Tuesday, 24 October 2017

GST Forms - GSTR4 & GSTR4A

All you need to know about GSTR 4

What is GSTR-4?
GSTR 4 return is to be filed quarterly by the person who has opted for the composition scheme under the GST Act.

When to file GSTR-4?

A composition dealer, registered under composition scheme of GST, is required to furnish GSTR-4 by 18th of the month succeeding quarter.

What details are included in GSTR-4?

In GSTR-4, the taxpayer is only required to specify the total value of supply made during the period of return and the tax paid at the compounding rate accompanied by the details of the payment of tax in the return.

Proforma of GSTR-4

Headings that appear under GSTR-4 and their significance

#HeadingsDetails to be furnished
1.GSTIN (Goods and Services Taxpayer Identification Number )15 digit state-wise PAN number
2.Legal Name of the Taxpayer and trade name if anyWill be auto-populated when a taxpayer will login to the common GST portal
4.Tax Period / period of returnPeriod / Quarter and year of tax to which the Return pertains to be selected from drop-down menu
5.Taxable Inward Supplies to a composition dealerIn the case intra-state supplies, details will be auto-populated Manual details to be entered for the inward supplies from an unregistered person. Supply under reverse mechanism will also get included in inward supply.
6.Modifications to Details of Inward Supplies Received in Earlier Tax PeriodsHere, the composition dealer can manually amend any detail with respect to goods or services received in earlier Quarters, including supply from the unregistered person or composition dealer.
7.Imported goods /capital goods (received from overseas)Under GST, imports (goods or capital goods received from overseas) are considered as inter-state supply and hence any such goods/services received, need to be furnished under this head
8.Modifications to Details of Imported goods / capital goods; received in Earlier Tax PeriodsAny amendment in tax calculated on imported goods is presented under this heading along with details of the entire changes in the bill of Entry / Import Report.
9.Services imported from overseas (received from overseas supplier)Alike goods imported, services imported by a composition dealer also need to furnish here. According to GST Act, a Service importer needs to pay GST if such services are received from overseas. Imported services will fall under Reverse Charge Mechanism of the collection of GST .
10.Modifications to Details of Imported services; received in Earlier Tax PeriodsAny amendment in tax calculated on imported services is presented under this heading along with details of the entire changes in the bill of Entry / Import Report.
11.Outward Supplies MadeOutward supplies include intra-state made by a Composition dealer. S/he is required to report details of all outward supplies under this head.
12.Modifications to outward supplies related to intra-state supplies; received in Earlier Tax PeriodsAny amendment in outward supply from earlier tax period is presented under this head. Such modifications will also have an impact on the tax liability of a composition dealer.
13.Debit notes and credit notes detailsAll debit and credit notes that are raised must be reported by a composition dealer. Debit note of counter-party will be auto-populated as composition dealer’s credit note and vice-versa.
14.Amendment to debit or credit notes of earlier tax periodsAny amendment in debit /credit note pertaining to previous Quarters shall be reported under this heading.
15.Receipt of TDS credit during the QuarterAny tax credit receipt by a composition dealer related to TDS will be auto populated from counter-party GSTR-7.
16.Tax Liability arising on account of the time of supply without receipt of Invoice (under reverse charge)Under this head, GST liability under reverse charge due to charge due to the time of supply falls under current tax period is required to be reported.
17.Modifications in Tax Liability arising on account of the time of Supply without receipt of Invoice (under Reverse Charge)Any modifications pertaining to GST liability under reverse charge as a result owing to charge due to the time of supply falls under current tax period is recorded under this head
18.Tax already paid on account of the time of supply for invoices received in the current period relating to reverse the chargeApart from tax liability, the tax amount that has already been paid by a composite dealer shall be reported under this head.
19.Tax Liability PayableBased on the entire information that has been furnished above, the composition dealer’s GST liability will get auto-populated here.
20.Tax Payment detailsTax liability as calculated in the previous heading, needs to be paid either by debiting Electronic Credit Ledger or Electronic Cash Ledger. Details of such debit will be retained under this head.
21.Refunds ClaimedA composition dealer can claim a refund of Input Credit amount in excess of tax liability in this header. The excess of TDS over tax liability will get auto-populated here as refund.
22.At the end, GSTN will ensure if a composition dealer is likely to cross composition limit before the date of next return: Y/NIn case, a composition dealer exceeds the threshold limit, he must pay taxes under the normal provision. Such affirmation is obtained from the composition dealer under this heading.
On correct furnishing of the entire particulars, the signature verification of the composition dealer is required for authentication of the return. The taxpayer needs to sign digitally either through a digital signature certificate (DSC) or Aadhar based signature verification.

