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GST

Complete Guide on GST Registration Online Process

Many people find it hard to complete the online GST registration process. Knowing the proper method might make the process much easier. If you want to apply for GST, read this post to find the answers to all your GST registration questions. [B-01] What is GST? GST is an indirect charge that has taken the place of many taxes in India, including excise duty, services tax, and VAT. The Parliament enacted the GST Act on March 29, 2017. It became effective on July 1, 2017. What is Online GST Registration? GST registration is the process by which a payer registers for the Goods and Services Tax (GST). After completing the registration process, you will get the Goods and Services Tax Identification Number (GSTIN). The Central Government hands over a 15-digit GSTIN number. It helps determine if a firm is required to pay GST. If a company’s revenue exceeds Rs. 40 lakhs, it must register as a basic taxable entity.Anyone applying for GST can do so via the online GST site. For registration, you must submit a form and provide the required papers. It is necessary to complete the GST registration online process. If you do not, you may be fined. Who is Eligible for GST Registration Online? People and firms must apply for GST if they meet the criteria given below: People who used tax services before the enactment of the GST law. Taxation of Non-Residents and Temporary Residents People that pay taxes through the reverse charge system. Every e-commerce individual. Firms with an annual amount of more than Rs. 40 lakhs. The firm should have a revenue of more than Rs. 10 lakhs in Himachal Pradesh, Uttarakhand, Jammu and Kashmir, and the North-Eastern states. Supplier agents and input service providers. People that provide access to databases and information online. They give data to people living in India who are not registered taxable persons from outside India. Facts About GST Registration Online Let’s go through some of the most crucial aspects of GST registration online: The GST registration online process is free of charge. A 10% penalty, or Rs. 10,000, will be charged if a firm fails to register online. In the case of tax theft, the penalty will be 100% of the amount owed. A firm with annual revenue of Rs. 40 lakhs or more requires GST registration. If you make a supply in more than one state, you must register for GST. Online GST Registration Process Step 1: Create the GST Application Form To begin with, go to the official GST portal. Select Services, Registration, and New Registration from the Services menu. On the registration page, you will need to enter your PAN number, email address, and mobile number. The person must choose the option “I am a taxpaying citizen”. After filling out the form, click the “Proceed” button. Following that, they will receive two distinct OTPs on their registered phone and email address for verification. The OTP is only valid for 10 minutes. Enter the received OTP and click “Continue.” Step 2: Filling Out the GST Application Form Online Now, on the top right, click the action button to fill out the GST application form. Enter the firm’s details. Under “Trade” put the name of the firm and its type (private limited or partnership). After finishing the registration, click “Save” and go to the next step. Enter your basic personal and identity details. Add the designation to the identifying information under the title. After filling in all the information, the person must submit their photo, which has to be in jpeg format and no larger than 100 KB. The form has many sections, which are listed below: Authorized Signatory If the person is the firm’s sole owner, select the primary authorized signatory and continue. If the person is not the firm’s sole owner, they must enter the information for the firm’s sole owner. Principal Place of Firm The person must enter the location of their firm here. The individual must also include the type of firm they represent in this section.The person must also include the type of firm they represent. Add the firm’s style and provide proof of the firm’s location. Click on “Save” to continue. Additional Firm Locations If the person has multiple outlets, they can add those or click continue to proceed. Products & Services The person must say whether they are trading goods or services here if they sell physical items, including the HSN code. Specific State Information It is totally up to the person to provide this information. Continue by clicking the save button. Step 3: Final Check This is the last step of the GST form. Once the person fills out the form, they may submit it with Electronic Verification Code (EVC) or Digital Signature Certificate (DVC). DVC accepts digital signatures. If the person chooses EVC, they will get the same OTP on their mobile number and email address. When finished, you will receive your Application Reference Number (ARN). The person can use this to track the status of their application (Services > Registration > Track Application). GST Registration Through Aadhaar Authentication New firms can get GST registration with the help of Aadhaar cards. The process is simple and quick. The new process came into effect on 21st August 2020. When registering for GST, the person will be given the option of using Aadhaar authentication. Below is the method for opting for Aadhaar authentication: Choose ‘YES.’ The authentication link would be emailed or texted to the registered email address and mobile number. Select the authentication link. Enter the Aadhaar number and click ‘Validate.’ You will receive an OTP at the given phone number and email address after the date is verified. To finish the process, enter the OTP. Within three working days, the person will receive their new GST registration. [B-02] Conclusion GSTN is a number that appears on all invoices sent to the tax credit input system. It helps people get an input tax credit, register their firms, and improve their firm standing. People can obtain the certificate of registration from the official website once they have applied. If you need more guidance and assistance with filing for GST registration online, visit Piramal Finance. This online platform is what you need to learn everything about relevant developments in the world of finance. For more information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on their website!

08-11-2023

GST

What are the Documents Required for GST Registration in India?

