Taxation & Accounting

Tag: Service Tax (Page 1 of 435)

Practical Issues regarding Double TDS – Section 206AB

In order to encourage taxpayers to file ITR and discourage non-filers of ITR, new provisions of the Income Tax Act will get applicable from 1st July 2021 under which TDS would get applicable at double rates for specified category of persons. These new provisions were announced in Budget 2021 vide introduction of Section 206AB and will get applicable from 1st July 2021.

Applicability of Provisions of Section 206AB

The provisions of newly introduced Section 206AB would only be applicable to those persons (including Individuals, Partnership Firms, LLP’s, Companies etc) who have not filed ITR for the past 2 consecutive years and the TDS Deducted in each of these past 2 consecutive years is more than Rs. 50,000.

If the above condition holds true, then the person making the payment to the person falling in the above category would be required to deduct TDS at Double the rate or 5% (whichever is higher).

The reason for introduction of this section is to encourage everyone (especially, those persons whose TDS has been deducted) to file their Income Tax Returns every year.

Non-applicability of this New Section

Apart from the above mentioned condition of more than Rs. 50,000 TDS Deduction and non-filing of ITR for 2 years, the provisions of this newly introduced section shall also not apply to Non-Residents who don’t have permanent establishment in India .

The provisions of this section shall also not apply where the payment is being made to a Resident Indian under any of the following sections:-

  1. Section 192: Payment of Salaries
  2. Section 192A: Withdrawal from Provident Fund
  3. Section 194B: Winning from Lottery
  4. Section 194BB: Winning from Horse Race
  5. Section 194LBC: Income in respect of Investment in Securitization Trust
  6. Section 194N: Cash Withdrawal in excess of specified limit

Thus, if the payment is being made under any of the above mentioned sections for the above mentioned purposes, this new section regarding double TDS would not apply. However, if the payment is being made for any other purpose, then the provisions of this section will get applicable.

For eg: Mr. X is a Salaried employee of ABC Ltd and earns Salary of Rs. 7,00,000. He has not filed his returns for the past 2 years. The TDS deducted on his income has been more than Rs. 50,000 each year for the past 2 years. In such a case as well, the provisions of Double TDS would not get applicable as the payment made by ABC Ltd to Mr. X is in the nature of Salary.

However, if the same Mr. X was providing consultancy services to ABC Ltd, the provisions of this section will get applicable in such a case and TDS at double the rates would get applicable. If Mr. X had filed his returns for the past 2 years, then the TDS deduction would have been @ 10% under Section 194J for professional consultancy services. However, as Mr. X has not filed his Income Tax Returns, therefore provisions of this section will get applicable and TDS would be deducted at 20% (Double the normal rate of 10% or 5% whichever is higher)

Therefore in this case where professional consultancy services have been provided by Mr. X, 20% of Rs. 7,00,000 i.e. Rs. 1,40,000 would be the TDS which would be deducted on the payment for architectural services. Mr. X would be able to claim credit of this double TDS while filing his income tax returns.

Practical Issues related to this Section

The provisions of this Section will only get applicable where the due date for filing of ITR under Section 139(1) has lapsed. The due date for filing of ITR under Section 139(1) for Financial Year 2020-21 has already been extended till 30th Sept. 2021 for Non-audit cases and till 31st Oct. 2021 for Audit cases.

Therefore, although officially this Section comes into force from 1st July 2021, the provisions of this section will not get applicable before 30th Sept 2021 as the due date for filing of ITR has not lapsed. Moreover, there is no mechanism as on date to verify whether a person whose TDS deducted was more than Rs. 50,000 in the past 2 years has filed his returns or not. The Income Tax Dept. should ideally create a framework on their portal which will help verify whether the person has filed ITR or not. In the absence of this framework, it is very difficult to practically implement this newly introduced section.

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5 Tips to Increase your Home Loan Eligibility (with Bonus Tip)

If you are planning to buy a home, it’s important for you to analyze how much funds you would be putting from your own pocket and how much loan would you be taking from a bank. There is a maximum limit on how much a bank can lend you for buying the property and it varies on a case-to-case basis.

Your home loan eligibility depends on a couple of factors and this article talks about the 5 most important tips to increase your home loan eligibility.

  1. Improve your CIBIL Score

The CIBIL Score is a score which basically indicates your Credit History as to how likely it is that you repay your debts on time. If this score is high i.e., more than 750 – it indicates that you have a very good credit history and are likely to pay off your loans on time.

However, if this score is low – then that means that there is a high probability that you may not be able to repay your loans. From the banks, the safety of money is equally important as the interest rates and therefore they are not very keen on giving higher loans to people with low CIVIL Score.

Therefore, it is advisable for every person to keep a high credit score. The credit score can be increased by doing the following

  • Always pay your Credit Card bills and EMI’s on or before the due date and in full.
  • Don’t apply for too many credit products at once as each application leads to a new credit score check which reduces your score.
  • Try to keep a low Credit Utilization Ratio of around 20-30% of your credit card spending limit.

