07 Oct 22

Startup India

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Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem that is conducive for the…

07 Oct 22

What is Consultancy?

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CONSULTANCY What is consultancy? Consultancy means offering an expert opinion in a particular field. Consultants and consultancy firms are the common terms…

October 7, 2022
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To initiate any activity to add growth in a business the first question rises up in our mind how does it benefit…

October 7, 2022
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BRIEF OF INDIAN INCOME TAX SYSTEM Tax is a financial charge imposed on the taxpayer. Through this, the Government revenue is raised…

October 7, 2022
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The Foreign Contribution (Regulations) Act started with an objective to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain…

October 7, 2022
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Are current liquid fund returns make it worth your while? At the moment liquid funds are delivering an annualized return of 5.5%-6%.…

October 7, 2022
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Are Gilt Funds the most secure bet after the Franklin episode? Gilt funds invest primarily in Government securities (G-secs) issued by the…

October 6, 2022
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Limit on Cash transactions in Business Cash is the only source by which tax evasion, Black money and other business frauds happen,…

October 6, 2022
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NEW TAX REGIME OR OLD ? In Budget 2020, our finance minister had announced a new tax regime. The finance minister has…

October 6, 2022
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When you make a plan to apply for ISO certification this question might come in your mind which ISO standard is most…

Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem that is conducive for the growth of startup businesses, to drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower startups to grow through innovation and design.

Several programs have been undertaken since the launch of the initiative on 16th of January, 2016 by Hon’ble Prime Minister, to contribute to his vision of transforming India into a country of job creators instead of job seekers. These programs have catalyzed the startup culture, with startups getting recognized through the Startup India initiative and many entrepreneurs availing the benefits of starting their own business in India.

An entity shall be considered as a Startup:

1. If it is incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India

2. Up to seven years from the date of its incorporation/registration; however, in the case of startups in the biotechnology sector, the period shall be up to ten years from the date of its incorporation/registration

3. If its turnover for any of the financial years since incorporation/registration has not exceeded INR 25 Crores

4. If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation

Note: An entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘Startup’.

Eligibility for Startup Registration

The company to be formed must be a private limited company or a limited liability partnership.
The firm must provide innovative schemes or products.
It should be a new firm or not older than five years, and the total turnover of the company should be not exceeding 25 crores.
The firms should have obtained the approval from the Department of Industrial Policy and Promotion (DIPP).
To get approval from DIPP, the firm should be funded by an Incubation fund, Angel Fund or Private Equity Fund.
The firm should have obtained a patron guarantee from the Indian patent and Trademark Office.
It must have a recommendation letter by an incubation.
Capital gain is exempted from income tax under the startup India campaign.
Angel fund, Incubation fund, Accelerators, Private Equity Fund, Angel network must be registered with SEBI (Securities and Exchange Board of India).

The benefit under Startups India Scheme

For availing various benefits under the Startup India scheme, an entity would be required to be recognized by DIPP as a startup by applying at https://www.startupindia.gov.in/content/sih/en/startupgov/startup-recognition-page.html

The benefits provided to recognized startups under the Startup India initiative are:

1. Self-Certification: Self-certify and comply under 3 Environmental & 6 Labour Laws

2. Tax Exemption: Income Tax exemption for a period of 3 consecutive years and exemption on capital and investments above Fair Market Value

3. Easy Winding of Company: In 90 days under Insolvency & Bankruptcy Code, 2016

4. Startup Patent Application & IPR Protection: Fast track patent application with up to 80% rebate in filing patents

5. Easier Public Procurement Norms: Exemption from requirement of earnest money deposit, prior turnover and experience requirements in government tenders

6. SIDBI Fund of Funds: Funds for investment into startups through Alternate Investment Funds

Documents required for registration under Startup India

Registration certificate either under:-

A Partnership Firm – To Know more Click on https://www.mycorporation.in/

B Limited Liability Partnership Firm – To know more click on https://www.mycorporation.in/india/llp-register-limited-liability-partnership

C Private Limited Company – To know more click on https://www.mycorporation.in/india/private-limited-company-register-start-pvt-ltd

