9 changes that impact your financial plan for FY2019-20

Your financial planning for the new financial year, i.e., 2019-20 should take into account the changes in the personal finance landscape that come into effect from April 1 this year.

So here are the 9 tax and other key changes that you must keep in mind for this financial year.

1. Zero tax on taxable income up to Rs 5 lakh

2. Standard deduction limit hiked to Rs 50,000

3. No income tax on notional income from second house

4. TDS threshold limit hiked to Rs 40,000

5. External benchmark to decide interest rates on loans

6. No transfer of physical shares from April 1, 2019.

7. New GST rules and rules for housing sector

8. Investing capital gains in two houses

9. Reporting of LTCG gains from equity in ITR

Zero tax on taxable income up to Rs 5 lakh

As per interim budget 2019, you will not be required to pay any tax if your taxable income does not exceed Rs 5 lakh for financial year 2019-20 except in a few specific cases.

As announced in the interim budget 2019, individuals having taxable income up to Rs 5 lakh in a financial year will be able to avail full tax rebate and thereby will not be required to pay any tax on this income. The tax-rebate available under Section 87A has been increased to Rs 12, 500 from FY 2019-20 onwards.

However, you will still have to file your income tax return (ITR). As per income tax laws, it is mandatory to file ITR if your total income exceeds the minimum exemption limit.

Individuals with taxable income exceeding Rs 5 lakh can make use of various deductions such as Sections 80C, 80D of the Income Tax Act and other allowances such as House Rent Allowance (HRA), Leave Travel Allowance (LTA) (tax-exempt up to a certain extent) to lower his/her taxable income and thereby availing the benefit of tax rebate.

Remember, after claiming all the tax-saving deductions, if your taxable income still exceeds Rs 5 lakh, then you will be liable to pay income tax as per the existing rates.

Standard deduction hiked to Rs 50,000

To help you save more tax in the new financial year, Interim Budget 2019 has also hiked the standard deduction from salary from Rs 40,000 to Rs 50,000, an increase of Rs 10,000.

Standard deduction was first introduced in Budget 2018 in lieu of transport allowance and medical reimbursement. This deduction is available to all the salaried class and pensioners. The deduction is claimed at the time of filing your incom . No income tax on notional rent from second self-occupied property

From FY 2019-20, people with a second house, lying vacant will not be required to pay any income tax on the notional rent from this house. Till FY 2018-19, an individual having a second house which was not let out was required to calculate notional rent and pay tax on it accordingly. The notional rent is the amount of the rent which the individual would have earned if the house was let out by him

Previously, if the individual was having more than one house property, then he could treat any one house property as 'self-occupied' and was required to pay tax on the other house property/s, irrespective of whether they were actually on rent or not.

TDS threshold increased to Rs 40,000

Taxpayers with income below the taxable limit were earlier required to submit Form 15G in order to avoid TDS on the interest income from bank. In a bid to provide relief to such tax payers, the TDS limit has been hiked to Rs 40,000 from Rs 10,000 earlier. This change is expected to reduce paperwork for people in the lower income brackets.

However, one must not confuse this with taxation of interest income earned from banks.

The hike in TDS threshold limit means that no TDS will be deducted by the banks for the interest income up to Rs 40,000. However, interest incomes will still be taxable as per current tax laws.

Interest income on fixed deposit held with banks is still taxable, whereas the tax-saving deduction under Section 80TTA can be claimed for the interest income earned from the savings account either held with a bank or post office.

External benchmark to decide interest rate on loans

The Reserve Bank of India (RBI) in its bi-monthly monetary policy meet held in December 2018 announced that all new floating rate personal or retail loans such as housing, auto etc and to micro and small enterprises would be linked to an external benchmark. Till now loans were linked to an internal benchmark, i.e., marginal cost of funds based lending rate (MCLR), prime lending rate (PLR) and benchmark prime lending rate (BPLR).

Though the statement said that the linkage to external benchmark will come into effect from April 1, 2019, however, the central bank is yet to issue final guidelines in this regard. It is yet to be seen how banks will implement this new rule. Linking loan interest rates to an external benchmark is expected to increase transparency in the changes in the rate with changes in the rates prevalent in the economy.

 

No transfer of physical shares from April 1,2019

The Securities Exchange Board of India (SEBI) announced last year that transfer of physical shares will not be allowed from December 5, 2018. However, this deadline was extended to April 1, 2019, as large numbers of shareholders were still holding shares in physical form. Therefore, as per the last SEBI order, from April 1 onwards, transfer of shares will be allowed only in dematerialised form.

New GST rates and rules for housing sector

As per the announcement made by the GST council in its 33rd meeting held on February 24, 2019 and subsequent clarification, the new rates of Goods and Services Tax (GST) for the real estate sector will come into effect from April 1, 2019.

From April 1, 2019, for on-going under-construction projects, developers and builders will have an option either to charge the GST as per old rates, i.e., at 12 per cent (with input tax credit) or new rates at 5 per cent (without input tax credit).

In case of affordable housing, such rates would be 8 per cent (with input tax credit) or 1 per cent (without input tax credit). Any new under-construction projects starting from April 1, 2019 would mandatorily be required to charge GST as per new rates.

Also, the council has defined what kind of houses will fall under the affordable housing category. As per the new definition, an affordable housing is a residential house/flat with a carpet area of up to 90 square metres in non-metropolitan cities/town and 60 square metres in metropolitan cities having value up to Rs 45 lakh. Metropolitan cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR) The previous limit for affordable housing was a uniform carpet area of up to 60 square metres for a house.

Therefore, while buying a flat in an on-going real estate project, you need to check what is the GST rate charged by the builder/developer.