2. Opt for Longer Tenure Home Loans

One of the major factors which determine your EMI payable is the duration of your home loan . The longer the duration, the lower would be the EMI payable. And the lower the EMI payable, the easier it would be for you to repay the loan.

The easier it is for you to repay the loan, the higher is the probability of the lender recovering the EMI due. Therefore, try to opt for longer duration home loans if you wish to increase your home loan eligibility.

3. Take Joint Home Loans

One of the best ways to improve your Credit Score is to apply for a Joint Home Loan preferably with a family member like Spouse, Son or Parents. In case of a joint home loan, the lenders consider the income of the other co-applicant as well which substantially increases your home loan eligibility. You can click here to read more about the documents required while applying for Home Loan: Home Loan Eligibility

4. Repay your existing Loans with Smaller Durations

Home Loans are loans with bigger durations of say 10/20 years. However, there are some loans like Vehicle Loan, Personal Loan etc. which are of 2/3 years. Try paying off such smaller durations loans before applying for a Home Loan as repaying this will increase your monthly net savings and will thereby lead to increase in your home loan eligibility.

5. Additional Sources of Income

If you have additional sources of income like Rent or Business – then that can also help you increase your home loan eligibility. Lenders do check your monthly cash flows before sanctioning your home loan and therefore the higher the monthly cash flows – the better it is.

Bonus Tip: Banks cannot sanction a home loan of an amount greater than your purchase price. And they will verify the purchase price through your purchase documents. Therefore, ensure that your purchase price is mentioned in the agreement and stamp duty is also paid on the same at the time of property registration. It has been observed in several cases that the purchase price is not mentioned in the Agreement and Stamp Duty not paid on the same which leads to lower home loan being sanctioned.

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Higher TDS and TCS rates for non-filers of Income Tax Return

Higher TDS and TCS rates for Non-filers of Income Tax Return

The Finance Bill, 2021, presented on 1st February 2021, has received presidential assent on 28th March 2021. Notably, the Finance Act, 2021 introduced/ inserted the following two new sections into the Income Tax Act-

  1. Section 206AB; and
  2. Section 206CCA.

Section 206AB covers the provisions of higher deduction of TDS , whereas, section 206CCA covers the provisions of higher collection of TCS in case of non-filers of an income tax return. The provisions of both sections are briefly explained in the present article.

Meaning of the term ‘specified person’-

In order to understand the provisions of both the sections i.e., section 206AB and section 206CCA, it is important to understand the meaning of the term ‘specified person’. It is important to note here that ‘specified person’ has the same meaning under both sections.

As per the term ‘specified person’, it means a person who satisfies all the below criteria-

Criteria 1 The person has not furnished income-tax return for two previous years immediately before the previous year in which TDS or TCS is required to be deducted or collected.
Criteria 2 The time limit for filing the income-tax return under section 139(1) is already expired.
Criteria 3 The total deduction of tax (TDS) and collection of tax (TCS) is INR 50,000 or more in each of the previous years.

The definition of the term ‘specified person’ doesn’t include within its ambit a non-resident person who is not having a permanent establishment in India. Accordingly, a non-resident having a permanent establishment is included within the term ‘specified person.

Higher deduction of TDS for non-filers of income tax return (section 206AB)-

Applicability of section 206AB-

The deductor will be liable to deduct tax at source (TDS) under section 206AB when-

  • Deductor is already liable to deduct the TDS of the deductee under any provisions of the Income Tax Act; and
  • The deductee is a ‘specified person’ (as per the definition explained above).

Rate of deduction of TDS under section 206AB-

In case of applicability of provisions of section 206AB, the deductor will be deducting TDS at higher of the following three rates-

  • Twice the rate as specified under the relevant provisions of the Income Tax Act; or
  • Twice the rate or rates as in force; or
  • Rate of 5%.

Exemption available under section 206AB-

The following sections of TDS covered under the Income Tax Act are exempted from the provisions of section 206AB-

  • Section 192 – Tax deduction on salary;
  • Section 192A – Tax deduction on premature withdrawal from employee’s provident fund;
  • Section 194B – Tax deduction on winnings from crossword or puzzle or card game or lottery or any other game;
  • Section 194BB – Tax deduction on winning from horse race;
  • Section 194LBC – Tax deduction on income from the investment in a securitization trust;
  • Section 194N – Tax deduction on specified cash withdrawal.

Higher deduction of TCS for non-filers of income tax return (section 206CCA)-

As and when the collectee satisfies the criteria of a specified person, the collector would be liable to collect TCS as per provisions of section 206CCA.

Here, the collector will have to collect TCS at higher of the following two prescribed rates-

  • At twice the rate as prescribed under the provisions of the Income Tax Act; or
  • At the rate of 5%.

