Jun 042021
 

Due dates for the Month of June 2021
7th
INCOME TAX
– TDS Payment for May.
10th
GST
– Return of authorities deducting tax at source – GSTR 7 for May.
– Details of supplies effected through e-commerce operator and the amount of tax collected – GSTR 8 for May.
11th
GST
– Details of outward supplies of taxable goods and/or services effected – GSTR 1 for May.
13th
GST
– Return for Input Service Distributor – GSTR 6 for May.
15th
Providend Fund
– PF Payment for May.
ESIC
– ESIC Payment for May.
20th
GST
– Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of the amount of tax – GSTR 3B for May.
– Return for Non-Resident foreign taxable person – GSTR 5 for May.
22nd
GST
– GSTR 3B for May if turnover below Rs. 5 Crore for Gujrat, Madhya Pradesh, Chattisgarh, Maharashtra, Telangana. Andhra Pradesh, Karnataka, Goa, Kerala, Tamil Nadu, Puducherry, Dadra & Nagar Haveli.
24th
GST
– GSTR 3B for May if turnover below Rs. 5 Crore for the Rest of India.
28th
GST
– Details of Inward Supplies to be furnished by a person having UIN and claiming refund – GSR 11 for May
.
30th
PROF. TAX
– Monthly Return for Tax Liability of Rs. 100,000 & above.
INCOME TAX
– TDS Quarterly Statements (Other than Government Deductor) for January to March
Sensys Technologies Pvt. Ltd.
HO: 904, 905 & 906, Corporate Annexe, Sonawala Road, Goregaon East, Mumbai- 400 063.
Tel.: 022-6820 6100| Call: 09769468105 / 09867307971
Email: sales@sensysindia.com | Website: http://www.sensysindia.com
Branches: Delhi & NCR | Pune | Bangalore | Hyderabad | Ahmedabad | Chennai | Kolkata
Visit our BLOG for the latest news and updates related to XBRL, Income Tax, HR & Payroll, PF / ESIC / TDS / PT, etc. Click here to visit Sensys BLOG
May 072021
 

Due dates for the Month of May 2021
7th
INCOME TAX
– TDS Payment for April.
10th
GST
– Return of authorities deducting tax at source – GSTR 7 for April.
– Details of supplies effected through e-commerce operator and the amount of tax collected – GSTR 8 for April.
11th
GST
– Details of outward supplies of taxable goods and/or services effected – GSTR 1 for April.
13th
GST
– Return for Input Service Distributor – GSTR 6 for April.
15th
Providend Fund
– PF Payment for April.
ESIC
– ESIC Payment for April.
20th
GST
– Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of the amount of tax – GSTR 3B for April.
– Return for Non-Resident foreign taxable person – GSTR 5 for April.
22nd
GST
– GSTR 3B for April if turnover below Rs. 5 Crore for Gujrat, Madhya Pradesh, Chattisgarh, Maharashtra, Telangana. Andhra Pradesh, Karnataka, Goa, Kerala, Tamil Nadu, Puducherry, Dadra & Nagar Haveli.
24th
GST
– GSTR 3B for April if turnover below Rs. 5 Crore for the Rest of India.
28th
GST
– Details of Inward Supplies to be furnished by a person having UIN and claiming refund – GSR 11 for
April.
30th
LLP
– Form 11 – Annual Return for Previous Financial Year.
31st
PROF. TAX
– Monthly Return for Tax Liability of Rs. 100,000 & above.
Sensys Technologies Pvt. Ltd.
HO: 904, 905 & 906, Corporate Annexe, Sonawala Road, Goregaon East, Mumbai- 400 063.
Tel.: 022-6820 6100| Call: 09769468105 / 09867307971
Email: sales@sensysindia.com | Website: http://www.sensysindia.com
Branches: Delhi & NCR | Pune | Bangalore | Hyderabad | Ahmedabad | Chennai | Kolkata
Visit our BLOG for the latest news and updates related to XBRL, Income Tax, HR & Payroll, PF / ESIC / TDS / PT, etc. Click here to visit Sensys BLOG
Apr 012021
 

