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CA Alka Gaharwar
Beginner
Asked: In:

  1. CA Manish Kumar Gupta Enlightened

    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

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CA Manish Kumar Gupta
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    The Finance Act, 2023, introduced a significant amendment to Section 115A of the Income Tax Act, impacting non-residents earning royalties and fees for technical services (FTS) in India. Key Changes: Increased Tax Rate: The withholding tax rate on royalties and FTS for non-residents has been raisedRead more

    The Finance Act, 2023, introduced a significant amendment to Section 115A of the Income Tax Act, impacting non-residents earning royalties and fees for technical services (FTS) in India.

    Key Changes:

    • Increased Tax Rate: The withholding tax rate on royalties and FTS for non-residents has been raised from 10% to 20%, effective April 1, 2023. This means payments made to non-residents for these services will now attract a higher tax burden, along with applicable cess and surcharge.
    • Impact on Non-Resident Taxpayers: Earlier, non-residents were not required to file tax returns in India if their income consisted only of dividends, royalties, FTS, or interest and if tax was withheld at the prescribed rate. However, due to the increased tax rate, many non-residents may now prefer to claim benefits under the Double Taxation Avoidance Agreement (DTAA) to reduce their tax liability.
    • Additional Compliance for DTAA Benefits: Non-residents seeking DTAA benefits must comply with additional tax filing requirements in India, including:
      • Obtaining a Permanent Account Number (PAN)
      • Furnishing a Tax Residency Certificate (TRC)
      • Submitting a No Permanent Establishment Declaration
      • Electronically filing Form 10F
      • Mandatory Tax Return Filing: Non-residents availing DTAA benefits are now required to file income tax returns in India.
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Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    If the invoice clearly separates the value of goods and services, then:✅ TDS is applicable only on the service component, as TDS is not deductible on the purchase of goods.✅ No TDS on the goods portion, as per the CBDT Circular No. 715 (1995) and various case laws. Check the contract terms to determRead more

    If the invoice clearly separates the value of goods and services, then:
    ✅ TDS is applicable only on the service component, as TDS is not deductible on the purchase of goods.
    ✅ No TDS on the goods portion, as per the CBDT Circular No. 715 (1995) and various case laws.

    Check the contract terms to determine if it falls under works contract or pure goods purchase.

    if it falls under the works contract then TDS u/s 194 C will be deducted.

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Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Yes, GST applicability on advance payments depends on whether the transaction involves goods or services as per the GST law: 1. Advance Payment for Goods 📌 As per Notification No. 66/2017 – Central Tax, GST is NOT required to be paid on advances received for the supply of goods (except in cases coveRead more

    Yes, GST applicability on advance payments depends on whether the transaction involves goods or services as per the GST law:

    1. Advance Payment for Goods

    📌 As per Notification No. 66/2017 – Central Tax, GST is NOT required to be paid on advances received for the supply of goods (except in cases covered under the reverse charge mechanism).
    📌 The supplier should issue a Proforma Invoice followed by a Tax Invoice at the time of supply.

    2. Advance Payment for Services

    📌 As per Section 13(2) of the CGST Act, 2017, GST must be paid at the earlier of:

    • The date of invoice (or the last date on which the invoice should be issued).
    • The date of receipt of advance payment.
      📌 The supplier must issue a receipt voucher for the advance amount received.

    3. ITC (Input Tax Credit) on Advance Payment

    📌 The recipient (buyer) can claim ITC once the Tax Invoice is received and the supplier has reported the GST payment.

