TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc. Here is the detailed analysis of sec 194 J TDS under section 194J is deducted on payments exceeding the threshold limRead more
TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc.
Here is the detailed analysis of sec 194 J
TDS under section 194J is deducted on payments exceeding the threshold limit for below payments.
Type of Payments
Rate of tax deduction
Threshold Limit
Technical service
2%
Rs. 30,000
Payment of royalty for sale, distribution or exhibition of cinematographic films.
2%
Rs. 30,000
Other Royalty
10%
Rs. 30,000
Professional Services
10%
Rs. 30,000
Non-compete fees or fees paid not to share any technical knowledge or know-how
10%
Rs. 30,000
Payments made by the company to directors by way of fees, commissions or remuneration
10%
Nil
Professional services include following services:
Legal
Medical
Engineering
Architectural
Accountancy
Technical consultancy
Interior decoration
Advertising
Film artist
Company secretary
Authorised representatives
Profession of information technology
Sportspersons
Commentators
Event managers
Anchors
Umpires and referees
Physiotherapists
Coaches and trainers, team physicians, and sports columnists
Fees for technical services include the following payments:
Services that involve technical expertise or expertise in technology.
Managerial services and management of the client’s business.
Consultancy services and business advisory services.
Note: Technical service does not include services provided by machines or robots.
Royalty means the payment made for:
Transfer of rights or usage of an invention, model, design, trademark, patent, etc.
Use of patents, inventions, designs, etc.
Provide any information related to using an invention, patent, formula, etc.
Transfer of rights related to scientific findings, literary work, films or videotapes for radio broadcasting but does not include consideration for the sale, exhibition, or distribution of cinematographic films.
Providing any information related to technical, industrial, commercial or scientific knowledge, experience or skill
Non-compete fees include the payment made for an agreement for not sharing any license, patent, trademark, franchise, know-how, commercial or business rights, or information to any other person for processing, manufacture, or provisional service.
Yes, ITC is allowed in the Air conditioner subject to the condition that it is not accounted as Land & Building and used in the course or furtherance of the business. Assessee should disclose it as Plant and Machinery. ITC is not allowed on immovable property as per section 17(5)(d).
Yes,
ITC is allowed in the Air conditioner subject to the condition that it is not accounted as Land & Building and used in the course or furtherance of the business. Assessee should disclose it as Plant and Machinery.
ITC is not allowed on immovable property as per section 17(5)(d).
Hi, An elevator is treated as a part of the building. An elevator is an integral part of the building and doesn't have a separate identity i.e it cannot be sold as individual peace. It is designed and assembled as per the requirement of a building which makes it an integral part of the building. WeRead more
Hi,
An elevator is treated as a part of the building.
An elevator is an integral part of the building and doesn’t have a separate identity i.e it cannot be sold as individual peace. It is designed and assembled as per the requirement of a building which makes it an integral part of the building.
We can refer to the explanation of section 17 (5) of the CGST Act as the expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes-
(i) land, building or any other civil structures;
(ii) telecommunication towers; and
(iii) pipelines laid outside the factory premises.
Section 17(5)(d) does not allow to take ITC on goods or services or both received by a taxable person for the construction of an immovable property.
Yes, an E-invoice can be generated for backdated invoices and there is no time limit for businesses with a turnover of less than 100 crore. GST portal is allowing it. But rule 48 says that every business having a turnover of more than 5 Cr must issue an E-invoice and section 31 says that a Tax invoiRead more
Yes, an E-invoice can be generated for backdated invoices and there is no time limit for businesses with a turnover of less than 100 crore. GST portal is allowing it.
But rule 48 says that every business having a turnover of more than 5 Cr must issue an E-invoice and section 31 says that a Tax invoice should be issued before or at the time of supply of service or delivery of goods.
Accordingly, in my opinion, in your case, E-invoice is mandatory and it must be issued as per the normal timeline. GST portal is allowing you to generate the e-invoice on a later date but that does not mean that you are allowed to violate Rule 48 and section 31.
in the best scenario, an E-invoice should be generated before the filing of GSTR-1 so that it can be auto-populated.