What is the Goods and Services Tax (GST)? In India, GST stands for Goods and Services Tax. It is an indirect tax applied to transactions related to goods and services. This form of taxation is only applicable to items and services meant for domestic use. It is a multi-level tax system that has replaced several indirect taxes. Examples include value-added tax, service tax, luxury tax, octroi, and excise duty. This system of taxation came into effect on July 1st, 2017. Since then, it has undergone lots of revisions and changes to reach its final form. The GST is not uniform. It changes according to the nature of the goods and services. In the case of luxury items, the rate of GST is higher. Whereas, it is minimum when it comes to basic household items and necessities. [B-01] What are the types of GST? Currently, four types of GST are applicable in India. They are – SGST or State Goods and Services Tax. At the state level, GST replaces taxes on sales, luxury, betting or gambling, entertainment, and purchases. The SGST tax applies to intrastate goods and services. The revenue from these transactions goes to the state governments. For instance, if the GST on a particular item or service is 18%, 9% goes to the state in the form of SGST. And the rest, 9%, goes to the center in the form of CGST. CGST or Central Goods and Services Tax. At the center, GST replaces central excise duty, additional excise duty, service tax, and more. The CGST applies to a transaction within the state. The central government of India collects the revenue generated from such transactions. The government implements the CGST along with the SGST in the states. For example, if a businessman is selling goods or services to a customer within the state, the GST levy is 20%. Out of the 20%, the SCGST and CGST are split equally. IGST or Integrated Goods and Services Tax. This system of taxation applies to interstate transactions or transactions between two states. The body responsible for the collection of IGST is the central government. The revenue that the central government collects, is split between the states involved. UTGST or Union Territory Goods and Services Tax. In union territories such as the Andaman and Nicobar Islands, Chandigarh, Lakshwadeep, etc., the UTGST replaces the SGST. Hence, in the case of transactions of goods and services within the Union territories, the government of the UT collects the GST. Here too, the GST tax comprises both UTGST and CGST. When does an individual need to register for GST in India? There are several occasions where GST registration is mandatory. Some of the instances are given below. Any business house whose annual turnover exceeds twenty lakhs. (There are exceptions, in certain states, the limit is Rs. 40 lakh.) A casually taxable person who takes part in the buying and selling of goods temporarily, and has no fixed place of business. A non-resident taxable person who supplies goods and services to a state within India. Similar to a casually taxable person, they do not have a fixed place of business in India. E-commerce operators who engage in transactions of goods and services over a digital platform. Persons involved in the supply of goods and services through these e-commerce operators. An individual/business involved in interstate transactions, and so on. There are GST Registration Documents approved by the government of India. If an individual or a business wishes to register, it is mandatory that they have those documents in their possession. What are the Documents Required for GST Registration? The following is a list of GST Registration Documents that are required for different types of businesses, firms, and individuals – For a sole proprietor, the GST Registration Documents are an Aadhar card, a PAN card, address proof, bank account details, and photographs of the owner. For a partnership, the Documents Required For GST Registration are a photograph, a PAN card, and address proof of all partners and authorized signatories. In addition to that, a copy of the partnership deed, and address proof of the place of business are also necessary. For a public or private company (based in India or abroad), GST Registration Documents are a certificate of incorporation issued by the Ministry of Corporate Affairs, a PAN card of the company, a PAN and Aadhar card of the authorised signatory, proof of appointment of the authorised signatory, a PAN card and address proof of all directors, the address of the place of the business, and bank account details. For people who are only occasionally taxed, the GST Registration Documents needed are proof of address, the necessary documents for a bank account in India, proof of the business’s formation, a photo, and proof that an authorized signatory based in India has been named. For non-resident taxable persons based outside India but carrying out businesses within the country. The Documents Required For GST Registration are – a scanned copy of the passport and visa of the individual, document proof of a bank account in India, address proof, and a photo and proof of appointment of a signatory based in India. [B-02] Conclusion Hence, any individual who is carrying out business in India or outside has to comply with the GST taxation laws. GST brings uniformity to India’s taxation system. It has also reduced taxation on certain goods, such as cars, mobile phones, and other gadgets. If you need more guidance on the documents required for GST registration, visit Piramal Finance. For more information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on their website!

08-11-2023

GST

What Are the Eligibility Criteria for the Composition Scheme Under GST?

