Key Points Highlighting Union Budget 2018-19

On Thursday, 1st February 2018, Finance minister Arun Jaitley has declared and presented the union budget of 2018-2019. It’s interesting to see what kind of changes we can observe in this budget because this is the first union budget after GST implication in the the country. Point to be noted is Agriculture, health, rural development and basic infrastructure is highlighted but salaried people, investors and job creators are seems to be avoided at some level. This is the major key point explaining the fact that, this budget will focus on improvement of basic infrastructure of the country. Educational sector is blessed with some good schemes which is not actually bad. Still one question  arises after going through whole budget,  whether this is the strategy for upcoming elections or what ?  Most of the population of country such as salaried people are seems to be unhappy with this. Of course there are some significant announcements we have to discuss. A special scheme has been launched to control the air pollution in Delhi. This scheme is promising because,  Delhi has secured the top rank in the list other polluted cities from India. Also digital education system, digital marketing strategies for the digital India are also focused. 

Focus of the budget is to cover poor population in the country thus the Scheme Called 'National Health Protection scheme' has also been declared. One thing which is catching every ones attention is poor people will get the advantage of this budget. Now to Discuss On Direct Tax (Income Tax)  - 

1. No change in Tax Rate. All persons including individuals, HUF, Firms and Companies to pay same tax

2. Education Cess is being increased from 3 to 4 % to be known as Education and Health Cess.

3. Corporate tax has been reduced in certain amount such as 30% to 25% for companies having turnover upto Rs. 250 crore, On Domestic Company Only.

4. Capital gain at 10%, if Capital gain is more than 1 lakh, But no Tax upto 31 Jan 2018 on capital gain u/s 10(38) on listed Shares, This section has been withdrawn with effective Date of 01 Feb, 2018,  Tax on STT paid long term capital Gain 112A. Further such tax will be liable for TDS

5. Medical Reimbursement  of Rs 15,000 under Section 17(2) are being withdrawn & Transportation allowance of Rs 19,200 for salaried people is to be replaced by Standard Deduction of  Rs. 40,000, This Deduction is also applicable to Pensioners.

6. Provision of Section 43CA, 50C and 56(2)(x) being amended to allow 5%  of sale consideration in variation vis a vis stamp duty value. On account of location, disadvantage etc.

7. Provision of section 40(ia) and 40A(3) and 40A(3A)are being made applicable to Charitable Trust . Hence expenditure incurred without deduction of tax and in cash will not be eligible as application of income under section 10(23C) and section 11(1)(a).

8. Agriculture Commodity Derivates income /loss  also not to be considered as speculative under section 43(5).

9. Income Computation and Disclosure Standards (ICDS) being given statutory backing in view of decision of Delhi High Court decision.

10. Marked to market loss computed as per ICDS to be allowed under section 36.

11. Gain or loss in Foreign Exchange as per ICDS to be allowed under new section 43AA.

12. Construction Contract income to be computed on percentage completion method as per ICDS.

13. Valuation of Inventory including Securities  to be as per ICDS.

14. Interest on compensation, enhanced compensation. Claim or enhancement claim and subsidy, incentives to be taxed in the year of receipt only as per new Section 145B.

15. Conversion of stock in trade to capital asset to be charged as business income in the year of conversion on Fair Market value on the date of conversion.

16. 54EC benefit of investment in Bonds to be restricted to Capital gain on land and building only. Further period of holding being increased from 3 years to 5 years.

17. PAN to be obtained by all entities  including HUF other than individuals in case aggregate of financial transaction in a year is Rs 2,50,000 or more. All directors, partners, members of such entities also to obtain PAN.

18. All companies irrespective of income to file return and in case it is not filed, such companies will be liable for prosecution irrespective of the fact weather it has tax liability of Rs 3,000 or not.

19. Assessments to be E assessment under new section 143(3A)

20. No adjustment under section 143(1) while processing on account of mismatch with 26AS and 16A.

21. Deemed dividend to be taxed in the hands of the company itself as Dividend Distribution of tax @ 30%.

22. Penalty  for non filing financial return as required under section 285BA being increased to Rs 500 per day.

23. Government to contribute 12% Employees' Provident Fund for new employees for 3 years, Only Women can Contribute 8% to EPF upto first 3 year & for man as earlier policy no change.

24. 100% deduction will be allowed to Farmer Producer Company.

25. Mediclaim Benefits for Senior Citizen upto 80,000/, this is an additional benefit of Rs 50,000/- given by government.