    ✅ Final Answer:

    • For Goods ➝ GST not required on advance payments.
    • For Services ➝ GST must be paid at the time of advance receipt.
    • Ensure proper documentation like receipt vouchers & tax invoices for compliance.
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Anonymous
Anonymous
Asked: In:

  1. CA Vishnu Ram Enlightened
    This answer was edited.

    Hi, This single question covers two questions in itself Applicability of TDS on consultancy services on NRI (Bhutan Citizen) Requirement of form 15ca/15cb on payment made to a resident of Bhutan. Section 195 of the Income Tax Act, 1961 covers the TDS  provision on the payments made by an individualRead more

    Hi,

    This single question covers two questions in itself

    1. Applicability of TDS on consultancy services on NRI (Bhutan Citizen)
    2. Requirement of form 15ca/15cb on payment made to a resident of Bhutan.

    Section 195 of the Income Tax Act, 1961 covers the TDS  provision on the payments made by an individual by way of interest or any other amount other than salary to an NRI or a foreign company and also requires the payer to furnish an undertaking in the form 15CA along with a certificate of Chartered Accountants in form 15CB.

    Now let’s discuss the first issue involved in the question:

    The TDS liability in India is to be decided on two levels:

    • First with reference to the provision of this section of the Income Tax Act and
    • Second with reference to the provision of the Tax treaty/Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the NR receiver.

    Now if you refer the clause 2 of article 12 of the DTTA between the Indian Government and the Roya Government of Bhutan, it is clearly stated that

    Royalties or fees for technical or professional services may also be taxed in the Contracting State i.e India, and according to the laws of that State, but if the beneficial owner of the royalties or fees for technical or professional services is a resident of the other Contracting State i.e Bhutan than the tax so charged shall not exceed 10 percent of the gross amount of the royalties or fees for technical or professional services.

    Now let’s discuss the second issue involved in the question i.e requirement of form 15CA and 15CB:

    Form 15CA and 15CB  are not required to be furnished for remittance in two cases:

    1. if it is covered in the negative list of RBI as per rule 37BB.
    2. if the remittance is made by an individual and it does not require prior approval of RBI [as per the provisions of section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000]

    In your case, it is not covered in the negative list, hence forms 15CA and CB is required to be furnished, there is no such exemption for the country of an NRI.

    Thanks.

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CA Manish Kumar Gupta
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    HI Hope this summary will work for you: Indirect Taxes 1. Customs duty on goods of textiles, toys, bicycle reduced from 21 to 13% 2. To promote Green Mobility - basic customs duty concession for lithium ion battery 3. To promote Electronics manufacture- relief on customs duty for camera lens and litRead more

    HI Hope this summary will work for you:

    Indirect Taxes
    1. Customs duty on goods of textiles, toys, bicycle reduced from 21 to 13%
    2. To promote Green Mobility – basic customs duty concession for lithium ion battery
    3. To promote Electronics manufacture- relief on customs duty for camera lens and lithium battery
    4. Television – TV panels customs duty reduced
    5. Electric kitchen chimney to reduce inverted duty structure from 7.5 to 15 percent
    6. Benefit for ethanol blending program and acid program and epichlorohydrine
    7 Marine Products- to promote exports – shrimps, etc. Duty on shrimpfeed reduced
    8. Basic Customs duty reduced for seeds in manufacture for diamonds
    9. Customs duty to increase in silver bars
    10. Steel – concessional customs duty on steel and ferrous products
    11. Copper – concessional customs duty on copper
    12. Rubber – concessional customs duty on rubber
    13. Cigarettes – increased tax

    Direct Taxes
    1. Common IT form and grievance redressal system
    2. MSME – avail benefit of presumptive taxation increased to 44AD to 3 crores
    Professionals u/s 44ADA – 75 lakhs
    Provided receipt in cash doesn’t exceed 5%
    3. TDS only on payment for deduction
    4. Co-operatives tax -15%
    Higher limit of 2 lakh per member for cash deposit in agricultural banks
    Higher limit of Rs. 3 crores on TDS for cooperative societies
    5. Startups
    To avail startup benefits from 31-03-2023 to 31-03-2024
    6. 100 new joint commissioners for appeal
    7. S.54 to S.54F capped at 10 crores
    8. TDS on Online gaming –
    9. TDS 30% to 20% on taxable portion of EPF
    10. Extending funds for GIFT and IFSC