Pan Card
Address Proof of Business
Details of Director and Partners – PAN, Aadhaar and address proof
The Startups may self-certify compliance in respect of following 6 Labour Laws:

Other Constructions Workers’ (Regulation of Employment & Conditions of Service) Act, 1996

The Payment of Gratuity Act, 1972
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
The Contract Labour (Regulation and Abolition) Act, 1970
The Employees’ State Insurance Act, 1948

Startup Recognition and Tax Exemptions

Startup Recognition:

Under the Startup India Action Plan, startups that meet the definition as prescribed under the G.S.R. notification 501 (E) are eligible to apply for recognition under the program. The Startups have to provide support documents, at the time of application.

Eligibility Criteria for Startup Recognition:

The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership
Turnover should be less than INR 100 Crores in any of the previous financial years
An entity shall be considered as a startup up to 10 years from the date of its incorporation
The Startup should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth. An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Startup”

Startup India: 80 IAC Tax exemption:

Post getting recognition a Startup may apply for Tax exemption under section 80 IAC of the Income Tax Act. Post getting clearance for Tax exemption, the Startup can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation.

Eligibility Criteria for applying to Income Tax exemption (80IAC):

The entity should be a recognized Startup
Only Private limited or a Limited Liability Partnership is eligible for Tax exemption under Section 80IAC
The Startup should have been incorporated after 1st April, 2016

Startup India: Tax Exemption under Section 56 of the Income Tax Act (Angel Tax)

Post getting recognition a Startup may apply for Angel Tax Exemption.

Eligibility Criteria for Tax Exemption under Section 56 of the Income Tax Act:

The entity should be a DPIIT recognized Startup
Aggregate amount of paid up share capital and share premium of the Startup after the proposed issue of share, if any, does not exceed INR 25 Crore.

Procedure of registration under Startups

Registering a profile on the Startup India website is a fairly simple process.

Here is the link for registration https://www.startupindia.gov.in

1. Simply click on ‘Register’ and fill in the details as required in the registration form. An OTP will be sent to your registered email address, post submitting which your profile will get created.

2. You will have an option to select your profile type. For ‘Individuals’, the profile goes live immediately, whereas for ‘Startups’, the profile goes under moderation for 24-48 Hrs, post which you will be able to avail all benefits on www.startupindia.gov.in.

FAQs

What is Startup India?

Can a Foreign company register under Startups?

Any entity having atleast one registered office in India is welcome to register on ww.startupindia.gov.in.

What Qualifies as a Startup under Startup India Scheme?

An entity shall be considered as a Startup:

1. If it is incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India

3. If its turnover for any of the financial years since incorporation/registration has not exceeded INR 25 Crores

Note: An entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘Startup’.

CONSULTANCY

What is consultancy?

Consultancy means offering an expert opinion in a particular field. Consultants and consultancy firms are the common terms used with regards to professionals who provide wide knowledge on a particular subject. There is an increasing demand for the consultant for Chartered Accountant firm owners. This is mainly because consultants have good foresight to predict possibilities of the future. They can provide good assistance with respect to day-to-day operations of upcoming opportunities.
For instance, they can recommend consultancy with respect to audit processes.

What can consultancy at the workplace provide?

In a hectic workplace, creating consultancy can present a challenge. Working to establish a workplace in which policies, procedures, and practices are consistent, however, has its benefits. There are a number of reasons why consultancy is a goal toward which you should work. Take these reasons into consideration when determining how much effort you want to dedicate to establishing this principle within your business space.

Importance of consultancy?

1. Consultancy build trust in the workplace

2. Respect and consultancy go hand-in-hand. You command respect from those who aren’t brave enough to express their own views.

3. Consultancy breeds credibility. A manager’s reputation is built on the policies he/she enforces, actions he/she rewards and pursuits she funds.

4. Positive workplace decisions stem from rational and reliable behavior. The information technology leadership website CIO Update advises that the ability to eliminate emotional decisions, as opposed to haphazard and inconsistent behavior, can make a difference in a company’s long-term survival.

Power of consultancy?

