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Business Loan

Business Loan for Bharat

Business Loan ke liye kuch kaagaz hi kam hai?Aaiye, baat karte hain. What is the Neeyat Initiative? At Piramal Finance, we are committed to helping the entrepreneurs of Bharat achieve their dreams. With our #PeopleNotJustPapers initiative, we make business loans easier to access, especially for those who need them the most. We believe every business owner, no matter their background, should have the opportunity to grow. By offering simpler and faster access to business loans, we’re helping small businesses across the country reach their goals, expand, and contribute to the nation’s growth. We celebrate the hard work and spirit of Bharat's entrepreneurs and are proud to support their journey. Let’s explore new financial opportunities and build a brighter future together. Join us as we grow with Bharat's businesses!

04-10-2024

Home Loan

Home Loan for Bharat

Home Loan ke liye kuch kaagaz hi kam hai?Aaiye, Baat Karte Hain. What is the Neeyat Initiative? At Piramal Finance, we’re deeply committed to supporting the dreams and ambitions of Bharat. Our #PeopleNotJustPapers initiative is designed to make formal credit more accessible to those who need it the most, ensuring that even underserved communities have the opportunity to take charge of their financial journey. We believe that financial inclusion should be within everyone’s reach, regardless of background or circumstances. By simplifying access to credit, we’re empowering individuals across the country to achieve their goals, build a better future, and contribute to the growth of our nation. As we work hand-in-hand with the people of Bharat, we celebrate their resilience, determination, and the endless possibilities that lie ahead. Let’s come together to explore new financial horizons and build a brighter future for all. Join us in celebrating the spirit of Bharat as we grow and prosper together!

04-10-2024

Tax

Understanding Goods and Services Tax (GST) on Bikes in India

The Indian two-wheeler industry, a vital cog in the nation's transportation network, has undergone a significant shift with the implementation of the Goods and Services Tax (GST). This streamlined tax system impacts both new and used bike purchases, with rates varying based on engine capacity and fuel type. Understanding GST intricacies empowers you to make informed decisions as a buyer or a business owner in this dynamic market. GST Rates for Bikes The current GST structure for bikes in India (as of May 20, 2024) categorizes them based on engine capacity and fuel type. Let’s break it down to make it easier: Two-Wheeler Insurance: A flat 18% GST applies to two-wheeler insurance premiums, regardless of the bike's engine size or fuel type. Non-Electric Bikes: Engine capacity plays a crucial role in determining the GST rate for conventional, fuel-powered bikes. Those with an engine displacement below 350cc attract a base GST rate of 28%. However, for bikes exceeding 350cc, an additional 3% cess is levied on top of the 28% base rate, resulting in a total GST of 31%. Electric Bikes: Recognizing the environmental benefits of electric vehicles (EVs), the government offers a significant incentive. Electric bikes, irrespective of their engine capacity, enjoy a considerably lower GST rate of just 5%. This translates to a more attractive price point for both manufacturers and consumers, fostering a shift towards eco-friendly transportation. The Impact of GST on the Two-Wheeler Market The initial implementation of GST, particularly for non-electric bikes, presented a challenge for the two-wheeler industry. The higher tax rates compared to the pre-GST regime led to a decline in sales and impacted manufacturer profits. Consumers, especially budget-conscious buyers, found the overall cost of ownership to be higher due to the additional tax burden. However, the government's push for electric vehicles is reflected in the significantly lower GST rate for electric bikes. This has led to a surge in the adoption of electric two-wheelers, particularly in urban areas. The lower cost of entry and the promise of lower running costs are making electric bikes a compelling alternative for many consumers. Potential Changes and Opportunities Recognizing the potential for growth in the two-wheeler industry, the government is considering lowering the GST rate for non-electric bikes. This move, if implemented, would be a positive step for both consumers and manufacturers. Consumers would benefit from potentially lower bike prices, making them more accessible. This, in turn, would likely lead to increased sales and a revitalized two-wheeler market. Manufacturers would gain from a potential GST reduction through increased production volumes. The lower tax burden would allow them to invest in research and development, potentially leading to more innovative and fuel-efficient bikes. Additionally, a thriving two-wheeler market could attract further investment, boosting the overall economy. GST and Business Purchases If you're a business owner involved in the buying and selling of bikes, understanding GST becomes even more crucial. As a registered taxpayer, you can apply for a GST number to claim input tax credit (ITC) on bike purchases. This helps to offset the GST you pay on your sales. Furthermore, you can update your two-wheeler insurance policy with your GST number by contacting your insurer's customer service. This ensures proper documentation and facilitates claiming any applicable tax benefits. Making Informed Choices Understanding GST empowers you to make informed decisions in the Indian two-wheeler market. Whether you're a consumer looking for a new bike or a business owner navigating the complexities of purchase and sales, familiarizing yourself with the current structure and potential changes in GST rates is essential.