26. Interest on FD, Saving Bank, Post office or any upto 50000/- allowed as Deduction u/s 80TTA only for Senior citizen & for other upto Rs 10,000 as earlier no change. 

27. Projected fiscal deficit upto 2019 will be 3.3% & upto Mar 2018 will be 3.5%

The budget focuses on the needs of the rural areas, hence the definition of 'Navbharat' can be strengthened. The 'Aayushyaman Bharat Yojana' can provide great medical care to the poor and this will be a milestone in upcoming era. One positive aspect of this budget is, government has reduced the corporate rates on micro, small and medium scale industries. Government says that, the budget is helpful in increasing the progress of basic stuff.

Let's focus on some important other announcements -

Increase in TV, Mobile phones rates, Last year, 8.27 crore populations has paid the tax. This year,  number of this population will increase. There is an increase in the Income tax with Rs. 90 thousand crore. Parliament members will be happy with the increased salary from April 2018. There will be increase in the payment of President, vice president & Governor. Two government insurance company will be established in the share market.Investment of Rs.7148 crore for Clothing industry. Expansion of railway routes in Mumbai upto 90 km. All railway station, railways will have CCTV cameras & wifi connection..Number of airports will increase by 5 %. Upgradation of 600 railway station in all over the country.Development in the production industry-Arun Jaitley. India's Economy will be on the 7th rank.Indirect taxation system has become easier due to GST.Digital education system will be focused. Training will be provided to 13 lakh teachers. Providing  training to workers,  for Mumbai-Ahemadabad bullet project has been started  at vadodara. Womens will get Ujjwala gas connection. Rs.600 crore invested for TB treatment. Eklavya school will be opened for Aadivasi Children. Investment for 24 Medical colleges in all over country.Through, National Defence conservation fund new scheme for safety of passenger will be launched soon.Investment of Rs. 600 crore on Pure water scheme.

Other schemes such as, Swaccha Bharat Abhiyan will play a crucial role for constructing the toilets in needed areas. Mudra yojana will be helpful for 10.38 crore people. In upcoming year,70 lakhs Job opportunity will be developed says Jaitley. 50 lakhs youngsters will be provided with the training for job. Investment of Rs.3700 crore as a loss compensation after demonetization. This is the promising factor seen in the budget. New Employees will get 12% amount in their E-PF. 187 schemes will be approved for cleaning project of river Ganga. 40% people in the country will get health insurance. Every year, Rs 5 lakhs will be invested on each & every family for medical services. Donation of  Rs.1 crore for educational field. ‘Operation flood to be launched like Operation green. Approval of Loan of Rs.75 crore for Saving groups by government. 4 crore house will get free electricity /power connection under Pradhan Mantri Sobhagya Yojana. Expectation of economic growth to be 7.5 percent. Rs.11 lakhs crore reserved for agriculture loan. Investment of Rs.500 crore for Operation Green. Livestock & fishery industries to be blessed with Rs.10,000 crore. This is wonderful for the growth of sea food industries. 42 food parks will be established throughout the country says finance minister. Investment of Rs. 1400 crore for food processing industries. Marketing of agricultural product is needed & government will take the responsibility of that. 

Food oil, olive oil, peanuts oil vegetable oil,  material required for manufacturing of ear machines, solar panels will get cheaper. Major factor to be noted in the recent budget is, the government proposed the provision of the economic development of Industry, self employment. f and for this purpose, more than one lakh crores than last year has been invested.

Many people are saying  this year’s budget is seems to be disappointing in many ways but it is definitely promising in many sectors says finance minister. it is needed for basic economy development. Modi government has focused on the development of rural areas & poor people. This the the key factor explaining each and everything about budget. Medical services, health, education, agriculture is on the top. 

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CA IPCC Result November 2017

On 25th January, 2017 ICAI notify the result Date, those exam which was held in November 2017 likely to be declare on 28th January,2018 at 6 p.m. but it may be declare soon around 4 p.m.

We wish you all the Best to all the Students who was appear for the CA-IPCC Exam November,2017 & pray to almighty to pass you with flying colours.

You can check your result on following website easily,
a. icaiexam.icai.org
b. caresults.icai.org
c. icai.nic.in

Click here to Download the Official Notification Issued by ICAI

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Everything you need to know about VAT Audit

VAT Audit, a process of checking the total paid tax by audit officers. Tax is collected from dealer/manufacturer or any importer which is levied by government. According to rules & guidelines provided by sales tax department, the officers issue a notice to the selected 10-20 percent dealers with respect to region. The dealers need to respond to the notice in a defined period or else has to face the actions taken by the officers. A financial audit may show that the financial records must be agree with the basic and important documents. There are different reasons and situations that may cause false result such as taxable sales are nowhere recorded, invoice receipts are duplicate or forged, products/goods have been taken from stock and not recorded, given discounts may reduce the taxable value incorrectly.