Benefit of investing capital gains in two residential houses

Taxpayers who have sold their house property will now have the option to invest the long-term capital gains (LTCG) in two houses instead of one in order to avoid paying LTCG tax on the amounts so invested. However, one must remember that this benefit can be availed only if the capital gains does not exceed Rs 2 crore and can be availed once in a lifetime.

Equity LTCG taxation has changed: Remember when filing ITR

LTCG tax on equity shares and equity-oriented mutual funds was announced in Budget 2018. Therefore, if you have sold equity shares and/or units of equity-oriented mutual funds in FY2018-19, which was held for more than one year, you will be required to pay tax on and report these transactions while filing ITR for FY2018-19. This ITR is due to be filed in the FY which has just started, i.e., in n FY2019-20.

The LTCG will attract a tax rate of 10 per cent without indexation benefit, if the gains exceeds Rs 1 lakh in FY 2018-19.

Here's what will happen if you don't finish these 9 tax tasks by March 31

There are just few days left for the end of the financial year, i.e., March 31. However, apart from tax-saving, there are some other tax-related issues that must be completed before March 31 as per current income tax rules.

Keeping these issues for the last minute could land you in trouble as you might miss the chance to complete or rectify mistakes made due to transactional glitches, technical errors, or even your own carelessness.

Tax-saving investments must be completed during the financial year, i.e., between April 1 and March 31. Further, if you have missed filing your income tax return (ITR) for the last financial year by August 31, 2018, then the deadline for filing a belated one is also March 31.

Here are a few tax-related tasks you should complete before the March 31 deadline:

1. TDS on rent payments over Rs 50,000 per month

If you are paying a monthly rent of Rs 50,000 or more then as per income tax laws, you are required to deduct tax at source (TDS) at the rate of 5 per cent on the rent paid.

As per tax laws, it is the duty of the tenant to deduct the tax on the total rent paid. TDS on rent will be deducted only once in a financial year, either at the end of last month of the fiscal, i.e., in March or in the last month of tenancy, whichever is earlier. The TDS deducted should be deposited with the government within 30 days from the end of the month in which the deduction was made. Therefore, if you deduct TDS on March 31, 2019, then you must deposit the same before April 30, 2019."

If you do not deduct and deposit the TDS on time, it will attract an interest and penalty. Interest will be levied at a rate of 1 percent on the amount of TDS for every month or part of the month, from the date on which it was supposed to be deducted to the date on which it is deducted. Additional interest at the rate of 1.5 per cent will be levied on the TDS amount for every month or part of it, if the tax is deducted but not deposited with the government within 30 days. The interest will be calculated from the date tax was deducted to the date on which it was deposited. A penalty can also be levied at Rs 200 per day, and this can go up to maximum of the amount equal to the tax that has to be deposited, can also be levied for failure to file the TDS return in time".

2. Belated ITR filing for FY2017-18

If you still have not filed your ITR for the FY 2017-18, then you must do it before March 31, 2019. As per the current income tax laws, an individual who has missed the deadline of August 31, 2018 for filing ITR for FY 2017-18 can file a belated ITR on or before March 31, 2019.

"Remember if you miss this deadline, you will not be able to file ITR unless the tax department sends you a notice and asks you to file it," adds Wadhwa. While filing your belated ITR, you will also be required to pay late filing fees as well. According to the Income Tax Act, under Section 234F income from FY 2017-18 onwards, late filing fees will be levied as follows:

a) Rs 5,000 if the ITR is filed after the due date (i.e., August 31, 2018) but before December 31.

b) Rs 10,000 if the ITR is filed between 1 January and 31 March.

However, in a relief to small taxpayers, if your income is not more than Rs 5 lakh, then maximum fees levied will be of Rs 1,000.

"The late filing fees will be levied irrespective of whether all your taxes due are already paid or not. Even if all your tax liability is paid or a refund is due to you, then also you are mandatorily required to pay late filing fees. On the other hand, if there are any taxes due, then the taxes and interest, if any, will be paid along with the late filing fees."

3. Revision of ITR for FY17-18 and FY2016-17

March 31 is also the deadline to file the revised ITR for FY 2017-18 and FY 2016-17. Section 139(5) of the Income Tax Act previously allowed individuals to file revised return any time before the expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier.

However, from FY 2017-18 onwards, the time period to file the revised return was reduced from 'expiry of one year from the end of the relevant assessment year' to 'the end of relevant assessment year'. Therefore, the last date to file revised ITR for FY 2017-18 and FY 2016-17, is March 31, 2019.

"One can use this opportunity to revise his/her returns to report the correct income details or else the department may levy penalty of 50 per cent of tax payable in cases where the income is under-reported. Remember if you have filed belated ITR for the FY 2017-18 and discover a mistake after 31 March, 2019 then you will miss out the chance to rectify your mistake."

4. If you have changed jobs during the FY

If you have switched your job during the financial year 2018-19, then you must provide the details of income from and tax deducted by previous employer to your current employer using Form 12B. "Your current employer will be able to deduct the correct amount of TDS only once you submit the details of TDS cut from your previous salary. This submission should also be done well before March 31. Remember your current employer may deduct incorrect amount of TDS in case of non-submission of Form 12B

5. Booking of capital gains and losses

Tax on long-term capital gains (LTCG) arising from equity was introduced with effect from April 1, 2018 at the rate of 10 per cent if the gains exceed Rs 1 lakh in a financial year. Chandak say, "Along with LTCG gains from equity, if you have also incurred long-term capital losses as well, then you can use those gains to set off against losses to arrive at the net taxable income." Further, in case you plan to sell equity and expect large long-term capital gains, then consider booking LTCG up to the tax exempt limit of Rs 1 lakh so as to use it fully each year.

6. Payment of advance tax dues

If your tax liability in a financial year exceeds Rs 10,000, then you are mandatorily required to pay advance tax. According to income tax rules, advance tax is paid in four instalments during the financial year. The last instalment of the advance tax was March 15. However, if you have missed the date, it is advisable you pay dues as soon as possible to avoid paying hefty interest.