The effective date of provisions of section 206AB and section 206CCA-

It is important to note that both the sections i.e., section 206AB and section 206CCA will be effective from 1st July 2021.

Applicability of multiple sections to specified person-

In case the deductee fails to furnish Permanent Account Number (i.e., PAN), then, the deductor is liable to deduct TDS at higher rates as prescribed under section 206AA.

The specified person may fail to furnish both PAN as well as filing an income tax return. In such a case, provisions of both the section i.e. 206AA and section 206AB get attracted. Here, the deductor will be liable to deduct TDS at the higher of the two rates prescribed under section 206AA and section 206AB.

Similarly, in case the collectee fails to furnish PAN, the collector is liable to collect higher TCS as per the rates prescribed under section 206CC. Accordingly, in case both the section 206CC and 206CCA gets applicable, then, the collector will be liable to collect TCS at the rates higher of the two as prescribed under section 206CC and 206CCA.

Purpose of insertion of section 206AB and section 206CCA-

As seen above, both sections impose higher TDS and TCS against non-filers of an income tax return. Lining up the same, the main purpose behind the insertion of both the section is only to boost a large number of persons towards filing of their income tax return on regular basis.

Synopsis-

Particulars Section 206AB Section 206CCA
Effective date 1st July 2021 1st July 2021
Applicability Deductee fails to furnish income tax return of specified period. Collectee fails to furnish income tax return of specified period.
Rate of deduction/ collection of tax

Higher of the following-

·   5%; or

·   Twice the rate/ rates in force; or

·   Twice the prescribed rate.

Higher of the following-

·  Twice the prescribed rate; or

·  5%.

Exemption Provision doesn’t apply to TDS deductible under section 192, section 192A, section 194B, section 194BB, section 194LBC and section 194N. There is no exemption available under section 206CCA.

 

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Covid Relief and Upliftment Scheme (CORUS)

Covid Relief and Upliftment Scheme (CORUS)

The  Government of Tamil Nadu has launched CORUS – Covid Relief and Upliftment Scheme to provide financial assistance to MSME units to face the prevailing challenge against Covid 19. The task of administering and implementing this loan scheme  is entrusted with the Tamil Nadu Industrial Investment Corporation Limited (TIIC). TIIC has formulated this special package to ease the fund flow to meet emergent fund requirements for expenses related to capital expenditure and working capital needs. The current article briefs the Covid Relief and Upliftment Scheme.

Objective of CORUS

The key objective of the Covid Relief and Upliftment Scheme is to meet out the liquidity crisis due to Covid 19 pandemic.

Purpose of CORUS

The government of Tamil Nadu has launched this scheme to meet the Capital expenses and the Working Capital needs of MSME sectors.

Eligibility Criteria

The eligibility criteria to avail the benefits of Covid Relief and Upliftment Scheme are as follows;

  • At the time of sanction: The unit must be in the Standard category as of 01.03.2020 (with or without overdue).
  • At the time of disbursement: There shall not be any overdue even after incorporating 3 monthly moratorium
  • MSME sectors, engaged in manufacturing, processing, and preservation activity are eligible for a corporate loan scheme.
  • The existing services sectors are eligible for Corporate loan scheme
  • The unit should be in existence and operation for the past three financial years to apply for a Corporate loan scheme
  • The government provides a loan under a corporate loan scheme for units that earned a net profit for the last three financial years.
  • To obtain a corporate loan, the net worth of the units should be positive and no cumulative losses
  • The units should continuously be in the standard assets category of TIIC /Banks for the last three financial years.

Quantum of Loan

The minimum quantum of assistance under the Covid Relief and Upliftment Scheme will be Rs.2 lakhs, and the maximum quantum of assistance will be Rs.25 lakhs per unit.

Rate of Interest

The rate of interest provided under the Covid Relief and Upliftment Scheme is as follows:

  • Prime Lending Rate – 11.95% (PLR)
  • Micro and Small Enterprises with 6% eligible Interest Subvention: Effective Return on investment (ROI): 5.95%
  • Medium Enterprises with 3% eligible Interest Subvention: Effective Return on investment (ROI): 8.95%

Repayment Period

The maximum repayment period is three years including a moratorium of 6 months for principal repayment, and the repayment will be in equal monthly installments.

Collateral Security

No additional collateral will be obtained and the charges on existing primary & collateral security shall be extended.

Promoter’s Contribution

The promoter’s contribution will be NIL subject to the overall debt-equity ratio including the proposed quantum of limit for the unit.

