Dec 012022

Appended below is the Pan India Compliance calendar for December 2022, employer is under obligation to contribute towards some of the above-mentioned compliances for the welfare of the employees. Each of these compliances is again governed by a set of rules and formulas. It is proven to be a deliberate attempt to violate the provisions of the law, there could be imprisonment of the employer. Please, comply with the same in time to avoid any future non-compliance so that hefty penalties and fines are not charged by the respective dept.

Oct 072022

If anyone wonders whether corporate training is essential to employees, they should start wondering if a user manual is required to learn about a piece of heavy machinery. Well, the answer is as clear as a day, it is fundamental. Along with being significant, it is rather a lot beneficial, too. As a person who is about to embark on the corporate world, they must have an idea about the things that go down here and the way the work is carried around here. Also, they must be well aware of the all-around rules and regulations and company-exclusive conditions.

Corporate training makes it easier for an employee to fit in the company space and create a self-proclaimed identity amongst the team. It is a way of understanding one’s strengths and weaknesses and certainly helps one emphasize the areas of improvement. This could be contributed by an internal team or can be provided by an externally hired team.

Getting into detail about the benefits of this training:


Pre-instilled knowledge.

They were generally called ‘Knowledge Transfer’ or ‘KT’, in the corporate world. As the name suggests, it is the transfer or sharing of knowledge from a senior to a junior; a newcomer. This entitles nurturing of basic work knowledge then the employee will conduct into them. In such a case, the employee is not entirely unaware of his role. Even though guidance is still required, it wouldn’t be a lot of pressure because the employee has a gist about their tasks. This could be done before joining or while onboarding.


Improvement in team strength.

While KT, the bond between the senior employee and the newcomer blooms. This bond further enhances creating excitement among the team, to have a newcomer who is already efficient. This creates a good rapport amongst the team which delivers good results. The employee would feel useful and contribute more to the team wanting to achieve higher success, which ahead motivates the other members. All in all, everyone grows with the flow of new blood in the team.


Social awareness.

In the training, a part of the training would be etiquette. In a world where people earn, etiquettes are what makes a person remarkable and memorable. A person who behaves well and is a faster worker, a sweet talker, a charmer, etc, is the one who succeeds in this social network. As networking is an important aspect of growth, the employee learns how to behave, capture good deals and make good impressions, creating a good name for themself and the company. This is beneficial as the employee becomes ready to face an obstacle without fear and succeeds well.


Motivation and continuation.

When the seniors share their knowledge with the juniors, a sense of achievement forms within them that keeps them motivated and makes them want to perform better and be good role models to the juniors. This motivation also makes them continue working for the company which then reduces the number of attritions. This training is an easy way to make the senior employees motivated without putting in a lot of effort. This makes it easier for the juniors to communicate with the seniors and the seniors enjoy the delight of being a teacher.


Operational business plans.

When the employee is trained, it is expected of them to receive the knowledge and put it to good use. The company invests time in them, anticipating a worthy outcome. Given that the employee is pre-informed of their duties, they formulate action plans that will help the company grow. They have new ideas and they match them up with the new techniques and things they learned during the training. This surely makes good proposals and keeps the team engaged in formulating new ideas.


Engaged in the process.

One can only be involved in the process if one knows what the process is. Since the employee has already been given knowledge and sheds light on the company tasks, ideologies, tagline, etc, they can now be incorporated into the process. After the training, they are well accustomed and comprehend the process easily. They immerse themselves in the task apart from just being an onlooker, further, learning completely about each task ahead of the process. In the long run, they would excel at all the processes sooner making them want to learn more and indulge more, and the loop goes on.


Reality check.

This point is made not in a way to criticize an employee but as a sort of conclusion being conveyed to them by themselves. During the entire time of training, they have a chance to understand and explore various things taught by someone very experienced and also understand what they like the most. At the same time, they can learn to acknowledge what they do best and what they are not fit for. This gives them a clear mirror of what tasks they should focus on and what process they have a good understanding of. This can help them balance themselves and create equilibrium within all the tasks to excel at all of them.


Pushing limits.