The Goods and Service Tax has many benefits. Earlier, you paid taxes in the form of VAT, excise tax, and service tax. With these taxes, you paid twice the usual taxes. The big companies in India comply with the processes. With the composition scheme of GST, small businesses can avoid going through a set of GST processes. Now you can pay the tax in small amounts as per the revenue of your business. The composition scheme under GST lowers regulatory costs for small taxpayers. The GST Composition Scheme applies to businesses of small and medium sizes in India. This scheme allows you, with an annual turnover of less than Rs 1 crore, to submit GST at a set turnover rate. Let’s check who can apply for the composition scheme under GST. [B-01] Eligibility of Composition Scheme Under GST You are eligible for the scheme if your revenue is less than Rs 1 crore in one financial year. The limit for Himachal Pradesh and North-Eastern states is Rs 75 lakh. But if your turnover goes above this limit on any given day, you become ineligible. So, you must register under the regular scheme. Before applying for the composition scheme under GST, this is what you should keep in mind: You must have GST Registration You cannot claim an input tax credit. You cannot take advantage of this scheme if you are a service provider. It is available only to you if you are selling products. Yet, service providers for restaurants are exempted. You should not do any interstate distribution of commodities. That means, companies with intrastate supplies of goods are eligible. You cannot register if you are selling items via an e-commerce provider. You have many business lines under the same PAN (such as textiles, electrical accessories, groceries, etc.). In that case, you should register all these companies under the scheme or opt out of the scheme. You must have the phrase “composition taxable person” on each invoice you issue. For transactions governed by the reverse charge mechanism, you must pay tax at standard rates. Who Is Not Eligible for the Composition Scheme Under GST? Here is a list of people not eligible for the composition scheme under GST: Supplier engaged in the provision of services (excluding restaurants) Ice cream, pan masala, and tobacco manufacturers A casually taxable individual A non-resident taxable individual Businesses that sell products using an e-commerce site The Benefits of the Composition Scheme The benefits of opting for the composition scheme under GST are: You enjoy more liquidity since you need to pay less GST to the government. You have fewer duties (keeping records, filing taxes, and issuing invoices). Also, this gives you ample time to focus on core company operations. Your tax burden decreases. This is helpful for startups and smaller companies facing cash flow issues. If you have a revenue of less than Rs 1 crore, you may not have the funds to pay taxes. Hence, with the composition scheme under GST, we can say that the government is helping startups. In the composition scheme, a quarterly report under GSTR-4 would be uploaded by: 18th July 18th October 18th January 18th April Limitations of Composition Scheme Under GST 1. Limits on business activities: You may have to limit your scope to do business. You cannot carry out any interstate transactions. This includes importing and exporting goods and services. 2. Can’t claim input tax credits: If you are a B2B seller, you cannot get credit for input tax paid. 3. No collection of tax: You cannot charge taxes to customers. The rate of the GST composition scheme is less. 4. Penalty in case of issues found later: There are penalties for any issues found. For example: If the tax authorities find that you were ineligible for registration, you will be penalized. Registration was granted by mistake. Key Features of the GST Composition Scheme Bill of supply, not a tax invoice The tax authorities will demand that registered payers under the GST composition scheme share the bill of supply. Hence, you may issue a bill of supply rather than an invoice. Penalty If you do not qualify for the composition scheme under GST, you may have to pay a penalty. It may be similar to the amount of tax owed in addition to your tax burden. Hence, be aware while using this scheme and paying taxes. If you provide the wrong details to the composition scheme under GST, there is a penalty. Voluntary Registrations To avail yourself of the scheme’s benefits, you must register yourself. If your yearly income turnover exceeds Rs. 75 lakh, you must switch to the regular scheme. You should register if you are currently part of the VAT composition. GST on Taxable Supplies Before, you had to pay composition GST on exempted items. As of January 1, 2018, only taxable goods would be subject to GST. Applicable GST Rates The GST rates are applicable to composition manufacturers different from non-composition dealers. Refer to the table below for more details: Business TypeCGSTSGST TotalManufacturers and traders (goods)0.5%0.5%1%Restaurants not serving alcohol2.5%2.5%5%Other service providers3.0%3.0%6% Return Filing of the Composition Scheme Under GST If you are registered under the scheme, you must file a return in an authorized format. It must be within 18 days of the end of each quarter. The government has released the GST CMP 08 form for quarterly payments under this scheme. [B-02] Conclusion The composition scheme under GST benefits small suppliers, intra-state local providers, and restaurants. It removes the need for them to follow many compliance requirements. If you want more details about GST, head to Piramal Finance, an online platform dedicated to all things finance, taxes, and investment. For more information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on Piramal Finance’s website!

