Has GST Audit been abolished in new Budget proposal for year 2021?
Reference has been given to Clause 102 of Finance Bill 2021:
102. For section 44 of the Central Goods and Services Tax Act, the following section shall be substituted, namely:–
“44. Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self- certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return under this section:
Provided further that nothing contained in this section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor- General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.”.
Analysis
Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by a specified professional and to provide for filing of the annual return on a self-certification basis. It further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return.
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Relaxation for certain category of senior citizen from filing return of income-tax*
In order to provide relief to senior citizens who are of the age of 75 year or above and to reduce compliance for them, it is proposed to insert a new section to provide a relaxation from filing the return of income, if the following conditions are satisfied:-
(i) The senior citizen is resident in India and of the age of 75 or more during the previous year;
(ii) He has pension income and no other income However, in addition to such pension income he may have also have interest income from the same bank in which he is receiving his pension income;
(iii) This bank is a specified bank. The Government will be notifying a few banks, which are banking company, to be the specified bank; and
(iv) He shall be required to furnish a declaration to the specified bank. The declaration shall be containing such particulars, in such form and verified in such manner, as may be prescribed.
Once the declaration is furnished, the specified bank would be required to compute the income of such senior citizen after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A of the Act, for the relevant assessment year and deduct income tax on the basis of rates in force. Once this is done, there will not be any requirement of furnishing return of income by such senior citizen for this assessment year.
This amendment will take effect from 1st April, 2021.
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✅ The 'Tax Audit’ limit under Section 44AB has been increased from Rs.10 crores to Rs.5 crores where 95% of business transactions are done in digital mode.
✅ Senior citizens aged above 75 years and with pension and interest on income are not required to file Income Tax Return (ITR).
✅ Taxpayers need to pay advance tax on dividend income only after the declaration or payment of dividend.
✅ If the PF amount was deducted but not deposited by the employer, it will not be allowed as a deduction for the employer.
✅ Section 43CA has been amended so that the stamp duty value can be up to 120% (earlier 110%) of the consideration if the transfer of an independent housing unit is made between 12.11.2020 and 30.06.2021.
✅ Now, Section 44ADA is applicable only to the resident individual, Hindu undivided family or a partnership firm other than LLP.
✅ The deduction for interest on housing loans under section 80EEA is to be extended to loans taken up to 31st March 2022.
✅ Tax holiday for affordable housing projects has been extended until 31 March 2022.
✅ The deduction under section 80IAC will be extended up to 31st March 2021.
✅ Till now, salary, tax payments and TDS are only pre-filled in ITR. Now, capital gains, dividend incomes, and interest income will also be pre-filled.
✅ The time limit to re-open income tax assessment cases has been reduced to 3 years from 6 years. Also, in case of serious tax evasion, the assessment can be reopened until 10 years, only when concealment of income is more than 50 lakh.
✅ The deadline for the “Vivad Se Vishwas” scheme has been extended to 28.02.2021.
✅ A “Dispute Resolution Committee” will be set up to reduce litigations for small taxpayers. Any taxpayer with taxable income up to 50 lakh and disputed income up to 10 lakh can approach the committee.
✅ Faceless Income Tax Appellate Tribunal (ITAT) for providing online resolution.
✅ FM proposes to notify rules for removing hardship for NRI due to double taxation.
✅ FM rationalized customs duty on copper, textile, gold and silver.
✅ Customs duty has been increased on solar inverters from 5% to 20% and solar lanterns from 5% to 15%.
✅ Exemption has been withdrawn on import of leather as they are domestically produced.
✅ Introduction of ‘Turant Customs’ initiative for faceless, paperless, and contactless customs measures.
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The Union Budget has imposed an Agriculture Infrastructure and Development Cess (AIDC) of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel. But thankfully, these will not result in any additional burden on consumers.
The reason for it is that unbranded petrol was earlier attracting a basic excise duty (BED) of Rs 2.98 and a special additional excise duty (SAED) of Rs 12 per litre. These have now been reduced to Rs 1.4 and Rs 11 per litre, respectively.Similarly, the BED on unbranded diesel has been cut from Rs 4.83 to Rs 1.8 and the SAEC on it from Rs 9 to Rs 8 per litre. So, the overall excise incidence on petrol (BED+SAEC+AIDC) will now be Rs 14.9/litre, which was previously Rs 14.98, while that on diesel is Rs 13.8 (earlier Rs 13.83).