Would a person who recently learned skating, keep the board aside? Definitely, not. The same is the case with everyone who learns new things. Just like the skateboarder trying to clear difficult stages by pushing themselves, the same thing happens with employees. Once they learn one thing, they keep pushing their limits, while practicing and trying to excel at it, by challenging themselves to do better. This is a self-challenge but the one who bears the fruit is not just the employee but also the company.


Concluding, it’s clear how the benefits of training don’t work just for the juniors but also for the seniors who teach them. It also creates a good bond while sharing knowledge. All in all, it seems like a very good option to keep the company growing and the employees going hand-in-hand to keep pushing themselves to achieve greater success.


Sep 222022

What Does Offboarding Mean?

HR pays much attention to onboarding and performance management, but less focus is on streamlining your offboarding procedure. Offboarding, however, is crucial for upholding your company’s reputation, improving the working conditions for your present staff, and retaining networking opportunities. 

Offboarding is the procedure that results in a formal breakup between a worker and a corporation via retirement, termination, or resignation. It includes every choice and action made during an employee’s departure. It may include:

  • Transferring the duties of that employee’s position using the employee database management system
  • Removing credentials and access rights with the help of HRM solutions
  • Delivering the equipment
  • Interviewing existing patrons to obtain comments

Additionally, you can learn from the process what you can do to make things better for your present and future employees.

exit interviews

What is the benefit of an exit interview?

1. It is cost-effective:- Exit interviews are unquestionably a great tool you can add to human resources because they don’t take up much time, cost little, and yield useful information. It’s also relatively simple to have a discussion or interview an employee to discuss the company’s strengths and flaws. It’s a tiny investment that will have a big payoff.

2. You will understand and come to know why people leave:- Finding out why people decide to quit your company will provide you with the information you need to address the problem. People will undoubtedly have different motivations; therefore, it’s essential to determine whether the company, management, or external factors are to blame. Possible reasons for the employee’s departure from their current position include receiving a job offer with a higher income elsewhere, failing to make the promised advancement, or having to deal with personal concerns. Knowing why someone departed will help you solve any problems and prevent them from happening again.

3. You will spot any issues with the company:- You want to grow your company if you’re considering holding an exit management process. People should want to work where you build it. Exit interviews provide the knowledge you need to increase employee retention and the working environment for employees. A lot of the inquiries made during a departure interview concern the workplace. Knowing how people under your management feel at work might be challenging.

4. Closure:- Exit interviews allow you to complete any outstanding business with a departing employee. You can talk to them about their reasons for leaving, their final salary, and any paperwork that needs to be finished by their last day, in addition to probing them about their decision. Additionally, it’s excellent if the company and employee can make amicably part ways. Even though an exit interview won’t tell you all you want to know, it’s a beautiful place to start understanding why people leave. Both existing and potential employees will have a better experience if you accept constructive comments and implement adjustments.

Components of a Successful Offboarding Program

  • Management Buy-In: The most crucial element of a successful offboarding program is a leadership team that is receptive to the suggestions for improvement and feedback the program will elicit. The knowledge gleaned from exit interviews will amount to little more than time and effort wasted without support from the management team. Companies should establish an executive committee to oversee their program’s creation, implementation, and outcomes to reap the above benefits.
  • Willingness to Change: A management’s desire to change and appreciation for employee feedback are indicated by their buy-in. Employees become disillusioned and start to think exit interviews are meaningless when they notice numerous coworkers leave for the same reasons, but nothing changes. Working for someone doesn’t thrill employees as much as working alongside them. An organization’s management team can develop collaboration and improve employee retention, morale, and performance by respecting and acting upon employee input.
  • Share the Feedback from Exit Interviews: To share the feedback from departure interviews, it’s critical to have a consistent protocol in place. The HR department should consolidate and analyze all the data they learn through exit interviews and then regularly meet with the right stakeholders to deliver this data, along with any change recommendations. Depending on how many exit interviews are conducted at any given time, this meeting’s frequency may change. A weekly or monthly feedback meeting may be helpful during high turnover. If not, quarterly gatherings might be sufficient.

Frequently Asked Questions(FAQs)

Q1. Why is an exit interview important?
A. When appropriately done, exit interviews can offer a steady stream of hr payroll software, insightful feedback, and insight on each of the three fronts. They can raise employee engagement and retention by outlining what functions well or poorly within the company.

