Income Tax Rates

Companies/Firms/LLPs/Local Authorities

 Co-operative Societies

 Securities Transaction

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[The view presented in above blog/ article is from North Pole Management LLP. We believe that the views put forward are is in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader can be reached out to the management of the company on the email ID of contact@northpolemanagement.in 
One is always welcome to reach out to us for any assistance, help or for advisory services in relation to the above mentioned topic in this article or any related topics relevant to us]

TCS Rate Chart F.Y 2021-22 (A.Y 2022-23)

DISCLAIMER

[The view presented in above blog/ article is from North Pole Management LLP. We believe that the views put forward are is in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader can be reached out to the management of the company on the email ID of contact@northpolemanagement.in 

One is always welcome to reach out to us for any assistance, help or for advisory services in relation to the above mentioned topic in this article or any related topics relevant to us]

TDS Rate Chart F.Y 2021-22 (A.Y 2022-23)

DISCLAIMER

[The view presented in above blog/ article is from North Pole Management LLP. We believe that the views put forward are is in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader can be reached out to the management of the company on the email ID of contact@northpolemanagement.in 

One is always welcome to reach out to us for any assistance, help or for advisory services in relation to the above mentioned topic in this article or any related topics relevant to us]

Slump Sale

Meaning of slump sale

As per section 2(42C) of Income -tax Act 1961, ‘slump sale’ means the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales.

A sale in order to constitute a slump sale must satisfy the following quick test:

1.   Business is sold off as a whole and as a going concern

2.   Sale for a lump sum consideration

3.   Materials available on record do not indicate item-wise value of the assets transferred

Taxability of gains arising on slump sale

Section 50B of the Income-tax Act, 1961 provides the mechanism for computation of capital gains arising on slump sale.

Some basic points which arise are:

“Net Worth”

Net worth is defined in Explanation 1 to section 50B as the difference between ‘the aggregate value of total assets of the undertaking or division’ and ‘the value of its liabilities as appearing in books of account’. This amendment has made it clear that the slump sale provisions apply to a non-corporate entity also.

The ‘aggregate value of total assets of the undertaking or division’ is the sum total of:

1.   WDV as determined u/s. 43(6)(c)(i)(C) in case of depreciable assets.

2.   The book value in case of other assets.

Capital Gain in respect of Slump Sale [Sec. 50B]

Term	Meaning
Undertaking	It include any part of an undertaking. Or a unit/division of an undertaking/a business activity takes as a whole, but does not include individual assets or any combination thereof not consulting a business activity.
Transfer	It would include sale, exchange, relinquishment of capital asset, extinguishment of any right therein, compulsory acquisition under any law etc.

Capital Gains on Slump Sale of an Undertaking [Sec. 50B]

DISCLAIMER

[The view presented in above blog/ article is from North Pole Management LLP. We believe that the views put forward are is in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader can be reached out to the management of the company on the email ID of contact@northpolemanagement.in 
One is always welcome to reach out to us for any assistance, help or for advisory services in relation to the above mentioned topic in this article or any related topics relevant to us]

Legitimate Tax Planning for Tax on Long Term Capital Gains

Illustration of Computation of taxable capital gain

Let’s go through various exemptions available for tax planning on Capital gain from Long term capital assets. Table below elaborates and denotes various tax exemptions for this;

DISCLAIMER

[The view presented in above blog/ article is from North Pole Management LLP. We believe that the views put forward are is in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader can be reached out to the management of the company on the email ID of contact@northpolemanagement.in 

One is always welcome to reach out to us for any assistance, help or for advisory services in relation to the above mentioned topic in this article or any related topics relevant to us]

Types of Capital Assets (under Income Tax Act)

There are 2 types of Capital Assets

Why Capital Assets are divided in Short / Long-term assets?

1.  The tax is calculated under the head “Capital Gains” based on whether the Capital Assets is short-term or long-term.

2.  Long-term Capital Assets is taxable at a specified rate 

(generally lesser than higher applicable rate)

3. Short-term Capital Assets is taxable at a normal rate of tax. Note that, for few short-term Capital Assets, tax rate is prescribed.