Application Process Fee

The applicant no needs to pay a fee for processing the application under the Covid Relief and Upliftment Scheme. For more details, access the Tamil Nadu Industrial Investment Corporation Limited (TIIC)

Documents Required

Documents required for applying the Covid Relief and Upliftment Scheme is explained in detail below:

  • Audited Balance Sheet
  • Trading and Profit Loss account of the Applicant
  • Associate concern for the last three years
  • Bio-data of Promoter, Director, Guarantors as per prescribed format
  • Details regarding the assets of the existing unit viz. Building, Land, and Machinery
  • Copy of Collateral documents with supporting records
  • IT Returns for the promoters, Company for the last three years
  • Copy of work orders
  • Copy of Contract Agreements
  • Copy of Registration Certificates
  • Other relevant documents

Covid Relief and Upliftment Scheme – Application Procedure

The application procedure for Covid Relief and Upliftment Scheme is explained in step-step by procedure here:

  • The applicant needs to apply in the prescribed application form for Covid Relief and Upliftment Scheme.
  • The application form for Covid Relief and Upliftment Scheme can be obtained from the Head Office or Branch Offices of the Corporation, or the applicant can also download this scheme application from the official website of TTIC. From the main page select the option CORUS under the event section.

 

Covid Relief and Upliftment Scheme - TIIC
Covid Relief and Upliftment Scheme – TIIC
  • The application form can be obtained By clicking on the download option under the scheme.
Covid Relief and Upliftment Scheme - TIIC application
Covid Relief and Upliftment Scheme – TIIC application
  • We have herewith enclosed the application form for CORUS

TIIC-CORUS-Application-form

  • Fill the application form with the following details and submit it to the Head Office or Branch Office of Tamil Nadu Industrial Investment Corporation Limited.
  • Note: Scanned copy of Application to be submitted in Typed or written form with signature shall be submitted through e-mail during lockdown period
    • Name of the Unit
    • Address
    • Size of the Unit
    • Constitution
    • Amount of Loan Applied
    • Type of Industry and Product
    • Details of all promoters
    • Details of work orders
  • The concerned authority will scrutinize the CORUS application. The committee will be examined the application for a loan and recommend the concerned authority for loan sanction.

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COVID-19 Relief under GST Law

COVID-19 Relief under GST Law

Because of the challenges faced by taxpayers in meeting the statutory and regulatory compliances under GST law due to the outbreak of the second wave of COVID-19 , The Central Board of Indirect Taxes and Customs (CBIC), vide various notification published on 1st May 2021, notified multiple reliefs under GST laws.

The Government has announced various reliefs for taxpayers in the form of extension of the due date of GSTR-1 , GSTR-4 & ITC-04 , waiver of late fees for GSTR-3B , relaxation in the interest rate on delay in filing GSTR-3B, extension in a time limit of various actions under GST. The current article briefs the COVID-19 Relief under GST Law

Synopsis of Notifications

The various relief announcements under the GST Law on account of the second wave of COVID-19 outbreak are as follows:

  • The Government has extended the due dates of filing details of outward supplies under FORM GSTR-1 and IFF for April by 15 days.
  • The due date of filing of Annual Return by composition dealers under FORM GSTR-4 for FY 2020-21 has been extended from 30th April 2021 to 31st May 2021.
  • The due date of filing of a declaration of movement of goods to or from job worker under FORM ITC-04 for Jan-March, 2021 quarter has been extended from 25th April 2021 to 31st May 2021.
  • The due dates for GSTR-5, GSTR-6, GSTR-7 & GSTR-8, and other GST compliances are also extended.
  • Concessional rates of interest instead of the normal rate of interest of 18% per annum for delayed tax payments have been prescribed in the following cases
    • For registered persons having aggregate turnover above Rs. 5 Crore
    • For registered persons having aggregate turnover upto Rs. 5 Crore
    • For registered persons who have opted to pay tax under the composition scheme
  • For registered persons having aggregate turnover above Rs. 5 Crore, a Late fee waived for 15 days in respect of returns in FORM GSTR-3B furnished beyond the due date
  • For registered persons having aggregate turnover upto Rs. 5 Crore: Late fee waived for 30 days in respect of the returns in FORM GSTR-3B furnished beyond the due date

Extension of due dates for filing GST return in Form GSTR-1

Vide notification no. 12/2021 – Central Tax dated 1st May, the due date for filing GST returns in Form GSTR-1for the tax period of April  2021 has been notified. The same is tabulated hereunder

Sl.No. Return Type To be filed by Tax period Due Date Due Date Extended till
1 Form GSTR-1 (Monthly) Normal Taxpayer filing Monthly returns April 2021 11.05.2021 26.05.2021
2 Form IFF Normal Taxpayers under QRMP Scheme April 2021 13.05.2021 28.05.2021

Extension of due dates for Filing of Returns by Composition, NRTP, ISD, TDS & TCS Taxpayers

The Government has also extended the due date of furnishing of Returns by Composition, NRTP, ISD, TDS & TCS Taxpayers to 31st May 2021.

