Monday 28 September 2015

Incorporation of Private Limited Company

Features of Private Limited Company
  • Separate Legal Status
  • Capacity to borrow
  • Easy Transfer of shares
  • Minimum number of Members : 2 ; Maximum number of Members : 200
  • Minimum Capital : Nil {omitted by Companies (Amendment) Act, 2015}
  • Limited Liability
  • Minimum number of Directors : 2
  • Foreign investment permitted (subject to applicable Sectoral Cap as per FDI guidelines)
  • Capacity to sue or to be sued
Procedure for Incorporation of Company
  • Obtain Digital Signature Certificate (DSC) for the proposed Director / Promoter not having DSC;
  • Obtain Directors Identification Number (DIN) for proposed Director / Promoter not having DIN by applying to Ministry of Corporate Affairs (MCA) in Form DIR-3;
Requirements for Form DIR-3
  • Passport Size Photograph
  • Identity Proof: PAN (mandatory) duly attested by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant
  • Address Proof: Passport / Aadhar / Telephone Bill / Electric Bill (not older than 2 Months) duly attested by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant
  • Educational Qualification
  • Email Id and Mobile Number
  • Apply for Reservation of Name in Form INC-1 along with the prescribed fees
  • On approval of Name of the proposed Company is received, the following Forms need to be filed;
  1. Form INC-7
  2. Form INC-22
  3. Form DIR-12 
  • On scrutiny and examination of the aforesaid forms, the concerned Registrar of Companies (ROC) shall issue Certificate of Incorporation of Company along with Corporate Identification Number (CIN).
Note: Certificate of Commencement of business is not required to be filed in Form INC-21 as the same has been omitted by the Companies (Amendment) Act, 2015.
Requirements for Form INC-7, Form INC-22, Form DIR-12
  • Memorandum of Association & Articles of Association (MOA & AOA) along with subscribers sheet
  • INC-8 duly notarized
  • INC-9 duly notarized
  • INC-10 duly verified by Banker or notarized
  • Affidavit for non - acceptance of deposit
  • Full address of Police Station under whose jurisdiction the registered office is situated
  • Utility Bill (not older than two months) of the registered office premise
  • Conveyance/Lease deed/Rent Agreement
  • NOC from the owner of the premise, if taken on lease
  • Form DIR-2
  • Directors Directorship details in other Companies / LLPs, if any.
Note: For Incorporation fees please refer Table of Fees Rules and Stamp duty will be levied as per prevailing stamp rate of the concerned State.
Taxation of Companies
Direct Tax
Corporate Tax Rates
Particulars             Domestic Company
Rate of Tax             30% of the Total Income
Surcharge                ·  5% of Income Tax, if taxable
income exceeds Rs. 1 crore upto
Rs. 10 crore
10% of Income Tax, if taxable
income exceeds Rs. 10 crore
Education Cess   2%
S.H.E.C.                 1%
Minimum Alternate Tax (MAT) @ 18.5% on Book Profits plus surcharge and cess, as applicable.
Due date for filing of returns: September 30 of the relevant Assessment year
Note: Maximum of MAT or Income Tax should be considered.

Indirect Tax
Service Tax
Service Tax Registration is mandatory if the annual turnover exceed Rs. 9 Lakhs Service Tax is charged at 14% (notified) plus 2% Swachh Bharat Cess (not yet notified) as per Finance Act, 2015.
VAT
VAT is levied on goods sold by the Company. The criteria for registration and charging VAT varies from State to State based on the rules and regulations formulated by the concerned state.
Mandatory Compliances
  • Quoting of CIN on all letterheads, invoices, notices etc.
  • Printing of share certificate and MOA & AOA
  • Opening Bank Accounts
  • Maintaining Books of Accounts
  • Appointment of First Statutory Auditor
  • Board Meeting Compliances as per Companies Act, 2013 and rules made thereunder
  • Maintaining Minutes Book
  • Annual General Meeting every year
  • Annual Filings with the MCA
  • Appointment of Company Secretary in whole-time employment if paid up capital exceeds Rs. 5 Crore
  • Maintaining Statutory Registers
  • Keeping Books of Accounts and Statutory Registers at the Registered Office of the Company 

Saturday 26 September 2015

Form 15CA & Form 15CB for Payments to NRIs


A person making a remittance (a payment) to a Non Resident or a Foreign Company has to submit Form 15CA. This form is submitted online. In some cases, a certificate from a Chartered Accountant in Form 15CB is required before uploading Form 15CA online. In Form 15CB, a CA certifies details of the payment, TDS rate and TDS deduction as per section 195 of the Income Tax Act, if any DTAA (Double Tax Avoidance Agreement) is applicable, and other details of nature & purpose of the remittance.
Banks require these certificates before they make any remittance on your behalf to a non-resident.
Here are the details regarding these forms –
  • In some cases Form 15CA and certificate from CA in Form 15CB are not required. This is when remittance is towards the list of 28 items mentioned in Rule 37BB. Scroll down to the bottom to see this list.
  • Certificate in Form 15CB is not required when remittance does not exceed Rs 50,000 (single transaction) and Rs 2,50,000 (in total in a financial year). Only Form 15CA is has to be submitted in this case.
  • Certificate in Form 15CB is not required if lower TDS has to be deducted and a certificate is received under section 197 for it or lower TDS has to be deducted by order of the AO. Only Form 15CA is to be uploaded in such a case.
  • In all other cases, if there is a remittance outside India, the person who is making the remittance will take a CA’s certificate in Form 15CB and after receiving the certificate submit Form 15CA to the government online.