Due dates for the Month of April 2021
10th
GST
– Return for authorities deducting tax at source – GSTR 7 for February
– Details of supplies effected through e-commerce operator and the amount of tax collected –
GSTR 8 for March.
11th
GST
– Details of outward supplies of taxable goods and/or services effected – GSTR 1 for March.
13th
GST
– Return for Input Service Distributor – GSTR 6 for March
– Quarterly Return GSTR 1 for January to March 2021 turnover not exceeding Rs. 1.5 crore
15th
Providend Fund
– PF Payment for March
ESIC
– ESIC Payment for March
18th
GST
– Return for composition taxable person- GSTR 4 for January to March
20th
GST
– Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of the amount of tax – GSTR 3B for March
– Return for Non-Resident foreign taxable person – GSTR 5 for March
22nd
GST
– GSTR 3B for February if turnover below Rs. 5 Crore for Gujrat, Madhya Pradesh, Chattisgarh, Maharashtra, Telangana. Andhra Pradesh, Karnataka, Goa, Kerala, Tamil Nadu, Puducherry, Dadra & Nagar Haveli
24th
GST
– GSTR 3B for March if turnover below Rs. 5 Crore for the Rest of India.
28th
GST
– Details of Inward Supplies to be furnished by a person having UIN and claiming refund – GSR 11 for
March.
30th
Income Tax

– TDS deduction for the month of March

Profession Tax
– Monthly Return for Tax Liability of Rs. 100,000 & above

Sensys Technologies Pvt. Ltd.
HO: 904, 905 & 906, Corporate Annexe, Sonawala Road, Goregaon East, Mumbai- 400 063.
Tel.: 022-6820 6100| Call: 09769468105 / 09867307971
Email: sales@sensysindia.com | Website: http://www.sensysindia.com
Branches: Delhi & NCR | Pune | Bangalore | Hyderabad | Ahmedabad | Chennai | Kolkata
Visit our BLOG for the latest news and updates related to XBRL, Income Tax, HR & Payroll, PF / ESIC / TDS / PT, etc. Click here to visit Sensys BLOG
Mar 102021
 

The draft of the Code on Wages Karnataka Rules, 2021 which The government of Karnataka proposes to make in the exercise of the powers conferred by section 67 of the Code on Wages, 2019 (Central Act No. 29 of 2019) is hereby published as required by sub-section (1) of said section, for the information of all the persons likely to be affected thereby and notice is hereby given that the said draft will be taken into consideration after thirty days from the date of its publication in the Official Gazette.

Any objection or suggestion, which may be received by the State Government from any person with respect to the said draft before the expiry of the period specified above will be considered by the State Government. Objections and suggestions may be addressed to the Additional Chief Secretary to Government, Department of Labour, Room No 414, Fourth Floor, Vikasa Soudha, Bengaluru.
COURTESY: PRAKASH CONSULTANCY SERVICE
Mar 092021
 

Facts in essence:
For the assessment year under consideration, the assessee filed his return of income on 27th September 2011, declaring a total income of Rs. 75,73,399 wherein an amount of Rs. 18,455, under the head “Income From House Property” is included and has shown rent received of Rs. 30,000.
Details of the property let out and rent received as furnished by the assessee: Vide letter dated 12th December 2013, the assessee furnished the details and submitted that he along with his father and brother is a co-owner of the flat. It was submitted that a part of the flat was given on rent to a partnership firm, wherein, his father is a partner. Thus, he and his brother both receive the rent of Rs 30,000/- each.
Also, the annual value of the said property has been fixed by the Municipal Authority at Rs. 79,380. Thus, ALV determined by the Municipal Authority could be adopted for determining the income.