Insights on GSTR-4 and GSTR-4A

FormsGSTR-4: It is a return to be filed by compounding taxpayer on quarterly basisGSTR-4A: To furnish details of inward supplies received by the recipient registered under composition scheme which are based on Form GSTR-1 filed by the supplier
Due date18th day of the month next to quarterEach quarter

Saturday, 14 October 2017

Is Inheritance Tax Coming Back In India?

India had an inheritance tax way back in 1935.  It was during Rajiv Gandhi's rule in 1985, that this tax was abolished. Now, the inheritance tax might just make a comeback. The Government is thinking of re-introducing inheritance tax popularly called estate tax. This is expected to pinch the pockets of the HNI's in India.
Yes, the Government is seeking recommendations....It wants to know if you would like the inheritance tax back. This tax could be around 5-10% for families above a certain net worth and might be introduced in the next budget.
For those who don't know, inheritance tax is charged on assets which you inherit from a deceased person. This tax is charged depending on the value of the asset which you have inherited.


How does inheritance tax work?

Inheritance tax works in two ways:
1. Testate Succession where you are named in someone's WILL.
2. Intestate succession as per laws of the land.

These are restrictions on who inherits a property:
If the deceased person is an NRI or PIO (Person of Indian Origin), and this person is not a resident or an Indian citizen, then you can only inherit Indian property if you are an Indian citizen. This is as per FEMA (Foreign Exchange Management Act).
If you are a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan, then you cannot inherit an immovable property in India, unless you are permitted to do so by the RBI.
As per Sharia Law, non-muslims, murderers, unborn children, children born out of marriage and step-parents cannot inherit a property.

How is property inherited in India?

Before inheriting a property, you will have to make a background check. You will have to find out if the deceased from whom you are inheriting the property, had any debts. You will have to pay off these debts before declaring your share in the property.
How will you transfer the property title in your name? To transfer the property title, you will need documents like a registered WILL. If succession is intestate, you will require a succession certificate, which has been issued by a court. You will also need the encumbrance certificate and the khata of the property.

SEE ALSO: What is a Trust?


How can you avoid paying inheritance tax?

For every problem there is a solution and the rich in India seem to have found one. One of the ways to avoid inheritance tax is the creation of family trusts. Many HNI's are already protecting themselves from inheritance tax by forming family trusts.
The Indian Trusts Act 1882, governs private trusts. If you are the owner of a property and you want to transfer this property to the beneficiary (say your chosen heir), you don't vest the property with the beneficiary, but with other people called trustees. These trustees have the responsibility of passing over the benefit of the property to the beneficiary.
Trusts can be of two types:
Discretionary and Non-discretionary
Non-discretionary Trust: Let's say you are the settlor of a trust. You clearly define the beneficiaries under the trust. You say who gets how much. The trustees still manage the trust and its finances, but they do not have the discretion to decide the proportion in which the income or the corpus is to be distributed among the beneficiaries. 
Discretionary Trust: In this trust, the trustees have complete discretion to decide the proportion in which the income or the corpus is to be distributed. The trustees may distribute  the benefits to just a few beneficiaries, exclude some of them, or may not distribute income in a particular year.
Simple: The trustees have the duty to pass on the benefits to one or more of the beneficiaries, named by you (settlor).  The trustees have the discretion to decide who among the beneficiaries will benefit from the trust.


Taxability of the trust:

For a non-discretionary trust, all income is taxable in the hands of the beneficiaries. If the beneficiary is a minor, the income is clubbed with that of the parent with a higher income. For a discretionary trust, the shares of the beneficiaries are unknown. So taxation is in the hands of the trust at maximum marginal rate.
Many Countries like the US, UK and Spain among others have inheritance tax. In developed countries, inheritance tax can be as high as 80% on the net value of the assets passed on to legal heirs, after the demise of the owner. But, these countries also have a very strong social security system. Will inheritance tax be imposed in India? Wait and Watch. Be Wise, Get Rich. 
Source: IndianMoney.com

Thursday, 6 July 2017

GST Registration Status Active Pending Verification & GSTIN ID

Image result for GST

Most of previous/existing service tax and vat registered businesses have migrated for GST registration through provisional id and password.

But their current GST application status remains 'active pending verification'. What's the meaning of this status, how to get GSTIN ID and provisional GST registration certificate?

GST Registration - Active Pending Verification

One can verify the status of their GST application by login on the GST portal.
Your ARN No
Form No.
Form Description
Application for Registration of Goods and Services Tax Act, 2017
Submission Date
Active Pending Verfication
'Active Pending Verfication' status is the standard status at time being and there is no action item for the business at this moment. Once we hear more from GSTN about the verification process, we will post it in this site. We are hoping that existing service tax and vat registered companies don't need to go through any process as part of this verification.
You can go ahead and upload invoice and file return with this status as your GST account is 'active'

GST Registration - GST REG-26

Many of the people would have got the following email about completing the GST REG-26 application. If you have already uploaded documents while doing registration, then they don't need to do it again.
To get permanent registration, please fill up details electronically in Part-B of the Enrolment Form (GST REG-26) on the GST portal along with the information and documents specified therein. You may provide the information and documents during next three months. If you have already filled up part-B and submitted the enrolment form, you may ignore this message.

