Wednesday, October 1, 2014

Due Date of Deposit of TDS/TCS extended to 10.10.2014


Due Date of Deposit of Tax Deducted at Source/Tax Collected at Source during the Month of September, 2014 extended from 7th October, 2014 to 10th October, 2014 

Considering the consecutive holidays owing to the festive season and weekend during the first week in the month of October, 2014, the Central Board of Direct Taxes (CBDT) has issued an order to extend the last date of deposit of tax deducted at source/tax collected at source during the month of September, 2014 from 7th October, 2014 to 10th October, 2014 without entailing any consequential interest. 

However, the due date for filing of TDS/TCS statements for the 2nd Quarter of the F.Y. 2014-15 shall remain the same.

PIO Card valid for Life Time


In pursuance of the announcement made by the Prime Minister of India, Shri Narendra Modi at Madison Square Garden in New York on September 28, 2014, Ministry of Home Affairs has issued a Notification on September 30, 2014 to the effect that Person of Indian Origin (PIO) Card shall be valid for life time and the PIO Card holder shall be exempt from police reporting / registration. 

It has been further clarified that all PIO Cards issued till September 30, 2014 are automatically deemed to have life time validity.

E FILING OF SERVICE TAX RETURN FOR APR-14 TO SEP-14 ENABLED DUE DATE 25-10-14


Service Tax Return (ST-3) for the period April,14 - September,14 is now available for e-filing by the assesses in both offline and online version. 

The last date of filing the ST-3 return for the said period is 25th October, 2014. 

However, to avoid congestion and inconvenience in the last minute, all assesses who wish to file their ST-3 for the said period are advised to start e-filing the returns immediately and not to wait till the last date. 

E- filing of Service Tax return is mandatory for every assessee.

Further With effect from 1st October, 2014; every assessee is required to pay service tax electronically through internet banking therefore service tax liability for the month of September, 2014 or quarter ending September, 2014 is required to be paid electronically irrespective of the constitution of assessee and quantum of turnover/service tax.

Here we would also like to mention that relaxation from e-payment may be allowed by the Deputy Commissioner/Asst. Commissioner on case to case basis.

(Notification No. 09/2014-ST)


The assesses can file return either online or use the offline utility by downloading the latest version

Download ST3 Return Excel Utility (V1.2)

(For Filing ST-3 returns for Half Year Oct-Mar 2013 onwards)
UPDATED ON 
01-10-2014


USE LESS KNOWN TALLY SHORTCUTS & SAVE TIME DOWNLOAD FREE E BOOK


Tally shortcut keys are the best way operate Tally because it saves so much of our time and the work can be done with much ease in comparison to without shortcuts.

The type of shortcut keys that I am talking about is not very well known by people. For example you may know the shortcut that is in the picture above and other shortcuts like that.

It is ALT+C to create a ledger in Tally.


But have you heard of a shortcut ALC? If not, let me tell you that this shortcut is also for creating a ledger in Tally.

When you are at the Gateway of Tally, press ALC consecutively and you will reach directly into the ledger creation menu.

Try it right now. If you don’t have Tally you can see the whole process of downloading and installing Tally for free here.

There are total 100+ shortcuts like this and by knowing only some of it you can run Tally with a lightning speed.

Author:I am Rishit Shah, a Tally lover, CA. Finalist and information geek. I write about different aspects of Tally on TallySchool.

For any queries you can comment below or reach me at rishit@tallyschool.com

Bank Reconciliation in Tally.ERP 9


Banking is one of the major parts of any accounting process. Major reason for this is because now a days more and more transactions are routed through banks. With the introduction of internet banking people have started transacting through banks on a very large scale.

On the other hand businesses have saved much time and money by using internet banking facilities such as NEFT, RTGS and e-cheques. With increased transactions through banks it has become very useful to match the transactions with books of accounts. If we look from the audit point of view, the importance of bank reconciliation is even more increased.

But one thing that many people are worried is of bank reconciliation is about its complexity. Well, there is good news. Tally has made it all easy and faster than ever. With the help of Tally.ERP 9 bank reconciliation has become just a small task and it is done in minutes.

