall be substituted, namely :—
“(4) The passbook shall ordinarily be presented for all withdrawals or deposits made at the counter and in case, deposits or withdrawals are made by using cheque or any electronic mode, the passbook, wherever issued, may be presented to the Post Office Savings Bank as soon as possible thereafter for bringing it up-to-date.”
7. In the said rules, in rule 15, for clause (a), the following clause shall be substituted, namely:—
“(a) responsible to a depositor for any fraudulent withdrawal by a person obtaining possession of the passbook or Automated Teller Machine or Debit card or a cheque from the cheque book of the depositor or by using any electronic mode of withdrawal.”
[F.NO.2/7/2012/NS-II]

Applicability of Companies Act 2013 to Auditor’s Report to FY 2014-15 & Onwards

As you are aware, the Ministry of Corporate Affairs, on 26th March 2014 notified a majority of the remaining sections of the Companies Act 2013, including sections 139 to 148, relating to audits and auditors.  The Act is stated to be effective from 1st April, 2014.
Queries are being raised by a number of members as to whether any auditor’s report of a company being signed on or after 01st April, 2014 would be in accordance with the requirements of section 143 of the Companies Act 2013.
In this context, it may be noted that the Ministry of Corporate Affairs (MCA) has, on 04th April 2014, vide its General Circular No. 08/2014,clarified that the financial statements (and documents required to be attached thereto), auditor’s report and Board’s report in respect of financial years that commenced earlier than 01st April, 2014 shall be governed by the relevant provisions/Schedules/rules of the Companies Act 1956.
Therefore, it is clear from MCA’s aforesaid General Circular that the auditor’s report of a company pertaining to any financial year commencing on or before 31st march 2014 , would be in accordance with the requirements of the Companies Act 1956 even if that financial year ends after 01st April 2014.For example, where the financial year of a company is 01st January 2014 to 31st December 2014, the statutory auditor’s report signed therefor would be in accordance with the requirements of the Companies Act, 1956.
As a corollary to MCA’s General Circular, it appears that the provisions of the 2013 Act would apply only to the financial years commencing on or after 01st April 2014.Thus, for example, the statutory auditor’s report signed in respect of the financial year of the company ended 31st March 2015 would need to be issued in accordance with the provisions of the Companies Act 2013.

Mandatory E-Filing of ITR for Ay 2014-15 – For whom?

1. The process of electronically filing Income tax returns through the internet is known as e-Filing.
2. e-Filing of Returns/Forms is mandatory for :
--Any assessee having total income of ₹ 5 Lakhs and above from AY 2013-14 and subsequent Assessment Years.
--Individual/ HUF, being resident, having assets located outside India from AY 2012-13 and subsequent Assessment Years.
--An assessee required to furnish a report of audit specified under sections 10(23C)(iv), 10(23C)(v),10(23C)(vi) ,10(23C)(via) , 10A, 12A(1)(b), 44AB, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E or 115JB of the Act, shall furnish the said report of audit and the return of Income electronically from AY 2013-14 and subsequent Assessment Years.
--An assessee required to give a notice under Section 11(2)(a) to the Assessing Officer from AY 2014-15 and subsequent Assessment Years.
--All companies.
--Firm (to whom provisions of section 44AB is not applicable), AOP, BOI, Artificial Juridical Person , Co-operative Society and Local Authority required to file ITR 5 from AY 2014-15 and subsequent Assessment Years.
--An assessee required to funish return u/s 139 (4B) in ITR 7.
--A resident who has signing authority in any account located outside India.
--A person who claims relief under sections 90 or 90A or deduction under section 91