"Interest under Sections 234B and 234C are levied in case of default in deposit of advance tax. Under section 234B, interest is levied if a taxpayer fails to deposit the advance tax or it is less than 90 percent of the actual liability. While as interest under Section 234C is levied if actual payment of instalments of advance tax falls short of the payment that had to be made in these instalments."

7. Tax-saving investments

Another important task you must complete before March 31 is tax-saving. The income tax Act offers certain tax benefits that an individual can make use of to reduce his tax liability. Section 80C offers the opportunity to save tax up to Rs 46,800 (inclusive of taxes) depending on the slab your income falls in by investing/spending up to Rs 1.5 lakh in/on specified avenues. Similarly, there are other sections of the Income Tax Act which allow one to save tax such as section 80D.

However, it is important to remember that tax saving investments/expenditures must be made within a financial year, i.e., between April 1 and March 31, to be able to avail the benefit for that financial year.

8. Investing minimum amounts in certain accounts

Another thing to keep in mind is that even if you are not investing in PPF or NPS for saving tax this fiscal. Ensure that you have made at least a minimum contribution to keep the account/s active.

Non-contribution to investment schemes such as National Pension System (NPS), Public Provident Fund (PPF) or Sukanya Samriddhi Yojana (SSY) will make the accounts of these schemes inactive. If the investment account becomes inactive, then to re-activate them you will have to pay a penalty along with the minimum contribution missed for that particular year/s.

9. Last day of linking PAN with Aadhaar

As per the advertisements released by the Income Tax Department, the last date to link PAN with Aadhaar is March 31, 2019. There are four ways to link your PAN with Aadhaar. Click here find out how to link your PAN with Aadhaar. Now, you can also check if your PAN is linked with Aadhaar on the e-filing website of the income tax department. Check if your PAN is linked with Aadhaar.

How to file GSTR-9: Preparing the first-ever annual return for financial year 2017-18

The filing of the first annual return for FY 2017-18 is due in roughly three months.. It covers a duration of 9 months from July 2017 to March 2018, as towards twelve months  in a financial yr. but many taxpayers nevertheless dread the instruction of annual return bureaucracy due to the fact the announcement of information in the annual returns has more than one implications.

The ultimate date has been prolonged to June 30, 2019, but it is crucial to know that GST Annual returns in GSTR-9, GSTR-9C or GSTR-9A can not be revised as soon as filed. furthermore, any incorrect records can attract tax needs and hobby or maybe penalties; depart alone the lengthy-time period litigations that could comply with years later.

GSTR-9 is an annual precis of the income, tax paid thereon, purchases, input tax credit score (ITC) claimed, ineligible credit, demands and refunds. If the shape turned into only a replica of the monthly GSTR-3B summarised at a every year stage, it'd were an smooth mission. the use of monthly GSTR-3Bs already filed through a taxpayer, the yearly form may be car-populated for the 12 months of the financial yr. however, being the first and possibly the final GSTR-9 format under the existing set up of GSTR-1 and GSTR-3B, every taxpayer should equipment up to make an correct assertion of transactions.

GSTR-nine auto-populates two fields. An choice to auto-fill from desk 4A of GSTR-3B is available to report the ITC declared as according to GSTR-3B within the desk 6A of the GSTR-nine. further, the once a year summary ITC contemplated in GSTR-2A is vehicle-stuffed in desk 8A of the GSTR-9. rest of the fields need to be looked after through the businesses. because of the choices taken within the thirty first GST council meeting, a taxpayer may additionally have a GSTR-9 that is not exactly the sum of information reported in GSTR-1 or GSTR-3B. So, the taxpayer can now claim values as accounted in books for a selected transaction(s). Taxpayers have to weigh the professionals and cons of maintaining a special discern that doesn't overall up to the values as consistent with GSTR-3B or GSTR-1 already filed for the specified duration. these differences should have an explanation and any brief charge of taxes on the cease of the 12 months should first be paid in cash in form DRC-03 and then the GSTR-nine ought to be filed.

The same council meeting had also addressed that irrespective of the month of filing, the table 8A (field that auto-populates GSTR-2A information) in GSTR-9 will reflect ITC as reported by all the suppliers of a tax filer. For invoices raised in FY 2017-18. Amid these developments, CBIC issued orders by the end of December 2018. These hold significance for filers of FY 2017-18 who have not finished compliance and those who desire to make corrections or claim ITC to already-filed returns. These are ..

• Any GST returns for July 2017 to September 2018 if not filed earlier, can now be filed up to 31st March 2019 without late fees.
• The input tax credit against purchase invoices of FY 2017-18 can be claimed before filing the GSTR-3B for the return period of March 2019.
• Portal has allowed amendments for B2B outward supplies which happened between July 2017-March 2018 in any GSTR-1 filed after September 2018, but up to March 2019.

With the extended time limit, taxpayers who are yet to submit GSTR-9 must proceed only after ensuring that all the GST Returns applicable to their business (GSTIN) during FY 2017-18 are filed. In addition to this, businesses can make necessary amendments related to FY 2017-18 in GSTR-1 or GSTR-3B being filed for present months till March 2019 return period and claim any missed but eligible ITC. Further, they can nudge their suppliers to upload invoice details in GSTR-1 for those genuine ITC of FY 2017-18 which were not appearing in GSTR-2A between period July 2017 to September 2018.

Taxpayers must reconcile data of FY 2017-18 throughout the year from July 2017 to September 2018 to identify differences if any between returns and between the book of accounts and returns. 

Advances paid or received must accordingly be adjusted at the year-end against invoices issued and balance must only be reflected. ITC reversals must be done at the end of the year as per CGST rules.