27-09-2024

Tax

Understanding GSTR 9A: Annual Return for Composition Taxpayers under GST

The GSTR 9A is an annual filing that consolidates details from quarterly returns (GSTR-4) submitted by composition taxpayers during a specific financial year. It captures information on inward and outward supplies, tax liabilities under various heads (IGST, CGST, SGST), and any adjustments made due to scheme switching. Who Needs to File GSTR 9A? The responsibility of filing GSTR 9A falls solely on composition taxpayers. Here are some key points to determine your eligibility: Composition Scheme Registration: Your business must be registered under the Composition Scheme of GST. Turnover Limit: Your business's annual turnover must be below the prescribed limit. This limit is generally Rs. 75 lakhs, with a concession of Rs. 50 lakhs for businesses located in North-Eastern states. GSTR-4 Filing: You must have successfully filed all GSTR-4 returns for the relevant financial year. Transaction Records: Maintaining accurate records of all business transactions throughout each quarter is essential. Exemptions from Filing GSTR 9A Casual Taxable Persons: Businesses making occasional taxable supplies are not obligated to file GSTR 9A. Non-Resident Taxable Persons: Entities without a permanent establishment in India are exempt from filing this return. TDS Payers: Businesses paying Tax Deducted at Source (TDS) under Section 51 of the CGST Act are not required to file GSTR 9A. TCS Operators: E-commerce operators collecting Tax Collected at Source (TCS) under Section 51 are exempt from filing. Input Service Distributors: These businesses are not required to file GSTR 9A. Understanding the GSTR 9A Format Part I: Basic Information: This section contains pre-filled details such as your GST Identification Number (GSTIN), legal name, and trade name. Part II: Supply Details: This part summarizes inward and outward supplies declared in your GSTR-4 returns for the financial year. Part III: Tax Liability: This section showcases the total tax amount you've paid under various heads like CGST, SGST, IGST, and any applicable penalty charges. Part IV: Previous Year Transactions: This part reflects details of transactions undertaken in the previous financial year, already declared in your GSTR-4 returns filed between April and September of the current year. It also includes any adjustments made to entries from the previous year. Part V: Sales, Refunds, and ITC Adjustments: This section provides a breakdown of your sales, refunds received, tax paid, and any balance payable. It also captures adjustments made to Input Tax Credit (ITC) if you switch from the composition scheme to a regular scheme. How to File GSTR 9A Online? The deadline for filing GSTR 9A is December 31st of the financial year following the one for which the return is being filed. Currently, there's no offline option for filing this return. Visit the Goods and Service Tax Council's official website. Log in to the GST portal using your credentials. Navigate to "Services," then "Returns," and select "Annual Returns." Choose the relevant financial year for which you want to file the return. Answer the provided questionnaire and indicate if you wish to file a NIL return (no transactions during the year). If not filing NIL, enter details in designated sections, including inward/outward supplies, turnover, tax paid, transactions from the previous year, differential tax (if applicable), and information on demands, refunds, credit availed/reversed. Preview the draft return in PDF or Excel format. Calculate any late fees (if applicable) and proceed to make the payment using available online payment methods. After payment (if any), re-preview the return to ensure late fees are reflected accurately. Select the declaration checkbox and choose an authorized signatory to electronically sign and submit the GSTR 9A.