Bank reconciliation in Tally.ERP 9 can be done is two ways.

1. Manual

2. Automatic

We’ll discuss both the methods in detail here and after reading them you will be easily able to reconcile banks in Tally.ERP 9.

Let’s start with the manual method:

In manual method you have to manually enter the dates on which your bank has actually credited or debited the amounts. This date is also called value date meaning on this date the value was credited or debited in your account.

For example, in your books one of the cheques you gave to your creditor was credited on 25/09/2014 and in your bank statement it is debited on 28/09/2014. Thus the value date is 28/09/2014.

While in general terms we call it value date, but in Tally it is called Bank Date.

Therefore if we take the above example, 28/09/2014 is the Bank Date and 25/09/2014 is Instrument Date.Instrument Date is the date on which you recorded the entry and Bank Date is the date on which your bank realized it actually.

Now let us check it via Tally.ERP 9. Take a look at the picture below.




I have passed two entries in the bank account named State Bank of India.

One is Bank Charges and other is payment to INB Avenues of a cheque of Rs. 1000.

This screen is called BankReconciliation screen.

After you have passed all your entries from the books of accounts, you have to come here in order to reconcile.

You can reach here by the following way:

From Gateway of Tally > Banking > Bank Reconciliation > List of Banks > Select your bank to reconcile.

Once you reach there you will be automatically taken to the Bank Date column by Tally and you have to enter the Bank Date as per your bank statement.

In this case, the Bank Date in the bank statement of State Bank of India is 02/09/2014 and the Instrument Date is 01/09/2014.

You have to manually enter the Bank Date and your bank account in Tally will be reconciled. 

This was the manual approach and is useful when there are comparatively less entries. But if you run a big business where the amount of entries is much more, say 100 entries a month then it would be cumbersome to enter each and every Bank Date.

Therefore in Tally.ERP 9 there is an option called Auto Reconciliation.

Here is the step by step process of enabling Auto Reconciliation in Tally.ERP 9.

Suppose we now have an HDFC Bank Account with certain entries that are needed to be reconciled.

For reconciling automatically you have to go to Bank Reconciliation screen as before.

From Gateway of Tally > Banking > Bank Reconciliation > List of Banks > Select your bank to reconcile.

After reaching there, first you have to specify the location of the folder in which your bank’s e-statements are on your computer.

You need to have e-statements in order to use the feature Auto Reconciliation. Formats supported by Tally.ERP 9 for importing bank statements are Excel, MT940 or .CSV in a readable format.

You can do that by pressing F12 which is for Configuration and then go to Banking Configuration.

After configuring the location of the bank’s statements, you have to return to the Bank Reconciliation screen once again to continue the process.

Now click on the button Bank Statementor simply press ALT+B. This will display the folder and all the supported files in that folder which you specified at the time of Banking Configuration.




Now, select the statement for reconciliation and click With View or press ALT+I.

This will show you the bank statement which you had in the folder.

Now click on Import button on the top right corner to import the statement.




After you have imported the bank statement all the Bank Dates with the matching transactions are automatically filled in the Bank Date column.

You can easily see it in the picture below.



This was the Automatic method of reconciliation. This method saves a lot of time and you can easily reconcile any number of bank statements in less time.

After reading this, I am sure that you will be easily able to reconcile banks from now on and will have no difficulties at all in case of Bank Reconciliation in Tally.ERP 9.

I am Rishit Shah, a Tally lover, CA. Finalist and information geek. I write about different aspects of Tally on TallySchool.

For any queries you can comment below or reach me at rishit@tallyschool.com.

Tuesday, September 30, 2014

POST INCORPORATION WORKS UNDER COMPANIES ACT


 POST INCORPORATION WORKS 
GOYAL DIVESH & ASSOCIATES, PRACTICING COMPANY SECRETARY, SERIES NO- 17 


In our earlier article (Series-16) – Incorporation of Companies & Table of Procedure of Incorporation of Company under Companies Act-2013, we explained detailed procedure for incorporation of company. After Incorporation many works are required to be done by companies on time to time.