Sl.No. Return Type To be filed by Tax period Due Date Due Date Extended till
1 GSTR-4 Composition Taxpayers (Annual Return) FY 2020-21 30th April 2021 31st May 2021
2 GSTR-5 Non-Resident Taxpayers (NRTP) March/ April 2021 20th April/ May 2021 31st May 2021
3 GSTR-6 Input Service Distributors (ISD) April 2021 13th May 2021 31st May 2021
4 GSTR-7 Tax Deductor at Source (TDS deductor) 10th May 2021 31st May 2021
5 GSTR-8 Tax Collectors at Source (TCS collectors) 10th May 2021 31st May 2021

Due Date Extension for Filing of Form ITC-04

The due date for filing Form GST ITC-04 for the Jan-March, 2021 quarter has been extended from 25th April 2021 to 31st May 2021. The Form ITC-04 is to be filed by the Principal/Manufacturer for goods sent/received/supplied from Job Worker.

Click here for official notification pertaining to COVID-19 Relief under GST Law

Reduction in Interest Rate and Waiver of Late fees

Filing of Form GSTR-3B

The Government has provided relief by way of reduction in the interest rate and waiver of late fees for delay in filing of GSTR-3B for the period March and April 2021. The relief of reduction of the rate of interest and waiver of late fees is summarized as under:

For registered persons having aggregate turnover above Rs. 5 Crore:

Late fee waived for 15 days in respect of returns in FORM GSTR-3B furnished beyond the due date for tax periods March 2021 and April 2021, due in April 2021 and May 2021 respectively

For registered persons having aggregate turnover Upto Rs. 5 Crore:

Late fee waived for 30 days in respect of the returns in FORM GSTR-3B furnished beyond the due date for tax periods March 2021 and April 2021 (for taxpayers filing monthly returns) due in April 2021 and May 2021 respectively / and for period Jan-March, 2021 (for taxpayers filing quarterly returns under QRMP scheme) due in April 2021

Filing of Form CMP-08

The Government has provided relaxation of interest on late filing of Form CMP-08 for a statement of Quarterly Payment of Tax for the last quarter of FY 2020-21. The relaxation provided is summarized as under:

Particulars  Quarter

Due date

 

Relaxation in Interest6
Form CMP-08 for a statement of Quarterly Payment of Tax Jan-Mar-21 18-Apr-21 Till 3-May-21 Nil
4-May-21 to 18-May-21 9%
After 18-May21 18%

Relaxation in availing of Input Tax Credit

As per Rule 36(4) of the CGST Rules, 2017, a person can take ITC claim in respect of invoices that are not uploaded by vendors in their Form GSTR 1 or through Invoice Furnishing Facility (‘IFF’) maximum of up to 5% of the invoices furnished by the vendors in their Form GSTR 1/ through IFF Facility i.e. only 105% of only invoices coming in GSTR-2A. Now, this condition has been relaxed for April and relaxation has been given in respect to April’s month. The condition of Rule 36(4) would apply cumulatively in May 2021 for both April and May 2021.

Other reliefs provided under GST

The Government has provided several other reliefs:

  • The filing of GSTR-3B and GSTR-1/ IFF by companies using electronic verification code has been enabled for the period from 27.04.2021 to 31.05.2021. The requirement of filing these returns through Digital Signature (DSC) is waived off.
  • The Time limit for completion of various actions such as completion of any proceedings, filing of appeal/reply/application, etc. by any authority or by any person, under the GST Law, which falls during the period from 15th April 2021 to 30th May 2021, has been extended up to 31st May 2021.

The Press Release issued by the Central Board of Indirect Taxes & Customs on 2nd May 2021 is attached here for reference:

COVID-relief-under-GST

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MCA Relaxes Levy of Additional Fee in the Filing of Certain Forms under Companies Act

MCA Relaxes Levy of Additional Fee in the Filing of Certain Forms under Companies Act

In view of Covid-19 related restriction and disruption, the Ministry of Corporate Affairs has decided to grant additional time Upto 31st July 2021 for companies, LLPs to file certain forms without any additional fee. MCA via a circular dated 3rd May 2021 announced that no additional fee shall be levied upto July 31, 2021, for the delayed filing of forms which were due during the period Apr 01, 2021, to May 31, 2021. The current article briefs the extension so provided.

Know more about MCA Relaxation of Time to File Forms for Creation or Modification of Charge

Synopsis of Notification

  • MCA relaxes levy of additional fees for delay in filing certain Forms under the Companies Act, 2013 and LLP Act, 2008  by Companies and LLP till 31st July 2021
  • Companies /LLPs can file any form (except the forms CHG-1, CHG-4, and CHG-9) which were or would be due for filing from 1st April 2021 to 31st May 2021, upto 31st July 2021 without any additional fees.