Rate of Exchange applicable from 4th April, 2014

As per Section 67A of the Finance Act, 1994 read with explanation to Section 14 of the Customs Act, 1962, rate of exchange for calculation of gross value of taxable service tax would be the rate, as determined by CBEC for the conversion of foreign currency into Indian currency or vice versa, applicable on the date on which taxable service has been provided or agreed to be provided. CBEC from time to time issues Notification to notify rate of exchange determined by it. Though Notifications issued under Customs use the words “For Imported Goods” or “Exported Goods” but these rates apply mutatis mutandis in case of Services as well by virtue of Section 67A. For Rate of Exchange applicable from 4th April, 2014 please refer Annexure-A. Annexure-A SCHEDULE-I

S. No. Foreign Currency Rate of exchange of one unit of foreign currency equivalent to Indian rupees (1) (2) (3)     (a) (b)     (For Imported Goods) (For Export Goods) 1. Australian Dollar 55.95 54.55 2. Bahrain Dinar 163.65 154.60 3. Canadian Dollar 55.10 53.70 4. Danish Kroner 11.25 10.85 5. EURO 83.45 81.45 6. Hong Kong Dollar 7.80 7.65 7. Kuwait Dinar 219.05 206.80 8. New Zealand Dollar 51.85 50.55 9. Norwegian Kroner 10.20 9.90 10. Pound Sterling 100.95 98.70 11. Singapore Dollar 48.10 46.90 12. South African Rand 5.85 5.45 13. Saudi Arabian Riyal 16.45 15.55 14. Swedish Kroner 9.40 9.10 15. Swiss France 68.50 66.60 16. UAE Dirham 16.85 15.85 17. US Dollar 60.45 59.45 SCHEDULE-II S. No. Foreign Currency Rate of exchange of 100 units of foreign currency equivalent to Indian rupees (1) (2) (3)     (a) (b)     (For Imported Goods) (For Export Goods) 1. Japanese Yen 58.40 56.95 2. Kenya Shilling 71.35 67.35

Forms for Appointment, Resignation, Removal & Reporting of Fraud by Auditor

Chapter X – The Companies (Audit and Auditors) Rules, 2014.

[To be published in the Gazette of India, Extraordinary,

Part II, Section 3, Sub-Section (i)]

Government of India

Ministry of Corporate Affairs

NOTIFICATION

New Delhi, the 31.03.2014

G.S.R….(E).- In exercise of powers conferred by sub-sections (1), (2) and (4) of section 139, sub-sections (1) and (2) of section 140, sub-section (3) of section 141, sub-sections (2), (3), (8) and (12) of section 143, sub-section (3) of section 148 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013) and in supersession of the Companies (Central Government’s) General Rules and Forms, 1956 in so far as they relate to matters covered under these rules, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:-

1. Short title and commencement.- (1) These rules may be called as the Companies (Audit and Auditors) Rules, 2014.

(2) They shall come into force on the 1st day of April, 2014.

2. Definitions.- (1) In these rules, unless the context otherwise requires,-

(a) “Act” means the Companies Act, 2013 (18 of 2013);

(b) “Annexure” means the Annexure enclosed to these rules;

(c) “fees” means fees specified in the Companies (Registration Offices and Fees) Rules, 2014.

(d) “Form” or “e-Form” means a form set forth under these rules which shall be used for the matter to which it relates;

(e) “section” means section of the Act.

(2) The words and expressions used in these rules but not defined and defined in the Act or in the Companies (Specification of definitions details) Rules, 2014 shall have the meanings respectively assigned to them in the Act or in the said rules.

3. Manner and procedure of selection and appointment of auditors.- (1) In case of a company that is required to constitute an Audit Committee under section 177, the committee, and, in cases where such a committee is not required to be constituted, the Board, shall take into consideration the qualifications and experience of the individual or the firm proposed to be considered for appointment as auditor and whether such qualifications and experience are commensurate with the size and requirements of the company:

Provided that while considering the appointment, the Audit Committee or the Board, as the case may be, shall have regard to any order or pending proceeding relating to professional matters of conduct against the proposed auditor before the Institute of Chartered Accountants of India or any competent authority or any Court.

(2) The Audit Committee or the Board, as the case may be, may call for such other information from the proposed auditor as it may deem fit.