As soon as a company is incorporated, whether public or private limited, it becomes a juristic person. It has its own name and property. It is a separate legal entity distinct from its members who incorporate it.


A company does its business through its Directors. The directors are also called the ears, eyes and hands of the company. The directors of a company are in fiduciary position. On the one hand they run the company as its owner (Policy maker) and on the other hand they are merely a servant of the company and take remuneration. They are entitled to do any work on behalf of the company, what a company can do in ordinary course of business. Any action done by the directors in the ordinary course of business are treated as done by the Company. But wrong done by the Directors (criminal action) are the responsibility of the Directors and not the responsibility of the Company. 

Monday, September 29, 2014

less TDS certificate shall be directly issued to Deductor Form 13 revised


INCOME-TAX (NINTH AMENDMENT) RULES, 2014 - AMENDMENT IN RULE 28AA AND SUBSTITUTION OF FORM NO. 13

NOTIFICATION NO. 46/2014[F.NO.133/10/2014-TPL]/SO 2487(E), DATED 24-9-2014

In exercise of the powers conferred by section 295 read with section 197 of the Income ‐tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income‐tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (9thAmendment) Rules, 2014.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962,—
(a) in rule 28AA, for sub-rule (4) and sub-rule (5), the following sub-rules shall be substituted, namely:—
"(4) The certificate for no deduction of tax shall be valid only with regard to the person responsible for deducting the tax and named therein.
(5) The certificate referred to in sub-rule (4) shall be issued direct to the person responsible for deducting the tax under advice to the person who made an application for issue of such certificate.
(6) The certificate for deduction of tax at lower rate shall be issued to the person who made an application for issue of such certificate, authorising him to receive income or sum after deduction of tax at lower rate.";
(b) in Appendix-II, for Form No.13, the following Form shall be substituted, namely:—



Form No.13(right click & select "save target as" "Save link as")

[See rules 28 and 37G]

Application by a person for a certificate under sections 197

and/or 206C(9) of the Income-tax Act, 1961, for no


*deduction/collection of tax or *deduction/collection of tax at a lower rate


Saturday, September 27, 2014

Income Tax treatment-exemption on Gratuity


Gratuity 

Tax treatment of gratuity can be classified as follows: 


(A) Gratuity received by Government employees and employees of local authority [Section 10(10)(i)] 

In case of a Government employee, any death-cum-retirement gratuity received is wholly exempt under section 10(10)(i). It should be noted that employees of statutory corporation will not fall under this category. 

Illustration (Government employee) 

Mr. Kishan is a Central Government employee. He retired from his service in December 2014 and received gratuity of Rs. 8,40,000. In this case, entire amount of gratuity will be exempt from tax. 

(B) Gratuity received by non-Government employees : 

This category will further be classified as follows : 

  • (1) Exemption in respect of gratuity in case of employees covered by the Payment of  Gratuity Act, 1972. 
  • (2) Exemption in respect of gratuity in case of employees not covered by the Payment of Gratuity Act, 1972. 

The detailed discussion in this regard is as follows : 

(1) Exemption in respect of gratuity in case of employees covered by the Payment of  Gratuity Act, 1972 [Section 10(10)(ii)] 

Exemption in this case will be lower of the following amounts : 

  1. 15 days’ salary (*) × years of service 
  2.  Maximum amount specified by the Central Government, i.e., Rs. 10,00,000. 
  3.  Gratuity actually received. 
(*) Following points should be kept in mind : 

  • 7 days instead of 15 days in case of employees of a seasonal establishment 
  • 15 days’ salary = Salary last drawn × 15/26 
  • Salary for this purpose will include basic salary and dearness allowance only. 

Illustration: If Mr. Keshav’s monthly salary at the time of his retirement is Rs. 8,484 and basic, Rs. 2,526 as dearness allowance, Rs. 1,848 as commission and Rs. 1,252 as bonus, then salary for aforesaid exemption will be Rs. 6,352, computed as follows: 

Rs. 11,010 (Basic + DA) × 15/26 = Rs. 6,352 (rounded off) 

· In case of piece rated employee, 15 days’ salary will be computed on the basis of average of total wages (excluding overtime wages) received for a period of three months immediately preceding the termination of his service. 