Analysis of facts:
When the assessee had furnished a valuation from the Municipal Authorities determining the ALV at Rs. 79,380, the same could not have been rejected without valid and cogent reasoning. Thus, in the absence of any inquiry by the department as to actual market rent of the assessee property, rejecting the Municipal valuation and referring ALV of some other property (which are commercial property let out to the bank and other commercial establishments) or some other estimated rent is un-justice to the assessee.

What is annual letting value:
Reasonable expected rent is deemed to be the sum for which the property might reasonably be expected to be let out from year to year for which the following factors are taken into consideration:
✓   Location of the property
✓   Annual rentable value of the property fixed by municipalities
✓   Rents of the properties in the neighborhood
✓   The rent which the property is likely to fetch having regard to demand and supply
✓   Cost of construction of the property
✓   Nature and history of the property

The fair rent of the property can be determined on the basis of a rent fetched by a similar property in the same or similar locality. Fair rent is based on some scientific basis and is not the estimated rent or an arbitrary rental value. Also, for collecting municipal taxes, local authorities make a periodical survey of all buildings in their locality in their jurisdiction. Such valuation may be taken as a piece of strong evidence representing the earning capacity of a building. However, it can’t be considered to be conclusive evidence in all cases.

Moreover, in metro cities, municipal authorities determine net rateable value after deducting 10 percent of the gross rateable value, on account of repairs and an allowance for service taxes. The net municipal valuation thus arrived at, requires a fair adjustment for determining reasonable expected rent for income tax purposes. However, such valuation can’t be rejected without valid and cogent reasoning.

Conclusion:
When the assessee had furnished a valuation from the Municipal Authorities determining the ALV at Rs. 79,380, the same could not have been rejected without valid and cogent reasoning. In view of the
aforesaid, AO has to accept the assessee’s claim that the ALV of the property has to be determined at Rs. 79,380, as per the valuation of Municipal Authorities and thereafter assessee’s share shall be determined for addition under the head income from house property.

Mar 012021
 

Due dates for the Month of March 2021
7th
Income Tax
– TDS Payment for February
10th
GST
– Return for authorities deducting tax at source – GSTR 7 for February
– Details of supplies effected through e-commerce operator and the amount of tax collected –
GSTR 8 for February
11th
GST
– Details of outward supplies of taxable goods and/or services effected – GSTR 1 for February
13th
GST
– Return for Input Service Distributor – GSTR 6 for February
15th
Providend Fund
– PF Payment for February
ESIC
– ESIC Payment for February
Income Tax
– Advance Income Tax – Final Installment for All Assessees
20th
GST
– Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of the amount of tax – GSTR 3B for February
– Return for Non-Resident foreign taxable person – GSTR 5 for February
22nd
GST
– GSTR 3B for February if turnover below Rs. 5 Crore for Gujrat, Madhya Pradesh, Chattisgarh, Maharashtra, Telangana. Andhra Pradesh, Karnataka, Goa, Kerala, Tamil Nadu, Puducherry, Dadra & Nagar Haveli
24th
GST
– GSTR 3B for February if turnover below Rs. 5 Crore for the Rest of India.
28th
GST
– Details of Inward Supplies to be furnished by a person having UIN and claiming refund – GSR 11 for
February.
31st
Income Tax

– TDS / TCS Quarterly Statement (Other than Government Deductor) for October to December 2020
– Payment of Taxes for a declaration under Vivad se Vishwas Scheme made by 31st December 2020

Profession Tax
– Annual Return for Financial Year March 2020 to February 2021
– Profession Tax (Enrollment) Payment for FY 2020-21
– Monthly Return for Tax Lability of Rs. 100,000 & above

Sensys Technologies Pvt. Ltd.
HO: 904, 905 & 906, Corporate Annexe, Sonawala Road, Goregaon East, Mumbai- 400 063.
Tel.: 022-6820 6100| Call: 09769468105 / 09867307971
Email: sales@sensysindia.com | Website: http://www.sensysindia.com
Branches: Delhi & NCR | Pune | Bangalore | Hyderabad | Ahmedabad | Chennai | Kolkata
Visit our BLOG for the latest news and updates related to XBRL, Income Tax, HR & Payroll, PF / ESIC / TDS / PT, etc. Click here to visit Sensys BLOG
Sep 292014
 

House Rent Allowance (HRA) Vs. Rent Free Accommodations (RFA)

House Rent Allowance (H.R.A.) results in tax savings because accounting under Income tax act is direct exemption based. However, accounting of Rent Free accommodation is valuation based taxation and added to total income of employee presumptive basis.