(3) Subject to the provisions of sub-rule (1), where a company is required to constitute the Audit Committee, the committee shall recommend the name of an individual or a firm as auditor to the Board for consideration and in other cases, the Board shall consider and recommend an individual or a firm as auditor to the members in the annual general meeting for appointment.

(4) If the Board agrees with the recommendation of the Audit Committee, it shall further recommend the appointment of an individual or a firm as auditor to the members in the annual general meeting.

(5) If the Board disagrees with the recommendation of the Audit Committee, it shall refer back the recommendation to the committee for reconsideration citing reasons for such disagreement.

(6) If the Audit Committee, after considering the reasons given by the Board, decides not to reconsider its original recommendation, the Board shall record reasons for its disagreement with the committee and send its own recommendation for consideration of the members in the annual general meeting; and if the Board agrees with the recommendations of the Audit Committee, it shall place the matter for consideration by members in the annual general meeting.

(7) The auditor appointed in the annual general meeting shall hold office from the conclusion of that meeting till the conclusion of the sixth annual general meeting, with the meeting wherein such appointment has been made being counted as the first meeting:

Provided that such appointment shall be subject to ratification in every annual general meeting till the sixth such meeting by way of passing of an ordinary resolution.

Explanation.- For the purposes of this rule, it is hereby clarified that, if the appointment is not ratified by the members of the company, the Board of Directors shall appoint another individual or firm as its auditor or auditors after following the procedure laid down in this behalf under the Act.

4. Conditions for appointment and notice to Registrar.- (1) The auditor appointed under rule 3 shall submit a certificate that -

(a) the individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act, the Chartered Accountants Act, 1949 and the rules or regulations made thereunder;

(b) the proposed appointment is as per the term provided under the Act;

(c) the proposed appointment is within the limits laid down by or under the authority of the Act;

(d) the list of proceedings against the auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.

(2) The notice to Registrar about appointment of auditor under fourth proviso to sub-section (1) of section 139 shall be in Form ADT-1.

5. Class of Companies.- For the purposes of sub-section (2) of section 139, the class of companies shall mean the following classes of companies excluding one person companies and small companies:-

(a) all unlisted public companies having paid up share capital of rupees ten crore or more;

(b) all private limited companies having paid up share capital of rupees twenty crore or more;

(c) all companies having paid up share capital of below threshold limit mentioned in (a) and (b) above, but having public borrowings from financial institutions, banks or public deposits of rupees fifty crores or more.

6. Manner of rotation of auditors by the companies on expiry of their term.- (1) The Audit Committee shall recommend to the Board, the name of an individual auditor or of an audit firm who may replace the incumbent auditor on expiry of the term of such incumbent.

(2) Where a company is required to constitute an Audit Committee, the Board shall consider the recommendation of such committee, and in other cases, the Board shall itself consider the matter of rotation of auditors and make its recommendation for appointment of the next auditor by the members in annual general meeting.

(3) For the purpose of the rotation of auditors-

(i) in case of an auditor (whether an individual or audit firm), the period for which the individual or the firm has held office as auditor prior to the commencement of the Act shall be taken into account for calculating the period of five consecutive years or ten consecutive years, as the case may be;

(ii) the incoming auditor or audit firm shall not be eligible if such auditor or audit firm is associated with the outgoing auditor or audit firm under the same network of audit firms.

Explanation. I – For the purposes of these rules the term “same network” includes the firms operating or functioning, hitherto or in future, under the same brand name, trade name or common control.

Explanation. II – For the purpose of rotation of auditors,-

(a) a break in the term for a continuous period of five years shall be considered as fulfilling the requirement of rotation;

(b) if a partner, who is in charge of an audit firm and also certifies the financial statements of the company, retires from the said firm and joins another firm of chartered accountants, such other firm shall also be ineligible to be appointed for a period of five years.