List of Forms where additional fees have been waived off 

The list of forms where additional fees have been waived off is tabulated below:

S No. Form  Form Description
1. Form CHG-1 Application for registration of creation, modification of charge (other than those related to debentures)
2. Form CHG-9 Application for registration of creation or modification of charge for debentures or rectification of particulars filed in respect of creation or modification of charge for debentures
3. Form ADT-1 Information to the Registrar by the company for appointment of auditor
4. Form INC-22 Notice of Situation or Change of situation of Registered Office of the Company
5. Form NDH-3 Return of Nidhi Company for the half-year ended
6. Form FC-4 Annual Return of a Foreign Company
7. Form MSC-3 Return of dormant companies
8. Form INC-27 Conversion of public company into a private company or private company into a public company
9. Form NDH-2 Application for extension of time
10. Form IEPF-3 Statement of shares and unclaimed or unpaid dividend not transferred to the Investor Education and Protection Fund

The relaxation concerning waiver off additional fees has been provided for the above-referred forms which are due for filing during a specific period of time only; therefore the clarification (list of forms) has to be referred along with its respective circular issued on 3rd May 2021.

Special Note: Remaining forms having due date between 01.04.2021 to 31.05.2021 shall not be allowed benefit of waiver of additional fees upto 31.07.2021.

List of Forms Excluded under the Relaxation

The forms which are not eligible for the above-referred relaxation are as follows:

  • Form CHG-1 – Application for registration of creation, modification of charge (other than those related to debentures)
  • Form CHG-4 – Form for filing particulars for the satisfaction of charge thereof
  • Form CHG-9 – Application for registration of creation or modification of charge for debentures or rectification of particulars filed in respect of creation or modification of charge for debentures
  • Top of Form

Important Announcement for Stakeholders

MCA also informed that if any form which has been due for filing before 01st April 2021, is being filed now, then the same would continue to attract additional fees on account of delay in filing, as the relaxation is a grant for filing of forms which are due for filing during 01st April 2021 to 31st May 2021.

Further, it has been informed that the changes as required in the MCA-21 System to implement the aforesaid decision are being made and stakeholders would be informed in this regard in due course through a similar notice.

The official notification pertaining to the MCA Relaxes Levy of additional Fee in the Filing of Certain Forms under Companies Act is attached here for reference:

GeneralCircularNo6_03052021

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Lesser-Known Facts About Term Insurance

If you are someone who agrees to the fact that life is uncertain, you should definitely consider getting yourself a term insurance plan . It helps secure the financial security of your family and your loved ones, and also allows you to prepare yourself for emergencies. We understand the skepticism of some people when it comes to a term insurance policy since it does not pay the policyholder a lump sum amount at the end of the tenure, while the other policies do. But the term life insurance more than compensates for your lost income for your family in your absence. Here are a few lesser-known facts about term insurance that may encourage you to get one for yourself.

  • Coverage up to 85 years of age

You needn’t buy a term insurance plan only when you are young. Yes, it is more beneficial if you opt to buy it in your 20s, but rest assured that you can also buy it as late as your 50s. It offers financial coverage up to 85 years of age. However, you need to know that the longer you wait to buy term insurance, the higher you will have to pay in form of premiums.

  • Term insurance isn’t a gimmick

Most of the other insurance plans are investment-linked and don’t guarantee adequate financial support for the future. Term insurance, on the other hand, is the true life insurance and can prove to be a reliable source of income for your family in your absence. If you are looking for a product that gives financial security to your family, term insurance is your answer.

  • Claims could be rejected if you falsify information

At the beginning of the process, you need to fill a form that asks for information like your age and health conditions. The amount you need to pay as premiums depends on the information you give. In a bid to lessen the amount of premium, people lie on their application. However, if caught lying, the insurance company has all the rights to reject your claim.

  • Coverage is limited to 20x of your annual income

One of the most important tasks when it comes to buying term insurance is determining the right coverage. It is natural that we would want to leave behind as much as we can for our families, but insurance companies have certain rules. They can only approve a maximum coverage worth 20x your annual income. So, if your annual income is Rs. 10 lakh, you cannot buy a term insurance plan with cover beyond Rs. 2 crores.

We hope that reading this article has given you a new perspective towards term insurance plan.

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Encumbrance Certificate in India

Encumbrance Certificate in India

While buying a property it is important to check whether any legal or monetary complications are associated with it.  An encumbrance certification will help you to find if there are any charges on the property.

What is an Encumbrance Certificate?

The Encumbrance Certificate in India is one of the mandatory documents that is used in the house property transaction. It acts as evidence that the property has a free title and ownership.  When an individual is buying a house the encumbrance certificate can be used to see whether the property is free from legal and monetary liabilities. This encumbrance certificate ensures that the person has total ownership rights over the property and is free from any liabilities.

If any property is purchased by availing a mortgage or in case if it has been pledged then the lender will add a Lien to the house. This ensures that the owner of the property cannot sell the property until the mortgage is paid.

Importance of the Encumbrance Certificate

It is very necessary to ensure that the property an individual wishes to buy has a clear title. Getting the encumbrance certificate assures that the property the person wishes to buy does not have any liabilities. If notice is charged on the encumbrance certificate, then it is very important to rectify it before the property is purchased. This EC will also help in finding out whether any existing owners can legally claim the property.

Also, a loan can be availed to buy the property if the lender is provided the Encumbrance certificate and relevant documents.