    Personal Income Tax
    1. Rebate for income upto 7 lakhs u/s 87A in the new tax regime
    2. New tax regime from
    0-3 lakhs nil
    3-6 lakhs- 5%
    6-9 lakhs 10%
    9-12 lakhs 15%
    12-15 lakhs 20%
    Above 15 lakhs- 30 %
    3. Standard deduction for new tax regime for Rs. 15.5 lakhs or more -52,500
    4. Reduction of highest surcharge from 37% to 25% on new income tax regime
    5. Limit on tax exemption for leave encashment is increased from 3,00,000 to 25,00,000
    6. New income tax regime default regime (option to avail old scheme available)

     

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CA Sanjiv Kumar
Enlightened
Asked: In:

  1. dhirajgupt4u Beginner

    PF Withdrawal Rules for Different Purposes Following are the EPF withdrawal rules for different purposes: Medical Eligibility: No eligibility criteria Limit: Six times the monthly basic salary or total employee’s contribution plus the interest, whichever is lower. Conditions: For medical treatment oRead more

    PF Withdrawal Rules for Different Purposes

    Following are the EPF withdrawal rules for different purposes:

    Medical

    • Eligibility: No eligibility criteria
    • Limit: Six times the monthly basic salary or total employee’s contribution plus the interest, whichever is lower.
    • Conditions: For medical treatment of self, spouse, parents or children.

    Marriage

    • Eligibility: Should have been in service for a minimum of 7 years.
    • Limit: Only up to 50% of employee’s contribution to EPF.
    • Conditions: For the marriage of self, daughter/ son, and brother/ sister.

    Education

    • Eligibility: Should have been in service for a minimum of 7 years.
    • Limit: Only up to 50% of employee’s contribution to EPF.
    • Conditions: For your education or for a child’s education that is post-matriculation.

    Purchase or Construction of a House or Purchase of a Land

    • Eligibility: Should have been in service for a minimum of 5 years.
    • Limit:
      • House: Up to 36 times the monthly basic salary plus dearness allowance.
      • Land: Up to 24 times the monthly basic salary plus dearness allowance. (The limits are restricted to the total cost)
    • Conditions:
      • The house or land must be in your name or jointly with the spouse.
      • Withdrawal is allowed only once during the entire service.
      • The construction must begin within six months and must finish within 12 months from the last withdrawn instalment.

    Home Loan Repayment

    • Eligibility: Should have been in service for more than ten years.
    • Limit: Least of the:
      • Up to 36 times of Monthly basic salary plus dearness allowance;
      • Total corpus consisting of employer and employer’s contribution with interest;
      • Total outstanding principal and interest on housing loan.
    • Conditions:
      • The property must be registered in your name or spouse or jointly with the spouse.
      • Submission of required documentation as per the EPFO requirements for a home loan.
      • The PF corpus accumulated in your account or together with your spouse (including the interest) must be more than INR 20,000.

    Home Renovation

    • Eligibility: Should have been in service for a minimum of 5 years.
    • Limit: Least of the:
      • Up to 12 times the monthly basic salary plus dearness allowance;
      • Employee’s contribution plus interest;
      • Total Cost
    • Conditions:
      • The property must be registered in your name or spouse or jointly with the spouse.
      • The home renovation facility can be availed twice:
        • (i) After five years of the completion of the home.
        • (ii) After ten years of the completion of the home.

    Partial Withdrawal before Retirement

    • Eligibility: Can withdraw up to 90% of the accumulated balance plus the interest.
    • Limit: The account holder must be at least  54 years, and withdrawal must be made before one year of superannuation or retirement.
    • Conditions: No other conditions

    Non-Receipt of Wages

    • Eligibility: No eligibility criteria
    • Limit: Your share (employee’s share) with interest.
    • Conditions: You haven’t received wages for a period of more than two months continuously (other than a strike).