List of 28 items where Form 15CA and Form 15CB are not required as per Rule 37BB of the Income Tax Act, Rules.
Serial No.Nature of Payment
 1Indian investment abroad -in equity capital (shares)
 2Indian investment abroad -in debt securities
3Indian investment abroad -in branches and wholly owned subsidiaries
 4Indian investment abroad -in subsidiaries and associates
 5Indian investment abroad -in real estate
 6Loans extended to Non-Residents
 7Payment- for operating expenses of Indian shipping companies operating abroad
 8Operating expenses of Indian Airlines companies operating abroad
 9Booking of passages abroad -Airlines companies
 10Remittance towards business travel
 11Travel under basic travel quota (BTQ)
 12Travel for pilgrimage
 13Travel for medical treatment
 14Travel for education (including fees, hostel expenses etc)
 15Postal services
 16Construction of projects abroad by Indian companies including import of goods at project site
 17Freight insurance – relating to import and export of goods
 18Payments for maintenance of offices abroad
 19Maintenance of Indian embassies abroad
 20Remittances by foreign embassies in India
 21Remittance by non-residents towards family maintenance and-savings
 22Remittance towards personal gifts and donations
 23Remittance towards donations to religious and charitable institutions abroad
 24Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
 25Contributions or donations by the Government to international institutions
 26Remittance towards payment or refund of taxes
 27Refunds or rebates or reduction in invoice value on account of exports
 28Payments by residents for international bidding

Friday 25 September 2015

Key Points--- INCOME TAX

-From FY 2014-15 Depreciation is to be calculated as per New Companies Act.
-As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and Other Sources.
-Salaried person must obtain Form 16 from his Employer Every Year.
-Income Tax Return should be filed by considering Form 16 and other Income.
-Transport Allowance is exempt up to Rs.1,600 per month.
-30% Standard deduction is available on Income from House Property.

-Income to be considered as deemed let out on second House property.
-For self-occupied house property, deduction of Interest on Housing Loan is allowed up to Rs. 200,000/- and for other house property actual expenditure of Interest on Housing Loan is allowed.
-Repayment of Principal amount of Housing Loan is deductible u/s 80C up to Rs.150,000/-.
-Tax Audit is compulsory if sales turnover exceeds Rs.1 crore in case of business.
-Tax Audit is compulsory if the Gross Receipts of Professionals exceeds Rs.25 lakhs.
If sales turnover is below Rs. 1 crore, then net profit of 8% or higher is to be taken as business income otherwise tax audit is required.

-The Due Date for Tax Audit and income Tax Return is 30th September.
-Assessee other than Company and those eligible for Tax Audit are required to file Income Tax Return before 31st of July. Extended date is 31st Aug for F.Y. 2014-15.
-Accurate Stock Valuation should be done on 31st of March.
-Cash payment should not be made to a person in single day exceeding Rs.20,000.
Cash Payment limit for Transporters is Rs.35,000/-.
-Loans, deposits and Immovable Properties transactions should not be carried out above Rs.20,000 in cash.
-Business loss can be carried forward to Next 8 Years.
-Tax Audit applicable assesses should deduct TDS on particular transactions.
-TDS should be made on the date of Credit or Payment basis of whichever is earlier.

-TDS payment should be made on or before 7th day of Next Month.
-TDS Returns are to be filed Quarterly.
-TDS returns can be revised any number of times.
-TDS should be deducted and paid if applicable.
-If TDS is not deducted then deduction of 30% of Expenditure is not allowed.
-Late filling of TDS return attracts late filing fees of Rs.200 per day.
-Long Term Capital Gain will arise if transfer of specified Capital Assets is made after 3 years.
Generally Long Term Capital Gains is taxable @ 20%
-STT paid Long Term Capital Gain on Shares,etc is exempt from Tax.
-Short Term Capital Gain is Taxable @ 15% if STT is paid.
-Capital Gain on Immovable Properties is chargeable at Stamp Duty Value or Selling Price whichever is higher.
-Dividend received from domestic company is exempt from Tax.
-Agricultural Income is exempt from Tax.
-Gifts received form stranger of an Amount exceeding Rs.50,000 is taxable.
-Income Tax is not chargeable on Gifts received at the time of Marriage, Will, and in case of Succession and from specified relatives.
-Maximum deduction limit u/s 80C, 80CCC and 80 CCD is Rs.1,50,000.