Motive of auditing is to bring the non performing asset into account and raise the tax revenue in government treasury. For this purpose some important legal formalities are required such as correct registration of the dealer, maintaining the accounting records, documents of business activities and other risk factors posed by the dealer are taken into consideration. Authorised auditors has to conduct the investigation according to the strict rules and instructions given by the department. Also has to treat the dealer in a kind way and also has to gain the personal information and assuring the dealer about it being confidential.  If the auditor fails to get co-operation or dealer not giving proper information or any unusual issues arised from the dealer’s side, the auditor has to report the scenario of the case to the investigation section.

As we know, the VAT Audit is broadly classified into three main categories i.e., general, refund and specific audit. In general audit a broad coverage of around five years tax payments of VAT dealers is declared. In case of urgent references late registrations, cancellation of registration or emergency situation specific audit is carried out. While performing audit a proper plan and program need to set up along with arranging an appointment with dealer,  doing mock drills to successfully carry out the audit without revealing the confidential information in public. In specific time period. The allotment for audits depends upon the annual tax, paid by the VAT dealer. For example,  the payable  tax of Rs 10 lakhs & more  should required only 5 days for auditing and Rs 2 lakhs-10 lakhs should require 3 days and annual tax payable below 2 lakhs should not extend more than two days.  The officers according to grade are initially allotted number of audit visit per month, say like deputy commissioner has four audit visits per month, assistant  commissioner have eight visits per month, the sale tax officer has to complete ten audit visits per month, to hot the actual target.  Actual management of Audit activity is an interesting part to be discussed. The actual & proper management of VAT audit section is the responsibility of additional commissioner sales tax. Planning  & achieving the VAT audit revenue target in the respective geographical region with the help of  joint commissioner VAT administration. Commissioner has to look for policy matters related to business audit and generating the general audit cases according to region. Joint and Deputy commissioner carries out different activities such as confirmation of satisfactory audit programs, maintaining control register for the cases allocated to his section, reviewing overall audit results achieved, conducting quarterly staff meetings to share opinions, views regarding areas & audit techniques. Responsibility of the sales tax officer ensuring the team audit program is completed.

The auditor has to frame a structural questionnaire to gain the detailed information from the dealers during the interviews This include professional as well as personal questions which can sometimes be irritating and disturbing, like all the “W” questions, who is the owner of the firm, who is providing the information to fill on VAT returns, what do you understand by VAT etc and  many more concerned questions.  Before completing the audit, the officers need to submit visit report till date. Also, if there are any queries or unresolved issues with the VAT dealers that has not been cleared on the visit should be referred to the immediate supervising authority and the final decision has to be notified to the VAT dealer within ten days and has to be recorded on Form Audit 6 as per regulation. The supervising authority retains all the daily visit reports analyze data, declarations and resolves the issues in specified time by submitting the final report.  After auditing any fraud cases investigated need to taken into consideration and strict actions are taken against that person or firm. Auditor plays vital role in identifying a potential fraud case, quantifying the fraud amount which need to be recollected back, collecting the data of the involved people in that case.

In case of fraud, the investigated fraud amount has to be paid back by the dealer also a legal investigation and prosecution in the court and the subjected financial penalties and punishments are liable on the dealers.  The VAT Auditors are having proper, special and technical  training about the VAT fraud cases which are handled by specialist fraud investigation team.  The online data of the tax need to be updated at the Mahavikas-official website of sale tax department of India, when it is updated. Till then the account data has to be maintained in book format(Offline data) provided by the authority.  The data submitted should be precise yet should fulfill all the requirements of the department. So that it helps the auditors to access the data easily. The level of documentation should be decreased to a minimum level by the auditors. This VAT audit may be the last audit because of GST i.e., Goods and Service Tax has been implemented in India on 1st July, 2017 governed by a GST council. This is the tax which is applicable throughout India. It is an indirect tax has already replaced all the other taxes which were earlier levied by state & central government, in all over India.

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Dynamic Impact of GST on Indian Economics

GST is an indirect tax which was introduced in India on 1st July 2017 and was applicable throughout India. GST is not going to be an additional new tax but will replace other indirect taxes. As the GST was introduced by replacing the old indirect tax structure it will defiantly affect the Indian Economy. Now we can take look on them. 