Q2. Who should do exit interviews?
A. The most typical option is to delegate it to an internal HR representative. They ought to be familiar with your organization’s participants and its dynamics. This enables them to delve farther into problems and poses more direct queries.

Q3. What happens during the exit interview?
A. An employee may be questioned about their reasons for leaving, their opinion of the business, and any advice they may have for revision during an exit interview. The ideal foundation for the discussion is a well-structured questionnaire.

Sep 022022

Appended below is the Pan India Compliance calendar for September 2022, employer is under obligation to contribute towards some of the above-mentioned compliances for the welfare of the employees. Each of these compliances is again governed by a set of rules and formulas. It is proven to be a deliberate attempt to violate the provisions of the law, there could be imprisonment of the employer. Please, comply with the same in time to avoid any future non-compliance so that hefty penalties and fines are not charged by the respective dept.

Jul 312022

Appended below is the Pan India Compliance calendar for August 2022, employer is under obligation to contribute towards some of the above-mentioned compliances for the welfare of the employees. Each of these compliances is again governed by a set of rules and formulas. It is proven to be a deliberate attempt to violate the provisions of the law, there could be imprisonment of the employer. Please, comply with the same in time to avoid any future non-compliance so that hefty penalties and fines are not charged by the respective dept.

Mar 302021
Total rental income

Standard Deduction @ 30%

Interest on borrowed capital

Rs 9,00,000/-

Rs 2,70,000/-

Rs 21,62,120/-

Loss under the head House Property Rs 15,32,120/-


Details of rent income and issue involved: The above rent was, on the basis of a field inquiry by the Assessing Officer (AO), found to be from the assessee’s major son, Roman Pathan, and major daughter, Neha Pathan, residing thereat along with the assessee’s other family members. Nobody would, charge rent (for residence) from his own son and daughter, particularly considering that both are unmarried and living together with their family at its’ self-owned abode. The arrangement was therefore regarded merely as a tax-reducing device adopted by the assessee, liable to be ignored. Is this sufficient ground to ignore the rental income and treat the house property as a self-occupied property, and restrict the claim of interest u/s. 24(b) to Rs. 1,50,000?


Facts to be considered:

The arrangement is highly unusual, particularly considering that the rent is in respect of a self-owned property (i.e., for which no rent is being paid), which constituted the family’s residence, with, further, the assessee’s son and daughter being unmarried. That, however, is not conclusive of the matter.

Being a private arrangement, not involving any third party, not informing the cooperative housing society may also not be of much consequence.

However, due to its unusual nature, it raises a doubt about the genuineness of the arrangement and needs a further investigation of the matter with respect to:

  • What is the total area, as well as its composition/profile?
  • Quantum of rent received per se the proportionate area leased out?
  • How many family members, besides the assessee (the owner) and the two tenants, are residing thereat?
  • Has the area let been specified, allowing private space (a separate bedroom each) to son and daughter,
  • Who would, in any case, be also provided access to or user of the common area – specified or not so in the agreement/s, kitchen, balcony, living area, bathrooms, etc.
  • How has the rent been received, e., in cash or through bank and, further, been sourced, i.e., whether from the assessee (or any other family member) or from the capital/income of the tenants.
  • If the arrangement was a subsisting/continuing one or confined to a year or two, strongly suggestive of, in that case, a solely tax-motivated exercise?


In the instant case, the assessee’s major son and daughter are financially independent (or substantially so), with independent incomes, sharing the interest burden of their common residence with their father. And, as such, instead of transfer of funds to him per se, have regarded, by mutual agreements, the same as rent, as that would, apart from meeting the interest burden to that extent, also allow tax saving to the assessee-father.


How to claim an interest in such case u/s 24 of income tax act treating the same as against both a self-occupied and a let out property:

The house property, is, in view of the rent agreements, both a self-occupied and a let-out property. The interest claimed (Rs. 21.62 lakhs) is qua the entire property, which therefore cannot be allowed in full against the rental income, which is qua a part of the house property. The assessee’s interest claim therefore cannot be allowed in full and shall have to be suitable proportioned.