08-11-2023

GST

Guide on How to Apply for GST Online

Individuals and businesses who supply goods or services in India must apply for GST. Registration under GST becomes compulsory when the total value of the supply of such goods and services exceeds INR 20 lakh. If an entity operates in a special category state, this limit is INR 10 lakh. The tax filing process has become very simple today. Because the Ministry of Finance has simplified the registration process for GST. You must apply online for GST with GSTN (Goods and Services Tax Network). After registering, you will receive a unique GSTIN. It is an identification number that the Central Government allots. It is a 15-digit number and is issued state-wise. Applying for GST has its benefits. You get a legal identity as a supplier. And you can also avail of the input tax credit. [B-01] Documents Required for GST Registration When registering for GST, you will need the following documents: Your PAN Card Certification of an incorporation or partnership deed PAN cards, voter ID cards, and Aadhar cards of promoters or partners Address proof of place of business. It includes electricity bills, legal ownership documents, property tax receipts, etc. Bank account statements Passport-size photograph of the applicant Photograph of an authorized signatory Letter of authorization as proof of appointment Proof of the details of a bank account. It includes the first page of the passbook, bank statement, and cancelled cheque. You can check the status of your registration. Simply enter the ARN on the GST portal. Process to Apply for GST Online You can easily apply for GST online. Either visit the government portal or GST Seva Kendra for this. If you want to register for GST online, follow these simple steps. Start by visiting the GST portal at https://www.gst.gov.in/. Then, under the services tab, click on ‘registration’. You will be able to see an option for ‘new registration’. Next, you will see a drop-down menu that reads ‘I am a.’ Here, select ‘Taxpayer.’ Next, you can fill out a GST REG -1 form for new registration. Here, you can enter your vital details. It includes the business’s legal name, email, contact number, PAN card, and more. You will receive a one-time password. It authenticates the transaction for verification of your information. It will be sent to your mobile number and email ID. From here, you can click on ‘Proceed’. Once verification is complete, you will obtain a TRN (Temporary Reference Number). Make sure that you note down this number. You can move to Part B of the process to apply for GST online. You will now move to Part B of the process to apply for GST. To begin with, log in with your TRN. You will also be prompted to enter a Captcha code. You will have to complete the OTP verification process. An OTP will be sent to your registered mobile number and email ID. After doing so, you will be redirected to a GST registration page. You will be required to enter your valid business information at this step. It includes the name of the company, PAN, state, date of commencing business and more. If you have an existing registration, mention it at this point. Next, you must submit the details of at least 10 promoters or partners. You can also submit details of the proprietor. For this, you can furnish personal information, a designation, a PAN, an Aadhar, and more. At the next step, you will have to submit the details of the person you authorized to file GST returns. Enter details such as the place of business, address, contact details, nature of the business, and more. Next, add details of additional places of business. Also, you can enter details about the goods and services that you supply. You may also be asked for company bank details. Based on the type of business you are registering, upload the requisite documents. Press on ‘Save’ and continue. Once you apply, you will need to sign the form digitally. After filling in all the details, press the ‘Submit’ button. This will save all your current progress. Once you apply, you will receive an ARN (Application Reference Number). You will receive it via SMS and email. So this is how you can apply for GST. Now, let us check the eligibility criteria to apply for GST online. Eligibility Criteria for GST Registration If you are headed to apply GST, then check the eligibility criteria: Only those service providers who provide a service worth more than INR 20 lakh in a year need to obtain GST registration. This limit is INR 10 lakh in states in the special category. Also, any business that sells goods on its own for more than INR 40 lakh must sign up for GST. A business should apply for GST online if they supply goods outside their state. If you are supplying goods or services through an online platform, then you must apply for GST. You must register regardless of your turnover. If you provide goods or services seasonally through a temporary shop, you must apply for GST. Irrespective of your turnover, you must meet the requirement. You may also obtain GST registration voluntarily. You may also surrender the registration in such a case. [B-02] Conclusion So, these are a few simple steps to apply for GST registration online. Every business must comply with the statutory requirements of law and tax. If you want more details about GST registration and the applicability of the tax to your business, head to Piramal Finance. Here, you can get informative advice on how best to obtain GST registration. It is an excellent destination to get clarity about all things related to finance, taxes, and investment. For more information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on Piramal Finance’s website!