Illustration explaining rotation in case of individual auditor

Illustration 1:-

Number of consecutive years for which an individual auditor has been functioning as auditor in the same company [in the first AGM held after the commencement of provisions of section 139(2)]	Maximum number of consecutive years for which he may be appointed in the same company (including transitional period)	Aggregate period which the auditor would complete in the same company in view of column I and II
I	II	III
5 years (or more than 5 years)	3 years	8 years or more
4 years	3 years	7 years
3 years	3 years	6 years
2 years	3 years	5 years
1 year	4 years	5 years

Note: 1. Individual auditor shall include other individuals or firms whose name or trade mark or brand is used by such individual, if any.

2. Consecutive years shall mean all the preceding financial years for which the individual auditor has been the auditor until there has been a break by five years or more.

Illustration explaining rotation in case of audit firm

Illustration 2:-

Number of consecutive years for which an audit firm has been functioning as auditor in the same company [in the first AGM held after the commencement of provisions of section 139(2)]	Maximum number of consecutive years for which the firm may be appointed in the same company (including transitional period)	Aggregate period which the firm would complete in the same company in view of column I and II
I	II	III
10 years (or more than 10 years)	3 years	13 years or more
9 years	3 years	12 years
8 years	3 years	11 years
7 years	3 years	10 years
6 years	4 years	10 years
5 years	5 years	10 years
4 years	6 years	10 years
3 years	7 years	10 years
2 years	8 years	10 years
1 year	9 years	10 years

Note:1. Audit Firm shall include other firms whose name or trade mark or brand is used by the firm or any of its partners.

2. Consecutive years shall mean all the preceding financial years for which the firm has been the auditor until there has been a break by five years or more.

(4) Where a company has appointed two or more individuals or firms or a combination thereof as joint auditors, the company may follow the rotation of auditors in such a manner that both or all of the joint auditors, as the case may be, do not complete their term in the same year.

7. Removal of the auditor before expiry of his term.- (1) The application to the Central Government for removal of auditor shall be made in Form ADT-2 and shall be accompanied with fees as provided for this purpose under the Companies (Registration Offices and Fees) Rules, 2014.

(2) The application shall be made to the Central Government within thirty days of the resolution passed by the Board.

(3) The company shall hold the general meeting within sixty days of receipt of approval of the Central Government for passing the special resolution.

8. Resignation of auditor.- For the purposes of sub-section (2) of section 140, when an auditor has resigned from the company, he shall file a statement in Form ADT-3.

9. Liability to devolve on concerned partners only.- In case of criminal liability of any audit firm, the liability other than fine, shall devolve only on the concerned partner or partners, who acted in a fraudulent manner or abetted or, as the case may be, colluded in any fraud.

10. Disqualifications of auditor.- (1) For the purpose of proviso to sub-clause (i) of clause (d) of sub-section (3) of section 141, a relative of an auditor may hold securities in the company of face value not exceeding rupees one lakh:

Provided that the condition under this sub-rule shall, wherever relevant, be also applicable in the case of a company not having share capital or other securities:

Provided further that in the event of acquiring any security or interest by a relative, above the threshold prescribed, the corrective action to maintain the limits as specified above shall be taken by the auditor within sixty days of such acquisition or interest.

(2) For the purpose of sub-clause (ii) of clause (d) of sub-section (3) of section 141, a person who or whose relative or partner is indebted to the company or its subsidiary or its holding or associate company or a subsidiary of such holding company, in excess of rupees five lakh shall not be eligible for appointment.

(3) For the purpose of sub-clause (iii) of clause (d) of sub-section (3) of section 141, a person who or whose relative or partner has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, or its subsidiary, or its holding or associate company or a subsidiary of such holding company, in excess of one lakh rupees shall not be eligible for appointment.

(4) For the purpose of clause (e) of sub-section (3) of section 141, the term “business relationship” shall be construed as any transaction entered into for a commercial purpose, except –

(i) commercial transactions which are in the nature of professional services permitted to be rendered by an auditor or audit firm under the Act and the Chartered Accountants Act, 1949 and the rules or the regulations made under those Acts;

(ii) commercial transactions which are in the ordinary course of business of the company at arm’s length price – like sale of products or services to the auditor, as customer, in the ordinary course of business, by companies engaged in the business of telecommunications, airlines, hospitals, hotels and such other similar businesses.

