NAYAK AND ASSOCIATES

Wishing everyone a joyous and prosperous Diwali filled with light, love and happiness 🪔

Congratulations, Amalin G Joseph on qualifying as a Chartered Accountant in the May 2024 examination!💐 Your hardwork and dedication have paid off. Best wishes for all your future endeavors✨

🚀 Join Our Team! 🚀 Are you looking for an opportunity to kickstart your career in Chartered Accountancy? Nayak and Associates is excited to announce a vacancies for CA Articled Assistants! 🌟 What We Offer: - Hands-on experience in various domains of accounting, auditing & Taxation - A dynamic and supportive work environment - Opportunity to work with a diverse portfolio of clients. 📩 How to Apply: Send your resume to: nayakandassociates2011@gamil.com Visit: https://lnkd.in/gxaiRyH3 Don't miss this chance to grow with us! Amalin G Joseph, Shravya Poojary, Sahana Shetty, Joswita Vaz, Suprita Poojari, CHANDNI KAMATH, Sharal Dsouza

Section 44 AD – Presumptive Taxation Scheme The Government has introduced these schemes to give relief to small taxpayers A) Eligibility to opt for Section 44 AD -> Any Individual resident -> Resident partnership firms (except for Limited Liability Partnership Firms LLP) -> Resident Hindu Undivided Families (HUFs) B) Turnover Limit -> The previous limit for Section 44AD for small businesses was Rs 2crore whereas the revised limit is 3 crore -> In case of profession u/s 44ADA, the previous limit was 50 lakhs, which has been revised to 75lakhs. *The increase in limit is subject to a condition that 95% of receipts must be through online modes. C) Assessee Barred From Availing Section 44AD -> a person carrying on profession as referred to in sub-section 44AA of the act Exception:- 44ADA allows professionals to adopt the provisions of presumptive taxation scheme provided their gross receipts for the financial year do not exceed Rs.50/75 lakh -> a person earning income in nature of commission or brokerage -> a person carrying on agency business D) Conditions for Section 44 AD -> Profit should be as per presumptive scheme for at least 5 years in continuation -> Turnover must be less than Rs 3 crore( if 95% of receipts are through online mode) or Rs 2 crore ( if 95% of receipts are through online mode) -> Net income should be 8% of the turnover -> Minimum net income should be considered 6% in case of digital receipts -> Don’t have to maintain accounting records -> Assessee opting for presumptive taxation has to pay 100% advance tax by 15th March of that particular financial year -> Assessee don’t have to get his/her accounting records audited Notes - In case the assessee is running multiple businesses, must consider the combined turnover to check eligibility for presumptive taxation - In case the assessee is involved in both business and professional practice, then provisions of presumptive taxation under Section 44AD can be adopted only for the business, income pertaining to profession has to be computed as per the normal provisions of the Income Tax Act, 1961. - An assessee can claim tax deductions and avail benefits under Chapter VI-A (Section 80C to 80U) - Assessee is not allowed to claim any deductions under Section 30 to 38 of the Income Tax Act. - No disallowance under Sections 40, 40A, or 43B will be permitted if an assesses elects to file their returns under Section 44AD. - Further deductions for any compensation or interest paid to the firm's partners may be made under Section 40(b) if the assessee is a partnership firm and chooses to file its returns under Section 44AD. However, the amount of this deduction is limited to the maximum amount stated in Section 40(b). - Any professional claiming deductions under this section shall be presumed to have taxable income equal to 50% of total revenues for the fiscal year. Article drafted by CHANDNI KAMATH

Section 50C: Special provision for full value of consideration for transfer of capital assets in certain cases This section deals with the computation of capital gain on the sale of land or building or both, which is held as capital assets. Applicability of Sec 50C 1) Consideration received for transfer of capital asset being land or building or both is less than the Stamp duty Value, then the Stamp duty value will be considered as full value of consideration. 2) But a marginal relief of 10% in variation is allowed, that is if the stamp duty value does not exceed 110% of consideration, then sale consideration shall be treated as full value of Consideration. Stamp Duty Value > 110% of sale consideration - Full Value of Consideration= Stamp Duty Value Stamp duty Value < 110% of sale consideration - Full Value of Consideration= Sale Consideration Stamp Duty Value where date of Agreement and Date of registration is different When Date of agreement is different from date of registration of transfer of asset then the Stamp duty value on the date of agreement shall be considered as full value of consideration if consideration received in full or part on or before the date of agreement by way of i) an account payee cheque ii) account payee bank draft iii) by use of electronic clearing system through a bank account or iv) through such other electronic mode such as IMPS, RTGS, Debit card, credit card, NEFT, Net Banking, UPI *If the Following conditions are not satisfied, then stamp duty value on date of transfer will be considered as full value of consideration. Stamp Duty Value Exceeds the Fair Market Value The Stamp Duty Value Exceeds the Fair Market Value on date of transfer and Stamp duty value has not disputed in appeal or no reference has been made before any other authority or court or high court, then Valuation made by valuation officer or Stamp duty Value whichever is lower shall be considered as full value of consideration. Article by Joswita Vaz.