Note that, Rural Agriculture land is not a Capital Asset under Income Tax. Therefore Gain from sale of Rural Agriculture land is not taxable. Act.

Transfer of Capital Asset [Sec.2(47)]

What included in transfer:

1.      Sale:

A sale maybe define as a contract founded on money consideration by which the absolute or general property in the subject of sale is transferred from the seller to the buyer.

The essentials of a sale are:

(i)       Mutual Agreement

(ii)     Competent parties

(iii)   Money Consideration

Transfer of the absolute or general property from the seller to the buyer, If any of these ingredients be wanting there is no sale.   

2. Exchange:

An exchange involves the transfer of property by one person to another and reciprocally the transfer of property by that other to the first person. There must be a mutual transfer of ownership of one thing for the ownership of another.

3. Relinquishment:

A Relinquishment takes place when the owner withdrawn himself from the property and abandons his rights thereto. It presumes that the property continues to exist after the relinquishment.

4. Compulsory acquisition of an asset:

(i)      When the transfer of capital asset is by way of compulsory acquisition under any law.

(ii)  When capital asset is transferred (not by way of compulsory acquisition) and the consideration is approved or determined by the Central Government or the RBI.   

5. Conversion of Capital Asset into stock-in-trade:

The supreme court in CIT had held that no transfer was involved where the assesse, holding by way of investment shares in companies, commenced a business in shares converting the shares into stock-in-trade of the business and when he subsequently sold these shares at profit, the assessable profit was the difference between the sale price of the shares and market price of the shares prevailing on the date when shares were converted into stock-in-trade of the business in shares.

The appreciation in the value of capital asset between the date of purchase of shares and date of its conversion into stock is not chargeable to tax.

6. Redemption of zero coupon bonds:

From the assessment year 2006-07, redemption of zero coupon bonds will be treated as “transfer”.

7. Giving possession of immovable properties under part performance of a contract:

Section 2(47)(v) of the Income Tax Act which dealt with the expression transfer provided that any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act 1882.

8. Transfer includes, any transaction which has the effect of transferring an immovable property:

If following conditions are satisfied, the transaction is treated as “transfer”-

Condition 1	The transferor is a member of co-operative society/company/AOP
Condition 2	By virtue of his membership, he has been allotted an immovable property or he will be allotted an immovable property.
Condition 3	The membership right is transferred which has the effect of transferring or enabling the enjoyment, of the aforesaid immovable property.

DISCLAIMER

[The view presented in above blog/ article is from North Pole Management LLP. We believe that the views put forward are is in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader can be reached out to the management of the company on the email ID of contact@northpolemanagement.in 

One is always welcome to reach out to us for any assistance, help or for advisory services in relation to the above mentioned topic in this article or any related topics relevant to us]

Know Top 10 changes in GST Law effective from January 1st, 2022

The Central Board of Indirect Taxes and Customs (CBIC) has notified several changes in GST Law effective from January 1st, 2022. Here are the top 10 changes.

 

1.    New GST Burden on E-Commerce Operators Zomato, Swiggy, Ola, Uber:

On September 17, it was decided at the Goods and Services Tax Council meeting that e-commerce operators be made liable to pay tax on services provided through them namely transport of passengers, by any type of motor vehicles restaurant services or restaurant services provided, with some exceptions This will become effective January 1, 2022, said a statement issued by the Finance Ministry after the GST Council meeting.

 

2.    Correction in inverted duty structure in Footwear &Textile sector:

 

The GST Council decided to introduce GST rate changes from January 2022 in order to correct the inverted duty structure in the Footwear and Textile Sector. All footwear, irrespective of prices will attract GST at 12 percent while barring cotton, all textile products including readymade garments will have GST at the rate of 12 percent.

 

3.    Blocking of GSTR-1 for non-filing of GSTR 3B:

 

From 1st January 2022, the GSTR-1 return filing facility will be blocked if you have not submitted the return in FORM GSTR-3B for the previous two return periods. For example, if a taxpayer has not filed GSTR-3B for October 2021 and November 2021, the GSTR-1 filing facility will be blocked from the 1st January 2022.

