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What is the difference between a subsidiary and joint venture?
What is a Subsidiary? A subsidiary company is defined under Section 2(87) of the Companies Act, 2013 as a company where another company (holding company) meets either of the following conditions: ✅ Owns more than 50% of its total share capital; or ✅ Controls the composition of its Board of DirectorsRead more
What is a Subsidiary?
A subsidiary company is defined under Section 2(87) of the Companies Act, 2013 as a company where another company (holding company) meets either of the following conditions:
✅ Owns more than 50% of its total share capital; or
✅ Controls the composition of its Board of Directors.
The parent (holding) company has significant control over the subsidiary’s operations, decision-making, and financial reporting.
What is a Joint Venture (JV)?
A joint venture is a business partnership where two or more companies collaborate for a common goal. Although the Companies Act, 2013 does not explicitly define a JV, it is generally understood as a strategic alliance where parties:
✔️ Contribute capital, resources, and expertise
✔️ Share risks and profits
✔️ Make joint decisions as per the JV agreement
A JV can be structured as a company, partnership, or contractual arrangement, depending on the agreement between the parties.
Key Differences Between a Subsidiary and a Joint Venture
Real-Life Examples
🚗 Subsidiary Example:
Maruti Suzuki India Ltd. is a subsidiary of Suzuki Motor Corporation, Japan, where Suzuki holds a majority stake and controls its operations.
🔩 Joint Venture Example:
See lessTata Steel and Nippon Steel formed a JV in India to manufacture high-quality steel, sharing expertise, investment, and control.
What is the change in capital gain tax as per finance budget 2025?
Capital Gains Taxation: Before & After Budget 2025 Asset Type Earlier (Before Budget 2025) After Budget 2025 Indexation Allowed? Listed Equity Shares & Equity-Oriented Mutual Funds (Holding > 12 Months) ✅ LTCG up to ₹1 lakh – Tax-free (Section 112A) ✅ LTCG above ₹1 lakh – Taxed at 10% (wiRead more
Capital Gains Taxation: Before & After Budget 2025
✅ LTCG above ₹1 lakh – Taxed at 10% (without indexation)
✅ LTCG above ₹1.25 lakh – Now taxed at 12.5% (without indexation)
✅ Non-residents taxed at 10% (without indexation)
✅ Non-residents now taxed at 12.5% (without indexation)
🚨 After April 1, 2023 – No indexation, taxed as per slab rate
✅ Exemptions available under Sections 54 & 54F if reinvested in property
🔹 Key Takeaways from Budget 2025
✅ Indexation rules remain unchanged – It is still available for unlisted shares, real estate, and gold, but not for listed shares, debt funds, or cryptocurrencies.
See less✅ LTCG tax on listed equity shares & mutual funds has increased from 10% to 12.5% (without indexation).
✅ Threshold for tax-free LTCG on listed shares has increased from ₹1 lakh to ₹1.25 lakh.
✅ Non-residents (including FIIs) now pay 12.5% instead of 10% on LTCG from unlisted shares.
✅ No impact on taxation of debt mutual funds (still taxed at slab rate without indexation).
How much tax is applicable on sale of equity shares?
The Union Budget 2025 has introduced key modifications to the taxation of equity shares and equity-oriented mutual funds. The following table summarizes the before and after impact of the changes: Comparison of Capital Gains Taxation Before and After Budget 2025 Type Earlier After Budget 2025 Short-Read more
The Union Budget 2025 has introduced key modifications to the taxation of equity shares and equity-oriented mutual funds. The following table summarizes the before and after impact of the changes:
Comparison of Capital Gains Taxation Before and After Budget 2025
· Unlisted Shares: Taxed as per the individual’s income tax slab rate.
– Gains up to ₹1 lakh per financial year are tax-free under Section 112A.
– Gains exceeding ₹1 lakh are taxed at 10% (without indexation).
· Unlisted Shares:
– Taxed at 20% with indexation benefit under Section 112.
· For non-residents, LTCG on unlisted shares is taxed at 10% (without indexation).
· This change applies to the sale of listed equity shares and equity-oriented mutual funds where Securities Transaction Tax (STT) is paid.
· The LTCG tax rate for non-residents, including FIIs, has also been increased from 10% to 12.5%, aligning with resident taxpayers.
· Cess: 4% Health & Education Cess on total tax.
Key Takeaways from Budget 2025
✅ Higher LTCG Tax Rate: Increased from 10% to 12.5% for gains exceeding ₹1 lakh.
See less✅ Higher LTCG Exemption Limit: Increased from ₹1 lakh to ₹1.25 lakh per financial year.
✅ No More Rebate (87A) on Capital Gains: Investors can no longer claim this benefit.
✅ Impact on Foreign Investors: FIIs and non-residents now face 12.5% LTCG tax, up from 10%.
✅ Short-Term Capital Gains Tax (15%) Remains Unchanged.
What are the new changes in Section 115a of Income Tax Act?
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.
See lessWhat are the documents required to apply for GST documents registration for a partnership firm?
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
✅ 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.
Each partner must provide:
✅ Aadhaar Card (Mandatory)
✅ Passport / Voter ID / Driving License (Any one as additional proof)
✅ Latest Passport-Size Photograph
✅ 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).
✅ 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.
✅ Authorization Letter – If a specific partner is appointed as the authorized signatory, an authorization letter is required.
✅ 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.
See less📌 Ensure the mobile number & email ID are active for OTP verification.
📌 Keep soft copies of the documents ready for online submission
How to deduct TDS if invoice contain both goods and service component?
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.
See lessIs TDS deductible on T shirts purchased with logo of my company on it?
If you are purchasing ready-made T-shirts with your company logo printed on them, it is treated as a purchase of goods. No TDS is required under Section 194C (TDS on contracts) or Section 194J (TDS on professional services). GST might apply, but TDS is not applicable under the Income Tax Act.
- If you are purchasing ready-made T-shirts with your company logo printed on them, it is treated as a purchase of goods.
- No TDS is required under Section 194C (TDS on contracts) or Section 194J (TDS on professional services).
- GST might apply, but TDS is not applicable under the Income Tax Act.
See less