Presentation on MSME – Cash Less Economy -Relevant to Direct Taxes At by CA Suresh Babu S Managing Partner SBS EVENTS HALL M/s SBS and Company LLP On 02 nd June, 2017 suresh@sbsandco.com 9440883366
RATES OF INCOME TAX Individual Resident Individual Resident Individual (Less than 60 years of (Age of 60 or more) (Age of 80 or more) age)/HUF/AOP/BOI/AJP) Income Rates Income Rates Income Rates Upto2,50,000 NIL Upto3,00,000 NIL Upto5,00,000 NIL Rs2,50,000 – 5% of(total Rs3,00,000 – 5% of (total Rs5,00,000 – 20% of (total Rs5,00000 income-2,50,000 Rs5,00000 income-3,00,000) Rs10,00,000 income-5,00,000) Rs5,00,000 – Rs12,500+20%of Rs5,00,000 – Rs10,000+20%of Above 1,00,000+30%of Rs10,00,000 (total income- Rs10,00,000 (total income- Rs10,00,000 (totalincome - 5,00,000) 5,00,000) 5,00,000) Above Rs 1,12,500+30% Above Rs 1,10,000+30% Rebate U/s 87A has been reduced 10,00,000 of(total income- 10,00,000 of(total income- to Rs. 2500/- . It is available if total 10,00,000) 10,00,000) income of resident individual does not exceed Rs.3,50,000 2 2 www.sbsandco.com
Company & Firm Tax Rates Companies with Annual Turnover up to Rs.50 Crore – 25% (Earlier 30%) Firms (Partnership or LLP) – 30% Surcharge:- In case of every INDIVIDUAL or HUF or AOP or BOI or AJP having total income exceeding Rs. 50,00,000/- but not exceeding Rs. 1 Crore is liable to surcharge @10%. Surcharge @15% will apply if total income exceeds Rs. 1 Crore. 3 www.sbsandco.com
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Cash Receipts(269ST) No person shall receive an amount of Rs.2,00,000 or more, by cash In aggregate from a person in a day; or a) In respect of a single transaction; or b) In respect of transitions relating one event or occasion c) Applicable from 1 April 2017 The penalty for violation of above is to be a sum equal to the amount of such receipt. Note – 1: The provisions of Sec 269 ST are not applicable in case of Cash withdrawal from Bank. Note - 2: Hence Cash can be withdrawn from Bank without limit. 5 www.sbsandco.com
Cash Receipts(269ST) In aggregate from a person in a day: a) Mr. A sells goods worth Rs.3,00,000 to Mr. B and generates 3 different bills of Rs.1,00,000 each and accepts cash in a single day at different times then Mr. A shall be found guilty of violation of Section 269ST(a) of Income Tax Act. In respect of a single transaction: b) Mr. A sells goods worth Rs.3,00,000 to Mr. B and generates one single bill for Rs.3,00,000. He then receives cash Rs.1,50,000 on Day 1 and Rs.1,50,000 on Day 2 then Mr. A shall be found guilty of violation of Section 269ST(b) of Income Tax Act. In respect of transitions relating one event or occasion: c) Mr. A books a wedding party at a Hotel & the Hotel makes a bill of Rs.1,50,000 for Food and Rs.1,00,000 for Hall Charges and accepts cash Rs.2,50,000 from Mr. A then the hotel shall be found guilty of violation of Section 269ST(c) of Income Tax Act. Even if they are 2 different types of expense, but they are for the same wedding. 6 www.sbsandco.com
Cash Receipts(269SS) Applicable to all persons. Mode of acceptance of Loans, Deposits or Specified sum should be through account payee cheque or account payee bank draft or use of electronic clearing system through a bank account if the amount is Rs. 20,000 or more in the following cases: The amount or aggregate amount of such loan, deposit or specified sum; or a) The amount or aggregate amount of loan, deposit or specified sum remaining unpaid; or b) The amount specified in (a) and (b) above. c) Specified Sum- Any sum of money, whether advance or otherwise in relation to transfer of immovable property whether or not transfer takes place.- W E F 01-06-2015 7 www.sbsandco.com
Cash Receipts(269SS) The provisions of this Section shall not be applicable if loan, deposit or specified sum is accepted from or accepted by: The Government; Any banking company, post office savings bank or co-operative bank; Any corporation established by a Central, State or Provincial Act; Any Government Company (as defined under the Companies Act); Such other institutions as may be notified by Central Government in this behalf. Penalty: Section 271D: In the case of failure to comply with the provisions of Section 269SS, a penalty of 100% of the amount of loan, deposit or specified sum is levied. 8 www.sbsandco.com
