February 26, 2019

The ordinance issued by the government on Thursday to ban unregulated deposit schemes does not stop any entity from seeking funds for its business or an individual raising a quick loan from relatives to tide over a crisis. Similarly, the Banning of Unregulated Deposit Schemes Ordinance, 2019 does not ban small and medium enterprises (SMEs) from receiving loans in the course of, or for the purpose of, business, the government has clarified. “There is no ban on any amount received in the course of, or for the purpose of, business,” the finance ministry said, citing Section 2(4)(I) of the ordinance promulgated last week by the President. The ordinance was promulgated after a bill to ban unregulated deposit schemes could not be passed in the Rajya Sabha. The Lok Sabha had earlier this month passed the bill that seeks to make illicit deposit-taking an offence in order to stop ponzi schemes. The ministry was responding to an ET story tilted ‘Unregulated deposits rule may have collateral damage’ on Monday which said that the law may hurt those seeking emergency loans, quoting sector experts.Experts quoted in the story had said that ability to raise resources for meeting personal and social commitments or medical and educational emergencies could be hit. They also said that charitable institutions will find it difficult to fund students or those seeking medical assistance. The government said individuals borrowing or taking loans or money from relatives or friends for marriage or medical emergency or business needs or any other personal reasons have nothing to fear from the law. Such transactions are not unregulated deposit schemes as defined in section 2(17). Further, any amount received by an individual by way of a loan from his relatives has been entirely exempted under section 2(4)(f).Based on Bill Passed by Lok SabhaSmall businesses, proprietorship, partnerships, LLPs and SMEs that take unsecured loans from unrelated parties and enterprises are also exempt under Section 2(4)(I) of the law. This exemption covers “advance payment for hire or supply of goods and covers genuine business needs and trade advances among others so that those who depend on small short-term credit or deposits for various needs do not face any problems”. In the case of charitable institutions, they accept donations and not deposits. Section 2(4) of the Act defines ‘deposit’ and does not include donations. Also, there is no ban on any individual taking a quick loan to tide over a crisis from relatives as prescribed under Section 2(4)(f). In the case of real estate, there were apprehensions that the sector may be hit as deposit can only be accepted for a designated transaction and can be adjusted against future sale consideration. The government has clarified that such transactions are exempted under Section 2(4)(g) and (l). It has also rebuffed the criticism by some experts that there was not adequate consultation, saying the ordinance was based on the bill passed by the Lok Sabha which had been discussed with states and had been examined by the standing committee on finance that had interacted with all stakeholders including the general public. On the issue of no monetary thresholds in the law, the government said this was to prevent illegal operators from running such schemes by taking money from the poor in small amounts to escape the provisions. The ordinance will also not have retrospective effect, the government said. The ordinance proposes to create three different types of offences — running of unregulated deposit schemes, fraudulent default in regulated deposit schemes and wrongful inducement in relation to unregulated deposit schemes. It provides for attachment of properties or assets and subsequent realisation of assets for repayment to depositors. Clearcut time frames have been provided for attachment of property and restitution to depositors. It also enables creation of an online central database for collection and sharing of information on deposit-taking activities. Last month, law minister Ravi Shankar Prasad had said that the CBI had lodged about 166 cases in the past four years related to chit funds and multi-crore scams, with the highest numbers in West Bengal and Odisha. As per information provided by the Reserve Bank of India, between July 2014 and May 2018, 978 cases of unauthorised schemes were discussed in state-level coordination committee (SLCC) meetings in various states and union territories, and were forwarded to the respective regulators or law enforcement agencies in the states.Our Correspondent RepliesThe article quoted a number of legal experts who said that the law, while well-intentioned, may have unintended consequences. Thus in case of loans taken by individuals, sections 2(4)(f) only exempts loans from relatives or amount received by a firm from relatives of partners. There is no explicit exemption for loans from non-relatives including friends. Further the story does not say that a businessman cannot take a loan for business purposes. It merely says borrowing from an acquaintance to meet personal obligations will be hurt. With regard to charitable trusts, the story doesn’t say that donations received by such trusts are unregulated deposits. Instead it says that loans given by a trust to a student or ailing person could be construed as unregulated deposit. As far as real estate is concerned, the exemption does not include any advance with a refund provision. Thus a home buyer, after giving an advance to a builder, may not be able to claim refund if the builder fails to deliver. – http://www.economictimes.indiatimes.com [26-02-2018]


