Vipin Sanger

GST and Taxation for MSMEs: GST accounting applications have helped in the transition of many small businesses and entrepreneurs in an easier and cost-effective manner to a new indirect tax system and also making them organised in terms of their bookkeeping. GST and Taxation for MSMEs: Since the launch of July 2017, Goods & Service Tax (GST) has been the most important factor for government and businesses with many changes being introduced recently. GST for Indian economy has been an evolving process and has brought advantages for small businesses in many ways by reducing complexities of inter-state taxation, digitization of MSMEs and an online portal for registration, filing and compliance purpose to make indirect taxation convenient and simple in India. There are about 13 million GST payers, out of which, 6-7 million are B2B, and 5-6 million are B2C. India’s MSME sector contributes about 8 per cent of India’s GDP, 45 per cent of the manufacturing output, 40 per cent of the ...

The Covid-19 outbreak has compelled businesses to transcend from traditional to digital models of work. With business models evolving on account of mass digitization, the complexities from a regulatory and taxation standpoint have only amplified. The advent and access to technology have enabled businesses to carry on business-as-usual with minimal physical presence. Unsurprisingly, India has the second-largest online users in the world, with over 560 million internet users, and hence, from the viewpoint of its tax revenue base, digital businesses could not be overlooked. However, as is the case in other jurisdictions, Indian tax laws were suited for conventional business models such as brick and mortar stores and thus in dire need of an overhaul. Recent Amendments To ensure that value created digitally is appropriately taxed; two significant amendments were introduced in Indian taxation laws in the recent past – The “Equalization Levy” – a tax aimed at foreign digital...

The reduction in TDS/TCS is expected to boost cash flows by ~50,000 crore, the finance minister said on Wednesday while announcing the move as part of an economic package. The government’s move to reduce the rates of tax deduction at source (TDS) and tax collection at source (TCS) by 25% will benefit investors and professionals by putting more cash in their hands. While this doesn’t bring down the tax liability of taxpayers, it leaves more money with them during the course of the financial year. Individuals will still have to pay their tax liability -- every quarter, or annually. The reduction in TDS/TCS is expected to boost cash flows by ~50,000 crore, the finance minister said on 13th May, 2020 while announcing the move as part of an economic package aimed at reviving an economy roiled by the Covid-19 pandemic and the lockdown enforced to combat it. Usually, the payee deducts TDS or TCS on behalf of the receiver and deposits it with the government. TDS and TCS are met...

Investors in dividend plans of equity mutual funds will benefit from the 25% cut in the rates for tax deducted at source (TDS) announced by finance minister Nirmala Sitharaman on 13th May 2020. Tax experts said mutual funds are currently required to deduct a 10% TDS on dividends paid to unit holders. For the remainder of FY 2021 this will come down to 7.5%. The lower rates will come into effect from May 14 and include deductions on dividend, interest, professional fees and brokerage. Investors who route money through alternative investment funds (AIFs), real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), too would get the benefit of the lower TDS rate, say experts. REITs and InvITs are taxed in the same manner as debt instruments. The government had made dividends taxable in the hands of investors in the budget for FY 2021. “The unit holders will get the benefit of reduction of TDS on the dividend declared by mutual funds. This benef...

In order to enhance liquidity in the hands of taxpayers, FM announced a reduction in the rate of tax deducted at source (TDS) for non-salaried specified payments made to residents by 25%. The coronavirus crisis has impacted lives severely. Several employees have been fired and many have witnessed salary reduction. In order to offer some relief to taxpayers amid such situation, Finance Minister Nirmala Sitharaman recently announced a slew of direct tax measures. FM said in her press conference, "We think this measure will release liquidity of Rs 50,000 crore who otherwise would have paid the tax." 5 Income Tax relaxations that you need to know: 1. TDS rate cut: In order to enhance liquidity in the hands of taxpayers, FM announced a reduction in the rate of tax deducted at source (TDS) for non-salaried specified payments made to residents by 25%.  2. TCS rate cut: In order to provide more funds at the disposal of the taxpayers, the rates of Tax Collection at ...