What is a Nil Encumbrance Certificate?

While applying for the Encumbrance Certificate the applicant is asked to specify the period for which the information is needed. If no charges are placed on the property during this requested property, then a Nil Encumbrance Certificate is issued. This means that no one of the lenders has placed a lien on the property during that requested period.

What Documents Required to obtain an Encumbrance Certificate in India?

Some of the documents that are required to obtain an Encumbrance Certificate in India are:

  • Property details
  • Deed details
  • The property sale deed/gift deed/ partition deed/ release deed if the deed has been executed previously.
  • The deed number that is obtained on registration contains the date and book number along with the signature of the applicant.
  • Property registration document.
  • Address proof of the applicant.

Please visit the nearest Sub-registrar’s office to know more about the encumbrance certificate in the region.

How to obtain the Encumbrance Certificate in India online?

The EC can be obtained from the sub-registrar’s office where the property in reference is registered. To obtain this Encumbrance Certificate the following steps need to be followed:

  1. The application for obtaining an Encumbrance certificate should be made in Form 22. This form is available on the respective state’s official land registration site.
  2. Attach this application with Rs. 2 stamp paper, an attested copy of the address proof, the purpose of why the certificate requirement, and the details of the property and the title.
  3. The prescribed fees also need to be paid along with the application.
  4. Once the application is filed the inspector will inspect all these transactions that have occurred against the property in a particular period.
  5. The sub-registrar will issue an encumbrance certificate in Form No.15 with all the transactions in a specified period. A nil encumbrance will be issued in Form no.16.
  6. The Encumbrance certificate is issued generally between 15-30 days from the date of the application.

The requisite fees for the certificate start with Rs.100 and go up based on the validity of the certificate. Also, the fees vary from state to state including the rules and regulations. As the certificate is issued in the regional language it can also be obtained in English but an additional fee needs to be paid for it. Both encumbrance certificate and possession certificate should be obtained as proof of the ownership of the property.

How to apply for an Encumbrance Certificate offline?

  1. Visit the sub-registrar’s office (the jurisdiction depends on the location of the property)
  2. Submit the duly filled Form 22.
  3. Enter the details including the name of the seller and buyer, the property details, the type of documents that are required.
  4. Payment of the required fees at the counter.

How to Track the Encumbrance certificate status?

The tracking status of the EC application differs from website to website. Most of the government websites that allow applying for the Encumbrance certificate will also help in tracking the status of the Encumbrance certificate.

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MCA Relaxation of Time to File Forms for Creation or Modification of Charge

MCA Relaxation of Time to File Forms for Creation or Modification of Charge

Because of the difficulties being faced by the stakeholders due to the resurgence of the COVID-19 pandemic, the Ministry of Corporate Affairs (MCA) has allowed the Relaxation of time to file forms for creation or modification of charges . MCA vide it’s General Circular no 07/2021 dated 3rd May 2021, has provided relaxation of time for filing forms related to creation or modification of charges (i.e., Form No. CHG-1 and Form No. CHG-9)  under the Companies Act, 2013.

Synopsis of Notification

Provisions of section 77 of the Companies Act, 2013 mandates the company to file a form relating to the creation or modification of charge (i.e., Form No. CHG-1 and Form No. CHG-9) within a maximum of 120 days from the date of creation of charge or modification of charge, as the case may be. With this circular, MCA is providing relaxation of time to Companies or Charge holder for condoning the delay in filing certain forms related to creation/ modification of charges under section 77 of the Companies Act, 2013 (Act)

Relaxation of time for filing forms related to creation or modification of charges

Relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 is a scheme introduced by the Ministry of Corporate Affairs to condone the delay in filing certain forms related to creation/ modification of charges particularly due to the difficulties being faced by COVID-19 pandemic

Law Governing the Form No. CHG-1 and Form No. CHG-9

Under section 77 & 78 of the Companies Act, 2013, the companies or the charge holders are required to file forms related to the creation or modification of charges within the timelines as provided, i.e. a total of 120 days of the creation or modification of charge.

In case, the company fails to register the charge within the period of thirty days referred to in sub-section (1) of section 77, the charge holder may file the form related to the creation or modification of charges under section 78 of the Act, within the overall timelines for filing of such form under section 77.