1. Consultancy allows for measurement.
2. Consultancy creates accountability.
3. Consultancy establishes your reputation.
4. Consultancy makes you relevant.
5. Consultancy maintains your message.

To initiate any activity to add growth in a business the first question rises up in our mind how does it benefit to my business.
To identity more opportunities for business growth and access a risk, ISO helps to allow a strategic tool for management. It is processed to review the management system of a company and process to identify weaknesses in the system. This process helps your management team to understand how quality control works and to make improvements. The benefit of ISO are beyond to your every aspect of your business ie: sales, marketing, operations, team engagement.

Benefit to Company

Every Business is customer-focused; ISO helps an organization to understand that its activity is customer-focused and continually improving products and services to meet the expectation of the customer.

ISO ensures your customer that your product and services are measured, monitored and improved by QMS Body and assessment helps to achieve these goals, productivity ultimately profits and improve efficiency.
The customer feels more confidence working with ISO certified company which can provide reliable products or services to their consumers. Which ultimately helps in customer retention and acquisition. ISO is beneficial for both small and large organizations. ISO helps an organization to focus on the important areas of business and improve the efficiency of the team.

It helps to prevent from occurring quality issue on first place to deal with the quality issue, identify the risk to your business and find the solution to control in a structured manner. The external training trends the employee of an organization to take a more effective decision, to improve efficiency and to make a better relationship with the supplier.

An organization often repeat the mistakes due to having such no record of the difficulties occurred in history. ISO guidelines trained your management team to maintain a system to keep a recording of problems the company faced in past and seek out the root cause and find the potential solution.

ISO trained your management system to measure, analyse, monitor and evaluate the potency of your management system.

It helps employees to know that organization is committed to eliminating the waste and producing the best quality products and services. If you have ever noticed you might realise that how many times you have seen a print advertising on a product marked with ISO CERTIFIED, on the website of the companies and on a banner outside of the companies. When you know that the product and services are certified by ISO you feel confident while consuming them. ISO boost your marketing and it is the best way to advertise your product or service’s’ quality. It helps your employee to understand how to maintain quality and raise awareness amongst the quality of product and services.

Benefit to Customer

As ISO is recognized worldwide and most of the customer only works with companies that certified with ISO because it ensures them that your management systems are constantly assessed and approved. ISO ensures your customer that your product and services are reliable and quality checked.

A consumer always prefers a product and service with high safety and quality and it is his right too and ISO support basic consumer rights .i.e Right to be Informed, right of the safety, right to get the best quality in product and services.

To know more about the ISO or take the ISO certificate please click here https://www.mycorporation.in/india/iso-certification-consultant-standard-9001-2008

BRIEF OF INDIAN INCOME TAX SYSTEM

Tax is a financial charge imposed on the taxpayer. Through this, the Government revenue is raised for the betterment of society and improving the economic situation of a country. Indian government generates major of its revenue from this tax system.

Indian Taxation System is categorized into 2 main parts: – Direct Tax and Indirect Tax.

Direct Tax is a tax that a person pays directly to the government on its own. Unlike Direct Tax, the tax in Indirect Tax is collected by some other on your behalf and paid indirectly to the government.

Income tax is a part of the Direct Tax system, in which the assessee pays taxes and furnishes their return of income to the Income Tax Department.

The power has been given in the constitution of India – Schedule VII – Union List – Entry 82 to the Central Government to levy a tax on any income other than agriculture income.

The Indian Income Tax Law consists of Income Tax Act 1961, Income Tax Rules 1962, Notification and Circulars issued by Central Board of Direct Taxes (CBDT), Annual Finance Acts and judicial pronouncements by the Supreme Court and High Courts.

The Income Tax Department is a part of the Department of Revenue under the Ministry of Finance, Government of India. The Income tax department is administered by the the Central Board of Direct Taxes (CBDT).

WHEN AN INCOME TAX RETURN (ITR) IS REQUIRED TO FILE?

As per the Income Tax Act, in case of Individual, any person who is less than 60 years of age (Normal Individual) and has annual income of more than Rs. 2.5 Lakhs has to file the Income Tax Returns. For senior citizens, the limit is Rs. 3 Lakhs, and for who are more than 80 years old (Super Senior Citizens), the same exemption limit is Rs. 5 Lakhs.