As per the Central Board of Direct Taxes (CBDT), the benefit of lower TDS and TCS rate can only be availed by resident individuals and is not available to non-resident Indian (NRI) taxpayers. Finance Minister Sithdraman in her press conference on Wednesday announced several measures for MSMEs, NBFCs and taxpayers. She unveiled details of the Rs 20 lakh crore economic package. In order to enhance liquidity in the hands of taxpayers, FM announced a reduction in the rate of tax deducted at source (TDS) and tax collection at source (TCS) by 25%.  However, there are some categories of taxpayers who will not be avail to avail the benefit of this cut: As per the existing rules, TDS rates differ based on whether or not the taxpayer has furnished the Permanent Account Number (PAN) or Aadhaar to the deductor.  Taxpayers who fail to furnish their PAN or Aadhaar, 20% or higher TDS can be charged. CBDT Press Release: Reduction in rate of Tax Deduction at Source (TDS) & ...

On 13th May 2020, the government has announced, "Due date for all income tax return for individuals for the Financial Year (FY) 2019-20 (Assessment Year 2020-21) will be extended from July 31 2020 and 31 October 31, 2020 to November 30, 2020 and tax audit from Sept ember 30, 2020 to 31st October 2020." The government has announced that the income tax return (ITR) filing deadline for Financial Year (FY) 2019-20 (Assessment Year 2020-21) has been extended to November 30, 2020 from July 31, 2020. "Due date for all income-tax return for individual taxpayers for the Financial Year (FY) 2019-20 (Assessment Year 2020-21) will be extended from July 31 2020 and 31 October 31, 2020 to November 30, 2020 and tax audit from September 30, 2020 to 31st October 2020". This was a part of the Rs 20 lakh crore relief package due COVID-19 lockdown. Along with the extension of the ITR filing deadline, there were other direct tax-related relief measures announced. The e...

Many components of tax optimized pay structure might not be suitable or justifiable, because of which people have to move to the liner and simple structures, which will obviously impact the tax liability. Lots of people are facing salary cuts, salary delays, retrenchment, layoffs, leave without pay, and partial deferred payout, etc. amidst the COVID-19 crisis.  Companies that are most affected belong to the MSME sector or those companies with heavy bank loans with no incoming funds. Hence, these salary cuts are to be expected.  Additionally, there are people who have the reimbursements component in their salary structure but, since people are not going out, they can’t claim entertainment or transport allowances. During this lockdown, most organizations have been non-functional or are working from remote places. Experts believe post lockdown, organizations will have to operate with the limited on-premises workforce and the rest will continue working from home ...

36 key points OF FM Sitharaman Press Conference on 'Mission Atmanirbhar Bharat' held on 13 May 2020- Easier loans for MSMEs; income tax return deadline extended; lifeline for discoms India is in the 50th day of its nationwide lockdown imposed in the month of March by Prime Minister Narendra Modi to battle Covid-19 spread in India. PM Modi addressed the nation on Covid-19 crisis and the ongoing lockdown situation, five days before the termination date of Lockdown 3.0. PM Modi announced an extension of lockdown and said that the details regarding the same will follow soon. This is Prime Minister's fifth special address to the nation in the last two months. FM Nirmala Sitharaman's press conference comes a day after PM Modi announced USD 265 billion fiscal stimulus to deal with COVID-19 situation in INDIA. This package is the second largest in Asia after Japan. Credit: republicworld.com As per FM Nirmala Sitharaman “Atmanirbhar (self-reliant) India does not me...

The ministry of finance issued a release, saying that the income tax (I-T) department would be issuing refunds of up to 5 lakh immediately, a move that will benefit 14 lakh taxpayers. It was done to provide relief to businesses and individuals during the lockdown. Cybercriminals took this as an opportunity to target gullible taxpayers. Many individuals started receiving fake messages, which stated that the I-T department is providing relief to all taxpayers due to covid-19 outbreak. The message contained a link that the individual needs to click to claim tax refund. Following this, the I-T department and the State Bank of India sent out messages on Twitter warning taxpayers about such cyber frauds. These are the things you should keep in mind to avoid falling into these traps. THE SIMPLE TRICK If you receive a message from the I-T department about a refund, don't rush immediately to claim it. There are chances that it could be from hackers, who want to trick you into...