Illustration: If in the above Illustration, Mr. Keshav is a piece-rated worker and salary drawn by him in three months preceding the retirement is Rs. 11,010 including Rs. 2,526 overtime (OT) wages, then salary for the aforesaid exemption will be Rs. 1,632 computed as follows: 

Step 1 - Computation of three months’ salary 

Three months’ salary will be Rs. 8,484 (Rs. 11,010– Rs. 2,526 being OT wages) 

Step 2 - Computation of monthly salary 

One month salary will be Rs. 2,828 (i.e., 8,484/3) 

Step 3 - Computation of salary 

Salary will be Rs. 1,632 (rounded off) (i.e., 2,828 × 15/26) 

  • · Part of the year, in excess of 6 months, shall be taken as one full year. 
Illustration: If the period of service is 18 years and 8 months, then 19 years will be taken as duration of service. If the period of service is 18 years and 5 months, then duration of service will be taken as 18 years. 

(2) Exemption in respect of gratuity in case of employees not covered by the Payment of Gratuity Act, 1972 [Section 10(10)(iii)] 

In case of employees not covered by the Payment of Gratuity Act, 1972 exemption in respect of gratuity will be least of the following : 

  1.  Half month’s average salary for each completed year of service, i.e., [Average monthly salary × ½] × Completed years of service. (*). 
  2. Maximum amount specified by the Central Government, i.e., Rs. 10,00,000 
  3. Gratuity actually received. 
(*) Following points should be kept in mind : 

  • · Average monthly salary is to be computed on the basis of average of salary for 10 months immediately preceding the month (not the day) of retirement. 
Illustration: Mr. Keshav retires from service on 8-4-2010. In this case, average salary will be computed on the basis of salary for the period of 1-6-09 to 31-3-10 (i.e., 10 months preceding the month of retirement). 

  • Salary for this purpose will include basic salary, dearness allowance, if the terms of service so provide and commission based on fixed percentage of turnover achieved by the employee. 
  • While computing year of service, any fraction of year is to be ignored. 
Illustration: If duration of service is 18 years and 11 months, then 18 years will be considered for computation. 

Illustration (Non- Government employee) 

Mr. Kaushal retired from A Ltd. on 15-2-3015, after serving for a period of 25 years and 9 months. Following are other details: 

  1. Basic salary per month during 10 months preceding the month of retirement (i.e., monthly salary from 1-4-12 to 31-1-13) : Rs. 60,000. 
  2. Dearness allowance per month during 10 months preceding the month of retirement (i.e., monthly DA from 1-4-12 to 31-1-13) 
    1. (a) Forming part of salary for computing retirement benefits : Rs. 60,000 
    2. (b) Not forming part of salary for computing retirement benefits : Rs. 10,000 
  3. Gratuity received at the time of retirement Rs. 25,20,000. 

Compute the amount of exemption in respect of gratuity under section 10(10)(ii)/(iii), considering : 
  • (i) Mr. X is covered by the Payment of Gratuity Act, 1972 
  • (ii) Mr. X is not covered by the Payment of Gratuity Act, 1972. 
** 

(i) When Mr. X is covered by Payment of Gratuity Act, 1972 

As per section 10(10)(ii), exemption in respect of gratuity received by non-Government employee (covered by the Payment of Gratuity Act, 1972) is least of the following: 

Particulars                                                                                                                            (Rs.) 

1. 15 days’ salary for each completed year of service or part in excess of 
6 months (Note 1)                                                                                                             19,50,000 

2. Maximum amount specified by the Central Government                                                  10,00,000 

3. Actual amount received                                                                                                  25,20,000 

Amount of exemption under section 10(10)(ii) will be Rs. 10,00,000, being least of above. Thus, taxable amount of gratuity will be Rs. 15,20,000 (Rs. 25,20,000 – Rs. 10,00,000) .However person can claim relief under section 89(1).