The principles of valuations are explained below:-

House Rental allowance
(Section 10(13A) of Income tax act, 1961 &Rule 2A of Income Tax rules, 1962)

Rent Free accommodation
(Rule 3(1) of Income Tax rules, 1962

Components of salary:

  • Basis Salary.
  • Dearness Allowance (Only the DA which forms part of the salary).
  • Percentage bases commission.


Extent of taxation:-

Exemption based:- HRA is taxable if received more than least of the following :

  • H.R.A received
  • 50% of salary
  • Rent Paid – 10% of salary

Examples:-

  • If the rent paid is zero,exemption will be zero and whole HRA received will become taxable.

Conclusion:-

Taxability under this is dependent upon the following factors:

  • H.R.A received
  • Rent Paid by the employee for hiring the accommodation out of HRA received.
  • Salary Computed for this purpose.
Components of salary:

  • Basis Salary.
  • Dearness Allowance (Only the DA which forms part of the salary).
  • All allowance to the extent taxable.
  • Leave salary received during employment.
  • Bonus (on receipt basis)
  • Commission (both Percentage based as well as fixed commission)

Extent of taxation:-

No separate exemption under this,

Least of the following is taxable

(In case accommodation is hired by the employer) :

  • Hire chargesOR
  • 15% of Salary

Conclusion:-

Taxability under this is dependent upon the following factors:

  • Hire charges paid for the accommodation by the employer.
  • Salary computed for this purpose.

Now, above factors may help a good tax planning tool for the employees and CTC planning for employer. In the following examples we shall explain this. Total outflow of the employer assumed to be Rs. 100/-

House Rental Allowances

Rent Free Accommodation

Basis salary = Rs. 50/-
HRA = Rs. 25/-
Other allowances = Rs 25/-Computation of Taxable HRA

HRA received = Rs. 25/-

Deduction will be least of the following:

  • 50% of salary i.e. Rs. 25/-
  • HRA received i.e. Rs.  25/-
  • Rent Paid – 10% of salary i.e.

Rs. 25 – Rs. 5 = Rs. 20/-

The taxable HRA comes out to be Rs. 5/-

Income under the head salary = Rs. 80/-

Basis salary  = Rs. 50/-
RFA(Hire charges paid) = Rs. 25/-
Other allowances = Rs. 25/-Computation of Taxable RFA

No tangible receipts to employee.

Least of the following will be taxable:

  • 15% of salary i.e. Rs. 11.25/-

OR

  • Hire charges i.e. Rs.  25/-

The taxable RFA comes out to be Rs. 11.25/-

Income under the head salary = Rs. 86.25/-

Analysis and fund planning:-

Total CTC of the employee (or outflow of employer) in both the cases will be Rs. 100/-

House Rental Allowances

Rent Free accommodation

Income taxable under the head salary :Rs. 80/-.

  • Extra income that can be avoided from being taxed: Rs. 6.25/-.
  • So it’s a tax advantageous.
Income taxable under the head salary : Rs. 86.25/-.

  • Extra income that is taxed: Rs. 6.25/-.
  • So the taxes disadvantage.


By: Sensys Technologies

For more tools on tax planning and CTC planning please refer to our blogs on http://www.sensystechnologies.com/blog

For any further information or query you can be reached to experts of our panel at contact@sensysindia.com

Sep 162014
 

HOUSE RENT ALLOWANCE – How to compute exemption

What is House Rent Allowance?