    Job Loss

    • Eligibility: No eligibility criteria
    • Limit: Up to 75% of the EPF balance. The remaining 25% can be withdrawn if you are unemployed for two months continuously.
    • Conditions: You are unemployed for a period of not less than one month.

    To meet Pandemic Related Financial Exigencies (Covid-19)

    • Eligibility: No eligibility criteria
    • Limit: Least of the following:
      • Three months basic salary plus dearness allowance;
      • 75% of EPF balance
    • Conditions: If the area where you stay/ employed is declared to be affected by an epidemic or pandemic.

    Investment in Varishtha Pension Bima Yojana

    • Eligibility: After 55 years of age.
    • Limit: Up to 90% of the available EPF balance (including your share, employer’s share and interest).
    • Conditions: The amount must be directly transferred to the Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana.

    EPF Withdrawal Rules 2023

    Employee Provident Fund investments focus on saving towards retirement. Hence withdraw only if it is an emergency.

     

    Before 5 Years of Service

    Following are the PF withdrawal rules for withdrawing the corpus before five years of continuous service:

    • Withdrawals before five years of continuous service are subject to TDS.
    • No TDS is applicable if the withdrawal amount is less than INR 50,000.
    • As per ITR Forms 2 and 3, it is mandatory for you to provide a detailed breakup of the PF deposits every year.
    • The Income Tax Department can then easily assess whether or not your withdrawals are taxable.
    • They can also check if you are liable to pay additional tax after revaluation.
    • EPF contributions have the following four components to them – Employee’s contribution, Employer’s contribution and the interest on both the deposits.
    • If you have claimed the EPF contributions under Section 80C of the Income Tax Act, 1961, for exemption, then all the four components of the EPF will be taxable.
    • If you haven’t claimed for exemption in the past. The employee’s contribution portion of the corpus will not attract any tax at the time of withdrawal.
    • The tax rates for the withdrawals depend on the income tax slabs in which you fall for that year.
    • The tax will be applicable only in the year of withdrawal but the consideration will be done separately for each year.

    After Retirement

    Following are the PF withdrawal rules for withdrawing the corpus amount after retirement:

    • For withdrawals after the age of 58, EPF Act mandates application for claim of the final settlement. In other words, you should apply for the claim of the final settlement.
    • The total PF corpus or balance comprises both your (employee) contribution and the employer’s contribution.
    • If you have more than ten years of continuous service, you will be eligible for Employee Pension Scheme (EPS) amount as well.
    • In case if you did not complete ten years of service by the time of your retirement you will be able to withdraw the entire EPS sum along with the EPF amount.
    • Completing the service period of 10 years will give you the pension benefits post-retirement.
    • Post-retirement, EPF withdrawals are tax-free. The interest earned on the EPF corpus is taxable after retirement.
    • To claim the funds, you will have to register yourself on the Official EPF member portal. Fill the forms and also claim them online. The entire process is online, and you can also do it in the comfort of your home.

    Tax on EPF Withdrawal

    Before 5 Years of Service

    EPF withdrawals before five years of continuous service attract TDS. If the withdrawal amount is less than INR 50,000, then no TDS is cut. The applicable TDS rate is 10% on withdrawals if the PAN details are furnished. In case PAN details are not provided, then the rate is 34.608%.

    EPF withdrawals made before five years of service are tax-free under the following scenarios:

    • Serious illness
    • Employer’s discontinuation of operations or winding down the organisation.
    • Withdrawals for reasons that do not fall under the employer’s authority.
    • Any advance made under the EPF Scheme is exempt from tax.

    After Retirement

    EPF withdrawals post-retirement (age of 58 years) is completely tax-free. The interest on the EPF amount is taxable as per applicable income tax slab rates. If you do not withdraw the EPF funds post three years of retirement, you will have to pay tax on the interest earned.