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Limits for Expenses Paid in Cash Limits for expenses paid in cash (both capital and revenue) has been reduced from Rs.20,000 to Rs.10,000 per day in aggregate per person(Sec 40A(3)) Capital Expenses paid in cash beyond Rs.10,000 will not be allowed for Depreciation purposes(Sec 32/43(1)) Revenues Expenses paid in cash beyond Rs.10,000 will not be allowed as business expense while calculating profit Cash payment limit for LORRY FREIGHT remains same at Rs.35,000 Salary or Bonus payments exceeding Rs.10,000 have to be done by Cheque Compulsorily. 10 www.sbsandco.com
Cash Payments(269T) Mode of repayment of Loans, Deposits or Specified advance should be through account payee cheque or account payee bank draft or use of electronic clearing system through a bank account if the amount is Rs. 20,000 or more in the following cases: The amount of loan, deposit or specified advance, along with interest payable (if any); or a) The aggregate amount of the loans or deposits, either in his own name or jointly with any b) other person on the date of such repayment together with the interest, if any, payable on such loans or deposits; or The aggregate amount of specified advances received by such person either in his own c) name or jointly with any other person on the date of such repayment together with the interest, if any, payable on such specified advances. 11 www.sbsandco.com
Cash Payments(269T) Exceptions: Government; Any banking company, post office savings bank or co-operative bank; Any corporation established by a Central, State or Provincial Act; Any Government Company 11 as defined in section 617 of the Companies Act, 1956 (1 of 1956); Such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette. Penalty: Section 271E: In the case of failure to comply with the provisions of Section 269T, a penalty of 100% of the amount of loan, deposit or specified advance is levied. 12 www.sbsandco.com
TCS Abolished Earlier – 1 % TCS on cash sales exceeding Rs.2 Lakhs (Rs.5 Lakhs in case of jewellery) Now – No need to collect TCS. Cash Sales exceeding Rs.2 Lakhs will Straightaway attract Penalty of Equivalent amount as previously explained. 13 www.sbsandco.com
TDS on Rent Payments Earlier: No TDS on Rent Payments by Individuals or HUFs Now: Individuals & HUFs paying Rent more than Rs.50,000 per month have to deduct TDS @ 5% 14 www.sbsandco.com
Donations – 80G Cash Donations exceeding Rs.2,000 – Not Eligible for deduction U/s 80G Bank/Digital or any mode other than cash – No limit Trusts accepting 80G donations Have To Advise their donors to give donations exceeding Rs.2,000 vide cheque / RTGS / digital modes. 15 www.sbsandco.com
Fee For Late Return Filing IT Return not filed within Due Date (31st July for Individuals & 30th September for Non- Individual Assessee’s) Up To 31st December – Rs.5,000/- After 31st December – Rs.10,000/- Note :- 1. If the total income of the person does not exceed Rs. 5 Lakhs, the fee payable under this section shall not exceed Rs. 1,000/- Note :- 2. Self-assessment tax to include the fees for delay in filing the return of income. Note :- 3. Revised return can be filed before the end of the relevant assessment year or before the completion of assessment, whichever is earlier. 16 www.sbsandco.com
Aadhaar to be linked with PAN Every person eligible to obtain Aadhar has to quote Aadhar number in IT Return. Every person who has PAN Card must intimate Aadhar number to IT Dept. failing which pan shall be deemed invalid. Aadhar – PAN cannot be linked if name doesn’t match perfectly in both the documents . New facility introduced in profile tab to link Aadhar on efiling site 17 www.sbsandco.com
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Individual or HUF is required to maintain books of accounts if income from business or profession, other than referred U/s 44AA(1), exceeds Rs. 2,50,000/- or total sales, turnover, gross receipts exceeds Rs. 25,00,000/-. www.sbsandco.com 19
Meaning of Presumptive Taxation: PRESUMPTIVE TAXATION NORMAL PROVISIONS To get relief to from this tedious Person engaged in business or work of maintenance of Books of profession are Relief to small accounts, a small taxpayer required to maintain regular tax payers can opt for presumptive taxation books of account and under section 44AD, 44AE or get accounts audited 44ADA if their gross turnover or income Upon satisfaction of the prescribed exceeds the prescribed limit conditions 20 www.sbsandco.com
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