From the viewpoint of the consumer, customers would now have paid more tax for most of the goods and services they consume. The GST implementation has a cost of compliance attached to it. As per the RBI’s latest monetary policy statement the implementation of the GST is not expected to have a material impact on overall inflation rate. GST removes the cascading effects of taxes, this will lowering the burden on the common man.

In case of hospitality sector the net tax rate under old tax regime was around 20 to 27 % with the scope of claiming the input tax credit against the indirect tax Liabilities.Under the new tax structure, the hospitality industry benefits with a consistence taxation system. GST Council decide to fixed tax rate @ 5% without giving the facility of input tax credit. Cancellation of ITC facility may affect the stakeholder’s ITC benefit & at the same time reduction in the tax rate may give consumers free from heavy tax burden.

Traders below 20 lakh annual turnover are exempt under GST as compared to the old tax structure of Rs 10 lakh in indirect taxes. Those between the threshold and composition turnovers will have the option to pay a turnover based tax or opt to join the GST regime. Those above limit will need to be within framework of GST. Now government can stop the reverse charge mechanism system for some period, this will benefit to unregister dealer for that period only. In a simple language non-register dealer was ultimately ignore by other register dealer for smooth administration of GST.

Despite of the economic slowdown, India's Fast Moving Consumer Goods i.e. FMCG products has grown consistently during the past three – four years reaching to $25 billion at retail sales in 2008. Implementation of proposed GST is expected to fuel the growth and raise industry's size to $95 Billion by 2018.

Implementation of GST could help government raise tax revenues and reduce fiscal deficit, which has been around 4.5 per cent in the last three years. By removing cascading effect, layers of taxes and simplifying structures, the GST would encourage compliance, which is also expected to widen the tax base. GST was introduced to replace all indirect taxes so the cost of maintenance of each department was ultimately reduced due to the effect of One Nation One Tax.

It is mandatory for all e-commerce operators to collect tax at the rate of two percent as TCS on the net value of sales made by suppliers through e-commerce operators. Such TCS has to be deducted in each state and deposited accordingly. The ecommerce operator has to report the product or service code individually with the applicable tax rate. This requires them to map every sale done by the dealer and ensure TCS is deducted at the right value. Additionally, the e-commerce operators will have to register in each state and file the reports separately on a monthly basis

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In the conclusion part we can conclude that each and every transaction must be disclosed to government under the GST compliances. GST is definitely a good move to reform indirect taxation in India and has positive effects on GDP growth, Tax revenue, exports, and so many. But even after a decade Government have failed to implement it, due to variety of reasons like, compensation mechanism for the states, GST rates, and issues relating to food products, petroleum, and tobacco.

Click here to Download PPT On Impact Of GST On Indian Economics

- Tushar Gopal Agrawal

 - CA Student

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Latest GST/IGST Rate, Cut on Over 240 items

On 10 Nov,2017 GST Council conduct there 23rd meeting at Guwahati on Friday. In this meeting council slashed GST rate around 244 items, those goods which are covered under GST rate 28% out of this 80% items are shifted under 18% GST rate, on an around 177 items are now covered in 18% form 28% , Only 50 items are covered under the 28% GST rate, only which are luxurious items. A Big relief given by the government or its may be the impact of upcoming election. But overall its good decision taken by the GST council after implementing GST from July onward & So many Goods which are earlier at higher rate now Shifted to lower rate. Its a good move by Government over the GST rate & appreciable for Government that they learn time to time to accept challenges ot make easier for that they make changes in GST rate & in further process for future references, This new GST rate applicable from 15 Nov,2017. 

Click here to Download Official Latest GST Rate by Government

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IPCC Taxation Paper Postponed Nov 2017

Taxation Paper-4 of Group-1, IPCC Exam is scheduled to be held on 9th Nov, 2017 stand postponed & examination of said paper shall now to be held on 17th Nov, 2017. Due to the state election in Himachal Pradesh , Shimla Center Students. ICAI notified it in general information, ICAI publish there notification on 20th Oct,2017. There is no change in Time & Venue as mention in admit card. The Same Admit Card will consider in the exam, no more further admit card will issue by ICAI. This notification applicable to Only for Shimla Center's students.    

Click here to Download the Official Notification Issued by ICAI

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IPCC RTP November 2017

Now, CA IPCC students can Download the RTP(Both group) of IPCC November,2017 issued by BOS(Board Of Studies) with the amendments applicable in the Exams. I think its a great initiative taken by BOS, from November, 2017 attempt, they providing all Books like(Study Material, Practice Manual & RTP or etc) through online only. 

Click here to Download the RTP November,2017

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