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CA Sanjiv Kumar
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Yes, expenses can be adjusted against income of a similar nature under certain conditions, but this depends on accounting standards, tax laws, and specific business circumstances. Let’s analyze this from an accounting and Ind AS/AS perspective. 1. Accounting Treatment as per Ind AS & AS (A) IndRead more

    Yes, expenses can be adjusted against income of a similar nature under certain conditions, but this depends on accounting standards, tax laws, and specific business circumstances. Let’s analyze this from an accounting and Ind AS/AS perspective.

    1. Accounting Treatment as per Ind AS & AS

    (A) Ind AS Perspective

    📌 Ind AS 1 (Presentation of Financial Statements):

    • It generally requires income and expenses to be shown separately in the financial statements.
    • Offsetting is allowed only when:
      • Required or permitted by another Ind AS
      • It reflects the substance of the transaction

    📌 Ind AS 18 (Revenue Recognition) & Ind AS 115 (Revenue from Contracts with Customers):

    • Expenses that are directly linked to revenue (such as cost of sales in case of trading income) can be adjusted against income.

    📌 Ind AS 37 (Provisions, Contingent Liabilities, and Contingent Assets):

    • If an entity incurs an expense that leads to a compensating claim (e.g., insurance claims, government subsidies), it can be recognized net of the claim if realization is virtually certain.

    (B) AS Perspective (Indian GAAP – Accounting Standards)

    📌 AS 9 (Revenue Recognition):

    • It does not permit netting off expenses against revenue unless they are directly related (e.g., trade discounts, returns).

    📌 AS 5 (Net Profit or Loss for the Period, Prior Period Items, and Changes in Accounting Policies):

    • Extraordinary income and expenses should not be offset against each other but separately disclosed.

    2. When is Offsetting Allowed?

    ✅ Examples Where Adjustment is Allowed:

    • Commission Income vs. Commission Paid: If a company earns commission and pays a commission for the same transaction, they may be netted off.
    • Trading Businesses: Cost of goods sold (COGS) is deducted from sales revenue.
    • Banking Transactions: Interest income and interest expense of the same nature can be reported net if permitted by the standard.

    ❌ Examples Where Adjustment is NOT Allowed:

    • Different sources of income (e.g., rental income vs. business expenses).
    • Operating expenses against unrelated income (e.g., office rent cannot be adjusted against interest income).

    3. Taxation Perspective

    📌 Under Income Tax Act, 1961, netting off is not generally allowed except:

    • Section 70 & 71: Business losses can be set off against business income but not against salary or capital gains.
    • Depreciation as per Section 32: Can be adjusted against business profits.
    • Capital gains adjustments (short-term vs. long-term).

    Final Answer:

    • Ind AS & AS generally prohibit offsetting unless specifically permitted.
    • Business-related expenses can only be adjusted against income of a similar nature (e.g., direct expenses against trading income).
    • Tax laws have specific rules for set-offs, so compliance with Income Tax Act, 1961 is necessary.
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CA Sanjiv Kumar
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Basic Documents ✅ PAN Card of the Partnership Firm – The firm must have a separate PAN card issued by the Income Tax Department. ✅ Partnership Deed – A notarized or registered partnership deed is required, mentioning the firm’s name, partners, and profit-sharing ratio. ✅ PAN Cards of All Partners –Read more

    1. Basic Documents

    ✅ PAN Card of the Partnership Firm – The firm must have a separate PAN card issued by the Income Tax Department.
    ✅ Partnership Deed – A notarized or registered partnership deed is required, mentioning the firm’s name, partners, and profit-sharing ratio.
    ✅ PAN Cards of All Partners – Each partner must submit a copy of their PAN card.

