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Taxchopal Latest Questions

Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Please refer the rule 3 of the Companies (Incorporation) Rules, 2014, which provides that only a natural person who is an Indian citizen and resident in India is eligible to incorporate OPC. Therefore, the question of any “body corporate” or other organizations can not constitute a One person companRead more

    Please refer the rule 3 of the Companies (Incorporation) Rules, 2014, which provides that only a natural person who is an Indian citizen and resident in
    India is eligible to incorporate OPC. Therefore, the question of
    any “body corporate” or other organizations can not constitute a One person company. Naturally, they are not a natural person.

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    • 0
Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    A vendor registered under the MSMED Act, 2006 is called an MSME vendor. There are three categories of vendors in MSMED act which are based on their investment and turnover. Micro manufacturing and services units- Rs. 1 Crore of investment in plant and machinery or equipment and Rs 5 Crore of turnoveRead more

    A vendor registered under the MSMED Act, 2006 is called an MSME vendor. There are three categories of vendors in MSMED act which are based on their investment and turnover.

    1. Micro manufacturing and services units- Rs. 1 Crore of investment in plant and machinery or equipment and Rs 5 Crore of turnover.
    2. Small manufacturing and services units- Rs. 10 Crore of investment investment in plant and machinery or equipment and Rs 50 Crore of turnover.
    3. Medium manufacturing and services units- Rs. 50 Crore of investment in plant and machinery or equipment and Rs. 250 Crore of turnover.
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    • 0
Ramesh Sharma
Enlightened
Asked: In:

  1. CA Manish Kumar Gupta Enlightened

    Yes, there are specific bonds available under the Income Tax Act that allow you to invest your capital gains and claim tax relief. One of the primary avenues is provided under Section 54EC of the Act. How It Works: Section 54EC Bonds:If you have incurred capital gains from the sale of an asset, youRead more

    Yes, there are specific bonds available under the Income Tax Act that allow you to invest your capital gains and claim tax relief. One of the primary avenues is provided under Section 54EC of the Act.

    How It Works:

    • Section 54EC Bonds:
      If you have incurred capital gains from the sale of an asset, you can invest those gains in specified bonds—such as those issued by the National Highways Authority of India (NHAI) or the Rural Electrification Corporation (REC).

    • Tax Exemption:
      By investing in these bonds, you can claim an exemption from capital gains tax on the invested amount, up to a certain limit (currently ₹50 lakh per financial year).

    • Holding Period:
      These bonds are non-convertible and must be held for a minimum period, usually three years, to avail the tax benefit.

    Key Points to Remember:

    • Investment Limit:
      The exemption is available up to the prescribed limit per financial year.

    • Purpose:
      This measure encourages the flow of capital into infrastructure and other government-promoted sectors.

    • No Other Eligible Bonds:
      While Section 54EC is the most common route for capital gains bonds, always review the latest provisions, as tax laws can evolve.

    By investing your capital gains in these bonds, not only do you help fund critical infrastructure projects, but you also reduce your tax liability. This strategy can be an effective way to manage your taxes while supporting national development initiatives.

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    • 0
mkg
Teacher
Asked: In:

  1. CA Manish Kumar Gupta Enlightened
    This answer was edited.

    Hi, You mean the tax slab for the assessment year 2021-22 or say Income tax slab for the financial year 2020-21. Income Tax slab for Individual Below 60 years, HUF and NRI Income Old Regime New Regime  Up to 2.5 Lakh NIL NIL 2.5 Lakh to 5 Lakh 5% 5% 5 Lakh to 7.5 Lakh 20% 10% 7.5 Lakh to 10 Lakh 20%Read more

    Hi,

    You mean the tax slab for the assessment year 2021-22 or say Income tax slab for the financial year 2020-21.

    1. Income Tax slab for Individual Below 60 years, HUF and NRI
    Income Old Regime New Regime
     Up to 2.5 Lakh NIL NIL
    2.5 Lakh to 5 Lakh 5% 5%
    5 Lakh to 7.5 Lakh 20% 10%
    7.5 Lakh to 10 Lakh 20% 15%
    10 Lakh to 12.5 Lakh 30% 20%
    12.5 Lakh to 15 Lakh 30% 25%
    above15 Lakh 30% 30%

    2. For Individual 60 years but less than 80 years

    Income Old Regime New Regime
     Up to 2.5 Lakh NIL NIL
    2.5 Lakh to 3 Lakh NIL 5%
    3 Lakh to 5 Lakh 5% 5%
    5 Lakh to 7.5 Lakh 20% 10%
    7.5 Lakh to 10 Lakh 20% 15%
    10 Lakh to 12.5 Lakh 30% 20%
    12.5 Lakh to 15 Lakh 30% 25%
    above 15 Lakh 30% 30%