-Deduction of Medical Insurance Premium is available up to Rs. 25,000.
-Deduction of Medical Insurance Premium paid for Parents is available up to Rs. 20,000.
-Deduction limit of Interest earned on Saving Accnt is up to Rs.10, 000.
-Income earned by a Minor child is clubbed in the hands of Parents.
-Every Taxpayer should verify his Form 26AS.
-Form 26AS provides the Information regarding the TDS, Advance Tax paid and details of refund.
-Notice may be sent to the Taxpayer if the Income mentioned in Form 26AS and the Income Tax Return filed is having difference.
-Basic Exemption Limit for individuals for FY2015-16 is Rs.2,50,000.
-Basic Exemption Limit for Senior Citizen i.e. above 60 years age is Rs.3,00,000.
-Basic Exemption Limit for Super Senior Citizen i.e. above 80 years age is Rs.5,00,000.
-Advance Tax is to be paid if Tax Liability during the year exceeds Rs. 10,000.
-12% of Surcharge is applicable if Income Exceeds Rs. 1Crore.
-Income Tax Return should be filed if Income exceeds Basic Exemption Limit.
-30% of Tax applicable on Income of Partnership Firm, Company, LLP etc.
-For Companies – Minimum Alternate Tax and for other Assesses– Alternate Minimum Tax rate is 18.5%.
-Details of all Bank Accounts have to be given in Income Tax return.
-In Income Tax, E-filling of return can be done for Previous 2 Years only.

--Detail of Fixed Assets held in Foreign Country is required to be given in Income Tax return.
-If taxable income of Individual is less than Rs. 5 Lakhs then relief of Rs.2,000/- is available in Tax.
-Aadhar Card No. is required to be mentioned in Income Tax return.
-E-filling of return is compulsory if income exceeds Rs. 5 lakhs.
-PAN Card is essential for Taxpayer and it should not be used as Id Proof.
-Domestic Transfer Pricing is applicable on transaction exceeding an Amount Rs.20 Crores.


Saturday 12 September 2015



 Income-tax Department thanks the taxpayers for making e-enabled initiatives a success It has been the constant endeavor of the Income-tax Department to make compliance simpler for the taxpayer through the use of technology. E-filing of returns, refund banker scheme and the newly introduced e-verification of Income-tax returns for the Assessment year 2015-16 are some of the key initiatives undertaken by the Department for making filing of returns simple and easy for the common taxpayer. The Income Tax Department would like to acknowledge and thank the taxpayer for the widespread support for its e-Governance initiatives. The taxpayers have come forward in greater numbers for e-filing of returns in the current year. In the Financial Year (F.Y.) 2015-16, the Department has received 2.06 crore returns on the e-filing portal as on 07.09.2015 which is an increase of 26.12% over the corresponding period of the preceding the F.Y. 2014-15, when 1.63 crore returns were e-filed. The peak filing rate in the F.Y. 2015-16 touched 3,475 returns per minute as compared to 2,901 returns per minute in the F.Y. 2014-15. To facilitate the taxpayers by providing end-to-end e-enabled services and reduce compliance burden, the Department offered the facility of electronic verification of Income Tax Return for the A.Y. 2015-16 through an electronic verification code (EVC). In the short period since its introduction, 32.95 lakh ereturns have been verified through EVC. Use of EVC has dramatically reduced the time taken for processing of e-filed returns for the A.Y. 2015-16. As on 07.09.2015 Central Processing Centre had processed 45.18 lakh returns relating to the A.Y. 2015-16 and issued refunds to 22.14 lakh tax payers who had claimed refunds for the A.Y.2015-16. The Department remains committed to improving taxpayer services through enhanced use and further improvement in technologies.

Wednesday 2 September 2015

ITR due date extended to 7th September All over India

F.No.225/154/2015/ITA.II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North-Block,ITA.II Division
New Delhi, the. 2nd September, 2015
Order under Section 119 of the Income-tax Act. 1961
For Assessment Year 2015-2016, vide even number order dated 10th June, 2015, the Central Board of Direct Taxes (‘CBOT) had extended the ‘due-date’ for filing Income-tax returns till 31st August, 2015 in cases of those taxpayers who were required to file their tax-return by 31st July, 2015. This date was further extended till 7th September, 2015 in case of taxpayers of Gujarat in view of dislocation of general life in that State in last week of August.
CBDT has further received representations that across the country, taxpayers had faced hardships in E-Filing Returns of Income on the last date i.e. 31st August, 2015 due to slowing down of certain e-services.
Therefore, after considering the matter, CBDT in exercise of powers conferred under section 119 of the Income-tax Act, 1961, hereby extends the ‘due-date’ for E-Filing Returns of Income from 31st August, 2015 to 7th September, 2015 in respect of all the taxpayers who were required to E-File their returns by 31st August, 2015.
(Rohit Garg)
Deputy- Secretary to the Government of India