In case of HUF/AOP/BOI, the exemption limit to file the ITR is Rs. 2.5 Lakhs.

(Even if your income does not exceed the above exemption limit, you can file the ITR voluntarily)

But there is no exemption limit in case of company and firms/LLPs. Therefore, it is mandatorily to file the Income Tax Returns in case of Company and Firms.

WHERE TO FILE THE INCOME TAX RETURNS?

The process to file the ITR is referred to as Income Tax filing. A taxpayer can file the ITR online through E-portal of the Income Tax Department. Taxpayers can find the Income tax return forms on the official website of the Income tax department.

To download the same,

-Visit the Income Tax Website: – https://incometaxindiaefiling.gov.in

– On the homepage, click on the link “IT Return Preparation Software” under download tab.

-Select the appropriate “Income Tax Return Form” option from the drop-down menu list.

The income tax department also notifies ITR forms for every assessment year. Assessment year is the year immediately following the financial year for which the return is to be filed i.e For FY 2019-20, the assessment year is 2020-21.

ITR can be filed by downloading the in Excel or Java utility file. But taxpayers who are eligible to file ITR-1 and ITR-4 also have the option to file it online on Income tax portal without downloading any software utility.

If you are eligible to file ITR-1, then you can use option ‘Prepare and submit online’ after login into your income tax user id on the income tax portal.

You can also read my following suggested articles on Income Tax: –

Step by Step procedure for registration at Income Tax Portal.
What is annual income or what types of income to be shown in ITR?
Which ITR Forms to be selected for different types of Income?

The Foreign Contribution (Regulations) Act started with an objective to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations and It prohibits the acceptance and utilisation of foreign contribution or foreign hospitality for the activities can be harmful to the national interest.
Foreign Contribution Regulation Act, 2010 came into force with effect from 11^th May 2011. The Act involves safeguarding national security.

“Foreign Contribution” means any donation or contribution or hospitality receives from any Foreign Source. It includes the following items:

Any Gift or an Article given to a person for personal use.
Any currency whether foreign or Indian in the form of donation or contribution.
The amount received, by way of fee exp. Indian Institute receives a fee from foreign student

Who are eligible to receive foreign contribution?

Any Person registered with FCRA 2010, must have a definite cultural, economic, educational, religious or social programme.
Any Non-Governmental Organization registered with FCRA can receive foreign contribution or donation from foreign sources.

Foreign Contribution is prohibited for:

Election candidate, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper, Judge, Government servant or Govt. Employee, Any Legislature Member, political party
An association or company deals in the production or broadcast of audio news or audiovisual news through any electronic mode, Person resident of India or a Person citizen of India residing outside of India.

Refer to Section-3 of FCRA Act 2010.

Some Clarifications:

A contribution made by a person who is an Indian citizen and lives outside of India not on behalf of any foreign organization but from personal saving shall not be treated as foreign contribution.

Any contribution receives from a person is the origin of India but a citizen of other countries shall be treated as foreign contribution and same is applicable on PIO and OCI cardholder.

Any help receives from a relative in the form of money from the foreign source shall not be treated foreign contribution but any person receiving foreign contribution in excess of one lakh rupees in one financial year needs to inform the Central Government within thirty days from the date of receipt. This form is available on the website: fcraonline.nic.in

Fee receives by any foreign delegate/ participant for attending a seminar/conference/event organized in India and this is going to utilize for meeting the expenditure of hosting organization shall not be treated as foreign contribution.

Any article or gift receives from foreign source for the personal use whose market value in India on the date of such gift exceeds rupees 25000/- shall be treated as foreign contribution.

Who will be called as Foreign Source under the act:

The government itself or Agency of Govt. body of any foreign country or territory.
Any International agency but excludes United Nations, The World Bank, International monetary fund or agencies time to time specify by central govt.

Any Corporation formed in a foreign country whether not being a foreign company.

Any company registered here in India under the act 1956 of companies act, its share capital held, either in singly or aggregate by Govt. of a foreign country, The citizen of a foreign country, Trusts, Societies or other associations of individuals.