27-09-2024

Tax

Understanding Perquisites and Tax Implications

Perquisites, often referred to as "perks," are benefits offered by employers on top of an employee's regular salary. These perks come in many forms, from a company car to free meals or a gym membership. While some perks are a welcome addition to an employee's compensation package, it's important to understand how they are taxed. Taxable vs. Tax-Free Perquisites Not all perks are created equal when it comes to taxes. Here's a breakdown of how perquisites are categorized for tax purposes: Taxable Perquisites: These perks are added to an employee's taxable income and taxed at their regular income tax rate. Common examples include rent-free accommodation (except in certain cases), club memberships, domestic help provided by the employer, and reimbursements for certain expenses beyond medical treatment. The tax paid on these perks is typically the responsibility of the employer. Tax-Free Perquisites: Fortunately, some perks are exempt from taxation. These perks don't get added to an employee's taxable income. Examples include medical and recreational facilities provided by the employer, a laptop or computer for work purposes, refreshments during office hours, and interest-free salary loans up to a certain amount. Additionally, the use of facilities like sports clubs, health clubs, and telephone lines for business purposes often fall under tax-free perks. Perquisites Taxed by Employees: In some cases, the employer provides a perk but the employee is responsible for paying the taxes on it. This might apply to company cars or educational opportunities for the employee's children. The employer typically calculates the tax value of the perk and withholds it from the employee's salary. How are Taxes on Perquisites Calculated? The tax on taxable perquisites is generally calculated as a percentage of the perk's value. The exact rate depends on the specific perk and the employee's income tax bracket. However, employers often calculate an average tax rate based on the employee's salary and the value of the perks provided. This average rate is then used to determine the amount of tax to withhold from the employee's salary. Perquisite Tax Calculation Example Let's consider an employee who earns a salary of Rs. 800,000 annually and receives Rs. 90,000 in non-monetary perks from their employer. These perks might include educational benefits or health club membership. Following the Income Tax Act, the employer would calculate the perquisite tax as follows: Salary: Rs. 800,000 Tax on Salary (including cess): Rs. 75,400 (assuming a 4% rate) Average Tax Rate: (Rs. 75,400 / Rs. 800,000) x 100 = 9.4% Tax on Perks (Rs. 90,000 x 9.4%): Rs. 8,316 In this scenario, the employer would withhold Rs. 693 per month (Rs. 8,316 / 12) as tax on the employee's perks. Understanding Tax-Exempt Perquisites Perquisites for Overseas Services: If an Indian citizen is employed outside of India, certain perks related to their work abroad may be exempt under Section 10(7) of the Income Tax Act. Rent-Free Accommodation for Officials: In specific cases, rent-free housing provided to certain officials, such as judges or government ministers, may be exempt from tax. Medical Treatment Loans: Interest-free or concessional loans provided for medical treatment of specific diseases (as per Rule 3A) or petty loans not exceeding Rs. 200,000 are generally tax-exempt. Telephone or Mobile Phone Expenses: Employers can cover the cost of phone bills for business purposes without incurring tax implications for the employee. Conclusion Perquisites can be a valuable part of an employee's compensation package. However, it's crucial to understand how these perks are taxed. By being aware of the tax implications of different perks, both employers and employees can make informed decisions and avoid any unexpected tax burdens.