Hi, As per Section 2(76) read with Rule 3 of the Companies (Specification of definitions, details) Rules, 2014 of the Act, Related party with reference to a company means: 1. A director or key managerial personnel or relative thereof; 2. A firm, in which a director, manager, or his relative is a parRead more
Hi,
As per Section 2(76) read with Rule 3 of the Companies (Specification of definitions, details) Rules, 2014 of the Act, Related party with reference to a company means:
1. A director or key managerial personnel or relative thereof;
2. A firm, in which a director, manager, or his relative is a partner;
3. A private company in which a director or manager or his relative is a member or director;
4. A public company in which a director or manager is a director AND holds along with his relatives, more than two percent of its paid-up share capital;
5. Any Body Corporate whose Board of Directors, managing director, or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager.
(b) Any person on whose advice, directions, or instructions a director or manager is accustomed to act.
Note: nothing contained in clauses (a) and (b) shall apply to the advice, directions or instructions given in a professional capacity.
6. Holding, subsidiary, or an associate company of such a company.
7. Subsidiary of a holding company to which it is also a subsidiary.
8. Investing company or the venturer of the company.
Explanation—” investing company or the venturer of a company” means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate
Note: Term relative in relation to a person means and includes Father, Mother, Son, Son’s wife, Daughter, Daughter’s husband, Brother, Sister, members of a HUF, Husband and wife
Hi, It's a very interesting question and I was waiting for it. Lots of companies are appointing a CFO cum Company secretary to save costs. Following provision will help to understand the context of the question: As per section 203, prescribed class of companies shall have the following whole-time kRead more
Hi,
It’s a very interesting question and I was waiting for it. Lots of companies are appointing a CFO cum Company secretary to save costs. Following provision will help to understand the context of the question:
As per section 203, prescribed class of companies shall have the following whole-time key managerial personnel
(i) managing director, or Chief Executive Officer or manager and in their absence, a whole-time director;
(ii) company secretary; and
(iii) Chief Financial Officer
Here, the term used is ‘whole-time’ and therefore, three different individuals are required to hold these three key positions.
Further, as per Regulation 78 of Table F,
‘a provision of the Act or these regulations requiring or authorizing a thing to be done by or to a director and chief executive officer, manager, company secretary or chief financial officer shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, chief executive officer, manager, company secretary or chief financial officer’.
Hence, with the above provision of the act, it is crystal clear that a CFO can not be appointed as company secretary of the company.
Section 40b describes the maximum amount of remuneration and interest on capital payable to a partner under Income Tax Act. Excess to this amount will not be allowed as a deduction from the income of the firm. Remuneration in a partnership firm is allowed as a deduction if the following conditions aRead more
Section 40b describes the maximum amount of remuneration and interest on capital payable to a partner under Income Tax Act. Excess to this amount will not be allowed as a deduction from the income of the firm.
Remuneration in a partnership firm is allowed as a deduction if the following conditions are satisfied:
Remuneration is allowed only to working partners.
Remuneration must be authorized by the partnership deed and according to the terms of the partnership deed.
Also, the amount of salary or manner of its computation is to be mentioned in the deed. If there is not any such provision in deed then no deduction is allowed. If it is mentioned in the deed that salary is allowed to partners as per the maximum limit defined under this section then this condition is satisfied.
It should be related to the period of the partnership deed.
It is not allowed if the income of the partner ship firm is calculated on the basis of section 44AD or section 44ADA (Presumptive Income).
Remuneration should be within the permissible limits as mentioned below. This limit is for the total salary to all partners and not per partner.
Book Profit
Amount deductible as remuneration under section 40(b)
If book profit is negative
Rs. 1,50,000
If book profit is positive- On first Rs. 3 lakh of book profit On the balance of book profit
Rs. 1,50,000 or 90% of book profit whichever is more 60% of book profit
Calculation of book profit
Profit as per Profit & Loss a/c – xxx
Add- Remuneration to partners if debited to Profit and loss a/c
Add- Brought forward business loss, deduction under section 80C
to 80U if debited to profit and loss a/c
Less – Income under house property, capital gain, other
sources if credited to profit and loss a/c Book Profits xxx
Such Remuneration will be taxable in the hands of receiving partner as “Income from Business or Profession” but If such remuneration is not allowed as an expense in hands of the partnership firm then it will not be taxable in the hands of partners.