Are current liquid fund returns make it worth your while?

At the moment liquid funds are delivering an annualized return of 5.5%-6%. This is lower than the 6.5%-7% seen a year ago. However, it is in line with the downward trending interest rates in the economy. If you are feeling disappointed with these returns and think that it’s better to move to a higher return fund or leave money in the bank itself, first read through the points below and then decide what to do.

Liquid funds are a genre of mutual fund schemes which invest in very short maturity debt and money market securities. These funds are open-ended and allow investors to invest and redeem as required. Given that the funds invest in short term securities, the returns from these schemes reflect the current trend in interest rates.

If you are feeling disappointed with these returns and think that it’s better to move to a higher return fund or leave money in the bank itself, first read through the points below and then decide what to do.

Lower deposit rates

Bank deposit rates too are lower in the current environment. For example, SBI is offering a 4.8% annual interest on a 6-month fixed deposit and around 5.5% interest on a one-year deposit. Similarly, HDFC Bank is offering 5.25% and 5.8% respectively. SBI has lowered its saving bank interest to 2.75% per annum.

Liquid fund provides returns on a broad basis and continues to be better than bank deposits rates with no added pressure of being a bank customer. You can park funds for a couple of days or a couple of months and earn competitive yield in the meantime.

Flexibility

You can buy and redeem funds online and, in some cases, there is an instant redemption facility of up to Rs 2 lakh where the funds can be withdrawn and money is received in the bank within the hours.

Liquid fund returns on a broad basis continue to be better than bank deposit rates with no added pressure of being a bank customer. You can park funds for a couple of days or a couple of months and earn competitive yield in the meantime.

Tax advantage

While there is no benefit in the short term as compared to other options, if you don’t utilize the money and leave it in this option for a long period, after three years, the tax benefits outweigh other short-term investment options.

Higher returns come with more risk

There are funds which can give you higher returns, Ultra short term debt funds and Short term income funds are giving annualized returns of 7%-9% currently which can be tempting sometimes. However, these are not strictly funds meant to part money for a few days to a few months. In these funds, you need to be sure that you have the staying power of 6 months and more.

Some short-term income funds are delivering negative returns too as risk is high in some portfolios.

Given the short-term nature of securities they hold, liquid funds are a good option to park money you may need at any time. In this case you needn’t chase returns, rather look for optimizing returns along with stability. It is in this combination that liquid funds work better than bank deposits. It is this combination that makes liquid funds more attractive than bank deposits.

Are Gilt Funds the most secure bet after the Franklin episode?

Gilt funds invest primarily in Government securities (G-secs) issued by the RBI on behalf of the Government. Since it invests in bonds that are of highest credit quality, capital protection is more or less guaranteed.

With redemption pressures mounting from its investors, Franklin Templeton mutual fund recently announced the closure of its six credit risk funds. Some of them invested in risky corporate bonds that were becoming difficult to sell in this tight liquidity situation.

Under these circumstances, some investors are now contemplating shifting their debt allocation towards gilt funds. Does it make sense for investors?

Let’s, first of all, understand gilt funds.

Gilt funds invest primarily in Government securities (G-secs) issued by the RBI on behalf of the Government. Since it invests in bonds that are of the highest credit quality, capital protection is more or less guaranteed. Unlike corporate bonds, G-secs have a negligible risk of default (or credit risk).

However, gilt funds carry other types of risk that you need to be aware of.

Types of risk

All type of debt funds carry three types of risk – credit risk, liquidity risk and interest rate risk. While credit risk as mentioned is essentially about the risk of default in repayments by the borrower, liquidity risk is about the inability to easily sell securities in the market. Usually, low rated-bonds (AA or below) have higher liquidity risk than that of benchmark G-secs.

Last but not least is the interest rate risk which is the susceptibility of the bond prices to the changes in the interest rates in the economy. Under an increasing interest rate regime, the returns from gilt funds fall, thanks to the inverse relationship between bond prices and interest rates.