08-11-2023

GST

Here’s How You Can Calculate GST on Gold Jewellery

The Goods and Services Tax (GST) became effective on July 1, 2017. GST impacted the prices of many goods. Gold is one of the commodities to undergo price changes due to GST. Different gold GST rates became applicable in phases. These included the stages of manufacturing, supply, and distribution. Therefore, it is necessary to understand the final impact of GST on gold jewellery. In India, investment in gold is widely prevalent. Also, one must note that GST on gold jewellery is different for the import, purchase, and manufacture of gold. But GST is not payable when you sell gold jewellery and buy new jewellery. [B-01] What Effect Does GST Have On Gold? Before GST, if you purchased gold, you had to pay 1% of service tax and value-added tax (VAT) on it. So, you had to pay a total of 2% over the cost of the purchase. But now, after the implementation of GST, all other taxes have been discarded. Now, a rate of 3% is applicable on gold purchases. Further, a rate of 5% is applicable on making charges. It has made gold purchases costlier for consumers. Let us understand how to calculate GST on gold jewellery. How To Calculate GST On Gold Jewellery? The billing system for gold jewellery is different for every jeweller. There is no standard invoice for GST on gold jewellery. It is vital to understand that the final price of any gold jewellery is the sum of the following: Weight of gold * daily rate of 10 gm gold + charges for making and wastages + applicable GST on gold jewellery Take a look at the following example. It explains the calculation of GST on gold jewellery. To check the change in price, we will calculate the pre and post-GST charges. Scenario 1 Service tax and VAT are applicable on gold jewellery Suppose you purchase 20 grams of gold. Applicable TaxPriceCost of 20 gm gold–INR 1,00,000Add: Custom Duty10%INR 10,000Add: Service Tax1%INR 1,100Add: VAT1.2%INR 1,333.20Add: Making charges10%INR 11,000Total–INR 1,23,433.20 Scenario 2 GST is applicable on gold jewellery Applicable TaxPriceCost of 20 gm gold–INR 1,00,000Add: Custom Duty10%INR 10,000Add: GST on gold3%INR 3,300Add: Making charges10%INR 11,000Add: GST on making charges5%INR 550Total–INR 1,24,850 It is evident how GST has increased the overall price of gold jewellery. Below are the steps to calculate GST on gold jewellery. Step 1 Check the rate of gold on that day for the desired carat. Step 2 Determine the quantity of gold that you want to purchase Step 3 Consider the rate of making charges; usually, it stands at 10%. Step 4 Apply a 3% GST rate to the purchase price of gold.Consider the combined cost of gold plus the making charges for this purpose. Step 5 Arrive at the total cost of the purchase of gold. It is the sum of making charges, GST, and the cost of gold. What Are the Different Gold GST Rates? If you purchase new gold jewellery, you will pay the following taxes: A customs duty of 10% on the import of gold GST of 3% on the cost of gold jewellery GST of 5% on making charges for gold jewellery As a consumer, you must pay 3% GST on finished or unfinished gold items. The cost of producing gold jewellery further attracts 5% GST. A rate of 0.25% is applicable to precious and semi-precious stones. These stones do not include diamonds. They may be mounted or temporarily strung. The rate of 3% is applicable to all other jewellery, including the following: Diamonds Pearls Gold Silver Gold Jewellery Synthetic stones Reconstructed stones Unworked stones A rate of 1.5% is applicable across the following: Diamonds that are cut and polished Studded gold Plain gold Silver Metal jewellery Things to Consider Before Purchasing Gold Jewellery Every Indian household dreams of purchasing gold as an investment. But you should remember a few important things. Gold prices fluctuate from time to time.Factors like import duty, demand, supply, and foreign exchange rates impact these prices. These, along with the gold GST rate, affect the purchase price of gold. The gold GST rate is different for precious and semi-precious stones. Rightfully, a purchase bill should specify both separately. It is best to purchase hallmarked gold jewellery. It provides assurance about the purity of the gold. GST on gold jewellery differs for different qualities of gold. For crafting jewellery, most jewellers use 22-karat or 18-karat gold. [B-02] Conclusion By now, you must have understood what the gold GST rate is. The above examples explain how to calculate the purchase price of gold. Many factors impact the final purchase price of gold jewellery. These include the weight of gold, the purity of gold, the making charges, and the applicable rates of GST. Often, the rates of gold differ from one part of the country to another. Therefore, there can be a difference in the purchase price of gold jewellery. It is possible to bargain on the making charges for gold jewellery. But there is no scope to bargain when it comes to the payment of GST. It is important to note that the calculation of the gold GST rate is made on the basis of the combined price of gold and making charges. Want to know more about purchasing gold as an investment? Head to Piramal Finance. It is the premier destination on the web for all financial information. You can read more blogs about the best investment proposals or know more about easy finance solutions, like personal loans or credit cards. Start your investment journey here to build your wealth.

