Tobacoo, Alcohol, meat is not our Supper
Avoid TV, NEWSPAPER TO STAY POSITIVE
SEE DISCOVER, EXPLORE NEW THINGS
READ PURAN, VEDAS
Tobacoo, Alcohol, meat is not our Supper
Avoid TV, NEWSPAPER TO STAY POSITIVE
SEE DISCOVER, EXPLORE NEW THINGS
READ PURAN, VEDAS
Kids are the biggest observer in the Universe
Always Speak Truth
To Believe everyone
Expect Nothing or Open Mind
Quality Living, Serving
Don’t Show off, Live with that you Own
Respect the Rule of Nature
Above all 100%
Don’t remember the past.
Even do not think the future.
Live in present.
To live happy = Live in present only.
ICAI-UDIN : Negative List
1. Auditor’s Opinion/Reports issued by the Practicing Chartered Accountant under any Statute w.r.t. any entity or any person (e.g.: Tax Audit, Transfer Price Audit, VAT Audit, GST Audit, Company Audit, Trust Audit, Society Audit, etc.,
2. Valuation Reports,
3. Quarterly Review Reports,
4. Limited Review Report,
5. Information System Audit,
6. Forensic Audit,
7. Revenue / Credit / Stock Audit,
8. Borrower Monitoring Assignments,
9. Concurrent / Internal Audit and like,
10. Any report of what so ever nature issued including Transfer Price Study Report, Viability Study Report, Diligence Report, Due Diligence Report, Management Report, etc.
INCOME TAX CASES:- JUDGEMENT ON PENNY STOCK IN THE FAVOUR OF ASSESSEE
1. *Amar Nath Goenka and ors v. ACIT (ITA No. 5882/D/18) (ITAT, Delhi) (12/12/2018)
SECTION 10(38) AND SECTION 68 – LONG TERM CAPITAL – PENNY STOCK ASSESSEE DISCHARGING THE ONUS BY PLACING ON RECORD VARIOUS DOCUMENTARY EVIDENCES – AO DID NOT MAKE ANY INDEPENDENT ENQUIRY – STATEMENT OF THIRD PARTY WHICH WAS NOT SUBJECTED TO CROSS EXAMINATION IS INADMISSIBLE EVIDENCE – ADDITION DELETED
2. Mukta Gupta v. ITO (ITA No. 2766/D/18, 2767/D/18) (ITAT, Delhi) (Dated 26/11/2018)
SECTION 10(38) & 68 – PENNY STOCK – ADDITION ON ACCOUNT OF PROFIT ARISING FROM SALE OF SHARES, ALLEGED AS PENNY STOCK CANNOT BE MADE UNDER SECTION 68 – SUFFICIENT EVIDENCES WERE ON RECORD TO PROVE VERACITY OF THE TRANSACTION – SEBI REPORT BY ITSELF WAS NOT SUFFICIENT TO DENY THE TRANSACTION ENTERED BY THE ASSESSE.
3. Veena Gupta v. ACIT (ITA No. 5662/D/2018) (ITAT, Delhi) (27/11/2018)
SECTION 10(38) AND SECTION 68 – LONG TERM CAPITAL – PENNY STOCK ADDITION BASED ON STATEMENT OF THIRD PARTIES- NO OPPORTUNITY OF CROSS EXAMINATION – ADDITION LIABLE TO DELETED
4. Ajay Goel and ors v. ITO (ITA No. 4481 – 84/D/18) (ITAT, Delhi) (03/12/2018)
SECTION 10(38) & 68 – LONG TERM CAPITAL GAIN ON SALE OF PENNY STOCKS – ADDITION ON THE BASIS OF INFORMATION FROM INVESTIGATION WING WITHOUT AFFORDING OPPORTUN ITY OF CROSS EXAMINATION – ADDITION NOT SUSTAINABLE*
List of goods which attracts GST 28% rate with HSN codes:
Many goods and services has changed since the time it was introduced. For example when GST was introduced, near 229 were having GST rate of 28%. Whereas now only 31 items net are having GST rate of 28%. Below is the list of 31 items having GST Rate of 28%.