One may find it difficult to report the HSN wise summary for purchases in GSTR-9, where it is not maintained in the books of accounts while raising an invoice. Reporting of a particular HSN is required if the value under one HSN is more than 10% of the total value of all HSNs put together. This was never a requirement in GSTR-3B. Use of a tool along with the sorting and filter feature can help identify HSN and summarise for GSTR-9 details. Technology can thus come to the rescue of taxpayers, who want to do this efficiently.

All this can be easy with the help of a sturdy reconciliation tool that can easily identify mismatches, duplication of entries, match credit/ debit notes against respective invoices, correct the reporting into wrong tax heads, non-reporting and so on. Hence, taxpayers especially those subject to audit under GST must ensure that a certified reconciliation statement in GSTR-9C is obtained from the auditor who is a chartered accountant or the cost accountant as soon as possible and is filed along with GSTR-9.

PAN-Aadhaar linking: Don't miss the 31 March deadline

1.By not linking your PAN card with your Aadhaar card, you will not be able to file income tax returns (ITR)

2.The Income Tax department may also cancel all PAN cards that are not linked to Aadhaar

If you have not linked your Permanent Account Number (PAN) card with your Aadhaar card yet, then you have time till this Sunday. According to the Income Tax department, all those whose PAN is not linked with Aadhaar would not be able to file income tax returns (ITR) and even risk cancellation of their PAN numbers.

The I-T department has already given several extensions of the deadline to link PAN-Aadhaar numbers and now your last chance could be till 31st March.

After the Supreme Court of India upheld the constitutional validity of Aadhaar in September 2018, the department issued a notification making the linkage mandatory for all those who want to file ITR under Section 139 AA (2) of the Income Tax Act.

Last month, the apex court had confirmed that linkage of PAN with Aadhaar is mandatory for the filing of ITRs.

How to link your PAN with your Aadhaar:

The PAN-Aadhaar numbers linkage can be done easily on the websites of Income Tax department, NSDL and UTIITSL by giving your PAN card number and Aadhaar number.

In cases where the name on the Aadhaar card is completely different from the one mentioned in PAN card, then the linkage is likely to fail and the individual will have to change their name in either of the two databases or personally visit a PAN application center of NSDL or UTIITSL for biometric Aadhaar authentication.

In case of a minor mismatch of data in PAN and Aadhaar, the Income Tax department will accept it for linkage after verification using a one time password (OTP) sent to your mobile number.

Government extends IGST, compensation cess exemption under various export promotion plans

Giving relief to exporters, the government has extended IGST (Integrated Goods and Service Tax) and compensation cess exemptions for goods procurement under certain export promotion schemes till March 2020.

These exemptions have been extended for exporters buying inputs domestically or importing for export purposes under export oriented unit (EOU) scheme, Export Promotion Capital Goods (EPCG) scheme and advance authorisation.

EPCG is an export promotion scheme under which an exporter can import certain amount of capital goods at zero duty for upgrading technology related with exports.

On the other hand, advance authorisation is issued to allow duty free import of inputs, which is physically incorporated in export product.

The move was aimed at giving relief to exporters as they do not have to pay IGST at the initial point itself. In the GST regime, they have to pay the indirect tax and then seek refund, which is a cumbersome process.

In a notification, the Directorate General of Foreign Trade (DGFT) has said that exemption from integrated GST and compensation cess under advance authorisation scheme, EOU, and EPCG scheme of foreign trade policy 2015-20 "is extended up to March 31, 2020".

During April-February of the current fiscal year, exports grew 8.85 per cent to USD 298.47 billion, while imports rose by 9.75 per cent to USD 464 billion.

The trade deficit has widened to USD 165.52 billion during the 11 months of the current fiscal from USD 148.55 billion compared to the year-ago period.

New GST actual estate rate to be applicable from April, supply 80% materials from registered dealer

The GST Council  approved a transition plan for the implementation of new tax structure for the real property sector with applicable guidelines for housing gadgets being applicable from April 1, 2019.

The Council additionally determined that under creation projects can have an option to shift to new price. The GST Council in its 33rd meeting on February 24, 2019 had provide you with new fees for housing devices. GST can be levied at effective fee of 5% with out ITC on residential residences outside low priced segment, while GST shall be levied at powerful GST of 1% with out ITC on low cost housing houses.

A residential residence/flat of carpet region of as much as 90 sq. in non-metropolitan cities/cities and 60 sq. in metropolitan cities having price up to Rs. forty five lakh (both for metropolitan and non-metropolitan towns) has been labeled as inexpensive housing. Metropolitan towns are Bengaluru, Chennai, Delhi NCR (restrained to Delhi, Noida, more Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR).

The Council in it meeting these days also held that 80% procurement of materials should be from registered provider. It additionally introduced that up to 15% of industrial space to be dealt with as residential belongings for GST motive. however, the exact contour of this point mooted via the Council isn't very clean.

With a number of the key inputs for production along with bricks, stone, hardware and so on. coming from sectors that are in large part unorganised, assembly the circumstance of 80% procurement from registered sellers for concessional GST charge could be hard, particularly in Tier-2 and smaller towns” stated Harpreet Singh, partner, oblique Tax, KPMG India.

Time will inform whether or not the reduced GST prices for beneath-production residences will provide the necessary fillip to the actual property sector which is presently witnessing adversities. “the concern concerning the reduced rate of five% and 1% is that it's far offered with out the capability for developers to take enter tax credit, that could without a doubt cause an escalation of charges. The GST council assembly these days mentioned modalities on transition and made the brand new fee mandatory for brand new production 1 April 2019 onwards,”

The Council additionally determined that reversal of enter tax credit score to be executed on propotionate basis and the time restrict for transition to new rates could be discussed with the states.