08-11-2023

GST

What is GSTIN? Everything You Need to Know

The government’s orders for compliance are getting more strict with every passing financial year. First, they introduced the GST by removing taxes like sales tax, excise duty, and VAT. GST emerged as one indirect tax for the entire nation, unifying the entire taxation system. The government implemented the use GST on July 1, 2017. GST registration implies application for GSTIN. But first, what is GSTIN? It is an identifier for every business entity that registers for it. Assigning a GSTIN to every entity helps with easy identification and maintains privacy. Keep scrolling to learn what GSTIN means and see what it takes to register for it. [B-01] What is GSTIN? GST stands for “Goods and Services Tax.” Likewise, GSTIN means Goods and Services Identification Number. Taxpayers who register under the GST regime get this 15-digit unique identification number. Now that the foundation of what GSTIN means is out of the way, the GSTIN format can be understood. The first two digits of the GSTIN represent the state code of the entity. Then, the ten digits following the state code are those of the PAN number of the individual or business entity. The thirteenth digit of GSTIN represents how many registrations the firm has done with that PAN within that state. By default, the next digit for every GSTIN is Z. The last one is a check code to ensure there are no errors. Note that applying for a GSTIN and registering under the GST regime are free of charge. GSTIN is a replacement for TIN, which was a unique number assigned to those who registered under the state VAT law. Just as GST has replaced VAT, GSTIN is a substitution for TIN. That’s something every business owner must know! What is the significance of GSTIN? The importance of GSTIN lies in the authenticity of the vendor one is transacting with. Business entities must mention their GSTIN in their invoices. GSTIN means a public identity that proves the validity and genuineness of the vendor under the GST regime. Now, you can find everything about a business entity by looking up its GSTIN with one click. Before proceeding with B2B deals, it is ethical to ensure that the other party is genuine by checking their GSTIN. Eligibility criteria for GST registration There are different slabs to apply for as a GST taxpayer. If a business entity supplying goods has a turnover exceeding INR 40 lakh in one financial year, it must register under the GST regime as a normal taxable person. The limit is INR 10 lakh if the business entity has its base in the northeastern states, Himachal Pradesh, Jammu and Kashmir, and Uttarakhand. Service providers can apply for a GSTIN if their turnover is at least INR 20 lakh in a financial year. However, the threshold is INR 10 lakh for those in the special category states listed above. Apart from these, GST registration is mandatory for some businesses, no matter what their turnover is. These are service providers, TDS/TCS deductors, non-resident taxable persons, casual taxable persons, ISDs, interstate suppliers, and e-commerce suppliers, to name a few. Types of GST registration As discussed earlier, the GSTIN is an identity for those under its regime. There are four categories here. Businesses with turnovers exceeding INR 40 lakh and INR 10 lakh in special category states can register as normal taxpayers. On the flip side, businesses that operate seasonally or occasionally need to apply as casual taxable individuals. Individuals who stay abroad but provide goods and services to Indian residents occasionally can apply as non-resident taxable persons. Finally, business entities that bag an annual turnover of up to INR 1 crore can apply for composition registration. They must pay a specified tax amount, irrespective of their turnover. Documents needed for GST registration The below documents are mandatory for registering a business under the GST regime: Aadhaar card Permanent Account Number (PAN) card Incorporation certificate or any proof of business registration Bank account statement or a cancelled cheque Digital signature of the applicant Address proof, a photograph, and the identity of the directors and/or promoters Authorisation letter or a board resolution for the authorised signatory of the business entity How to apply for GSTIN? The easiest way to apply for a GSTIN online is: Step 1: Visit the GST portal. Step 2: Click on ‘New registration’. Enter details like the name, mobile number, and email ID. Step 3: Once the OTP verification is complete, you will get an Application Reference Number (ARN). Step 4: In Part B, one will require further documents like a photograph, bank details, an authorization form, proof of the business location, and the taxpayer’s constitution. Step 5: Enter all the details and upload the documents. Finally, apply via Aadhaar OTP or DSC. Advantages of GSTIN Having a GSTIN has some great perks, such as those listed below: The business can take credit for its purchases and input services. All e-commerce websites need the GSTIN for registration. Listing the business on such platforms will increase customer acquisition. GSTIN brings authenticity to the name of the business as a supplier of goods and services. The business will outdo small businesses as it can take credit for their purchases. The business entity can reach out to outside markets by engaging in the interstate supply of goods and services. It will come under the category of casual taxable persons. Nowadays, GST returns are mostly automatic and ensure businesses follow all orders of compliance. This results in high GST ratings. [B-02] The bottom line Visiting the official GST portal is necessary to stay tuned to any changes or announcements made by the government with respect to GST. So, now that everyone knows what GSTIN means, one should have no problem registering their entity under GST. If you need more help registering under GST, visit Piramal Finance. This online platform is what you need to learn everything about relevant developments in the world of finance. For more information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on their website!

08-11-2023

Tax

What is an Assessment Year: All You Need to Know About It

What Do You Mean by Assessment Year? The terms Assessment Year (AY) and Financial Year (FY) are commonly used. Taxpayers are quite familiar with them, and they are important for filing ITR returns. Financial planners and CAs carry out the task for their clients. Let us have a close look at what an assessment year is. After the financial year ends, people file their ITRs. This period is the assessment year. This is the period when your previous year’s income undergoes assessment. The time during which you earn money is the financial year. [B-01] What is the Difference Between AY and FY? In simple terms, the financial year is when salaried people earn money. The assessment year is when the same money undergoes evaluation for ITR. For example, the financial year starts on April 1, 2021, and ends on March 31, 2022. The money you earn during this time will undergo evaluation the following year. That is from April 1, 2022, to March 31, 2023. This is the assessment year. Why Is AY Essential for ITR? Income for every financial year undergoes evaluation in the assessment year. Therefore, ITR forms have AY. During the financial year, events can take place. For instance, job loss, new investments, and changes of jobs are possible. Besides, you cannot know the total income in a financial year before it ends. Therefore, the AY period begins only after the FY period ends. How to File ITR: Log In and Registration You can file your ITR online from the comfort of your home. The process is called E-filing. The best part of the process is that it is easy and quick. It helps save money, as you do not have to hire anyone to do it. We will look at how to file ITR. But first, let’s look at how to log in or register on the portal. Step 1: Here is the website you should visit. https://www.incometax.gov.in/iec/foportal Step 2: Log into your account if you already have one. If you do not have an account, first register yourself and then login. Step 3: Choose the ‘Taxpayer’ option. Put in your PAN card details. Select ‘Validate.’ Next, choose the ‘Continue’ option. Step 4: Enter name, gender, address, date of birth, and other such details. Step 5: Give your registered contact number along with your email ID. Step 6: Now that you are done filling out the form, choose the ‘Continue’ tab. Step 7: The registered mobile number will receive an OTP. Verify the details to continue. Step 8: Enter the correct OTP. Now, follow the steps to proceed with the registration. Step 9: A new window will open once you verify the OTP. If you need to change any details, now is the time. Make certain that you only provide accurate information. If you change any details, you will receive an OTP. This is to verify the changes. Step 10: Now, you need to set a password and a secure login message. Step 11: Once you are done, select ‘Register’. You will get a confirmation message. The message will specify that the registration was successful. Step-by-step Guide on How to File an ITR on the Portal In this section, we will look at the second step of the process. That is how to file ITR in the assessment year. Before going ahead with the process, understand the category you are in. Then, choose an ITR form. Meanwhile, let us look at the steps on how to file ITR below. Step 1: Visit the official website for tax e-filing. Select the ‘Login’ button. Step 2: Put in your username. Choose ‘Continue’. Finally, put in your password. Step 3: Now, you are logged into the official portal. Choose the e-file option. Select ‘File Income Tax Return.’ Step 4: Choose the assessment year for which you need to file an ITR. Select ‘Continue.’ Step 5: You can now choose whether to file your returns offline or online. Choose online mode because it is simple and quick. Step 6: Here, you will have three options. They are ‘Individual’, ‘HUF’, or ‘Others.’ Step 7: Select the ITR you wish to file it for. Choose from ITR-1, ITR-2, and ITR-4. Step 8: Now, you will get an option to select the reason for filing the returns. Choose the right option here. Step 9: Enter your bank account details. If the details are already present, validate them. Step 10: You will now be redirected to a new page. Look through all the details and confirm them. Step 11: Now, comes the final step. Verify the returns. Also, make sure to send a hard copy to the Income Tax Department. This verification is necessary. [B-02] ITR Filing: The Importance of ITR Filing The government requires every working individual with an annual income to file a tax return. This is done in the assessment year. You should calculate the tax and pay it before the deadline. A lack of payment will lead to penalties. Piramal Finance is an online platform that allows you to learn everything you need to know about relevant acts and developments in the world of finance. For more such information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on their website!