This list updated upto 1st January 2018 and incorporates all the changes notified by government on the basis of suggestion given by GST council in the 31st meeting.
Explanation 1.- For the purposes of this entry, value of supply of lottery under sub-section (5) of section 15 of the Central Goods and Services Tax Act, 2017 shall be deemed to be 100/128 of the face value of ticket or of the price as notified in the Official Gazette by the organising State, whichever is higher.
Explanation 2.- (1) “Lottery authorized by State Governments” means a lottery which is authorized to be sold in State(s) other than the organising state also. (2) Organising state has the same meaning as assigned to it in clause (f) of sub-rule (1) of rule 2 of the Lotteries (Regulation) Rules, 2010 Any chapter 31 Actionable claim in the form of chance to win in betting, gambling, or horse racing in race club Any Chapter
4 golden rules of fundamental analysis:
People, who are working in government services or those working with government departments get pensions after retirement from their services. In addition to above those who have contributed towards Employee Provident Fund (EPF) also get pension under Employee Pension Scheme (EPS), 1995. Even after the death of the employee, their family members are also entitled to get the pension from the employer as well as under EPS.
Taxable Amount = Received Amount – Exempt Amount
Some employers contribute towards superannuation fund of employees so that they get pension after their retirement. From 2004, the government has shifted all its new joiners to New Pension System (NPS) where the amount of pension received by them is dependent on the amount contributed by them along with the employer to the NPS. Even self-employed can also contribute towards NPS account and get annuity after their retirement.
Generally the words pension and annuity are used interchangeably but strictly speaking the monthly amount received by an employee after retirement from his ex-employer or in connection with employment is called pension and periodical payments received from an insurance company on annuity policy is called annuity but such annuity is also referred to as pension.
Income Tax rules for such pension and annuity
For those employees who receive pension from their ex-employer is taxable under the head salaries. Therefore, it is not only the active employees whose salary are taxable under the head Salaries but also the pension receive by ex-employee is tax under the same head. Like Salaried employees, the pensioners are also entitled to the benefit of standard deduction available upto Rs. 40000/- every year, which has been introduced from this year, against the pension received by them.
You are entitled to commute certain portion of your pension and receive the present value of such commuted value of pension at the time of your retirement. For government employees and those working with government companies the entire value of commute pension is exempt. However, for other employees commuted value of 1/3 of pension is exempt in case the employee receives any gratuity. In case the employee does not receive any gratuity, he can commute pension upto 50% of the pension and claim the same as exempt.
In case your employer had contributed towards superannuation fund or ha purchased superannuation policy for you, the pension received by your from the insurance company is taxable under the head Salary as it is received as a result of your employment. Even for the 1/3 of the commuted portion of pension receivable under the superannuation is fully exempt.
Likewise, the pension received by you under the EPS based on your contribution towards EPF is taxable in your hand. Since this pension is received because of your employment, you are entitled to claim standard deduction as discussed above.
Pension received by the dependent of an employee is called family pension and is taxable in the hands of the dependent recipient/s. However as the pension is not received due to services rendered by the dependent the same is taxable under the head “Income From Other Source”. However, the dependent person who receives the pension is entitled to claim a deduction of 1/3 of the pension received subject to a maximum of Rs. 15000/- against the deduction of Rs. 40000/- available to retired employees.
In order to ensure that you receive a certain sum at a fixed period, you can buy an annuity plan from an insurance company, which in turn will pay the agreed amount at the agreed interval, which is annuity but loosely, called pension. The amount of pension received under an annuity plan is taxable under the head “income from other Sources.” Since this amount does not have any co-relation with any employment, you are not entitled to claim standard deduction against this amount.