For adjusting the above interest amount, in the instant case, in view of the joint residence, be that no area (portion) is specified in the rental agreements. The number of family members living jointly; their living requirements – which may not be uniform; the fair rental value of the property, etc., are some of the parameters which could be considered for the purpose.



Thus, a genuine arrangement cannot be disregarded as the same results or operates to minimize the assessee’s tax liability.

Mar 242021

The assessee is in the business of film distribution in the name of M/s Sukrit Pictures. The assessee has paid an amount of Rs.2 crores as Minimum Guarantee Royalty (MGR) and has not deducted TDS. The Assessing Officer held that the payment would fall within the definition of “Royalty” and failure to deduct TDS as per Section 194J of the Income Tax Act, 1961 would attract provisions of Section 40(a)(ia) of the Act.

Whether the amount paid as MGR would attract Section 194J?

The provisions of section 194J of the Act with relation to “Royalty” are as per the Explanation 2 to Clause (vi) of sub-section (1) of section 9 reads as under:

Explanation 2.—For the purposes of this clause, “royalty” means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head “Capital gains”) for—

(i) the transfer of all or any rights (including the granting of a license) in respect of a patent, invention, model, design, secret formula or process or trademark or similar property;
(ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trademark or similar property;
(iii) the use of any patent, invention, model, design, secret formula or process or trademark or similar property;
(iv) the imparting of any information concerning technical, industrial, commercial, or scientific knowledge, experience, or skill;
(iva) the use or right to use any industrial, commercial, or scientific equipment but not including the amounts referred to in section 44BB;]
(v) the transfer of all or any rights (including the granting of a license) in respect of any copyright, literary, artistic or scientific work including films or videotapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films; or
(vi) the rendering of any services in connection with the activities referred to in sub-clauses (i) to [(iv), (iva) and] (v).”

What is GMR? – A film distributor pays an amount as Minimum Guarantee Royalty (MGR) for the purchase of theatrical distribution rights. It is worthwhile to note that in such a case, copyright is always with the producer, and the distributor is only given the right to the exhibition of cinematographic films.

Analysis of facts:

Clause (v) of Explanation 2 to section 9(1) consists of two different transactions as given below:

Inclusive Part Non – Inclusive part
Transfer of all or any rights (including the granting of a license) in respect of any:

1.      copyright,

2.      literary,

3.      artistic or

4.      scientific work including

5.      films or videotapes for use in connection with television or

6.      tapes for use in connection with radio broadcasting.

Consideration for the sale distribution or exhibition of cinematographic films


It is wrong to hold that what the assessee purchased is copyrights and hence liable to TDS. In fact, the copyrights are always with the producer. The distributor is only given the right exhibition of cinematographic films. Hence, such transactions do not attract the provisions of TDS.

Moreover, the minimum guarantee amount which is paid by the distributor for acquiring the exhibition rights of a movie is a fixed expenditure for the distributor that is paid to producers irrespective of the fact whether the film generates a profit or incurs losses. Hence, the payments made by the assessee do not fall under the term “Royalty” and do not attract the provisions of TDS.

Hence, TDS is not liable to deduct on MGR.

Mar 232021

The Government of Madhya Pradesh has issued the Draft (Madhya) Social Security Code Rules, 2006 in the suppression of the following Rules:

• Madhya Pradesh Employees Insurance Court Rules, 1963.

• Madhya Pradesh Employees State Insurance (Medical Benefits Services System) Rules, 1959.

• Madhya Pradesh Supplies to the Hospitals established under the scheme of employees, estate insurance rules, 1981.

• Madhya Pradesh workmen’s compensation rules, 1962.

• Madhya Pradesh workmen’s compensation (Occupational diseases) rules, 1963.

• Madhya Pradesh maternity benefit rules, 1965.

• Payment of Gratuity (Madhya Pradesh) Rules, 1973

• Madhya Pradesh Building and other construction workers (regulation of employment and conditions of service) rule, 2002.

The following are the objectives:

• The Draft Rules provide for the registration of establishments required to pay provident funds, employees’ insurance benefits to workers, payment of various benefits such as insurance, gratuity, and maternity benefits.