Sources: Indianexpress
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👉 Module wise new functionalities deployed on the GST Portal for taxpayers.
https://www.gst.gov.in/newsandupdates/read/444
👉 Relaxation of additional fee in filing all AOC-4 e-formsPdf(22 KB)
http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.4_29012021.pdf
👉 Result of the Online Examination of the Certificate Course on Ind AS held on 24th January, 2021 - (28-01-2021)
https://resource.cdn.icai.org/62883indusresult290121.pdf
👉 Announcement of Online Examination of the 'Certificate Course on Ind AS' to be held on 7th February 2021 - (29-01-2021)
https://resource.cdn.icai.org/62881indus290121.pdf
👉 Announcement regarding Clarification on matters related to Scheme for condonation of delay for companies restored on the Register of Companies between 01 December, 2020 and 31 December 2020, under section 252 of the Companies Act, 2013 by CL&CGC ICAI - (30-01-2021)
https://resource.cdn.icai.org/62884clcgc300121a.pdf
👉 Announcement regarding Extension of filing of e-form AOC-4, AOC-4 (CFS), AOC-4 XBRL and AOC-4 Non XBRL for the FY 2019-20 upto 15.02.2021 by CL&CGC ICAI - (30-01-2021)
https://resource.cdn.icai.org/62885clcgc300121b.pdf
👉 Announcement regarding 'Extend' functionality introduced in SPICE+ Part A w.e.f. 26th January, 2021 by CL&CGC ICAI - (30-01-2021)
https://resource.cdn.icai.org/62886clcgc300121c.pdf
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⚫The market staged stellar performance with the benchmark indices gaining 5% as the Budget 2021 boosted investors and traders' sentiment. The Govt increased capital expenditure by 35% to Rs 5.54 lakh crore and focussed on several key sectors such as infrastructure and healthcare in FY22 to increase jobs, along with a divestment target of Rs 1.75 lakh crore. FM announced strategic divestment in public sector co's and financial institutions, including two PSU banks and one insurance company, in the next fiscal year.
⚫The Govt proposed to increase FDI in insurance to 74%, a move aimed at attracting overseas players.
⚫To boost domestic mfg, the Govt announced an increase in custom duty for up to 10% on mobile chargers and some sub-parts of phones, a move that can make handsets costlier by 3-4%.
⚫The 15th finance commission has kept the transfer to states from the divisible tax pool to 41% for 2021-22 to 2025-26. This is the same level as was recommended in its interim report for the current f/y and the previous finance commission report, if reorganisation of Jammu and Kashmir is taken into account.
⚫The Budget has proposed to reduce the time limit for completion of assessment proceedings to 9 months effective AY 2021-22. Corresponding reduction in time limits of filing revised and belated tax returns have also been proposed.
⚫The Govt proposed to reduce the time limit for re-opening assessment from exiting 6 yrs to 3 yrs though the scope for re-opening has been relatively widened where such re-opening could be based on flags raised by computer based information systems.
⚫The budget has paved the way for a faceless Appellate scheme for ITAT proceedings with dynamic jurisdiction to impart greater efficiency, transparency, and accountability.
⚫Farmer unions announced chakka jam on Feb 6 when they would block national and state highways for three hours in protest against the internet ban in areas near their agitation sites.
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💡Interest on PF contribution above Rs 2.5 lakh to be taxable
📝📜Crux / Summary
he 2021 budget has also proposed to remove the tax exemption under Section 10(10d) to Ulips with a premium of more than Rs 2.5 lakh a year. This will not apply to existing Ulips, but only to policies sold after 1 February this year
🧭Proposal at Budget 2021
The interest earned by the Provident Fund contributions above Rs 2.5 lakh a year will now be added to the taxable income and taxed at the normal rates.
✍️Applicable
This will only apply to the employee’s contribution and not that of the employer.
📍Reform Impact
This is a big change. It will hit high-income salaried people who use the Voluntary Provident Fund to earn tax-free interest.
📑Impact of the Proposal
will impact less than 1% of the total subscribers to the provident fund.
💡How it will affect
1. it affects only the creamy layer of salaried employees.
2. The Rs 2.5 lakh annual threshold means that a person contributing up to Rs 20,833 a month to PF (basic salary of up to Rs 1.73 lakh a month) will escape the tax.
💰⚒️Impact on HNIs
1. The budget has proposed to remove the tax exemption to Ulips with a premium of more than Rs 2.5 lakh a year.
2. Above mentioned Ulips will now be treated like equity mutual funds, with gains of over Rs 1 lakh taxed at 10%.
3. Note- Rs 2.5 lakh ceiling is the aggregate premium for all policies held by a policyholder, which means one cannot get past the tax by investing in multiple policies of less than Rs 2.5 lakh
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FM Sitharaman proposes to incentivise OPC setup to benefit startups; removes capital limits
▶️According to the Ministry of Corporate Affairs, if the paid-up share capital of an OPC currently surpasses Rs 50 lakh or its average annual turnover of immediately preceding three consecutive financial years exceeds Rs 2 crores, then the company is mandated to convert itself into a private or public company.
🍥The minister proposed removing restrictions with respect to paid-up capital and turnover for setting up OPCs. “By allowing OPC companies to grow without any restriction on paid-up capital and turnover, allowing their conversion into any other private company any time,” Sitharaman said. “
⭕FM Sitharaman also proposed reducing the duration of residency for individuals to set-up such companies. “… reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 128 days and allowing also NRIs to incorporate OPCs in India.
, this will be a big boost for startups,” the minister added. “NRIs may be able to incorporate One Person Company and no turnover/capital threshold will be applicable. This will incentivize investments from NRIs in startups in India,”
https://www.financialexpress.com/budget/budget-2021-fm-sitharaman-proposes-to-incentivise-opc-setup-to-benefit-startups-removes-capital-limits/2183796/
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