Note 1: Computation of 15 days’ salary for each completed year of service or part in excess of 6 months: 

Following points should be considered: 

  1. Part of year in excess of six months will be considered as a full year. 
  2. Salary for the aforesaid purpose will be last drawn salary. 
  3. Salary for the aforesaid purpose will include basic salary and any dearness allowance  (i.e., whether or not forming part of salary while computing retirement benefits). 
  4. While computing 15 days’ salary, we will divide monthly salary by 26 days. Based on above, computation will be as follows: 
    1. Monthly salary will be Rs. 1,30,000 (Rs. 60,000 + Rs. 60,000 + Rs. 10,000). 
    2. 15 days’ salary will be Rs. 75,000 (Rs. 1,30,000/26 × 15). 
    3. Duration of service is 25 years and 9 months, i.e., it will be taken as 26 years (for computation of exemption). 
Thus, total amount of salary will be Rs. 19,50,000 (Rs. 75,000 × 26 years). 

(ii) When Mr. X is not covered by the Payment of Gratuity Act, 1972 

As per section 10(10)(iii), exemption in respect of gratuity received by non-Government employee (not covered by the Payment of Gratuity Act, 1972) is least of the following : 

Particulars                                                                                                         (Rs.) 

1. Half month’s salary for each completed year of service (Note 2)                15,00,000 
2. Maximum amount specified by the Central Government                               10,00,000 
3. Actual amount received                                                                                25,20,000 

Amount of exemption under section 10(10)(iii) will be Rs. 10,00,000, being least of above. Thus, taxable amount of gratuity will be Rs. 15,20,000 (Rs. 25,20,000 - Rs. 10,00,000). However person can claim relief under section 89(1).

Note 2: Computation of half month’s salary for each completed year of service : Following points should be considered in this regard: 

  • While computing duration of service, any part of year will be ignored. 
  • Salary for the aforesaid purpose will be average salary for 10 months preceding the month (not the day) of retirement. 
  • Salary for this purpose will include basic salary, dearness allowance forming part of salary while computing retirement benefits and commission based on fixed percentage of turnover achieved by the employee. 
  • Half month’s salary will be computed by dividing average salary by 2. Based on above, salary will be computed as follows: 

Particulars                                                                                                                (Rs.) 

Basic salary per month, for 10 months immediately preceding the month of
 retirement                                                                                                          60,000 

(+) Dearness allowance per month (forming part of salary while computing 
retirement benefits), for 10 months immediately preceding the month of 
retirement                                                                                                             60,000 

Total monthly salary for the purpose of computing exemption                               1,20,000 

There is no need to convert aforesaid monthly salary of Rs. 1,20,000 into average monthly salary, since there is no change in salary during past 10 months. 

Based on above, computation will be as follows: 

· Half month’s salary will be Rs. 60,000 (i.e., Rs. 1,20,000/2). 

· Duration of service will be 25 years (part of year will be ignored). Thus, total amount of salary will be Rs. 15,00,000 (Rs. 60,000 × 25 years). 


Download Free E Book The companies Act 2013 By ICAI (Pages 575)


The Companies Act, 2013 is an important milestone in bringing the glory of Indian Business at par with international community. The Act intends to improve corporate governance and to further strengthen regulations for the companies, keeping in view the changing economic environment as well as the growth of our economy. The Act which was much awaited and deliberated topic for a long period of time has introduced some new concepts like definition of Independent Directors along with the Code for Independent Directors and the Concept of Corporate Social Responsibility in the Indian context which is not only remarkable but also setting a tone for making our Law at par with the best International Standards and Practices. 

The Corporate Laws & Corporate Governance Committee of ICAI has taken the initiative of bringing out a E-Book on Companies Act 2013 for the benefit of the members of the profession. 

The members can access the E-Book as per their convenience through their laptop, i pad, tab, or mobile etc. and refer the provisions of the Act and the Rules thereon whenever required. I commend the Corporate Laws & Corporate Governance Committee in bringing this publication in electronic form which is so essential in our day to today lives now.