    3. For Individual 80 years and above

    Income Old Regime New Regime
     Up to 2.5 Lakh NIL NIL
    2.5 Lakh to 3 Lakh NIL 5%
    3 Lakh to 5 Lakh NIL 5%
    5 Lakh to 7.5 Lakh 20% 10%
    7.5 Lakh to 10 Lakh 20% 15%
    10 Lakh to 12.5 Lakh 30% 20%
    12.5 Lakh to 15 Lakh 30% 25%
    above 15 Lakh 30% 30%

     

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    • 5
Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Yes, CSR (Corporate Social Responsibility) activities can be undertaken in kind. This means that instead of providing cash, a company may donate goods or services—provided the donation meets the objectives of CSR as defined under Schedule VII of the Companies Act, 2013. Example: Donation of Books ScRead more

    Yes, CSR (Corporate Social Responsibility) activities can be undertaken in kind. This means that instead of providing cash, a company may donate goods or services—provided the donation meets the objectives of CSR as defined under Schedule VII of the Companies Act, 2013.

    Example: Donation of Books

    • Scenario:
      If your company is in the business of publishing books, you can donate books to schools, libraries, or community centers as part of your CSR activities.

    • Requirements:

      • Alignment with CSR Objectives: The donation should further a social cause, such as improving literacy, education, or community development.
      • Valuation: The fair market value of the donated books should be properly determined and documented.
      • Board Approval & CSR Policy: The donation must be in line with your company’s CSR policy and must receive appropriate board approval.
      • Documentation: Maintain records, receipts, and any other supporting documents to substantiate the donation as part of your CSR expenditure.

    Key Takeaways

    • In-Kind Donations Are Allowed:
      Contributions in kind—like donating books—are permissible as CSR expenditure if they are aligned with the approved social objectives outlined in Schedule VII.

    • Compliance is Crucial:
      Ensure that the in-kind donation is properly valued, documented, and approved by the board to meet compliance requirements.

    • Enhancing Social Impact:
      In-kind contributions can be an effective way to make a direct impact on community development while also promoting your company’s core business strengths.

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    • 0
Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Approval Requirement from Audit Committee for Related Party Transactions under Section 188 Section 188 of the Companies Act, 2013 governs Related Party Transactions (RPTs) and specifies when prior approval is required. Additionally, the Companies (Meetings of Board and its Powers) Rules, 2014 and SERead more

    Approval Requirement from Audit Committee for Related Party Transactions under Section 188

    Section 188 of the Companies Act, 2013 governs Related Party Transactions (RPTs) and specifies when prior approval is required. Additionally, the Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI (LODR) Regulations, 2015 impose further compliance requirements.

    1. Applicability of Section 188

    Section 188 applies when a company enters into a transaction with a related party, including:
    ✅ Sale, purchase, or supply of goods/materials
    ✅ Selling or disposing of property
    ✅ Leasing of property
    ✅ Availing or rendering services
    ✅ Appointment of related party to office or place of profit
    ✅ Underwriting of securities

    If these transactions exceed the prescribed threshold limits, approval from the Board of Directors and in some cases, shareholders is required.

    2. Threshold Limits for Shareholder Approval under Section 188

    As per Rule 15(3) of the Companies (Meetings of Board and its Powers) Rules, 2014, shareholder approval via a special resolution is required if the transaction value exceeds the following limits:

    Nature of Transaction Threshold Limit (Exceeding)
    Sale, purchase, or supply of goods/materials 10% or more of turnover
    Selling or buying property 10% or more of net worth
    Leasing of property 10% or more of net worth or 10% of turnover
    Availing or rendering services 10% or more of turnover
    Appointment of a related party to an office of profit in the company, subsidiary, or associate company ₹2.5 Lakh per month
    Underwriting of securities or derivatives 1% of net worth

    Note: The limits are based on the last audited financial statements of the company.

    3. Role of the Audit Committee in Related Party Transactions (RPTs)

    • Section 177(4)(iv) of the Companies Act, 2013 mandates that the Audit Committee must approve all RPTs, including those covered under Section 188.
    • Even if a transaction does not exceed the monetary limits of Section 188, it still requires Audit Committee approval if the company is required to have an Audit Committee.
    • Listed companies and certain public companies must comply with SEBI (LODR) Regulations, 2015, which impose stricter approval requirements for RPTs.

    4. Exemptions Where Audit Committee Approval May Not Be Required

    Audit Committee approval is not required in the following cases:
    ❌ Transactions between holding and wholly-owned subsidiary (subject to disclosure requirements).
    ❌ Transactions entered in the ordinary course of business and at arm’s length price.

    However, even in these cases, proper documentation and disclosure are essential.

    5. Shareholder Approval for Certain Transactions

    In addition to Audit Committee and Board approvals, shareholder approval via special resolution is required if the transaction value exceeds the thresholds mentioned above.

    Final Answer

    ✅ Yes, Audit Committee approval is mandatory for all Related Party Transactions, including those under Section 188, unless they are exempted (ordinary course & arm’s length).
    ✅ If the transaction exceeds prescribed limits, Board and shareholder approval is also required.
    ✅ Listed companies must comply with SEBI (LODR) Regulations, 2015, which impose additional RPT approval requirements.

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    • 0
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