27-09-2024

Tax

Understanding GSTR 9: Annual Return for GST Registrants

GSTR 9 is an annual return mandated by the GST regime. It encapsulates a year's worth of a taxpayer's inward and outward supplies, the tax paid on those supplies, the input tax credit (ITC) availed, and refund claims (if any). It also provides insights into the taxpayer's annual turnover and, for certain cases, audit details. Who Needs to File GSTR 9? Not all GST registrants are required to file GSTR 9. Here's a breakdown of who falls under the ambit of GSTR 9 filing: Regular Taxpayers: Businesses registered under the GST regime as regular taxpayers must file GSTR 9, provided they have filed GSTR 1 (sales return) and GSTR 3B (summary return) for the relevant financial year. SEZ Units and Developers: Special Economic Zone (SEZ) units and developers operating under GST also need to file GSTR 9. Composition Taxpayers Who Migrated Out: Taxpayers who opted out of the composition scheme during the financial year and transitioned to the regular taxpayer category must file GSTR 9. Understanding the Components of GSTR 9 Casual taxpayers, non-resident taxpayers, and Input Service Distributors (ISDs) don't need to file. A comprehensive form structured into six parts: Part 1: Basic Details - This section gathers basic information like the taxpayer's GST Identification Number (GSTIN), financial year, and legal/trade name. Part 2: Outward Supplies - This part details all outward supplies made during the year, including those exempt from tax, along with the tax paid on them. Part 3: Input Tax Credit (ITC) - This section is further divided into three subsections: Details of ITC claimed and reflected in returns filed for the year (typically obtained from GSTR 3B) Information on ineligible and reversed ITC claimed in returns for the year Auto-populated ITC details Part 4: Tax Paid - This part captures the total tax paid during the financial year. Part 5: Amendments - Taxpayers can use this section to report any amendments made to supply details in tax returns filed between April and September of the current year or the previous year's annual return (whichever is applicable). Part 6: Other Information - This part gathers details like tax demands, refunds, supplies received from deemed suppliers and composition taxpayers, goods sent on approval basis, an HSN summary of both inward and outward supplies, and any applicable late fees. How to File GSTR 9 Online The process of filing GSTR 9 is primarily online through the GST portal. Here's a simplified breakdown of the steps involved: Login: Access the GST portal using your credentials. Navigate to Returns Section: Go to "Services" and then "Returns." Select Annual Return: Click on "Annual Return." Choose Financial Year: Select the relevant financial year for which you want to file GSTR 9. Prepare Online: After clicking "Search," review the "Important Message" and select "Prepare Online." Choose Filing Option: Select "Yes" to file a nil return (if applicable) or "No" to proceed with a regular return. Fill in Details: Click on each displayed section and fill in the required information. Preview and Compute: Utilize the "Preview" button to view a summary of your GSTR 9 in Excel or PDF format. Select "Compute Liabilities" to calculate any late fees. Payment (if applicable): If there's any tax liability after calculating late fees, you can proceed with payment. The system will auto-generate a challan for the amount payable. Choose your preferred payment mode for the challan. Review and File: Download a draft of your GSTR 9 for review. Verify the declaration box and authorized signatory details.

27-09-2024

Tax

Understanding Corporate Tax in India

Corporate tax is a levy imposed by the Indian government on the profits earned by businesses. It's a significant source of income for the government, used to fund public services and infrastructure development. In India, both domestic companies (registered under the Companies Act) and foreign companies with a presence in India pay corporate tax. What is Taxed as Corporate Income? Business Profits: This is the core element, representing the net income after subtracting expenses from total revenue. Rental Income: If a company rents out a property, the rental income is classified as business income and subject to corporate tax. Capital Gains: When a company sells an asset for a profit compared to its purchase price, the capital gain is taxed. Income from Other Sources: Any other income not explicitly taxed under other heads, such as dividends or interest earned, is included in this category. Corporate Tax Rates in India Domestic Companies: Standard Rate: Currently, domestic companies pay a base corporate tax rate of 30%. Concessional Rate: Introduced in 2019, Section 115BAA offers an option for domestic companies to pay a lower tax rate of 25.168%. This includes a base rate of 22%, a surcharge of 10%, and a health and education cess of 4%. Surcharge: An additional tax levied on top of the base rate. The surcharge applicable depends on the company's net taxable income. Companies with a net income between Rs. 1 crore and Rs. 10 crores pay a 7% surcharge, while those exceeding Rs. 10 crores pay a 12% surcharge. Foreign Companies: Royalties and Fees: Foreign companies are taxed at a rate of 50% on royalties or fees received for technical services provided before April 1, 1976, under government-approved agreements. Other Income: For all other income earned in India, foreign companies pay a corporate tax rate of 40%. Surcharge: Similar to domestic companies, foreign companies are also subject to a surcharge on their net taxable income. Companies with a net income between Rs. 1 crore and Rs. 10 crores pay a 2% surcharge, while those exceeding Rs. 10 crores pay a 5% surcharge. Additional Charges Health and Education Cess: A 4% cess is levied on the sum of income tax and surcharge, applicable to all companies regardless of their income level. Minimum Alternate Tax (MAT): This is an alternative minimum tax levied to ensure companies with low profits or availing significant deductions still pay a minimum level of corporate tax. However, companies opting for the concessional tax rate under Section 115BAA are exempt from MAT. Tax Planning for Businesses Understanding Exemptions and Deductions: The Indian tax code offers various exemptions and deductions that can reduce taxable income. Businesses should stay updated on these provisions and utilize them effectively. Proper Expense Management: Categorizing expenses accurately under the appropriate heads in financial accounts can optimize tax benefits. Capitalization and Depreciation: Capitalizing assets and claiming depreciation deductions on their value over time can lower taxable income. Optimizing Investments: Selecting tax-advantageous investments can offer additional benefits. Tax Rebates and Incentives Dividend Deduction: Under certain conditions, domestic companies can deduct dividends received from other domestic companies. Special Provisions for Venture Capital: The tax code offers special benefits for venture capital funds and enterprises. Export and Startup Incentives: Deductions are available in specific situations for companies engaged in exports or newly established businesses. Infrastructure and Renewable Energy Incentives: Tax benefits are offered for investments in new infrastructure and renewable energy sources. Carry Forward of Business Losses: Companies can carry forward business losses for up to eight years and offset them against future profits.