The employees who have opted for NPS instead of EPF account have to mandatorily buy an annuity plan from an Indian insurance company for 40% of the accumulated corpus. The pension received by these employee should be taxable under the head Salaries but since the employee can continue to contribute to his NPS account even after he leaves his employment or even when he turns self-employed, it is doubtful whether in such situation the annuity received will become taxable under the head Salaries or it should be taxable under the head “Income From other Sources”. Likewise even a self-employed person can also contribute towards the NPS account and receive pension. Presently the income tax law does not have any clear-cut provision as to the head under which the annuity received for annuity policy bough on retirement should be taxed. In my opinion for the salaried, the pension should be taxable under the head Salaries and should be entitled for standard deduction upto Forty thousand rupees. However, since the law is silent on this aspect it is risky to offer it under the head Salaries for claiming the standard deduction. Additionally salaried and self-employed both can contribute additional fifty thousand to claim deduction under Section 80 CCD(1B) so the head under which the pension received will become taxable and whether one will be entitled to claim standard deduction is a grey area and clarificatory amendment of the law is needed to clear the clouds.
Some points which are generally considered while preparing CMA Data
CMA means Credit Monitoring Arrangements. This full form of CMA is as given by Reserve Bank of India. For arranging working capital finance information about income, expenses, assets & liabilities is required to be given in a specific format to the bank by applicant. This specific format is referred to as CMA Report / CMA Data. Audited P & L A/c & Balance Sheet of at least last 1 year, estimates of current year & projections of next at least 2 years are provided to bank by the applicant along with Funds Flow Statement, Ratio Analysis, Comparative Statement of Current Assets & Current Liabilites & Statement of Maximum Permissible Bank Finance. Number of years for which data is required may vary from bank to bank. Even after getting the finance such data is required to be submitted to the bank periodically.
If we concern varied goods and services there are total of 45 classes out of which 34 classes are for products and 11 are stated for services category. The main aim of classification of trademark goods and services is to prepare a complete hierarchy which trademark is being used under which category. While following this strategy; it will be easy for the govern bodies to handle the trademark classes list at domestic and international level.
Trademark Classes List of Goods and Services:
Class 1: is for Chemicals, Resins, and Plastics.)
Class 2: is for Varnishes, Paints, and Anti-corrosion substances
Class 3: is for Cosmetics, Hair Oils and Lotions, and Cleaning Preparations
Class 4: is for Greases, Lubricants, and Fuels
Class 5: is for Pharmaceutical, Medical, and Sanitary Preparations
Class 6: is for Goods of Metals and Alloys, Ironmongery and Hardware Products
Class 7: is for Equipment and Machinery
Class 8: is for Hand-operated Devices and Tools
Class 9: is for Scientific, Electrical, and Technological Apparatus
Class 10: is for Medical and Surgical Instruments and Apparatus
Class 11: is for Heating, Cooling, Drying, and Refrigerating Apparatus
Class 12: is for Land, Air, and Water Vehicles
Class 13: is for Explosives and Firearms
Class 14: is for Precious Metals and Stones, and Jewelry Items
Class 15: is for Diverse Musical Instruments
Class 16: is for Paper Goods, Stationery Products, and Printed Materials
Class 17: is for Rubber and Plastic Goods and Products
Class 18: is for Products made of Hides and Leathers
Class 19: is for Various Non-Metallic Building Materials)
Class 20: is for Furniture, and other precious household Articles
Class 21: is for Kitchen Utensils, Household Appliances and Glass products
Class 22: is for Ropes and Cordage, Fibers, and Stuffing materials
Class 23: is for Threads and Yarns for uses in textiles
Class 24: is for Textiles and Fabrics
Class 25: is for Apparels and Clothing
Class 26: is for Fringes and Fancy Goods and Products
Class 27: is for Floor Coverings and Wall Hangings
Class 28: is for Toys, Sporting, and Sports Goods
Class 29: is for Meats and Processed Food Items
Class 30: is for Auxiliary Food and Beverage Items
Class 31: is for Agricultural and Horticultural Products
Class 32: is for Beers, Light Beverages, and Fruit Juices
Class 33: is for Wines and Spirits
Class 34: is for Tobacco Products and Smokers’ Articles
Class 35: is for Advertising and Business Services
Class 36: is for Insurance and Financial Services
Class 37: is for Building, Construction and Repair Services
Class 38: is for Telecommunication Services
Class 39: is for Transportation and Storage Services
Class 40: is for Treatment of Materials Services
Class 41: is for Education and Entertainment Services
Class 42: is for Computer, Scientific and Legal Services
Class 43: is for Hotels and Restaurants Services
Class 44: is for Medical, Beauty, and Agricultural Services
Class 45: is for Personal and Social Services Services
(i). Do you want to file Nil return?