There is no condition for payment of interest under income tax. You can pay any amount of interest. However, for getting deduction of this expenditure under income tax, you need to fulfill the following conditions of section 40b of act: Payment of Interest to a partner (working or non-working partnRead more
There is no condition for payment of interest under income tax. You can pay any amount of interest.
However, for getting deduction of this expenditure under income tax, you need to fulfill the following conditions of section 40b of act:
Payment of Interest to a partner (working or non-working partner)
Interest must be authorized by the partnership deed
Only for the period of partnership deed.
The rate of interest should not exceed 12%. Excess of this is disallowed.
if Income is calculated on a presumptive basis under section 44AD or section 44ADA then it is not allowed.
If interest is paid to a partner on behalf or for the benefit of any other person then such interest is not disallowed under this section.
If the firm receives interest on drawings from a partner then it is taxable in the hands of the firm.
Deduction of Life insurance premium paid by an assess is available in respect of policy taken in the name the taxpayer, his spouse and his children.Further, it should be noted that deduction is allowed for all children irrespective of the fact whether they are dependent/independent, major/minor, orRead more
Deduction of Life insurance premium paid by an assess is available in respect of policy taken in the name the taxpayer, his spouse and his children.Further, it should be noted that deduction is allowed for all children irrespective of the fact whether they are dependent/independent, major/minor, or married/unmarried.
In the case referred in the question, Father can take the deduction of Insurence premium paid by him for the policy of married daughter.
But in my opinion, the daughter can not avail the deduction of the premium paid his father.
Hi, Both are accounting terms. Let's understand first to "Trade payable" (TP). Trade Payable refers to a general ledger account of an identified vendor or supplier in the books of the company. The company has made transactions with them for the supply of goods/services and has some outstanding balanRead more
Hi,
Both are accounting terms. Let’s understand first to “Trade payable” (TP).
Trade Payable refers to a general ledger account of an identified vendor or supplier in the books of the company. The company has made transactions with them for the supply of goods/services and has some outstanding balances to pay in accordance with the terms of payments/agreement.
Since the company has the obligation to pay them they called creditors or trade payable. These are shown in the liability side of the balance sheet of the company.
Now come to Expenses Payable, Technically they’re also the liability of the company and shown in the liability side of the balance sheet. Generally, they belong to unidentified parties. It is also not confirmed that whether the company will require an outflow of economic benefit to settle their obligation in near future. This means either the creditor is not identified or the obligation to payment of the outstanding amount is not confirmed. For example, in the “Provision of an expense” here neither the party is identified nor the obligation is confirmed. When the party is identified or payment of obligation is confirmed the outstanding amount is transferred to the creditor’s account.
Hope it clears the terms. There may be different opinions also.
Is TDs deductible on Certification charges?
TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc. Here is the detailed analysis of sec 194 J TDS under section 194J is deducted on payments exceeding the threshold limRead more
TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc.
Here is the detailed analysis of sec 194 J
TDS under section 194J is deducted on payments exceeding the threshold limit for below payments.
Professional services include following services:
Fees for technical services include the following payments:
Note: Technical service does not include services provided by machines or robots.
Royalty means the payment made for:
Non-compete fees include the payment made for an agreement for not sharing any license, patent, trademark, franchise, know-how, commercial or business rights, or information to any other person for processing, manufacture, or provisional service.
Thanks
See lessIs ITC allowed on air conditioner?
Yes, ITC is allowed in the Air conditioner subject to the condition that it is not accounted as Land & Building and used in the course or furtherance of the business. Assessee should disclose it as Plant and Machinery. ITC is not allowed on immovable property as per section 17(5)(d).
Yes,
ITC is allowed in the Air conditioner subject to the condition that it is not accounted as Land & Building and used in the course or furtherance of the business. Assessee should disclose it as Plant and Machinery.