GST Provisional Registration Certificate (GST Reg-25) and GSTIN ID

Once your GST application status goes to 'active' or 'active pending verification', you should get an email from gst.gov.in containing your provisional GST registration certificate (also called GST Reg-25). This certificate contains your GSTIN ID
You can also download this certificate online on gst portal by login to portal and going to Services -> User Services -> View/Download Certificates
This certificate will contain following details:
  1. Your GSTIN ID
  2. Your PAN
  3. Legal Name
  4. Trade Name
  5. Registration Details under Existing Law

Thursday, 11 July 2013

Income Tax | Returns Filing - Step 2 [b] : Filling-up Form ITR-2, for Individual / HUF with Additional Income [other than TDS1 & TDS2]

ITR-2 is for Individual / HUF with additional source of Income, other than the standard deductibles under TDS1 [Salary] & TDS2 [Renumerated].
  • Who CAN use this Return Form?
    • This Return Form is to be used by an individual or a Hindu Undivided Family whose total income for the assessment year 2013-14 includes:-
      • (a) Income from Salary / Pension; or
      • (b) Income from House Property; or
      • (c) Income from Capital Gains; or
      • (d) Income from Other Sources (including Winning from Lottery and Income from Race Horses). Further, in a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this Return Form can be used where such income falls in any of the above categories.
  • Who CANNOT use this Return Form?
    • This Return Form should not be used by an individual whose total income for the assessment year 2013-14 includes Income from Business or Profession.
This is much more complicated than the ITR-1, it is advisable to be left to the professionals or to be filed under professional guidance. For complete help click here, and for professional help, click here.

    Wednesday, 10 July 2013

    Income Tax | Returns Filing - Step 2 [a] : Filling-up Form ITR-1, For Salaried Employee [under TDS1 or TDS2]

    For Individuals / HUF having Income from Salary / Pension / Income from One House Property [excluding loss brought forward from previous years] / Income from Other Sources [Excluding Winning from Lottery and Income from Race Horses]

    ITR-1 is for salaried individual or HUF  [with TDS1 accumulation], with no other income sources other than salary or renumeration contract employee [with TDS2 accumulation] or both.

    It is also one of the most simple Income-Tax Returns-Filing, with very few fields, with just 4 pages to fill up. Lets do it in the traditional step by step process.
    1. Income Details: In the First page, it is the basic information [like, name, DoB, PAN, IT Ward & Section, Annual Salary/Pension, Income from One House,  etc].
    2. TDS: In the Second page, the TDS details from Form 16, Form 16A & any Advance Tax Paid or Self Assessment Tax paid/payable details are to be filled.
    3. Taxes Paid and Verification
    4. Section 80G Deductions: [Refer article Section 80] There are 4 different sub sections under 80G, which are explained in the before said page-link.
    If you are still unsure and need professional help, feel free to contact us for our extended [payable] services.

      Thursday, 30 May 2013

      Income Tax | Returns Filing - Step 1 : Selecting ITR Form

      A Guide to Choosing the 'Correct' ITR Form for an Assessee.
      • This page helps to identify the right ITR form for an Assessee.
      • To choose the right ITR Form, first identify the 'Status of Assessee'.
      • If you are not able to Identify the correct 'Assessee Status', visit Know Your PAN page..
      After Identifying the Status, Select the Form referring the table below:

      Sr #
      Status of Assessee
      ITR Form(s)
      ITR-1, ITR-2, ITR-3 or ITR-4
      Hindu Undivided Family
      ITR-1, ITR-2, ITR-3 or ITR-4
      Association of Person
      Body Of Individuals

      Now, you must be wondering why there are 4 ITR forms for Individuals and HUF. Visit "Why Four ITR Forms for Individuals / HUF?" Page for more details.

      If you know your correct ITR form, then download the latest from the official site [here] and proceed to Step 2.

      Thursday, 16 May 2013

      Income Tax | Filing Returns - Why Four ITR Forms for Individuals / HUF?

      The 4 forms are designed on a hierarchical order and the forms should be referred as below. The 'Assessee' with lower form relevance should not go for higher one.

      Case #Income from Salaries and Interest under head
      “Other Sources”
      Any income
      other than “Partnership”,
      Income from Partnership in businessIncome from Proprietorship businessITR Form
      Case 1.  Yes X X X ITR - 1
      Case 2. Yes / No Yes X X  ITR - 2 
      Case 3. Yes / No Yes / No Yes X  ITR - 3 
      Case 4. Yes / No Yes / No Yes / No Yes  ITR - 4 

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