 

4.    Rules related to mandatory aadhaar authentication for GST Refund & Revocation     application:

 

 

The Central Board of Indirect Taxes and Customs (CBIC) has notified that Rules related to Mandatory Aadhaar authentication for GST Refund and Revocation application are to be effective from 1 January 2022.

 

5.  GST provision related to communication of details or invoice or debit note to the recipient:

 

Section 109 of the Finance Act, 2021 seeks to amend section 16 of the CGST Act wherein sub-section (2), after clause (a), the clause shall be inserted, namely “(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37.

 

6. Self-assessed tax shall include the tax payable in respect of details of outward supplies:

 

Section 114 of the Finance Act, 2021 seeks to Amend section 75, in sub-section (12), the Explanation shall be inserted, namely “For the purposes of this subsection, the expression “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.”

 

7. Commissioner empowered to attach provisionally, any property, including bank account:

 

Section 115 of the Finance Act, 2021 seeks to Amend section 83, for sub-section (1), the sub-section shall be substituted, namely “(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.

 

8.    No appeal to be filed against section 129(3) order, unless a sum equal to 25% of the penalty is paid:

 

Section 116 of the Finance Act, 2021 seeks to Amend section 107, in sub-section (6), the proviso shall be inserted, namely “Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five percent of the penalty has been paid by the appellant.”

 

9.    Commissioner’s Power to call for information:

 

Section 119 of the Finance Act, 2021 seeks to Substitute of new section for section 151 namely “Power to call for information: The Commissioner or an officer authorized by him may, by an order, direct any person to furnish information relating to any matter dealt with in connection with this Act, within such time, in such form, and in such manner, as may be specified therein.”

10. Proper officer detaining or seizing goods or conveyance to issue notice within 7 days of such detention or seizure:

The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty.

DISCLAIMER

[The view presented in above blog/ article is from North Pole Management LLP. We believe that the views put forward are is in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader can be reached out to the management of the company on the email ID of contact@northpolemanagement.in 

One is always welcome to reach out to us for any assistance, help or for advisory services in relation to the above mentioned topic in this article or any related topics relevant to us]

Appointment of Auditor in Casual Vacancy of Auditor under Companies Act 2013 (Resignation, Death, Disqualification, etc.)

As we are aware that, every company needs to have an auditor. The auditor play key roles in compliance and confirm the maintenance of company’s records and financial statements as per the provisions of the Companies Act, 2013. The audit reports of the company prepared by an auditor are important documents of the company. Thus, the company needs to appoint an auditor at its first Annual General Meeting. Scenario’s where auditor post get vacated due to resignation, death, disqualifications or any other reason, then same needs to be filled up as per provision of Casual Vacancy mentioned in the Company Act 2013.

 

What is Casual Vacancy?

Thought the term casual vacancy not specifically defined in Companies Act but any vacancy caused due to death, resignation, and disqualification of Auditor may be referred as casual vacancy. 

 

   

Procedure

Application for Resignation

1.    Outgoing Auditor should file the application in form ADT-3 to the registrar after resigning from the company.
2.   After submitting resignation and form ADT-3, board meeting shall be organised with all directors for effecting the resignation.
3.   The company shall appoint new auditor to fill the vacancy as per the provision of the company act 2013.
 
Auditor Appointed in Case of Government Company:-
 

•  CAG will appoint new Auditor within 30 days.
•  If CAG does not appoint within 30 days then Board of Directors will appoint New Auditor within next 30 days.

Auditor Appointed in other than Government Company:-

• Company shall convene a board meeting within 30 days from arising of such casual vacancy after giving notice to all directors and pass a resolution for appointment of new Auditor.
•  Issue notice for conduct of Extra Ordinary General Meeting (EOGM) within 3 months from the date of recommendation of the Board.
•  File Form ADT-1 with the ROC within 15 days from the date of appointment in the EOGM.

DISCLAIMER

[The view presented in above blog/ article is from North Pole Management LLP. We believe that the views put forward are is in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader can be reached out to the management of the company on the email ID of contact@northpolemanagement.in 

One is always welcome to reach out to us for any assistance, help or for advisory services in relation to the above mentioned topic in this article or any related topics relevant to us]