ITC is not allowed on immovable property as per section 17(5)(d).
See lessWill an elevator qualify as plant and machinery or land and building under GST
Hi, An elevator is treated as a part of the building. An elevator is an integral part of the building and doesn't have a separate identity i.e it cannot be sold as individual peace. It is designed and assembled as per the requirement of a building which makes it an integral part of the building. WeRead more
Hi,
An elevator is treated as a part of the building.
An elevator is an integral part of the building and doesn’t have a separate identity i.e it cannot be sold as individual peace. It is designed and assembled as per the requirement of a building which makes it an integral part of the building.
We can refer to the explanation of section 17 (5) of the CGST Act as the expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes-
(i) land, building or any other civil structures;
(ii) telecommunication towers; and
(iii) pipelines laid outside the factory premises.
Section 17(5)(d) does not allow to take ITC on goods or services or both received by a taxable person for the construction of an immovable property.
See lessIs E Invoicing can be generated after the end of financial year for back dated invoice having turnover less than 100 crore?
Yes, an E-invoice can be generated for backdated invoices and there is no time limit for businesses with a turnover of less than 100 crore. GST portal is allowing it. But rule 48 says that every business having a turnover of more than 5 Cr must issue an E-invoice and section 31 says that a Tax invoiRead more
Yes, an E-invoice can be generated for backdated invoices and there is no time limit for businesses with a turnover of less than 100 crore. GST portal is allowing it.
But rule 48 says that every business having a turnover of more than 5 Cr must issue an E-invoice and section 31 says that a Tax invoice should be issued before or at the time of supply of service or delivery of goods.
Accordingly, in my opinion, in your case, E-invoice is mandatory and it must be issued as per the normal timeline. GST portal is allowing you to generate the e-invoice on a later date but that does not mean that you are allowed to violate Rule 48 and section 31.
in the best scenario, an E-invoice should be generated before the filing of GSTR-1 so that it can be auto-populated.
Thanks
See lessWhat is the meaning of related party?
Hi, As per Section 2(76) read with Rule 3 of the Companies (Specification of definitions, details) Rules, 2014 of the Act, Related party with reference to a company means: 1. A director or key managerial personnel or relative thereof; 2. A firm, in which a director, manager, or his relative is a parRead more
Hi,
As per Section 2(76) read with Rule 3 of the Companies (Specification of definitions, details) Rules, 2014 of the Act, Related party with reference to a company means:
1. A director or key managerial personnel or relative thereof;
2. A firm, in which a director, manager, or his relative is a partner;
3. A private company in which a director or manager or his relative is a member or director;
4. A public company in which a director or manager is a director AND holds along with his relatives, more than two percent of its paid-up share capital;
5. Any Body Corporate whose Board of Directors, managing director, or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager.
(b) Any person on whose advice, directions, or instructions a director or manager is accustomed to act.
Note: nothing contained in clauses (a) and (b) shall apply to the advice, directions or instructions given in a professional capacity.
6. Holding, subsidiary, or an associate company of such a company.
7. Subsidiary of a holding company to which it is also a subsidiary.
8. Investing company or the venturer of the company.
Explanation—” investing company or the venturer of a company” means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate
Note: Term relative in relation to a person means and includes Father, Mother, Son, Son’s wife, Daughter, Daughter’s husband, Brother, Sister, members of a HUF, Husband and wife
Thanks
See lessIn terms of provision of section 203 of Companies Act, 2013, whether an individual can be appointed as CFO as well as company secretary of a company?
Hi, It's a very interesting question and I was waiting for it. Lots of companies are appointing a CFO cum Company secretary to save costs. Following provision will help to understand the context of the question: As per section 203, prescribed class of companies shall have the following whole-time kRead more
Hi,
It’s a very interesting question and I was waiting for it. Lots of companies are appointing a CFO cum Company secretary to save costs. Following provision will help to understand the context of the question:
As per section 203, prescribed class of companies shall have the following whole-time key managerial personnel
(i) managing director, or Chief Executive Officer or manager and in their absence, a whole-time director;
(ii) company secretary; and
(iii) Chief Financial Officer
Here, the term used is ‘whole-time’ and therefore, three different individuals are required to hold these three key positions.