–  Employees generally receive a house rent allowance (HRA) from their employers.
– This is a part of the salary package, in accordance with the terms and conditions of employment.
– HRA is given to meet the cost of a rented house taken by the employee for his stay.
– Now a days HRA is given to all employees irrespective of actual rent factor. In most of the cases it is 40% to 50% of basic pay of or 28% (approx.) of CTC and so is the major tax planning factor.
– The exemption on HRA is covered under Section 10(13A) of the Income Tax Act and Rule 2A of the Income Tax Rules.

How is HRA accounted for in the case of a salaried individual and a self-employed professional?

Basis  Salaried individual Self-employed professional
Tax accounting Under Section 10 (13A) of Income Tax Act, 1961, in accordance with rule 2A of Income Tax Rules. Under section 80GG, which resembles section to 10(13A) but is subject to certain conditions.

What is the formula for calculating HRA exemption?

Minimum of the following three options:

  1. Actual house rent allowance received from your employer
  2. Actual house rent paid by you minus 10% of your basic salary
  3. 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro

This minimum of above is  allowed as income tax exemption on house rent allowance.

Salary here means basic salary which  includes dearness allowance if the terms of employment provide for it, and commission based on a fixed percentage of turnover achieved by the employee. All the components shall be taken on due basis. Caution: salary is taxable on due or receipt whichever is earlier (sec 15) but for calculating HRA exemption all components shall be taken only on due basis.  

Caution: The deduction will be available only for the period during which the rented house is occupied by the employee and not for any period after that.

Examples for calculation of exemption/deduction of HRA

X has received following amount during the previous year.

  1. Basic Salary – Rs. (5000*12) – Rs. 60,000/-
  2. Dearness Allowance (D.A) – Rs. (1000*12) – Rs. 12000/-
  3. House Rent Allowance (H.R.A.) – Rs. (2000*12) – Rs. 24000/-
  4. Actual Rent Paid – Rs.(2000*12) – Rs. 24000/-

Calculation

The minimum of the following amount shall be exempt

  • Actual HRA received (2000*12) – Rs. 24000/-
  • Rent Paid in excess of 10% of salary ( 24000-7200) – Rs. 16800
  • 40% of Salary – Rs. 28800/-

Therefore, Rs. 16800 shall be exempt and the balance Rs. 7200 shall be included in gross salary.

Nov 192012
 

House Rent Allowance

Income tax department offers HRA tax exemption for those individual tax payer who stays in a rented house. Section 10(13A) of the income tax act allows the exemption of HRA. Employee can claim for HRA exemption if he or she lives in a rented house. To be eligible for claim of HRA deduction, an employee must be paying for the rent to his landlord and maintain the receipts which state that he has been paying for his rental expenditure. If an employee stays in his own house there is no tax deduction on HRA.

Following points to be considered for Calculation of HRA exemption.

1. Amount equal to 50 percent of Salary where residential house is situated in Mumbai, Delhi, Kolkatta or Chennai or Amount equal to 40 percent of Salary for other places.

2. House Rent Allowance received by the Employee

3.  Excess of Rent paid over 10% of Salary.

Salary includes Basic Salary + Dearness Allowance + Commission on fixed percentage of turnover achieved by an Employee.

Minimum of point no. 1, 2 & 3  is exempted.

For Example,

Basic Salary (Rs 5000/- per month —— Rs. 60, 000/- yearly),
Dearness Allowance (Rs. 1000/- per month —- Rs. 12, 000/- yearly).
Actual Rent Paid (Rs 2000/- per month —— Rs 24000/- yearly),
HRA received by Employee (Rs. 2000/- per month —- Rs. 24, 000/- yearly)
City: Mumbai

1.  50% of  Salary (Basic + DA) = Rs. 36,000/-

2. Rent Received = Rs. 24,000/-

3. Rent paid in excess of 10% of Salary (Basic + DA) =  Rs. 16, 800/-,

Hence, Rs. 16800/- would be exempt and the rest Rs 7,200/- would be included in gross salary for tax calculation.

Documents needed to claim HRA includes rent receipts, rental agreement, PAN details of the landlord.