11. Other matters to be included in auditors report.- The auditor’s report shall also include their views and comments on the following matters, namely:-

(a) whether the company has disclosed the impact, if any, of pending litigations on its financial position in its financial statement;

(b) whether the company has made provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;

(c) whether there has been any delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

12. Duties and powers of the company’s auditor with reference to the audit of the branch and the branch auditor.- (1) For the purposes of sub-section (8) of section 143, the duties and powers of the company’s auditor with reference to the audit of the branch and the branch auditor, if any, shall be as contained in sub-sections (1) to (4) of section 143.

(2) The branch auditor shall submit his report to the company’s auditor.

(3) The provisions of sub-section (12) of section 143 read with rule 12 hereunder regarding reporting of fraud by the auditor shall also extend to such branch auditor to the extent it relates to the concerned branch.

13. Reporting of frauds by auditor.- (1) For the purpose of sub-section (12) of section 143, in case the auditor has sufficient reason to believe that an offence involving fraud, is being or has been committed against the company by officers or employees of the company, he shall report the matter to the Central Government immediately but not later than sixty days of his knowledge and after following the procedure indicated herein below:

(i) auditor shall forward his report to the Board or the Audit Committee, as the case may be, immediately after he comes to knowledge of the fraud, seeking their reply or observations within forty-five days;

(ii) on receipt of such reply or observations the auditor shall forward his report and the reply or observations of the Board or the Audit Committee alongwith his comments (on such reply or observations of the Board or the Audit Committee) to the Central Government within fifteen days of receipt of such reply or observations;

(iii) in case the auditor fails to get any reply or observations from the Board or the Audit Committee within the stipulated period of forty-five days, he shall forward his report to the Central Government alongwith a note containing the details of his report that was earlier forwarded to the Board or the Audit Committee for which he failed to receive any reply or observations within the stipulated time.

(2) The report shall be sent to the Secretary, Ministry of Corporate Affairs in a sealed cover by Registered Post with Acknowledgement Due or by Speed post followed by an e-mail in confirmation of the same.

(3) The report shall be on the letter-head of the auditor containing postal address, e-mail address and contact number and be signed by the auditor with his seal and shall indicate his Membership Number.

(4) The report shall be in the form of a statement as specified in Form ADT-4.

(5) The provision of this rule shall also apply, mutatis mutandis, to a cost auditor and a secretarial auditor during the performance of his duties under section 148 and section 204 respectively.

14. Remuneration of the Cost Auditor.- For the purpose of sub-section (3) of section 148,-

(a) in the case of companies which are required to constitute an audit committee-

(i) the Board shall appoint an individual, who is a cost accountant in practice, or a firm of cost accountants in practice, as cost auditor on the recommendations of the Audit committee, which shall also recommend remuneration for such cost auditor;

(ii) the remuneration recommended by the Audit Committee under (i) shall be considered and approved by the Board of Directors and ratified subsequently by the shareholders;

(b) in the case of other companies which are not required to constitute an audit committee, the Board shall appoint an individual who is a cost accountant in practice or a firm of cost accountants in practice as cost auditor and the remuneration of such cost auditor shall be ratified by shareholders subsequently.

[File No. 1/33/2013-CL-V]

(Renuka Kumar)

Joint Secretary to the Government of India

FORM NO. ADT-1 – Notice of appointment of auditor by the company

FORM NO. ADT-2 – Application for removal of auditor(s) from his/their office before expiry of term

FORM NO. ADT-3 – Notice of Resignation by the Auditor

Form No.ADT-4 – Report to Central Government on suspected offence involving fraud being committed or having been committed

TDS RATE CHART FINANCIAL YEAR 2014-15 (ASSESSMENT YEAR 15-16)

The Rate Chart for the Financial Year 2014-15 i.e. Assessment Year 2015-16 is tabulated below.