Higher the maturity of the government bonds, more volatile their prices. For instance, the price of a five-year government bond falls by five per cent for every one per cent increase in interest rates and vice-versa. With most gilt funds holding bonds with maturity ranging from five to 10 years, they are highly susceptible to interest rate movements in the economy.

Interest rate movements are not unidirectional. It is currently hovering at multi-year lows with higher odds of interest rates going up. With average maturity of G-sec holdings at 8.8 years for gilt funds, there are chances of gilt funds posting negative returns if interest rates rise consistently. Remember, in the calendar year 2017, gilt funds posted a minuscule return of 2.8 per cent, when interest rate rose by about 80 basis points.

Don’t go by past returns

Bond yields of 10-year government bonds – a barometer of the interest rate in the economy – were down from 7.03 per cent a year back to little less than six per cent now. This, in turn, has resulted in a big appreciation of long-term bond prices. Gilt funds, on an average, have given a return of 15.7 per cent in the last one year, which is next only to that of Gold funds.

The track record of gilt funds looks impressive – in the last three, five and 10 years, it gave a CAGR of 8.6 per cent, 9.0 per cent and 8.7 per cent respectively.

Does that make a strong case for investing in gilt funds? Not really.

Investors, therefore, need to proceed with caution without getting lured by past returns. Moreover, there is weak demand for government bonds in the market now. Foreign Portfolio Investors (FPI) on the one hand are selling heavily, while local banks are wary of investing, fearing a rise in yields (and reporting of losses).

Goal orientation

Moreover, choice-making of instruments has to be in sync with the financial goal in mind. Once you arrive at an asset allocation for it, you need to choose from various debt funds in the offing.

As you can see from the above chart, interest rate risk is highest for long duration and gilt funds. For liquid, ultra-short duration and low duration funds, the risks are far lower. For your debt requirements, a combination of investments in these three low-risk debt fund categories should suffice. It will outperform the returns of Bank fixed deposits and protect capital. To beat inflation, however, your portfolio needs the support of equities.

Takeaway

Gilt funds carry negligible risk of default from the borrower, but takes huge interest rate risk. With interest rates seemingly bottoming out, any increase could correct bond and NAV prices sharply. Stick to liquid, ultra-short duration and low duration funds for your debt portfolio allocations.

Limit on Cash transactions in Business

Cash is the only source by which tax evasion, Black money and other business frauds happen, so it is very important for any country to control its Cash transaction. In this line to Control Cash transactions Government of India taken many majors by inserting different clause and different section in many Acts. So I want explain one by one topic where cash transactions happen on daily basis in very brief manner & how our government try to control cash transaction in India.

Limit of Cash transactions in GST:-Now a days as GST is implemented in whole India every businessman want to know how much we use cash in our business what is limit of cash transaction in our business, but as far as from the perspective of GST Act there is no such limit on Cash transaction whether for cash sales or cash purchase, but In income tax there is limit regarding cash transaction.

Limit on Cash transactions in income tax Act:-

Limit for Cash Payments:-In businesses it is very important to incurred expenditure for working capital that is for the operation of Business and in business Capital expenditure also incurred. In income tax act Government impose restriction of Cash expenditure, No Assessee can make cash payment for revenue and capital expenditure exceeding Rs. 10000 in Single day to single person for such transactions.

Note 🙁 In case of Payment made to Hiring, leasing of Good Carriages Limit is Rs. 35,000 instead of Rs. 10,000)

If Payment Exceeds Rs.10, 000 in case of any Expenditure then it is Disallowed it means we cannot claim this as Expenditure.

Limit of Cash Receipts: – As per section 269ST No person shall Receive More than Rs. 2 lakh in aggregate in a single day from single person OR for Single transaction OR in respect of transaction related to one event or occasion from a person.

If violation of law happens then amount of penalty u/s 271 D of Income tax Act will be equal to the amount received by such person.

Limit on Receiving Deposit in cash:-

As Per Sec 269SS any person shall not take any deposit, loan any amount from any other person exceeding 20,000, if any assessee violate the rule then the person shall be liable for penalty equal to loan amount.

Limit on repayment in Cash:-

As per sec 269T any person shall not repay any deposit ,loan , advance to any other person exceeding 20,000 in cash , if the person violate the rule then the person shall be liable for the penalty equal to loan amount.

