Finprep consulting

DID YOU KNOW that your electricity bill could be a reason for you to land up in jail?

Wait, let me connect the dots.
⭕ So you can land up in jail for a period of 6 months to 7 years for not filing your income tax return (ITR).
⭕ And the amount you pay every year towards your electricity bill is one of the conditions for determining whether you are required to file your ITR or not.

As weird as it sounds, here are a few other conditions that make it compulsory for you to file an ITR, that have no correlation with your income:
📌 If your electricity bill for the year is more than Rs. 1 lakh
📌 If you have more than Rs. 50 lakhs of deposit in your savings accounts in a year
📌 If you have more than Rs. 1 crore of deposit in your current accounts in a year
📌 If your annual sales is more than Rs. 60 lakhs
📌 If you’ve earned more than Rs. 10 lakhs as professional fees during the year

Considering the ITR filing for this year has just started, you might wanna contact your CA before it's too late.

Exciting news for hostel owners! The Madras High Court has ruled that hostels are exempt from GST. This landmark decision brings relief to hostel operators and underscores the importance of clarity in tax regulations. Let's stay informed and celebrate this favorable ruling for the hospitality industry.

In March 2024, businesses should focus on completing GST compliances for FY 2023-24. This includes reconciling Input Tax Credit (ITC) claims, filing pending GST returns like GSTR-1, GSTR-3B, and GSTR-9, and paying any outstanding GST liabilities to avoid penalties. Conducting an internal audit ensures compliance with GST laws, while maintaining accurate documentation is crucial. Reviewing GST rates and exemptions, rectifying errors in previous returns, and providing GST compliance training to staff are essential. Engaging with GST consultants can address complex issues, while preparing for the annual GST audit ensures readiness. Additionally, businesses should start planning for FY 2024-25 by budgeting for GST liabilities and considering changes in operations. By undertaking these activities, businesses can ensure timely and accurate GST compliances, fostering regulatory adherence and minimizing risks.

Attention corporate entities! With the tax-saving deadline for FY 2023-24 ending on 31st March 2024, it's crucial to optimize tax strategies. Consider options like accelerated depreciation, R&D credits, and deductions for employee benefits. Explore investment in infrastructure, technology upgrades, and CSR initiatives to avail tax benefits. Utilize deductions under Section 80G and 80IA for charitable contributions and infrastructure projects. Review transfer pricing policies and explore tax-efficient supply chain management. Leverage tax planning opportunities before the deadline to minimize tax liabilities and maximize profitability. Consult with tax experts to ensure compliance and strategic tax optimization. Act now to make the most of available tax-saving avenues! -24 -25

Attention all salaried employees! With the tax-saving deadline for FY 2023-24 approaching on 31st March 2024, it's time to act fast. Explore options like investing in ELSS mutual funds, PPF, NSC, or making contributions to NPS before the deadline. Maximize deductions under Section 80C, 80D, and 80CCD(1B) by investing in insurance, health plans, and pension schemes. Utilize HRA, LTA, and other exemptions to reduce taxable income. Don't miss out on these opportunities to save on taxes and secure your financial future. Consult with a tax advisor to make informed decisions. Act now to make the most of this tax-saving window! -24 -25

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𝐖𝐡𝐲 𝐢𝐬 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 43𝐁(𝐡) 𝐒𝐮𝐝𝐝𝐞𝐧𝐥𝐲 𝐨𝐧 𝐄𝐯𝐞𝐫𝐲𝐨𝐧𝐞'𝐬 𝐑𝐚𝐝𝐚𝐫?

Section 43B(h) was introduced in Finance Act, 2023. But as FY end is near, consultants are constantly getting calls from clients & their accountants. Everybody wants to understand the section and want to know how to finalize accounts under this new rule.

𝐖𝐡𝐚𝐭 𝐝𝐨𝐞𝐬 𝐬𝐞𝐜𝐭𝐢𝐨𝐧 43𝐁(𝐡) 𝐬𝐚𝐲?

Any sum owed by an assessee to a micro or small enterprise that is outstanding beyond the time limit specified in section 15 of the MSMED Act, 2006, shall be allowed only in the previous year in which such sum is paid.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐭𝐡𝐞 𝐭𝐢𝐦𝐞 𝐥𝐢𝐦𝐢𝐭 𝐩𝐫𝐞𝐬𝐜𝐫𝐢𝐛𝐞𝐝 𝐢𝐧 𝐬𝐞𝐜𝐭𝐢𝐨𝐧 15 𝐨𝐟 𝐌𝐒𝐌𝐄𝐃 𝐀𝐜𝐭?

1. When there is no agreement between the buyer and the seller; payment to be done within 15 days of purchase.

2. When there is an agreement; Payment to be done within the time-limit decided by buyer and seller which can be maximum 45 days.

𝐋𝐞𝐭’𝐬 𝐮𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝 𝐰𝐢𝐭𝐡 𝐞𝐱𝐚𝐦𝐩𝐥𝐞𝐬:

1. Purchases done from MSE seller on 01.03.2024. No agreement regarding credit period. Time allowed for payment will be 15 days.

📌If amount is o/s as on 31.03.2024, purchases will be disallowed

📌If not paid within 15 days but paid before 31.03.2024, purchases will be allowed.

2. Purchases done from MSE seller on 01.03.2024. Seller and buyer agreed for a credit period of 40 days. The expense will be allowed even if payment is o/s as on 31.03.2024

3. Purchases done from MSE seller on 01.02.2024. Seller and buyer agreed for a credit period of 90 days. As per MSMED Act payment must be made within 45 days. If the amount is o/s as on 31.03.2024, expense will be disallowed.