    1. Identity & Address Proof of Partners

    Each partner must provide:
    ✅ Aadhaar Card (Mandatory)
    ✅ Passport / Voter ID / Driving License (Any one as additional proof)
    ✅ Latest Passport-Size Photograph

    1. Business Address Proof (Any one of the following)

    ✅ Electricity Bill / Water Bill / Property Tax Receipt (Not older than 2 months)
    ✅ Rent Agreement (If Rented Property) – An agreement between the firm and the property owner.
    ✅ NOC from Property Owner – A No Objection Certificate (NOC) from the property owner (if rented/leased).

    1. Bank Account Proof

    ✅ Cancelled Cheque or Bank Statement – A firm’s bank account statement or a cancelled cheque displaying the firm’s name, account number, and IFSC code.

    1. Authorized Signatory Documents

    ✅ Authorization Letter – If a specific partner is appointed as the authorized signatory, an authorization letter is required.

    1. Digital Signature Certificate (For LLPs & Large Firms)

    ✅ DSC (Digital Signature Certificate) – If the firm is an LLP (Limited Liability Partnership), a DSC of the authorized partner is required for GST filing.

    Key Points to Remember:

    📌 All documents should be clear and self-attested.
    📌 Ensure the mobile number & email ID are active for OTP verification.
    📌 Keep soft copies of the documents ready for online submission

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CA Manish Kumar Gupta
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Mandatory Conditions for a Partnership Firm in India A Partnership Firm in India is governed by the Indian Partnership Act, 1932. While registration is not mandatory, certain legal and operational conditions must be met for a valid partnership. 1. Minimum Two Partners (Section 4) A partnership mustRead more

    Mandatory Conditions for a Partnership Firm in India

    A Partnership Firm in India is governed by the Indian Partnership Act, 1932. While registration is not mandatory, certain legal and operational conditions must be met for a valid partnership.

    1. Minimum Two Partners (Section 4)

    • A partnership must have at least two persons to form a firm.
    • The maximum number of partners is:
      • 50 (as per Companies Act, 2013).
      • No limit for professional firms (e.g., chartered accountants, lawyers).

    2. Valid Partnership Agreement (Partnership Deed)

    • A written or oral agreement between partners is necessary.
    • A written Partnership Deed is recommended for clarity and legal proof.
    • Essential contents of a Partnership Deed:
      • Name of the firm and partners
      • Capital contribution
      • Profit-sharing ratio
      • Rights and duties of partners
      • Dispute resolution mechanism

    3. Profit Motive

    • The partnership must be formed for lawful business with the intent to earn profit.
    • Non-profit organizations cannot be partnerships.

    4. Shared Responsibility & Liability (Section 25)

    • Partners have unlimited liability, meaning personal assets can be used to pay business debts.
    • Each partner is jointly and severally liable for the firm’s liabilities.

    5. Mutual Agency (Section 18 & 19)

    • Each partner can act as an agent of the firm and bind other partners.
    • Any act done by a partner in the ordinary course of business is binding on the firm.

    6. Registration (Optional but Recommended) – Section 58

    • While registration of a partnership firm is not mandatory, an unregistered firm:
      ❌ Cannot file legal suits against third parties
      ❌ Cannot claim set-off in court
    • Registration requires filing with the Registrar of Firms in the respective state.

    7. PAN & Bank Account

    • A partnership firm must obtain a PAN (Permanent Account Number) from the Income Tax Department.
    • A separate bank account in the firm’s name is required for transactions.

    8. Taxation & Compliance

    • A partnership firm must file Income Tax Returns (ITR-5) annually.
    • GST registration is required if turnover exceeds ₹40 lakh (₹20 lakh for services).
    • TAN (Tax Deduction & Collection Account Number) is needed if TDS is applicable.

    Final Answer

    For a valid Partnership Firm in India, these conditions must be met:
    ✅ Minimum two partners
    ✅ Partnership Deed defining terms
    ✅ Profit-sharing agreement
    ✅ Unlimited liability & mutual agency
    ✅ Optional but recommended registration
    ✅ Compliance with tax laws (PAN, ITR, GST, TAN, etc.)

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