• The Draft Rules also provide for Aadhaar-based registration of construction workers, unorganized workers, and gig and platform workers. Migrant construction workers will be entitled to benefits in the state where they are working.

•• The Draft Rules provide that there shall be a crèche facility in every establishment with 50 or more women employees. Further, it provides detailed procedures for the application and payment of gratuity.

All persons likely to be affected thereby and the notice is hereby given that the said draft rules will be taken into consideration after the expiry of a period of 45 days. Objections and suggestions if any may be addressed to the labor commissioner of Madhya Pradesh at and

Notification:- Madhya Pradesh Social Security Code Rules 2020



Mar 222021

An addition of Rs. 11 lakhs made by the Assessing Officer as deemed dividend under section 2(22)(e ) of the Act. However, the assessee has challenged the sustenance of the addition of Rs. 4,55,250 as deemed dividend under section 2(22)( e) in respect of loans received from the following companies :

(a) Taneja Builders Pvt. Ltd. (TBPL)

(Holding more than 50% share capital & Director)

Rs. 75,750
(b) Panchsheel Properties Pvt. Ltd. (PPPL)

(Director of the company)

Rs. 19,500
(c) Tera Construction Pvt. Ltd. (TCPL)

(Holding more than 52.8% share capital)

Rs. 3,60,000
Rs. 4,55,250

Deemed dividend under income tax act:

Explanation 2 to section 2(22) accumulated profits shall always include all profits of the company to date of payment of dividend and cannot merely be taken as accumulated profits on the last date of previous accounting year as business profits earned by company accrues from day to day and not only at end of the year when accounts are finalized

Therefore, once the amount is advanced to extent of which the company possesses accumulated profits, on the date of advance itself it becomes income in form of deemed dividend under section 2(22)(e).

The provision of section 2(22)( e) and Explanation 2 thereto are extracted herein:—

“Section 2(22)(e): Any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) [made after 31-5-1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares not being shares entitled to a fixed rate of a dividend of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten percent of the voting power or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the ‘said concern’)] or any payment by any such company on behalf or for the individual benefit, of any such shareholder, to the extent to which the company, in either case, possesses accumulated profits;

** ** **

Explanation 2.—The expression ‘accumulated profits’ in sub-clauses (a), (b), (d ), and (e), shall include all profits of the company up to the date of distribution or payment referred to in those sub-clauses, and in sub-clause (c) shall include all profits of the company up to the date of liquidation, [but shall not, where the liquidation is consequent on the compulsory acquisition of its undertaking by the Government or a corporation owned or controlled by the Government under any law for the time being in force, include any profits of the company prior to three successive previous years immediately preceding the previous year in which such acquisition took place].”  


Analysis and conclusion:

The assessee was having a substantial shareholding in three companies, namely, ‘TBL’, ‘PPPL’, and ‘TCPL’. He had taken advances from these three companies.

Whether amount taken from the company shall be treated as advances taken for the business of company or loan and/or an advance of an employee?

The assessee was also a director in these three companies and to achieve the objectives of the company, he had to supervise the transaction of sale and purchase of properties and had to make handy payments in substantial sums for acquiring, maintaining, refunding, and selling the properties. He was, therefore, required to keep a sufficient amount in his saving bank account to meet the urgent needs.

If the amount remained unutilized for one or two months, it was deposited back in the companies account through cheque.

On perusal of accounts of the assessee in the books of said company, it nowhere revealed that the amount was advanced for the purpose of the business of the company. The assessee was not able to substantiate such a claim.

An assertion that the amount advanced by the company was for the purpose of the business of the assessee, could not be accepted in the absence of any corroborative material.

Thus, the amount was rightly treated as loans and advances within the meaning of section 2(22)(e ).


Also, said companies were possessing accumulated profits on the date of payments of loans/advances so what is the amount assessable as a deemed dividend?

The issue was as to what was the amount assessable as such.