“The pragmatic move to segregate under construction tasks from new projects might provide alleviation to builders who were worried about the loss of input tax credit. this will also allow them to charge the lack of enter tax credits within the new projects. Reversal of enter tax credit score on a proportionate foundation would  entail massive computational troubles for developers as each project might be in diverse stages of construction and have differing pre and publish of entirety sale styles. shielding current enter tax credit and mandating the new charges best in appreciate of latest tasks could advantage each developers and consumers. The specific announcement on invocation of anti-profiteering provisions if the benefits of lower rates are not handed to clients seems to indicate that the government is eager to guard purchasers from a GST-led price growth”.

GST Council approves transition plan for brand spanking new tax prices for real estate

The all-effective GST Council approved a transition plan for the implementation of recent tax shape for housing units.

An inexpensive time for transition may be given to developers in session with states.

The meeting deliberated at the transition provision and associated troubles for the implementation of decrease GST quotes for the actual estate quarter.

The Council had in its last assembly on February 24, slashed tax quotes for underneath-construction residences in the low-cost class to 1 per cent. GST price on other categories changed into decreased to 5 in line with cent, powerful April 1.

GST charges for brand new projects might be obligatory from April 1.

GST Composition Scheme

Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.0 crore.

CBIC has notified the increase to the threshold limit from Rs 1.0 Crore to Rs. 1.5 Crores.

1. Who can opt for Composition Scheme

A taxpayer whose turnover is below Rs 1.0 crore* can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75* lakh.

As per the CGST (Amendment) Act, 2018, a composition dealer can also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. This amendment will be applicable from the 1st of Feb, 2019. Further, GST Council in its 32nd meeting proposed an increase to this limit for service providers on 10th Jan 2019*.

Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.

CBIC has notified the increase to the threshold limit from Rs 1.0 Crore to Rs. 1.5 Crores.

3. What are the conditions for availing Composition Scheme?

The following conditions must be satisfied in order to opt for composition scheme:

1. No Input Tax Credit can be claimed by a dealer opting for composition scheme
2. The dealer cannot supply GST exempted goods
3. The taxpayer has to pay tax at normal rates for transactions under the Reverse Charge Mechanism
4. If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
5. The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
6. The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.
7. As per the CGST (Amendment) Act, 2018, a manufacturer or trader can also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. This amendment will be applicable from the 1st of Feb, 2019. Earlier the limit was up to Rs 5 lakhs.

4. How can a taxpayer opt for composition scheme?

To opt for composition scheme a taxpayer has to file GST CMP-02 with the government. This can be done online by logging into the GST Portal.

This intimation should be given at the beginning of every Financial Year by a dealer wanting to opt for Composition Scheme.

5. How Should a Composition Dealer raise bill?

A composition dealer cannot issue a tax invoice. This is because a composition dealer cannot charge tax from their customers. They need to pay tax out of their own pocket.

Hence, the dealer has to issue a Bill of Supply.

The dealer should also mention “composition taxable person, not eligible to collect tax on supplies”  at the top of the Bill of Supply.

6. How should GST payment be made by a composition dealer?

GST Payment has to be made out of pocket for the supplies made.

The GST payment to be made by a composition dealer comprises of the following:

GST on supplies made.

Tax on reverse charge

Tax on purchase from an unregistered dealer

Only on the specified categories of goods and services and well as the notified class of registered persons with effect from 1st Feb 2019 but is yet to be notified. Hence, not applicable until then.

7. What are the returns to be filed by a composition dealer?

A dealer is required to file a quarterly return GSTR-4 by 18th of the month after the end of the quarter. Also, an annual return GSTR-9A has to be filed by 31st December of next financial year.

8. What are the advantages of Composition Scheme?

The following are the advantages of registering under composition scheme:

Lesser compliance (returns, maintaining books of record, issuance of invoices)

Limited tax liability

High liquidity as taxes are at a lower rate

9. What are the disadvantages of Composition Scheme?

Let us now see the disadvantages of registering under GST composition scheme:

A limited territory of business. The dealer is barred from carrying out inter-state transactions

No Input Tax Credit available to composition dealers

The taxpayer will not be eligible to supply exempt goods or  goods through an e-commerce portal.

Biz can evaluate tax liability declared in final, summary GST returns forms

The GSTN, which handles the generation backbone for the brand new indirect tax, has provided a facility to the taxpayers to view and download a record on tax legal responsibility as declared in their form GSTR- 1 (final sales return) and as declared and paid in their return filed in form GSTR-3B (summary sales return).

Even as GSTR-1 for a month is filed via the eleventh day of the succeeding month, GSTR-3B is filed and taxes paid by means of the 20 th day of the succeeding month.

GSTN, in a assertion stated, on the grounds that GSTR-1 and GSTR-3B are filed unbiased of every different, a need became felt to provide facility to view liability declared in both the forms at one location.

The new facility permits the taxpayers to view those two liabilities in one table for each go back duration at one region, which may be compared. this could allow taxpayers to make top of any variations between the 2 forms filed via them on GST portal, GSTN said.

In addition, the GSTN has additionally supplied taxpayers data regarding information of input tax credit (ITC) as claimed of their form GSTR 3B and as collected in form GST network Tuesday said corporations registered underneath GST can now examine the tax legal responsibility declared in addition to input tax credit score claimed of their very last and summary income returns bureaucracy.

This capability has been supplied in Returns dashboard on the GST Portal to taxpayers below the 

headings "evaluation of legal responsibility declared and ITC claimed".

"This facility will help taxpayers in reconciling their legal responsibility and ITC info speedy. they can view the monthly assessment in addition to cumulative comparison as much as the month, at the GST Portal in the tables furnished. this will help them in taking corrective steps," GSTN CEO Prakash Kumar said

Accounting and Taxation : Understanding how section 80C of the Income Tax Ac...

Accounting and Taxation : Understanding how section 80C of the Income Tax Ac...: Eligible bills include life insurance top rate, most important repayment of the home mortgage and children's lessons. Understand al...