GST on Real estate Revised

1. For affordable house in Metro up to 60 Sq Mt and costing less than 45 lacs – 1%

2. For affordable house in Non metro up to 90 sq Mt and costing less than 45 Lacs – 1%

3. For all other houses – 5%

*No ITC would be allowed*

*To be implemented from 1st April 2019.*

Feb 22, 2019

*Amendment in the following Rules w.e.f. 25.02.2019*

*1) The Companies (Incorporation) Amendment Rules, 2019*

*2) Companies (Regn Offices and Fees) Amendment Rules, 2019*

*New Provisions:*

According to new *Rule 25A*-

✓ Every Company incorporated on or before 31st December 2017 has to file the particulars of the Company and it’s Registered Office in *e-Form ACTIVE (INC-22A)* (Active Company Tagging Identities and Verification) *on or before 25/04/2019*

However, the Companies which have not filed Financial Statements or Annual Returns or both (except case recorded under mgt dispute) shall not be able to file the said e-Form ACTIVE.

*Companies Excluded from the requirement of filing the said e-Form:*
~ Struck off Cos
~ Cos under the process of Strike off
~ Cos under Liquidation
~ Cos Amalgamated
~ Cos Dissolved

*Failure to File the said e-Form ACTIVE (INC-22A):*

1) If the Company fails to file the said e-Form ACTIVE on or before the due date then such Company shall be marked as “ACTIVE-NON-COMPLIANT” and shall be liable for action under Section 12(9) of the CA 2013.

2) The following e-Forms shall be barred from taken on record :-
* SH-7
* PAS-3
* DIR-12 (except cessation)
* INC-22
* INC-28

3) Penalty of Rs. 10000/- after due date

On or before 25.04.2019 —> *NIL*
After 25.04.2019 —> *Rs.10000/-*

*Mandatory Attachment to e-Form ACTIVE (INC-22A):*
Photograph of Regd. Office showing the external building and inside office and also showing therein at least one Director/KMP who has affixed his/her DSC to the said e-Form.

Feb 21, 2019

  • Extension for last date of filing initial return in MSME Form I

The period of *thirty days* for filing initial return in MSME Form 1 as specified in _Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019 dated 22.01.2019_ shall be *reckoned from the date the said e-form is deployed on MCA 21 portal.*
For more details: http://www.mca.gov.in/Ministry/pdf/InitialReturnInMSMEForm_21022019.pdf

  • Due date for filing GSTR-3B Extended

The Commissioner on recommendation of GST council has extended the due-date for filing GSTR-3B for January, 2019. Now the due date for taxpayers having place of business in the State of Jammu and Kashmir shall be 28th February, 2019 and for all other taxpayers, it shall be 22nd February, 2019.

Feb 19, 2019

  • Norms for Angel tax relaxed; no tax on issuance of shares up to Rs. 25 crore

The Department for Promotion of Industry and Internal Trade (DPIIT) has issued a new notification in supersession of its earlier notification no. GSR 364(E), dated 11-04-2018. Now, an entity shall be treated as start-up for a period upto 10 years. Further, the threshold limit of startup towards its paid-up share capital & share premium after issuance of shares has been increased to Rs. 25 crore.

Feb 18, 2019

  • Govt. grant one time exemption for GST payment under wrong head while transferring goods to custom bonded warehouse

Government has granted one time exemption to those suppliers who made CGST and SGST payment instead of IGST while transferring goods to custom bonded warehouse

  • Registered Persons must specify place of supplyalong with name of State in tax invoice

Government issues instruction that registered persons making inter-state supplies shall specify place of supply along with name of State in tax invoice. There will be levy of penalty upto 25000 if there is contravention in such reporting.

Feb 15, 2019

  • Capital gain vs. business income – sale of shares – loss on account of sale of shares adjusted against gains from sale of shares – bonus stripping – allowed. [A.Y. 2007-2008]…read more
  • After the merger of the assessee company with another company, subsequent assessment order passed in the name of the assessee company was a nullity….Read more

Feb 13, 2019

  • Suspicious Refund Claims Under I-T Dept Scanner

Suspicious income tax refund claims have gone up in last three years and scrutiny assessments have been initiated against taxpayers claiming high refunds inconsistent with the pattern of income and investments, Parliament was informed Tuesday. Minister of State for Finance Shiv Pratap Shukla in a written reply to a question in Rajya Sabha said there has been an increase in detection of suspicious refund claims. The number of suspicious refund claims selected for scrutiny stood at 20,874 in 2018-19, 11,059 in 2017-18 and 9,856 in 2016-17. “Scrutiny assessments have been initiated against taxpayers claiming high refunds inconsistent with the pattern of income and investments. “Wherever after scrutiny the claim of refund was found to be inadmissible, the same was denied and consequential action of penalty and prosecution was taken based on the merits of the case,” he said. – http://www.economictimes.indiatimes.com [13-02-2018]