Sl. No.	Section Of Act	Nature of Payment in brief	Amount		Rate %
					HUF/IND	Others
1	192	Salaries			Average Rate
2	193	Interest on debentures		5000	10	10
3	194	Deemed dividend		-	10	10
4	194A	Interest other than Int on securities (by Bank)		10000	10	10
4A	194A	Interest other than Int. on securities (By others)		5000	10	10
5	194B	Lottery / Cross Word Puzzle		10000	30	30
6	194BB	Winnings from Horse Race		5000	30	30
7	194C(1)	Contracts		30000	1	2
8	194C(2)	Sub-contracts/ Advertisements		30000	1	2
9	194D	Insurance Commission		20000	10	10
10	194EE	Paymentsout of deposits under NSS		2500	20	-
11	194F	Repurchase of units by MF/UTI		1000	20	20
12	194G	Commission on sale of lottery tickets		1000	10	10
13	194H	Commission or Brokerage		5000	10	10
14	194I	Rent (Land & building)		180000	10	10
		Rent (P & M , Equipment, furniture & fittings)		180000	2	2
15	194J	Professional/Technical charges/Royalty & Non-compete fees		30000	10	10
16	194J(1)(ba)	Any remuneration or commission paid to director of the company(Effective from 1 July 2012)		NIL	10	10
17	194LA	Compensation on acquisition of immovable property		200000	10	10
18	194IA	Payment on transfer of certain immovable property other than agricultural land(applicable only if amount exceeds : (a) Value exceeds INR 50) (Effective from 1 June 2013)			1	1

 

 

TCS RATES FOR THE FY 2014-15
The Tax Collection at Source Rates for the Financial Year 2014-15 is tabulated below:

 

Sl.No.	Nature of Goods	Rates in %
1.	Alcoholic liquor for human Consumption		1
2.	Tendu leaves		5
3.	Timber obtained under forest lease		2.5
4.	Timber obtained by any mode other than a forest lease		2.5
5.	Any other forest produce not being timber or tendu leaves		2.5
6.	Scrap		1
7.	Parking lot		2
8.	Toll plaza		2
9.	Mining & Quarrying		2
10	Minerals, being coal or lignite or iron ore		1
11	Bullion or jewellery (if the sale consideration is paid in cash exceeding INR 2 lakhs)		1

 

No Education Cess on payment made to resident-Education Cess is not deductible/collectible at source in case of resident Individual/HUF /Firm/ AOP/ BOI/ Domestic Company in respect of payment of income other than salary.
Education Cess @ 2% plus secondary & Higher Education Cess @ 1% is deductible at source in case of non-residents and foreign company.
Surcharge on Income-tax - Surcharge on Income-tax is not deductible/collectible at source in case of individual/ HUF /Firm/ AOP / BOI/Domestic Company in respect of payment of income other than salary.
Due date for furnishing TDS return for the last quarter of the financial year has been modified to 15th May (from earlier 15th June). The revised due dates for furnishing TDS return are

 

Sl. No.	Date of ending of the quarter of the financial year	Due date
1.	30th June	15th July of the financial year
2.	30th September	15th October of the financial year
3.	31st December	15th January of the financial year
4.	31st March	15th May of the financial year immediately following the financial year in which deduction is made

 

Due date for furnishing TDS certificate to the employee or deductee or payee is revised as under :

Sl. No.	Category	Periodicity of furnishing TDS certificate	Due date
1.	Salary (Form No.16)	Annual	By 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted
2.	Non-Salary(Form No.16A)	Quarterly	Within fifteen days from the due date for furnishing the ‘statement of TDS’

Due Date for Payment of March 2014 -The time limit for deposit of TDS for the entire month of March is rationalized to 30 April instead of two separate time limits viz. 7 April for TDS up to 30 March and 31 May for TDS as of 31 March.