Understanding how section 80C of the Income Tax Act works

Eligible bills include life insurance top rate, most important repayment of the home mortgage and children's lessons.
Understand all approximately: section 80C
There are numerous tax saving avenues however the maximum popular is the tax benefit Section 80C of the Income Tax Act below which an amount equal to the investment that you make in certain specified instruments or an expense that you incur up to a maximum of Rs 1.5 lakh in a financial year reduces your gross total income by the same amount.

1. An individual or an HUF can reduce as much as Rs 1,50,000 from their overall taxable earnings through section 80C for the financial year 2018-19.

2. Eligible investments consist of contributions to EPF, VPF, PPF, ELSS mutual budget, Sukanya Samriddhi Account, tax saving FDs and post workplace, NPS, NSC, SCSS, NABARD bonds, and a few different options.

3. Every of the eligible investment has its personal investment restrict, price of return, liquidity and tax remedy on its returns.

4. Eligible payments include life insurance premium, principal repayment of home loan and children's tuition.

5. In order to claim the deduction for this particular financial year, one needs to invest or spend the deductible amount in this financial year itself.

All about Reverse Charge under GST

1. What is Reverse Charge?
Normally, the supplier of goods or services pays the tax on supply. In the case of Reverse Charge, the receiver becomes liable to pay the tax, i.e., the chargeability gets reversed.

2. When is Reverse Charge Applicable?

A. Supply from an Un registered dealer to a Registered dealer
If a vendor who is not registered under GST, supplies goods to a person who is registered under GST, then Reverse Charge would apply. This means that the GST will have to be paid directly by the receiver to the Government instead of the supplier.
The registered dealer who has to pay GST under reverse charge has to do self-invoicing for the purchases made.

For Inter-state purchases the buyer has to pay IGST. For Intra-state purchased CGST and SGST has to be paid under RCM by the purchaser.

B. Services through an e-commerce operator
If an e-commerce operator supplies services then reverse charge will be applicable to the e-commerce operator. He will be liable to pay GST.

For example, Urban Clap provides services of plumbers, electricians, teachers, beauticians etc. Urban Clap is liable to pay GST and collect it from the customers instead of the registered service providers.
If the e-commerce operator does not have a physical presence in the taxable territory, then a person representing such electronic commerce operator for any purpose will be liable to pay tax. If there is no representative, the operator will appoint a representative who will be held liable to pay GST.

C. Supply of certain goods and services specified by CBEC
CBEC has issued a list of goods and a list of services on which reverse charge is applicable.

3. Time of Supply under Reverse Charge
A. Time Of Supply in case of Goods
In case of reverse charge, the time of supply shall be the earliest of the following dates:

• the date of receipt of goods
• the date of payment*
• the date immediately after 30 days from the date of issue of an invoice by the supplier

If it is not possible to determine the time of supply, the time of supply shall be the date of entry in the books of account of the recipient.
This point is no more applicable based this Notification No. 66/2017 – Central Tax issued on 15.11.2017
Illustration:

1. Date of receipt of goods 15th May 2018
2. Date of invoice 1st June 2018
3. Date of entry in books of receiver 18th May 2018

The Time of supply of service, in this case, will be 15th May 2018

B. Time Of Supply in case of Services
In case of reverse charge, the time of supply shall be the earliest of the following dates:

1. The date of payment
2. The date immediately after 60 days from the date of issue of invoice by the supplier

If it is not possible to determine the time of supply, the time of supply shall be the date of entry in the books of account of the recipient.
Illustration:

1. Date of payment 15th July 2018
2. Date of invoice 15st May 2018
3. Date of entry in books of receiver 18th July 2018

The Time of supply of service, in this case, will be 15th May 2018

4. What is Self Invoicing?
Self-invoicing is to be done when you have purchased from an unregistered supplier AND such purchase of goods or services falls under reverse charge.

This is due to the fact that your supplier cannot issue a GST-compliant invoice to you, and thus you become liable to pay taxes on their behalf. Hence, self-invoicing, in this case, becomes necessary.
To create such an invoices on ClearTax GST software, follow the below steps:

Step 1 – Click on ‘+ New Purchase Invoice’ to create a new invoice
Step 2 – As you can see, you need to fill data in multiple fields. Let’s understand each field in detail:
1. Enter the serial number of the bill into the field marked ‘Invoice Serial Number’. Since your supplier has not issued an invoice and you are creating an invoice on their behalf, you need to add a serial number on your own. You can create and maintain a serial number series for reverse charge bills, for easier invoicing
2. Enter the ‘Invoice Date’. This date must be based on time of supply
3. Enter any detail such as the order number etc., into the field marked ‘Reference Number’
4. Under ‘Due Date’, you have to mention the date by when you have to make the payment to the supplier for the purchase you made (mentioning this date is not mandatory)
5. Under ‘Vendor Name’, enter the supplier’s name. Remember this name cannot be your own name, even if you are doing self-invoicing under reverse charge
6. In case the vendor’s name is not set already, you can add a new vendor
7. Enter details of goods/ services purchased
8. From the drop-down under ‘Advance Settings’, select ‘Reverse Charge’
9. Now, fill in all the details displayed on your screen.
Step 3 – After filling all the other details, click on Save.

No want to pay GST on tax at source on purchase of goods, says govt

In a explanation that settles the dust over the fee of goods and services tax (GST) on income tax gathered at supply (TCS) on purchases of select objects, the government has stated that GST does now not observe on the TCS quantity.

In an earlier circular dated December 31, 2018, the central board of indirect taxes and customs (CBIC) said GST should be levied on the entire amount of purchase including the amount added due to tax collected at source. TCS is usually applied to a list of nearly 10 items which includes cars costing above Rs 1,000,000 and scrap articles.