  • The amount assessable could not exceed the accumulated profits possessed by these companies. As per Explanation 2, the expression ‘accumulated profits’ in sub-clause (e) of section 2(22) shall include all profits of the company up to the date of distribution or payment referred to in this clause.
  • The expression ‘accumulated profits’ shall mean profits in the commercial sense and not assessable or taxable profits liable to be taxed as income.
  • It is wrong to merely take the accumulated profits as appearing under the head ‘Reserves and surplus’ as per the accounts of those companies only or their taxable profits.
  • There is no provision that only the cash balance available to the company on the date of payment is to be treated as deemed dividend. Thus, the contention of the assessee that the amounts were invested in real estate and, hence, to be reduced from the accumulated profits, was also wrong.
  • Further, the contention raised by the assessee was that accumulated profits mean the balance on the last date of the previous accounting year and could not include current profits in which advance was made, was also wrong.
  • The contention that closing balance in the loans and advances were to be treated as a deemed dividend and the re-payments received from the loans and advances will reduce the quantum to a deemed dividend. There is no such provision under section 2(22)(e ), which suggests that only the outstanding balance at the end of the year is to be treated as deemed dividend.
  • Once the amount is advanced to the extent of which the company possesses accumulated profits, on the date of advance itself it becomes income in the form of deemed dividend under section 2(22)(e).


Hence, said the payment was treated as deemed dividend as per section 2(22)( e), read with Explanation 2 to said section. It was also not in dispute that the assessee was holding substantial shares in the said companies. Thus, the amount of loans and advances to such shareholder to the extent the company was possessing accumulated profits could be assessed as income by way of deemed dividend as per section 2(22)(e ).

Mar 192021

For the computation of capital gain under Section 48 of the Income-tax Act, 1961

Expenses claim to have spent on construction and/or renovation of property Rs 1,70,000/-

In support of its claim, the assessee filed a bill of the said amount issued by one ‘S’

However, it was found to be bogus and the signature stated therein was not of ‘S’

Now the question arises:

Whether genuineness of any claim is not proven merely on the production of some paper but only when same is substantiated?

Whether since there was nothing on record to suggest that sum in question was paid by the assessee so as to claim the cost of improvement of property sold is sufficient ground to disallow the said expenses?

Detail facts

The assessee sold his share of house property. While computing capital gains, the assessee claimed to have spent a sum of Rs. 1,70,000 on account of construction/renovation of property sold. In support of its claim, the assessee filed a bill of the said amount issued by one ‘S’. The Assessing Officer while verifying the bill in respect of alleged renovation found that same was bogus. The Assessing Officer, accordingly, disallowed the said amount. The Commissioner (Appeals), however, allowed the claim of the assessee.

Analysis of facts

Liability to prove that expanses claimed to be genuine:

  • The onus was upon the assessee to prove that particular deduction was admissible.
  • It also depends on him to lead evidence in that regard.

Issue No 1 -> The amount was stated to be spent on some civil nature and in the parking area. However, details of such renovation work were not filed.

Issue No 2 -> The bill issued by ‘S’ was found to be bogus. The signature stated therein was not of ‘S’.

Issue No 3 -> The amount stated in the bill was also not paid to date.

Thus, there was nothing on record to suggest that the sum of Rs. 1,70,000 was paid by the assessee so as to claim the cost of improvement of property sold.

It is wrong to say that once the voucher for expenditure was produced, the expenses should have allowed the same. The allowability of the expenditure do not depend upon the mere production of voucher but such voucher should also be authentic and genuine and not merely a piece of paper.

The genuineness of any claim is not proven merely on the production of some paper but only when the same is to be substantiated. The creditworthiness of the claim having not been established rather the ungenuineness nature of the claim having been proved by the Assessing Officer, he was justified in disallowing Rs. 1,70,000 as cost of improvement of the property.

One more revealing fact was that when the expenditure was incurred for the whole of the property, the assessee had claimed the entire expenses as its own expenses, whereas the assessee was only having one-fourth share of the same. This also proved in the approach of the assessee in claiming bogus expenses and, consequently, reduced his tax liability.


Merely because the signature in an invoice is not matching does not amount to the expenditure to be bogus. Whether expenses claim are genuine or is a matter of fact and entire transaction cycle (need of expenses, quotation, billing, receiving, payment and benefits from the expenses), justification of claim and approach of the assessee in making such claim shall be looked after before disallowing the expenses.