27-09-2024

Tax

Understanding GST Invoices in India

A GST invoice, also known as a tax invoice, is a crucial document in the Goods and Services Tax (GST) regime of India. It serves as a formal record of a transaction between a seller (supplier) and a buyer (recipient) for the supply of goods or services. This invoice not only details the items or services provided but also breaks down the applicable GST taxes. What Information Must a GST Invoice Include? Supplier Information: GST Identification Number (GSTIN) of the supplier issuing the invoice Supplier's legal name and address Recipient Information (if registered): GSTIN of the recipient (if registered) Recipient's legal name and address Invoice Details: Unique invoice serial number (not exceeding 16 digits) Date of invoice issuance Product/Service Details: Clear description of each item or service provided HS Code (Harmonized System Code) for goods or SAC (Services Accounting Code) for services Quantity of goods or extent of services rendered Unit price of each item Total value of the supply before any discounts Discount offered, if applicable Tax Details: Taxable value (price after discount) Applicable GST rate (CGST, SGST, or IGST) Calculated CGST amount Calculated SGST amount (applicable for intra-state supplies) or IGST amount (applicable for inter-state supplies) When to Issue a GST Invoice? For Goods (Normal Supply): The invoice must be generated on or before the date the goods are removed from the supplier's location. This removal can occur when the goods are dispatched for delivery or collected by the recipient or their representative. For Goods (Continuous Supply): In cases where the supplier has an ongoing business relationship with the recipient, the invoice can be issued on or before the generation of the account statement or receipt of payment. For Services: The invoice for services rendered must be issued within 30 days of completing the service. For Banking and NBFC Services: Unlike other services, banks and non-banking financial institutions (NBFCs) have a deadline of 45 days from the date of service supply to issue the GST invoice. Types Bill of Supply: This document resembles a GST invoice but excludes any tax amount. It's used when the supplier cannot charge GST to the buyer, such as in exempt supplies or transactions between related parties. Aggregate Invoice: When the total value of multiple supplies made to an unregistered recipient in a single day is less than Rs. 200, the supplier can issue a single aggregate invoice instead of individual invoices. Benefits Transparency and Accuracy: A GST invoice provides a clear and detailed breakdown of the transaction, including the product or service description, quantity, price, and applicable tax components. This transparency minimizes errors and ensures both parties are aware of the exact tax liability. Input Tax Credit (ITC) Claim: Registered businesses receiving a GST invoice can claim Input Tax Credit (ITC) on the GST paid. This credit can be utilized to offset their own GST liability on future outward supplies. Proper GST invoices are essential for claiming ITC efficiently. Compliance and Record-keeping: GST invoices serve as crucial documents for both suppliers and recipients when it comes to adhering to GST regulations. They simplify tax filing procedures and record-keeping for audits or assessments by tax authorities. Streamlined Business Operations: Standardized GST invoice formats facilitate seamless data exchange between businesses and with tax authorities. This reduces manual work and potential errors associated with data entry. Improved Cash Flow: Faster processing of ITC claims enabled by proper GST invoices can improve a business's cash flow by reducing the amount of tax initially paid upfront.