"This explanation comes as pretty a remedy for companies specifically the automobile region. at the same time as maximum industry players already believed that GST should now not be leviable at the income tax TCS thing, they were pretty frightened of litigation on this issue".

New GST return forms launched; compliance procedure simplified from April 1

The goods and services tax (GST) network released the revised return forms which businesses would need to comply with from this year. The new forms would be operated on a pilot basis from April 1, 2019, and would be mandated across the country from July, according to the decisions of the GST Council.

The new and revised return format might obviate the want to furnish returns underneath the circle of relatives of GSTR-1, GSTR-2 and GSTR-3, but the annual return GSTR-9 might continue.

The GST Council had suspended GSTR-2, a purchase return, and GSTR-three, input-output return, because of the complex form structure. on the other hand, GSTR-1, a sale return, and GSTR-3B, precis input-output return, remain. the brand new paperwork are uploaded following an exercise to simplify the returns under GST.

The new return codecs — named “regular”, “sahaj” and “sugam” — might make the compliance manner less difficult for the smallest of groups wherein taxpayers as much as a turnover of Rs five crore might have an option to record any of the three bureaucracy.

For the revenue department, the new format would help in matching the invoices of the seller and the purchaser, and would help the department check evasion to a great extent. But at the same time, it is likely to increase clerical and administrative work for businesses.

The HSN-wise details need to be provided at the invoice level rather than the summary level. In addition, while details at 4-digit HSN codes are required in the current format, the new format would need those details at the 6-digit HSN level.

Under the new format, invoices can be reported on a continuous basis.

Comfort for Industry as govt clears air on levy of GST on promotional gives

In a chief comfort to manufacturers, distributors, marketers and direct dealers of client products, the government on Thursday clarified the quantity of tax liability and the eligibility of enter tax credit on promotional offers such as loose samples and “purchase one, get one free”.

Industry players were apprehensive approximately incre­ased litigation from tax audit government in the event that they advertised their merchandise as unfastened, beca­use of ambiguity on such gives. Now, the notification by means of the critical Board of oblique Taxes and Customs makes it clear that tax could be applicable and input tax credit score might be available for the entire bundle sold, including the free items.

Professionals stated the rationalization will bring ease of advertising and keep litigation problems for the enterprise, however most importantly for the FMCG and Pharma sectors whe

re such gives are commonplace.

Inside the case of free samples, consisting of those medical representatives of pharma agencies offer to doctors, they would not be taken into consideration as supply, and could now not entice tax.

For offers such as a discount of 10 per cent for a purchase of more than Rs 1,000 and of 20 per cent for a purchase of more than Rs 2,000, the discounted amount would be excluded to determine the value of supply. Such discounts are generally passed on by the supplier through credit notes.

However that is relevant simplest when the bargain is made clean at the time of deliver. when it's miles supplied after the sale, it's miles termed as secondary bargain, the discounted cost have to not be excluded to calculate the fee of supply.

“GST would be paid at the fee recovered from the customer without reversing the enter credit score. Enter  credit will best be reversed in case of 'unfastened samples' and 'items' which is especially mentioned in the regulation.”

GST's promise of one country, one tax. Has it delivered?

It's been slightly over 20 months because the historic moment of July 1, 2017, while a gong in a unique midnight joint parliamentary session signalled the release of the products and services tax (GST) across the u . s .. Billed as the most important tax reform when you consider that independence, the landmark tax reform, with its first of its kind 'one country-one tax' method, aimed at subsuming nearly all indirect taxes at the vital and country levels.

However looking again at the tax reform's journey, submit a few six hundred days, the query remains if it has managed to gain its supposed functions? now not completely, it appears.

Remember this: The GST Council in its thirty second meeting, announced new registration criteria for agencies, doubling the income threshold for GST registration to Rs forty lakh, and permitting certain states of northeast and small states to preserve threshold at Rs 10 lakhs as against Rs 20 lakhs for other states. whilst the news has been nicely acquired by way of India Inc, the pertinent fact that a few states chose to live out of the registration criteria for groups, over again exposed how the Centre-States' differences can hurt GST's uniform implementation across the us of a.

One of a kind states, unique rules

It is because of such bottlenecks that enterprise experts like Saurbh Agarwal, member, dealing with committee, Assocham, nevertheless name GST a 'work in progress'. Calling the government's one-time exception granted to sure states 'opposite' to the essence of 1 kingdom, and one tax reform, Agarwal similarly highlights that due to the fact that this elevated exemption restriction is applicable to handiest those who've agencies inside a country, organizations which can be doing  inter-kingdom alternate are not protected below this relief. in the end, "this partial comfort could save you inter-country trade. In impact, this will prevent rationalisation of charges throughout the country", cautions Agarwal.

Similarly, in keeping with Harpreet Singh, companion, oblique Taxes, KPMG India, "exceptional thresholds for States with recognize to the deliver of goods is probable to distort the uniform tax regime and growth complexity. Cautioning that such an choppy exercise may, in fact, incentivize small businessmen to indulge in unscrupulous trade practices (say, classifying inter-state deliver as intra-nation) for claiming registration exemption, Singh, as a consequence remarks: "A uniform threshold throughout India is the excellent manner forward as the same is in line with the founding concepts of GST."

If in any respect, the GST Council's this selection is so factually irrational, then what will be the reason for the GST Council to recollect it within the first place? shedding light in this, Agarwal reasons, "more than one thresholds can be justified presently considering the states in India have no longer advanced equally on the financial the front and consequently the equal rule across the united states of america can't be implemented".

Concurring with Agarwal's views, Anil Bhardwaj, Secretary preferred of Federation of Indian Micro and Small & Medium establishments (FISME), says, "an ordinary dealer in a hill state like Manipur could have a long way much less turnover than the only in Delhi or Mumbai". And, consequently, for the representative of the enterprise huge umbrella corporation, this type of rest does make experience.