Sec 43CA: Special provision for full value of consideration for transfer of assets other than capital assets in certain cases This section deals with the sale of land or buildings or both held as stock in trade, and the income derived from such transfer will be treated as business income. Applicability 1)     When the consideration received on transfer of asset (other than capital asset) is less than the Stamp duty value, the stamp duty value shall be considered as the full value of consideration for computing profits and gains from transfer of such asset. 2)      If stamp duty value does not exceed 110% of the consideration received, then the consideration received shall be deemed to be the full value of consideration.   The date of agreement and date of registration of transfer of asset are different In cases when the date of agreement and date of registration of transfer of asset are different, the Stamp duty value may be considered as on the date of agreement if the consideration received in full or part, on or before the date of agreement is through following modes: a)      Account payee bank draft or b)      Account payee cheque or c)       Use of an electronic clearing system (‘ECS’) or d)     Through other prescribed mode such as net banking, Unified Payment Interface (UPI), Credit card, Debit card, Immediate Payment Service (IMPS), Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT),   In case of transfer of asset being a residential unit the 110% limit is increased to 120% subject to the following conditions a)      The transfer occurs between 12.11.2020 to 30.06.2021 b)     Primary sale (1st time allotment) between the real estate developer and the buyer c)      The sale consideration received does not exceed Rs 2 crore. Article by Joswita Vaz.

Wishing you all a very Happy Holi 🎊 May your life be filled with vibrant colors, joy, and prosperity!✨

Today, as we mark International Women's Day, let's honor the remarkable achievements of women worldwide. From leadership and innovation to advocacy and entrepreneurship, women continue to inspire and drive positive change in every sphere. Let's commit to fostering diversity, equality, and inclusion in our workplaces and communities, ensuring that every woman has the opportunity to thrive and succeed. Happy International Women's Day! . . . Shravya Poojary Sahana Shetty Joswita Vaz Suprita Poojari Suhasini Bhat CHANDNI KAMATH Shama Kunder

Section 43B(h) of Income Tax Act & Section 15 of MSME Act MSME Definition: Micro enterprises - investment in Plant and Machinery or Equipment not more than 1 crore - annual turnover not more than 5 crore Small enterprise - investment in plant and machinery or equipment not more than 10 Crore -  annual turnover not more than 50 crore Medium enterprises - investment in plant and machinery or equipment not more than 50 crore - annual turnover not more than 250 crore. Section 43B(h) of the IT Act: As per Section 43B Clause (h) of the Income Tax Act and 15, 16, and 2(b) of the MSME Act, Expenditure related to Purchases / Services taken from Micro and Small Enterprises will only be allowed if the payment is made within the time limits as per Section 15 of MSME Act. Section 15 of MSME Act: Section 15 of the MSME Act requires buyers to pay suppliers of goods or services by the agreed-upon date. If no date is agreed, payment must be made before the appointed day which is within 15 days. The agreement cannot extend payment beyond 45 days from the day of acceptance or the day of deemed acceptance. This ensures timely payments to MSME suppliers. Income Tax Implication: If Payment is made by an Assessee to a micro or small enterprise beyond the time -limit specified under MSMED Act then such payment will be deductible in the year of making payment. If Payment is made by an Assessee to a micro or small enterprise within the time -limit specified under MSMED Act then such payment will be deductible on accrual basis (If Assessee maintain books of account on mercantile basis). Penalties for Failure to Pay MSMEs Within the Time Frame: In the case of late payment to an MSME, interest is applicable as per section 16: - Rate of interest: Compound interest at 3 times of the bank rate notified by the Reserve Bank of India (RBI). - Date from which interest is payable: Appointed day or the date as per the agreement, as the case may be. - Deduction of this interest is not allowed as an expense, as per the Income-Tax Act (ITA), 1961. Article drafted by Suprita Poojari.

INVERTED TAX STRUCTURE The term ‘Inverted Tax Structure’ refers to a situation where the rate of tax on inputs purchased is more than the rate of tax on outward supplies. That means Inverted Duty Structure arises when tax paid on Inward Supplies is higher than tax payable on outward supplies. Legal Provisions for Claiming Inverted Duty Refund: Sec 54 contains the provisions for refund of tax. It provides for a time period of two years from the relevant date. The relevant date for inverted duty refund would be the date of payment of tax. No refund of unutilised input tax credit shall be allowed in cases other than- 1. zero rated supplies made without payment of tax; 2. where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council; 3. Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty; 4. Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. How to Claim Refund of ITC Unutilized: 1. GSTR-1 and GSTR-3B have to be filed for the relevant tax period for which you want to file a refund application of the accumulated ITC. 2. RFD-01 Form is to be filed, it is the application through an online facility enabled for claims of refund. 3. RFD-01 has to be filed within two years from the end of the relevant filing date for the particular tax period. Conclusion: With the widened scope for obtaining refund under Inverted Duty Structure, businesses can encash the accumulated ITC lying idle in the electronic credit ledger. One has to carefully scrutinize the compliance with all the conditions & restrictions imposed to obtain refund, so as to ensure that legitimate refunds are obtained without any error. Article drafted by CHANDNI KAMATH