08-11-2023

Tax

A Comprehensive Guide for Section 194c in TDS

Everything You Need to Know About Section 194c in TDS Section 194c of the Income Tax Act, 1961, deals with the tax deducted at source (TDS) that must be deducted whenever payments are made to resident contractors or subcontractors. In other words, if you are paying a contractor for some work according to a contract, then deducting TDS is mandatory. The list of organizations that should deduct TDS includes: Trusts State government/central government Firms Companies Cooperative societies University Registered societies Local authorities [B-01] Who is a Contractor? A contractor is an individual who enters into a contract with a local authority or corporation to carry out work. Similarly, a subcontractor is someone who enters into a contract with the contractor. It can be used for: Manpower for all or part of the work Carrying out some or all of the contract work What is “Work” as Per Section 194c? Section 194c TDS defines “work” as the following: • Telecasting, broadcasting • Advertising • Catering • Carriage of passengers and goods in modes of transport (excluding railways) • Manufacturing products as per customer requirements Who is a Subcontractor? As per Section 194c, a subcontractor is an individual who falls into these categories: • Carries out a portion or entirety of work under an agreement. • Agrees upon the completion of any work. • Completes labor under a contract with conditions agreed upon with the agencies we have above. When Should Section 194c Be Deducted? The individual who makes the payment to the contractor or subcontractor should deduct TDS under the following circumstances: • At the time of payment (in cash) • Any mode of payment that is faster • during the time of crediting the payment to the account Rates of TDS as per Section 194c Credit or payments to the resident individual: If PAN is available, the TDS rate is 1%. If PAN is not available, the TDS rate is 20%. Credit or payment to a resident person other than an individual: If PAN is available, TDS is 2%. If PAN is not available, the TDS rate is 20%. Credit or payment to transporters: If PAN is available, TDS is nil. If PAN is not available, it is 20%. Conditions & Payments: Your Guide to Section 194c In this section, we will talk about the conditions for deductions. In addition, we will account for payments made to the subcontractor. • The subcontractor should be a resident following Section 6 of the Income Tax Act. • Payments are made to the subcontractor. • A resident contractor is the one who receives payment. They should not be HUF or individuals. • The consideration amount of the contract under which the payment is made should not be less than Rs. 30,000. • The contractor should credit or pay the amount. What are the Exceptions to Section 194c? In a single contract, the total amount paid to the contractor cannot be more than Rs. 30,000. The total amount credited to the contractor involves both employment and hiring. In this case, the contractor does not possess more than 10 goods from the year before. The contractor must provide the declaration along with the PAN to the deductor. The sum paid to the contractor is for carrying out tasks for personal use. The total payment made in the financial year does not exceed Rs. 1,00,000. Here are additional exceptions you must take note of. • If the government supplies raw materials for the project. • If the contractor is in an agreement to build a building or dam. • If the contractor offers labour to carry out the task. If the particular party offers to supply raw materials to the contractor, then there is no deduction. When Should You Deposit TDS Under Section 194c? As per Section 194c, the TDS should be deposited the same day the payment is made. This is if the payment is made by the government. But if the payment is done by someone else, this is what you should do. • If the payment is made in March, it should be deposited before April 30th. • If the payment is made in any other month, it should be deposited before the 7th of the following month. For example, if a company pays TDS for July, the TDS due date is the 7th of August. [B-02] The Bottom Line Now that you are aware of Section 194c TDS, filing returns will be simpler. Make certain you understand the terms and conditions. With this, you can also claim tax-related benefits. We hope you find this guide on Section 194c helpful. Visit Piramal Finance to learn more about filing returns and for deeper insights into finance-related topics. Piramal Finance is an online platform that allows you to learn everything you need to know about relevant developments in the world of finance. For more such information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on their website!