Following points to be noted:-

The sec 269ST, 269SS & 269T is applicable on every person except the person as mentioned below:-

a) Government

b) Any Corporation established by Central and State Government

c) Any banking Company, Post office & cooperative bank

d) Where debtor and Creditor both person have only agriculture income, neither have any taxable income.

e) Any other notified institutions

f) Any Government Company

Conclusion: – Excess use of Cash is not good for our economy, so we should try our best to make our economy cashless and support government so that day by day our economy strengthen.

Author Name:-CMA Praveen Kumar Tiwari

Websites:- https://www.mycorporation.in/

NEW TAX REGIME OR OLD ?

In Budget 2020, our finance minister had announced a new tax regime. The finance minister has given the taxpayers to choice between the new regime and existing one. The choice is depending on the taxpayers, on what regime they would like to opt for.

The new tax regime is a concessional tax regime with more tax slabs and lower taxes. But to opt for this new tax regime, the taxpayers have to forego certain exemptions and specific deductions and exemptions, which was available to him in the old tax regime.

OLD TAX REGIME – HIGH INCOME TAX RATES BUT LOT OF OPTIONS AVAIALBE FOR DEDUCTION

In current tax regime, the tax rates are high. But there are lot of ways to reduce your tax liability.

In this regime, the taxpayer can reduce his tax liability by claiming some of the exemptions and deductions.

Exemptions: – House Rent Allowance (HRA), Leave Travel Allowance, Leave Encashment, Uniform Allowance, etc.

Deduction: – Standard Deduction of Rs. 50000, 80 C Deduction of upto Rs. 1.5 lakh, Principal and Interest Component of Home Loan, etc.

NEW TAX REGIME – LOWER TAX RATES BUT HAVE TO SACRIFICE THE EXEMPTION/DEDUCTIONS

This new tax regime is much different from the old one.

In new regime, the tax slabs have been increased and the rates of tax has been lowered. But all the exemptions and deductions that was used by taxpayers in existing regime won’t be available in this new tax regime.

The comparison of tax slabs in the old and new tax regime

Tax Slabs (Rs.)	Old Tax Rates	New Tax Rates
0 – 2,50,000	0%	0%
2,50,000 – 5,00,000	5%	5%
5,00,000 – 7,50,000	20%	10%
7,50,000 – 10,00,000	20%	15%
10,00,000 – 12,50,000	30%	20%
12,50,000 – 15,00,000	30%	25%
15,00,000 and above	30%	30%

WHICH WOULD BE BENEFICAL TO OPT?

It is very complicated to decide, for which option one must go? But for the answer, we have to go in a systematic way.

You all need to do is:-

Calculate all the exemptions that you are available with
Also you need to calculate all the deductions that you can claim

Now, combine these exemptions and deductions and subtract the total from your gross salary, so that you are able to reach at taxable income. Now what would be your taxable income if have let go all those exemptions and deductions. This is how, taxpayers can decide what regime they should go for?

The pros of new tax regimes: –

The new tax regime provides for lower tax. Also, as most of the deductions and exemptions are not available, the documents required is lesser and tax filing is easier.
Investor may not prefer to lock-in funds in investment for specified period for tax benefit. Since in this regime, the tax benefit on account of locked-in funds won’t be available. So, the taxpayers can now invest in open-ended funds, and don’t have to invest the funds for a restricted period.
The reduced tax rates will provide more disposable income to the taxpayer.

The cons of the new tax regimes: –

Non-availability of certain specified deductions:

Taxpayer cannot avail the following illustrative list of deductions :-

a) Clauses referred in section 10 as follows:

(i) Leave travel concession;

(ii) House rent allowance;

(iii) Special allowance (such as children education allowance, hostel allowance, transport allowance, per diem allowance, uniform allowance, etc.)