Going in addition, according to Bhardwaj, having different exemption restriction does no longer in any manner abate the system because the mega tax framework currently has, in vicinity many checks and balances that help its lengthy-time period growth throughout the usa. "in the gift dispensation of GST, regardless of the exemption threshold in force in a country, maximum MSMEs need to check in with GST because in any other case, they cannot input into interstate exchange. Secondly, most MSMEs being B2B suppliers should sign in with GST as their buyers decide upon to shop for from GST-complaint providers to keep off problem of opposite credit mechanism. Thirdly, MSMEs themselves now decide on GST registration to take credit of tax on their buy," contends Bhardwaj.

However, Sumit Dutt Majumder, Former Chairman, CBEC, has a distinct take on the problem. As in line with him, such a rest by using the authorities will subsequently result in complicating the entire tax framework. Majumder, consequently, indicates that all the aforesaid small states have to have only one threshold i.e. either the doubled quantity of Rs 20 Lakh or the modern-day level of Rs 10 Lakh, and small states want to come to a consensus on finding out the commonplace threshold out of the 2 proposed - a situation,  that for now, appears out of sight.

AAR Rulings - including greater headaches

presently, the way exclusive states comply with cases of enhance Ruling government (AAR), in which for similar instances, extraordinary states have observed one of a kind rulings have emerged as a main trouble, requiring pressing redressal by way of the policymakers.

"Industry remains harassed at the threat created by using AAR rulings, wherein divergent rulings are given on a unmarried trouble," says Rajat Mohan, accomplice, AMRG & friends. bringing up the recent instance in which, in one case of sun strength plant life, at the same time as Maharashtra AAR implemented a rate of 18%, the Karnataka AAR applied 5% tax price, he says, " although all and sundry knew that GST is a brand new regulation and would be tweaked in future to improvise, but in previous couple of months entire policy of GST 'one country, one tax' has been modified to each one, decide for oneself."

Consistent with Mohan, recent adjustments made in GST has essentially reduced the complete regulation into a charade and some of the guidelines like the Kerala cess, country-clever registration criteria and the separate threshold for goods and offerings might upload to the pan-India complexities for organizations. "GSTN could additionally have sleepless nights in implementing this law with divergent taxation regulations", Mohan adds.

On the roadmap beforehand, enterprise leaders opine that GST council desires to take price and restart the work of aligning tax rules, as a way to make certain that whole united states signs and symptoms and dances on the equal tunes. "authorities needs to realize the age-old precept of team spirit of command and legally region all AAR's and AAAR's below a very best courtroom judge to make sure harmony of orders", says Mohan of AMRG pals, even as Majumder, the Ex CBEC Chairman, believes: "There must be one common advance ruling authority based totally at Delhi with benches at each quarter, as is the placement with the Customs Excise and provider Tax Tribunal (CESTAT). The decision of one such AAR ought to have application across the u . s . a .."

In which's the ITC

The ability of a enterprise to say input tax credit score (ITC) is one of the hallmark of GST, however increasingly more we are seeing sectors being omitted of the purview. as an instance, inside the 33rd GST Council assembly hung on twenty fourth February, 2019, GST Council slashed the GST costs on residential housing, but denied developers from claiming ITC.

Currently, GST is levied at an effective rate of 12 percent (trendy fee of 18 percent much less a deduction of 1/3rd of price for land) on everyday housing and powerful price of 8 percent (concessional price of 12 percentage much less a deduction of one/third of cost for land) on low cost housing on payments made for underneath-construction property, in which final touch certificates has not been issued at the time of sale. under this tax shape, developers had been allowed to avail and make use of ITC for discharging the stated GST liability. but, according to the new rules the GST 

costs on below-production assets as follows:

Effective GST price of five% without ITC on residential residences outside cheap segment

Effective GST of 1% without ITC on inexpensive housing properties

At the same time as this assertion of lower fee powerful 01 April 2019 has lowered the charges drastically, one must no longer turn a blind eye to the complications with admire to the said change.

below this modification, builders shall now not be able to avail and make use of ITC whilst 

discharging GST at decrease costs. For a developer and each person else associated with the actual estate area, this breaks the complete chain of GST and is going towards the very person of GST.

Because of withdrawal of ITC facility (i.e. blockading of credit chain), GST paid on inward substances will form a part of value, resulting in increase within the cost of creation and reduced profitability for developers. further, real property builders might also bypass in this burden to the remaining customers within the form of expanded sale fee. as an example, the GST fee on Cement is at 18% even as on Elevator, it is 28%.

"The decrease charges would cause a revival of the demand for under construction flats, which had tapered down as shoppers have been who prefer ready flats which did no longer entice any GST . Having sure categories which are not eligible for enter tax credit is an aberration of the simple principles of a very good GST, in addition to leading to issues of traceability of transactions and making the transactions opaque, "says MS Mani, partner, Deloitte India.

Creation of a decrease rate structure with out a ITC facility is not new underneath GST. in the past, any such scheme became introduced in hospitality quarter, in which GST eating places had been charged at a decrease charge of five% without a ITC. This has, but, not caused any advantages for clients and best brought about extended complexity.

Lower slab with restrict on input tax credit score is in all likelihood to lead to cost-gain evaluation of lower price vis-à-vis loss of credit score. wherein the lack of credit is big and the builders are unwilling to endure the loss, the identical may result in boom in base charge. Facility to rate GST at lower fee and not using a input tax credit has been tried for particular eating places in the beyond. unfortunately, the stated scheme did no longer acquire the intended consequences. thus, it'd be interesting to see whether or not the real-estate sector behaves differently and implementation of the stated scheme, results in decrease buy value inside the arms of homebuyers," says KPMG India's, Singh.