Note:Nil return can be filed by you if you have not made any outward supply (commonly known as sale) AND have NOT received (commonly known as purchase) any goods/services AND do not have any liability.
(ii). Have you made inward supplies (other than reverse charge supplies) during the period (Table 4A):
(iii). Have you made inward supplies (attracting reverse charge) during the period (Table 4B):
(iv). Have you received any supplies from un-registered suppliers) during the period (Table 4C):
(v). Have you imported any service (Table 4D):
(vi). Do you intend to amend inward supplies reported in Table 4A (other than reverse charge) (Table 5):
(vii). Do you intend to amend inward supplies reported in Table 4B (reverse charge) (Table 5):
(viii). Do you intend to amend inward supplies reported in Table 4C (supplies received from un-regd. persons): (Table 5)
(ix). Do you intend to amend import of services reported in Table 4D (Table 5):
(x).Have you received any debit/credit note (Table 5B):
(xi). Do you intend to amend debit/credit note reported in Table 5B (Table 5C):
(xii). Have you made any outward supply during the Qtr (Table 6):
(xiii). Do you intend to amend outward supplies reported in Table 6 in earlier quarters (Table 7):
(xiv). Have you paid any advance amount for reverse charge inward supplies or made adjustment there to [Table 8A(1) / 8A(2)/8B(1)/8B(2)]:
(xv). Do you intend to amend advance amount received for reverse charge supplies [Table 8A(1) / 8A(2)/8B(1)/8B(2)]:
(xvi). Do you intend to claim refund from cash ledger (Table 12):
(xvii). Previous period(s) / return(s) liability, if any: Previous period (s) / return (s) liability would be system determined.
Applicants are required to follow steps given below:
Step 1 – Add/Update Entity Details
Step 2 – Add/Update Firm’s Branch Details
Step 3 – Add/Update all director/partner Details as follows —
> For Proprietorship — Proprietor’s details
> For Partnership & LLP — Details of all Partners
> For Limited Company — Details of all directors
> For Trust — Details of Trustee
>For Society — Details of Secretary
Step 4 – Upload address proof of the firm and bank certificate(or pre-printed cancelled cheque)
– For modification upload following additional documents:
> Signed Copy of Application
>scanned copy of Part-C of ANF-2A
Step 5 – Pay & Verify Fees
Step 6 – Preview and Print Application
Step 7 – Submit application. Generate and Print IEC
Deferred tax refers to the tax effect of temporary differences between accounting income that is calculated by taking into consideration the provisions of Companies Act, 2013 and taxable income that is calculated by taking into consideration the provisions of Income Tax Act,1961.
While calculating taxable income, certain expenses debited to Profit or Loss A/c are disallowed in one period and gets reversed in future period in accordance with provisions of the Income-tax Act. In the same manner, certain incomes credited in one period to Profit or Loss A/c form part of the income in future period. Such items are considered as temporary differences.
(i) In case of treatment of deferred revenue expenditure (say, advertisement expenses incurred in one year but the benefit of which extends in subsequent years also), the expenditure incurred is amortised over a period of time but as per tax laws, it is allowed wholly in first year in which such deferred revenue expenditure is made.