(iv) Allowances to MPs/MLAs;

(v) Allowance for clubbing of income of minor;

(b) Exemption for SEZ unit under section 10AA;

(c) Standard deduction, deduction for entertainment allowance and employment / professional tax as contained in Section 16;

(d) Interest under section 24 in respect of self-occupied or vacant property (loss under the head Income from House Property for rented house shall not be allowed to be set off under any other head and would be allowed to be c/f as per extant law);

(e) Additional depreciation under section 32(1)(iia);

(f) Deductions under sections 32AD, 33AB and 33ABA;

(g) Various deductions for donation or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-clause (iii), of sub-section (1) or sub-section (2AA) of section 35;

h) Deduction under section 35AD or 35CCC;

(i) Deduction from family pension under clause (iia) of section 57;

(j) Any deduction under chapter VI-A (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc.). However, deduction u/s 80CCD(2) and section 80JJAA (for new employment) can be claimed

The choice to opt can be exercised every year and any regime which is beneficial can be adopted by the individual (except for those who have income from business or profession). Iindividuals who have income from business or profession cannot switch between the new and old tax regimes every year. If they opt for the new taxation regime, such individuals get only one chance in their lifetime to go back to the old regime. Further, once switched back to existing tax regime, they will not be able opt for new tax regime unless their business income ceases to exist.

The income tax department has brought out a tax comparison utility, which is available on their web portal and in which, an individual taxpayer can use to evaluate which option is better for him/her.

The link to the same is as under: https://www.incometaxindiaefiling.gov.in/Tax_Calculator/

When you make a plan to apply for ISO certification this question might come in your mind which ISO standard is most relevant for your company’s activity. There are so many ISO standards therefore it creates confusion between ISO Standard Numbers. And for an Organization it is difficult to choose the more suitable standard for its scope. Learn about the most popular standards impacting the business and consumerism.

ISO 9001 QMS (Quality Management System):

To sets off the basic norms for quality management system ISO 9001 was published in 1987, and this update its norms guidelines in every seven years. The current version is 9001:2015 released in September 2015. This standard can be applied by any small or large organization with any scope of business. The standard provides guidelines and measures to achieve effective quality management in an organization. The standard ensures consumers that they receive high-quality product and service.

ISO 14001 EMS (Environmental Management System):

The standard 14001 is applicable to those companies have an impact on the environment while producing a product. The standard governs the guidelines for implementing a systematic framework to manage the environmental impacts of a product produced by an organization. Any organization may use this standard that has a responsibility to maintain, improve, set up and implement an environmental management system to promise that it meets the requirement of environmental policy.

ISO 22000 FSMS (Food Safety Management System):

The food Industries who wish to focus on the development and implementation of the food management system can apply for ISO 22000 FSMS. This ensures the customer that the food processing and the ingredients obtained from their supplier are safe. It improves the control over the food safety activities. It increases consumer and stakeholder confidence in products.

ISO 18001 OHSAS (Occupational Health and Safety Management System)

An International standard to maintain the Occupational Health and Safety Management System. Rather than addressing the safety of the specific product, it addresses Occupational Health and Safety. This is replaced by 45001 and got the recognition as 18001:2007. This is the standard recognized and implemented worldwide. This governs the rules, policies, plans, records and plans that define whether your company takes care of occupational health and safety. The standard ensures that the employer follows the management system for his employee’s health and safety and measure to prevents the injuries at the workplace. This improves the safety culture in an organization, implement effective preventive controls and avoid hazards at the workplace.

ISO 27001:2013 ISMS (Information Security Management System):

This is a standard expand by ISO (International organization for Standardization). The guidelines of this standard provide that how an organization can establish an effective information security management system and to protect data & avoid the possible potential cyber-attack. The standard aids an organization on how to do the best practice to manage and protect the valuable data and information about it. This identifies which risk exists for the information and implement the safeguard and another mitigation method to handle the risk and meet the identified expectation.

ISO 20000 SMS (Service Management System)

The standard is held by service providers and it provides the requirement to plan, monitor, implement, establish, review and maintain service management system. The standard assures that the consumers getting service from a service provider is well qualified and fulfilled the requirement of the service management system. The guidelines of this standard provide how to improve the design, delivery of service.

To get the ISO certificate please click here https://www.mycorporation.in/india/iso-certification-consultant-standard-9001-2008

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