27-09-2024

Tax

Providing Tax Benefits for Senior Citizens in India via Section 80TTB

Section 80TTB of the Indian Income Tax Act, introduced in the 2018 budget, provides a valuable tax deduction for senior citizens. This section helps reduce their tax burden by allowing them to claim deductions on interest income earned from various deposits. Eligibility for Section 80TTB Deduction Only resident senior citizens in India, aged 60 years or more at any time during a financial year, can benefit from this section. This benefit applies to interest earned on deposits held with banks, cooperative societies involved in banking activities, and post offices. These deposits can include savings accounts, fixed deposits (FDs), and recurring deposits (RDs). Maximum Deduction Amount Section 80TTB offers a maximum deduction of Rs. 50,000 on interest income earned in a financial year. This deduction is calculated as the lower of: The total interest earned on eligible deposits. Rs. 50,000. For instance, if a senior citizen earns Rs. 30,000 in interest income, the entire amount can be deducted under Section 80TTB. However, if the interest income exceeds Rs. 50,000, the maximum deduction of Rs. 50,000 applies. Documents Required to Claim Deduction To claim the deduction under Section 80TTB, senior citizens should have the following documents readily available: Bank statements, including passbooks and account statements. Permanent Account Number (PAN card). Form 16 (if applicable). Who’s Not Eligible for Section 80TTB Deduction? Non-resident Indians (NRIs) can’t use this deduction. Senior citizens who opt for the new tax regime introduced under Section 115BAC of the Income Tax Act are not eligible for Section 80TTB deductions starting from the financial year 2022-23. Interest income earned on deposits held by entities other than senior citizens, such as firms, associations of individuals, or Hindu Undivided Families (HUFs), is not covered under Section 80TTB. This deduction does not apply to interest earned on company fixed deposits, National Company Deposits (NCDs), or bonds. Claiming Deduction under Section 80TTB Eligible senior citizens can claim the deduction under Section 80TTB while filing their income tax returns. Here's a general process: Include all interest income earned from various deposit accounts in your total income for the financial year. While filing your income tax return online, disclose your interest earnings under the "Income from Other Sources" section. Subsequently, claim the applicable deduction under Section 80TTB of the Income Tax Act. Benefits of Section 80TTB for Senior Citizens Compared to regular taxpayers, senior citizens already enjoy a higher basic exemption limit for income tax purposes. Section 80TTB provides an additional layer of tax savings, allowing them to keep more of their hard-earned interest income. Example: Tax Savings Illustration Consider Mr. Ravi, a senior citizen who earns interest income from the following sources: Savings account interest: Rs. 5,000 Fixed deposit interest: Rs. 200,000 Income from other sources: Rs. 150,000 Let's compare Mr. Ravi's tax liability with and without the benefit of Section 80TTB: Particulars Senior Citizen (Rs.) Regular Taxpayer (Rs.) Interest on savings 5,000 5,000 Interest on fixed deposit 200,000 200,000 Income from other sources 150,000 150,000 Total income 355,000 355,000 Deduction under Section 80TTA (not applicable for senior citizens) - 10,000 Deduction under Section 80TTB 50,000 - Taxable income 305,000 345,000 Tax before rebate under Section 87A 2,500 4,500 Rebate available under Section 87A 2,500 2,500 Considerations The deduction applies only to the interest income earned, not the principal amount deposited. It's crucial to maintain proper records of your bank statements and interest income certificates for tax filing purposes. Consulting a tax advisor can be beneficial to ensure you're maximizing your deductions and claiming all applicable benefits under Section 80TTB.

27-09-2024