  • Copy of the Finance Bill, 2019 as passed by Lok Sabha….Download Now
  • RoC has no PAN info on 95% realty companies

ACAG report tabled in Parliament on Tuesday said the Registrar of Companies did not have information about PAN of 95 per cent of the real estate companies. The Registrar of Companies (RoC) maintainsadatabase of all companies that register at the time of incorporation. Companies are required to file annual returns with RoCs. Form MGT7, prescribed in the Companies (Management and Administration) Rules, 2014, requiresacompany to file its annual report mentioning its Permanent Account Number (PAN) compulsorily. The Comptroller and Auditor General (CAG) said it could obtain the detailsofcompaniesdealinginthereal estate sector from the RoCs in 12 states only. “(The) RoCs did not have information about PAN in respect of 51,670 (95 per cent) ofatotal of 54,578 companies for which data was made available to (the) Audit,” said the report. The report contains significant results of the performance audit on ´Assessment of Assessees in Real Estate Sector´ completed by the Department of Revenue (Direct Taxes) during financial years 201314 to 201617. The official auditor further said it “was difficult” to ascertain from the information obtained from RoCs whether the companies were in the tax net of Income Tax Department (ITD) or not, except in case of Andhra Pradesh and Telangana where the audit could identify PAN in respect of 147 firms. It said the audit attempted to ascertain whether the companies in RoC data with PAN were regular in filing their income tax returns (ITRs).In respect of 840 companies with PAN coming under selected assessment charges, “we noticed that 159 companies (19 per cent) were not filing their ITRs,” it added. The CAG said it “can be concluded” that there is no mechanism with ITD to ensure that all the registered companies have PAN and are filing their ITRs regularly. It recommended that the Central Board of Direct Taxes (CBDT) and corporate affairs ministry may have an arrangement “where there is an interface between ITD and RoC so that whenacompany is registered with RoC, the application for PAN is submitted automatically with ITD”. Also when PAN is issued to the newly incorporated company, it should be automatically sent to the RoC Systems for updation. – http://www.business-standard.com [13-02-2019]

Feb 12, 2019

  • SEBI grants relaxation to non-residents from requirement to furnish PAN for transfer of shares- It has been brought to the notice of SEBI that many non-residents such as NRIs, Overseas Citizens of India, Persons of Indian Origin and Foreign Nationals have been facing difficulties in transferring shares held by them since many of them do not possess PAN card. Therefore, SEBI has decided to grant relaxation to non-residents from requirement to furnish PAN for transfer of equity shares of listed entities.

Feb 11,2019

  • Due date for filing of GSTR-7 for the month of January, 2019 extended to Feb 28, 2019

Feb 06, 2019

The Supreme Court has said that linkage of PAN with Aadhaar is mandatory for filing of Income Tax returns.

Feb 04, 2019

  • I-T assessments to be completely faceless in few years: CBDT chairman

    Income tax assessments will be “completely faceless”, without the taxpayer having to face the taxman, in about two years and assessees will be provided pre-filled return forms as part of the government’s initiative to simplify procedures, a senior government official said Sunday. Central Board of Direct Taxes Chairman Sushil Chandra told PTI in a post-Budget interview that about 2.06 lakh income tax assessment cases were handled online by the department last year, as part of the ‘nameless and faceless’ delivery of service to taxpayers . He added that the recent government sanction to create the advanced Centralised Processing Centre 2.0 in the I-T Department is a precursor to these futuristic proposals.

Feb 02, 2019

  • Good news! Income Tax rebate limit up at Rs 5 lakh, standard deduction at Rs 50,000

    Middle-CLASS households will have a little more to spend in 2019-20 with the tax rebate (Section 87A) threshold for the levy of income tax having been raised to Rs5 lakh. The change in the limit will save middle-class individual assessees Rs10,000 a year each; the total relief, across three crore individuals, is around Rs18,500 crore. That’s not all. Salaried individuals will now get the benefit of Rs50,000 per annum as standard deduction, higher by Rs10,000 than the earlier Rs40,000. Across three crore salary earners and pensioners, this amounts to a benefit of Rs4,700 crore.

Feb 01, 2019

Key takeaways of Budget 2019…..Read more

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