𝐊𝐞𝐲 𝐜𝐥𝐚𝐫𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬:

📌The provision is applicable from AY 2024-25. Purchases done in FY 2023-24 will be covered.
📌Purchases from Medium Enterprises not covered.
📌Applies only to purchases from manufacturers and service providers.
📌Does not apply to purchases before 01.04.2023, no disallowance even if unpaid by 31.03.2024.
📌Even if payment is made before ITR filing, it will be allowed only in the year of payment.
📌In case of any dispute, the timeline starts post dispute resolution.
📌Not applicable to the buyers opting for presumptive taxation.
📌Applicable for all the buyers whether MSME or non-MSME.

𝐀𝐜𝐭𝐢𝐨𝐧 𝐏𝐨𝐢𝐧𝐭𝐬 𝐟𝐨𝐫 𝐁𝐮𝐲𝐞𝐫𝐬
📌Send a letter to verify your suppliers’ MSE status’. Ask for their Udyam Certificate.
📌Maintain a separate MSE supplier database, tracking due dates and payments.
📌no MSE creditor's outstanding exceeds 15/45 days as on 31.03.2024.
📌Pre-agree on payment terms for purchases.
📌Regularly monitor payments and outstanding to MSE suppliers.

𝐆𝐮𝐢𝐝𝐞𝐥𝐢𝐧𝐞𝐬 𝐟𝐨𝐫 𝐒𝐞𝐥𝐥𝐞𝐫𝐬
📌Display Udyam registration on invoices; inform buyers of your MSE status.
📌Specify a credit period (up to 45 days) on invoices.
📌If not Udyam registered, seek assistance from your MSME consultant

HOW GAINS FROM INTRADAY TRADING ARE TAXED

Ever since the covid-19 pandemic set in, many people resorted to direct trading in stocks. Some of the brokerages have seen a surge in the number of new demat accounts after February this year. If you are among those who traded in stocks during the financial year 2020 and are planning to file tax returns for the year, you should know how the gains from stock trading are taxed. Also, let’s understand where to report them in the income tax return (ITR) and which ITR form to file.

>>>>> Trading is different from investing

Buying or selling of stocks on the same day is known as intraday trading. In the case of investing, the investor takes the delivery of shares and holds it for at least a day. In intraday trading, the intention of the trader is not to hold the stock for the long term based on the growth prospects of the underlying stock, but to make foreseeable gains based on the volatility of shares on that particular day.

Therefore, income from intraday trading is either speculation gain or loss, which comes under the head of business income. It is added to the other incomes such as salary and taxed as per the marginal slab rate of the person.

“As intraday trading is done with the objective to earn income or profit from fluctuation in prices of the stocks, thus it is arguably considered under business income category taxable under the head ‘Income from business or profession,".

While buying a particular stock, the trader or investor has to mention whether she intends to buy for intraday or delivery (to hold the shares for more than one day).

In the case of investing, the transaction of sale gives rise to either capital gains or capital losses. These gains and losses are classified as long-term and short-term capital gains depending on the holding period. If a stock is held for more than a year, they are classified as long-term, else short-term. The long-term gains above ₹1 lakh are taxed at 10% while short-term gains are taxed at the rate of 15%.

>>>>> Expense deduction

While arriving at the income or loss from trading of stocks, you are allowed to deduct the expenses related to trading in stocks as business expenses. “Expenses such as internet charges, telephone charges, broker’s commission and demat account charges, among others, can be claimed as deduction as business expenses," .

Also, losses arising from intraday trading are allowed to be set off only against profit from any other speculative business. “You cannot set off the speculative loss from incomes such as salary, any other business, house property or any other income. You can carry forward the loss to the next four years for set off against future speculative income," said Gupta. To carry forward the losses, you must disclose them in your ITR.

>>>>> Which ITR form to use?

ITR-3 has been notified for FY19-20 for individuals, including salaried individuals, having income from profits from business or profession. “ITR-3 may be used by intraday traders for filing their tax returns by reporting all the required details therein (including any loss from such trading),".

The income tax department has now enabled the filing of ITR-3 for the assessment year 2020-21.

DISCLAIMER: THE CONTENTS OF THIS ARTICLE ARE FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE ADVICE OR A LEGAL OPINION AND ARE PERSONAL VIEWS OF THE AUTHOR.
READERS ARE REQUESTED TO CHECK AND REFER TO RELEVANT PROVISIONS OF STATUTE, LATEST JUDICIAL PRONOUNCEMENTS, CIRCULARS, CLARIFICATIONS ETC BEFORE ACTING ON THE BASIS OF THE ABOVE WRITE UP.

EPF contributions to be deducted at 12%, starting August 1

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Source : "TimesNowNews" via Dailyhunt

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EPF contributions to be deducted at 12%, starting August 1 New Delhi: As part of relief measures announced by the government under the Atma Nirbhar Bharat package, in May, Finance Minister Nirmala Sitharaman announced that monthly EPF contributions (of both employers and employees) were to be reduced from 24 per cent to 20 per cent for t...

We can still file Income Tax Return for AY 2019-20 (F. Y. 2018-19) Till September 2020

Due date for filing income Tax return for A.Y. 2019-20 (F Y 2018-19) has extended from 31st july 2020 to 30th sep 2020 as per notification dated 29 July 2020

Due to COVID-19 pandemic and challenges faced by taxpayers, the Government has extended dates for various direct tax compliances. Here is a list of due dates/extended due dates.

Important Announcement regarding Medical Financial Assistance to Members & their dependents suffering from CORONA - CABF
For details visit
https://www.icai.org/post/covid19cabf
For detailed info mail to [email protected]

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