08-11-2023

Tax

Everything You Need to Know About the 80EEA Deduction

Have you or your friend bought a house between April 1, 2019, and March 31, 2022? If yes, then keep reading; this article is going to help you a lot. Do you know that you can avail yourself of an additional deduction as a tax benefit under Article 80EEA? Everything you need to know about the 80EEA deduction is explained clearly and simply in this article. [B-01] What is 80EEA Deduction? 80EEA was added to the Income Tax Act of 1961 in 2019. This section offers relaxation in the income tax for first-time homebuyers in India. This means that the house buyer should not own any other property in their name. If you buy a house under “affordable housing,” then you can claim an additional deduction under this section. You also need to note that this 80EEA deduction is available only if you buy the house through a home loan. What is affordable housing? Affordable housing has a different meaning under the different provisions of different acts. Under section 80EEA of the Income Tax Act, affordable housing means that the value of the house property should not exceed Rs. 45 lakhs. The carpet area of the house should not be above 60 square meters in metropolitan areas. Whereas, the carpet area should not be over 90 square metres in other cities. History of 80EEA Deduction The central government launched a flagship program in 2014, Housing for All by 2022. It aimed to provide affordable housing for all. Under this program, the center launched a scheme named Pradhan Mantri Awas Yojana to incentivize the purchase of houses by giving subsidies. To give a boost to this program, in 2019, a new section, i.e., 80EEA, was added to the Income Tax Act to offer an additional tax deduction. Amount available under Section 80EEA The amount that is available under the 80EEA deduction is Rs. 150,000 or the interest payable on the home loan, whichever is lower. This deduction is available along with the one available to all homebuyers under Section 24(b) of the Income Tax Act. The deduction amount available under section 24(b) is up to 2 lakhs. Thus, the maximum amount you can claim for the purchase of your house is Rs. 350,000. Also, this 80EEA deduction is not a one-time deduction. It is available as long as you pay the interest on your home loan. You can avail yourself of it once a year. Eligibility for 80EEA Deduction Since the government did not extend the 80EEA scheme, this deduction is no longer valid after March 2022. If you buy a house after March 31, 2022, you are not eligible for this deduction. However, you can claim the regular deduction under Section 24(b). The metropolitan cities as mentioned under article 80EEA are Mumbai, Kolkata, Hyderabad, Delhi NCR (Faridabad, Gurgaon, Ghaziabad, Greater Noida, Noida, Delhi), Chennai, and Bengaluru. Moreover, the deduction is available even if the house is bought under joint ownership. The joint owners can avail of the deduction. You will be eligible for the 80EEA Deduction if you meet the following conditions: You have bought your first house and have no other residential property under your name. You are an individual assessee. This is because the deduction is not available for HUF, BOI, partnership firms, etc. You get the loan from a financial institution like a bank, etc. The sanction date of the loan was between April 1, 2019, and March 31, 2022. The stamp duty of the house is under Rs. 45 lakhs. You are not eligible for a deduction under Section 80EE. How section 80EEA and section 24 are different? Though both sections offer tax benefits for buying a house, there are many differences that you need to know. The differences between both sections are as follows. Under section 80EEA, the deduction is available only if the loan is obtained from financial institutions like banks, housing companies, etc. On the other hand, under Section 24, even if a loan is taken from friends or family, you can still claim the deduction. The next difference is in terms of the maximum amount of deduction under both sections. Under the 80EEA Deduction, the maximum is Rs. 150,000, while under Section 24, it is Rs. 2 lakhs. Another difference between sections 80EEA and 24 is about the possession of the property. You can take advantage of the 80EEA deduction as soon as you start paying the interest. This means that you do not have to claim possession first. For the deduction under Section 24, possession of the property is required. What is Section 80EE of the Income Tax Act? Section 80EE is also for first-time home buyers, but the deduction and some conditions are different. It is available for a maximum of Rs. 50,000 in deductions. The value of the house should not increase by more than Rs. 35 lakhs.Also, the loan sanction date should be between April 1, 2016, and March 31, 2017. [B-02] Conclusion When it comes to buying a house, you should do extensive research about home loans offered by banks and the deductions available, etc. Buying a house is the lifetime dream of many. You must not miss any opportunities to get the best deal. We hope this article helps you understand all the information about Section 80EEA. Piramal Finance is an online platform that allows you to learn everything you need to know about relevant acts and developments in the world of finance. For more such articles or information about personal loans, credit cards, and financial management, check out more blogs on their website!

08-11-2023