Applicability of Relaxation

The Circular shall be applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 by a company or a charge holder, as per the date of creation/modification of charge. The Scheme does not apply to the following forms relating to charges:

  • CHG-4 – Particulars for the satisfaction of charge thereof
  • CHG-6 – Notice of appointment or cessation of receiver or Manager

The Time period for applicability of the relaxation

  • The relaxation is applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 by a company or a charge holder, where the date of creation/modification of charge is before 01.04.2021, but the timeline for filing such form has not expired u/s 77 of the Act as on 01.04.2021
  • The relaxation is applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 by a company or a charge holder falls on any date between 01.04.2021 to 31.05.2021 (both dates inclusive)

Conditions to count the number of days under section 77 & 78

Relaxation is provided and if the date of creation/modification of charge is before 01.04.2021 but the time limit of 120 days has not expired

  • In such a case, the period beginning from 01.04.2021 and ending on 31.05.2021 shall not be taken into consideration to count the number of days under section 77 or section 78 of the Act.
  • Further, in case, the form is not filed within such period, the first day after 31.03.2021 shall be reckoned as 01.06.2021 to count the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

Relaxation is provided and where the date of creation/modification of charge is between 01.04.2021 to 31.05.2021 (both dates inclusive)

  • In such a case, the period beginning from the date of creation/ modification of charge to 31.05.2021 shall not be taken into consideration for counting days under section 77 or section 78 of the Act.
  • Further, in case the form is not filed within such period, the first day after the date of creation/modification of charge shall be reckoned as 01.06.2021 to count the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

Applicable Fee for creation/modification of charges

The following fee will be charged, if the date of creation/modification of charge is before 01.04.2021 and the timeline for filing such form had not been expired under section 77 of the Act as on 01.04.2021

Under such circumstances, there are two criteria’s for Fee:

  • If the form is filed on or before 31.05.2021, the fees payable as of 31.03.2021 under the Fees Rules for the said form shall be
  • Further, if the form is filed thereafter, fees shall be paid after adding the number of days beginning from 01.06.2021 till the date of filing plus the time period elapsed from the date of the creation of charge till 03.2021.

The following fee shall be charged where the date of creation/modification of charge falls on any date between 01.04.2021 to 31.05.2021? (both dates inclusive)

Under such circumstances, there are two criteria’s for Fee:

  • If the form is filed on or before 05.2021, normal fees under the Fees Rules for the said form shall be charged.
  • Further, if the form is filed thereafter, the first day after the date of creation/modification of charge shall be reckoned as 06.2021, and the number of days till the date of filing of the form shall be counted accordingly for payment of fees under the Fees Rules.

Cases excluded under the Scheme

The Scheme is not applicable under the mentioned circumstances:-

  • The forms e.CHG-1 and CHG-9 had already been filed before the date of issue of this Circular.
  • The timeline for filing the form has already expired under section 77 or section 78 of the Act before 01.04.2021.
  • The timeline for filing the form expires at a future date, despite the exclusion of the time provided
  • Filing of Form CHG-4 for the satisfaction of charges
  • Filing of Form CHG-6 for Notice of appointment or cessation of receiver or Managed

The official notification pertaining to the MCA Relaxation of Time to File Forms for Creation or Modification of Charge is attached for reference:

GeneralCircularNo7_03052021

The post MCA Relaxation of Time to File Forms for Creation or Modification of Charge appeared first on IndiaFilings – Learning Centre .

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Nativity Certificate

Nativity Certificate

What is a nativity certificate?

A nativity certificate is a document that is issued by the respective state government certifying that an applicant, his/her parents, and grandparents lived in the state. A nativity certificate in India is required for many purposes such as for claiming reservations for a government job, educational institution, claiming a ration card, etc.  Even when a person wants to claim a scholarship provided by the respective state government, he needs a nativity certificate. Also, a nativity certificate that is obtained once is valid for a lifetime.

Who is eligible for the nativity certificate?

For an applicant to fulfill the needs he must satisfy the following conditions:

  1. He must be a permanent resident of the State for 5-6 years from the mentioned date.
  2. The applicant should also hold land in the state.

What documents are to be submitted to obtain a Nativity certificate in India?

Here is the list of documents that are to be submitted to obtain a Nativity certificate in India:

  • Aadhar card
  • Ration card
  • Birth certificate
  • Class 10 certificates
  • Parents school certificates
  • Address proof (Can be any utility bill)
  • Mobile number and email id is mandatory while making an online application
  • In case the applicant has not attained 18 years of age then the nativity certificate of the applicant’s father is mandatorily required.

What is the procedure to obtain the nativity certificate?

  • An applicant can apply for the Nativity Certificate from his/her parents/grandparents of the native state in India. The Nativity certificate in India is issued by the respective District collectors and District Magistrate’s office from his or her native district only
  • An application is to be made in the prescribed form before the District collector and the magistrate of the concerned native place in India.
  • Along with the application, a set of relevant documents that is duly attested by the notary/gazette officer have to be submitted
  • 6 passport size photos of the applicant are necessary.
  • The applicant needs to be present before the Taluka Mamlatdar in person with all the original documents as and when he is called for verification
  • Once the verification is done a person can collect his nativity certificate

Is there any difference between Nativity Certificate and Domicile Certificate?

There is major confusion between the nativity certificate and the domicile certificate in some states it is also called the residence certificate. All these certificates are the same as they serve the same purpose.

They certify that an individual and his parents/grandparents lived in that particular state.  These certificates are useful in securing jobs through the reservation, in educational institutions, etc.

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