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Refund refers to any amount that is due to the taxpayer from the administration owing to excess payment of taxes or any other reason. In the current GST regime, the entire refund process has been clearly defined in law. It aims at keeping the issues due to which refund arises at a minimum level with the help of higher compliances and self-regulating mechanism. Scope of Refund i.       Refund of taxes paid as per GST tax rates in India on zero-rated supplies ii.     Refund of taxes on Inputs or Input Services used in making zero-rated supplies iii.   Refund of taxes on the supply of goods regarded as deemed exports iv.   Refund of the unutilized input tax credit (ITC) as provided u/s 54(3) i.e. due to inverted duty structure. Further, there could be various other situations wherein refund can be granted to the registered person as per the refund provisions. Taxpayers who export goods or services can choose any of the f...

Introduced by the Finance Act, 1994, the Section 194-I emphasizes that an entity, whether an individual or H.U.F. who receives rental income is liable for a tax deduction at source (‘TDS’) when the income credited is more than Rs.1,80,000 during a financial year. Definition of ‘Rent’ in regard to section 194I? Any payment under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any – land, building (including factory building), land appurtenant to a building, machinery, plant, equipment, furniture or fittings whether owned by the payee. Unlike the advance rent, no tax is to be deducted on refundable security deposits u/s 194I. Moreover, where any such rent is credited to ‘suspense account’ or to any other account shall also be liable to TDS. At what point TDS is to be deducted? One should deduct TDS and pay tax direct online at the time of credit of rental income to the payee’s account or at the time ...

Across the world many corporations, particularly multinational organizations, now favour ESOP (employee stock ownership plan) as a preferred mode of employee compensation. Unlike the regular salary that the employee draws periodically, this is an in-kind benefit that allows the employee to own a part of the company (in the form of stock ownership) either while undertaking employment or as part of regular reimbursement. This gives the employee a personal interest in the business and maintains the corporate culture in the company. Similar to the ESOP, many corporations also award their employees SAR or Stock Appreciation Rights. These may be declared from time to time as incentives or as bonus. Usually the employee is allocated stock options of the company (at current market value) and can be redeemed anytime after a year (till the period of employment or within any other term specifically mentioned). This means that the amount of appreciation of a specific number of shares of t...

Income Tax is a direct tax on any income earned by a person during a financial year. An individual is supposed to file a return of income and pay taxes on the same by 31 st  July of the next year. Paying taxes always seems like a burden to the common man. However, the issue synonymous to both  Direct and Indirect Taxes  that must be addressed is Chapter VI of the Income Tax Act, 1961 has offered a variety of deductions to lessen the tax burden. A few of the major deductions enlisted under Chapter VI are presented as follows in accordance with the recent updates. It is notable that these deductions cannot exceed the Gross Total Income of the individual. Section Description Maximum Deduction threshold 80C Contribution to LIC, RPF, NSS, Tuition fees, principal repayment for purchase/construction of residential house, Sukanya Samridhi Account, ULIPS/ELSS, 5-year FD, Subscription to NABARD Bonds 80C + 80CCC+ 80CCD (1) should be l...

The Direct Taxation system in India is one of its kinds and includes its fair share of interesting and complex provisions and sections to be reckoned with. The concept of Advance Tax being one such provision includes depositing tax on income in advance by estimating the projected earnings for the year and then paying taxes accordingly on time-bound intervals instead of lump sum payments at year-end. Section 208 of the Income Tax Act, 1961 includes the provisions pertaining to Advance Income Tax which stipulates that where total income tax liability is greater than INR 10,000 then tax is to be deposited under Challan 280 via online or offline mode with designated banks to the Income Tax Department. Interestingly, the concept of paying taxes online in India is on the rise as more than 85% of transactions are now done online. The concept of Advance tax has been helping both the government and the taxpayers as there is a lesser chance of default in tax payments and collections w...

Technology might have taken over the world by a storm, but it’s a year-old GST that’s taking people for a ride in India. E-commerce sector comprises of the e-commerce marketplaces and the online sellers. Various Electronic Commerce Operation (ECO) players such as Amazon, Paytm and Ola among others, who have established solid ground in online operations through the internet are now making GST registration mandatory for their merchants. While the previous Indirect tax regime of India was more complex and ambiguous about this sector, the new tax base under Goods and Service Tax Act not only explicitly recognizes the ECOs but has also rolled out specific provisions that have impacted the online merchants. Whether the impact of GST is a boon or bane, is still under deliberation. A few operational and administrative impacts of GST on e-commerce are: I.    One of the striking impacts of GST on ECOs is the denial of statutory exemption limit of INR 20 lakhs, which means they ...

Information Technology (IT) services constitute a central division in almost all multinational companies in their objective to do business and generate revenues. Among the most recent tools of IT employed by businesses for their operations is ‘cloud computing’. Broadly speaking, a cloud computing service provides omnipresent and easy, on-demand network access to a consortium of configurable computing resources including networks, servers, storage, applications and services, which can be provisioned in a short time and released with minimum effort from the management and service provider. This effectively means that Cloud works on demand, is available anywhere, at any time, provided there is internet connection and is scalable, which means that the user can scale the amount of Cloud Computing services or goods required as and when required or for example when their business grows and requires more resources for more users. Multinational businesses are switching to t...