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

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