(ii) In case of advance incomes received (say, advance rent), the disclosure of same is mandatory for the purpose of calculating taxable income. However, this income is recognized in the books of account when actually earned.
(iii) In case of different book and tax depreciation which could arise due to difference in depreciation rates or methods of calculating depreciation i.e. SLM or WDV or differences in composition of actual cost of assets.
(iv) In case of provisions made in anticipation of liabilities where the liability is allowed in the subsequent period when it crystalizes.
Deferred Tax Accounting:
The accounting, presentation and disclosure of deferred tax is carried out as per the provisions of “Accounting Standard- 22” (i.e., Accounting for Taxes on Income) or “Ind AS- 12” (i.e., Income Taxes). Deferred tax asset or deferred tax liability is created by debiting/crediting Statement of Profit and Loss.
The following table shows different cases where deferred tax asset/ liability is required to be created:
|CASES||DEFERRED TAX ASSET/ LIABILITY|
|Book Profit > Taxable Profit||Deferred Tax Liability (DTL)|
|Book Profit < Taxable Profit||Deferred Tax Asset (DTA)|
Deferred Tax Asset/ liability in case of LOSS:
Due to differences in income as per financial books and taxable profit as per tax laws, there is a certainty that one book reflects loss and other shows profit. In that case, the following treatment shall be made:
|CASES||DEFERRED TAX ASSET/ LIABILITY|
|Loss as per books of accounts and Profit as per tax laws (Subject to the principles of prudence)||Deferred Tax Asset (DTA)|
|Loss as per tax laws and Profit as per books of account (MAT has to be paid)||Deferred Tax Liability (DTL)|
Deferred Tax Computation Rate:
The deferred tax asset/liability is calculated at the normal rate of tax.
Deferred Tax Asset Accounting:
Deferred Tax Asset (DTA) account is created by crediting Profit & Loss Account. The following journal entry is required to be passed.
Deferred Tax Asset A/C……………. Dr
To Profit & Loss A/C……………………..….
Deferred Tax Liability Accounting:
Deferred Tax Liability (DTL) account is created by crediting Profit & Loss Account. The following journal entry is required to be passed.
Profit & Loss A/C ……………. Dr
To Deferred Tax Liability A/C ………..…….
To Change, must you first flow out of your Comfort zone,
to grow, imbibe in you the worthy ingredients of success,
The modus operandi though is in the models – you’ve borne
yet to transform, ‘innovate’ in the secrets you possessed.
The paradigm [an Instrument] that affects a breakthrough change from current state of existence into a newer state of significance.
Deferred Tax is the tax effects of Timing Difference. The whole concept of deferred tax is depending on timing difference.
Accounting income (loss) is the net profit or loss for a period, as reported in the statement of profit and loss, before deducting income tax expense or adding income tax saving.
Taxable income (tax loss) is the amount of the income (loss) for a period, determined in accordance with the tax laws, based upon which income tax payable (recoverable) is determined.
As per AS-22 Timing differences are the differences between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent periods.
Example: – An asset is purchased of Rs.1,00,000/- having a useful life of 5 years and allowed 100% depreciation under Income Tax Act. Profit before depreciation is Rs.2,00,000/-.
Rs. 20,000/- (i.e. 100,000/5) is allowed as depreciation while computing the accounting income and Rs.1,00,000/- is allowed as full depreciation in the year of purchase while computing the taxable income.
Hence, Accounting Income is Rs.1,80,000/- (i.e. 2,00,000-20,000)
Taxable Income is Rs.1,00,000/- (i.e. 2,00,000-1,00,000)
Hence, the difference between Accounting Income and Taxable Income is created in this year and shall be created in a subsequent year (by the balance depreciation of Rs. 80,000=1,00,000-20,000) because in subsequent years, while computing the accounting income the entity shall deduct the depreciation of Rs. 20,000 but nil depreciation shall be allowed while computing the taxable income. This is called timing difference.