Further, as per Regulation 78 of Table F,
‘a provision of the Act or these regulations requiring or authorizing a thing to be done by or to a director and chief executive officer, manager, company secretary or chief financial officer shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, chief executive officer, manager, company secretary or chief financial officer’.
Hence, with the above provision of the act, it is crystal clear that a CFO can not be appointed as company secretary of the company.
See lessWhat is the limit of remuneration of partner as per Income Tax act?
Section 40b describes the maximum amount of remuneration and interest on capital payable to a partner under Income Tax Act. Excess to this amount will not be allowed as a deduction from the income of the firm. Remuneration in a partnership firm is allowed as a deduction if the following conditions aRead more
Section 40b describes the maximum amount of remuneration and interest on capital payable to a partner under Income Tax Act. Excess to this amount will not be allowed as a deduction from the income of the firm.
Remuneration in a partnership firm is allowed as a deduction if the following conditions are satisfied:
Calculation of book profit
Profit as per Profit & Loss a/c – xxx
Add- Remuneration to partners if debited to Profit and loss a/c
Add- Brought forward business loss, deduction under section 80C
to 80U if debited to profit and loss a/c
Less – Income under house property, capital gain, other
sources if credited to profit and loss a/c
Book Profits xxx
Such Remuneration will be taxable in the hands of receiving partner as “Income from Business or Profession” but If such remuneration is not allowed as an expense in hands of the partnership firm then it will not be taxable in the hands of partners.
See lessWhat are the conditions of Interest payable to partners of a firm under the Income Tax Act?
There is no condition for payment of interest under income tax. You can pay any amount of interest. However, for getting deduction of this expenditure under income tax, you need to fulfill the following conditions of section 40b of act: Payment of Interest to a partner (working or non-working partnRead more
There is no condition for payment of interest under income tax. You can pay any amount of interest.
However, for getting deduction of this expenditure under income tax, you need to fulfill the following conditions of section 40b of act:
See lessCan the premium be claimed u/s 80C by married daughter in her return if LIC premium paid by her father?
Deduction of Life insurance premium paid by an assess is available in respect of policy taken in the name the taxpayer, his spouse and his children.Further, it should be noted that deduction is allowed for all children irrespective of the fact whether they are dependent/independent, major/minor, orRead more
Deduction of Life insurance premium paid by an assess is available in respect of policy taken in the name the taxpayer, his spouse and his children.Further, it should be noted that deduction is allowed for all children irrespective of the fact whether they are dependent/independent, major/minor, or married/unmarried.
In the case referred in the question, Father can take the deduction of Insurence premium paid by him for the policy of married daughter.
But in my opinion, the daughter can not avail the deduction of the premium paid his father.
See lessWhat is difference between Trade Payables and Expenses Payable?
Hi, Both are accounting terms. Let's understand first to "Trade payable" (TP). Trade Payable refers to a general ledger account of an identified vendor or supplier in the books of the company. The company has made transactions with them for the supply of goods/services and has some outstanding balanRead more
Hi,
Both are accounting terms. Let’s understand first to “Trade payable” (TP).
Trade Payable refers to a general ledger account of an identified vendor or supplier in the books of the company. The company has made transactions with them for the supply of goods/services and has some outstanding balances to pay in accordance with the terms of payments/agreement.
Since the company has the obligation to pay them they called creditors or trade payable. These are shown in the liability side of the balance sheet of the company.
Now come to Expenses Payable, Technically they’re also the liability of the company and shown in the liability side of the balance sheet. Generally, they belong to unidentified parties. It is also not confirmed that whether the company will require an outflow of economic benefit to settle their obligation in near future. This means either the creditor is not identified or the obligation to payment of the outstanding amount is not confirmed. For example, in the “Provision of an expense” here neither the party is identified nor the obligation is confirmed. When the party is identified or payment of obligation is confirmed the outstanding amount is transferred to the creditor’s account.
Hope it clears the terms. There may be different opinions also.
See less