COMPANY LAW SETTLEMENT SCHEME 2014, Your last stand

 As per the circular issued by Ministry of Corporate Affairs (MCA) i.e. “General Circular No. 34/2014” dated August 12, 2014 have announced its new scheme called “COMPANY LAW SETTLEMENT SCHEME 2014”.

 

It covers all the companies who have failed to file their annual reports, financial statements and related documents due on or before June 30, 2014 can file these documents before October 15, 2014.

 

Click here to check your name in defaulter list 

Highlights of the Scheme:

1.    Scheme is valid from 15th August 2014 to 15th October 2014

2.    Only 25% of the additional fees is payable.

3.    Scheme applicable for forms 23AC, 23ACA, 23AC-XBRL, 23ACA- XBRL, 20B, 66, 23B, 21A

4.    Immunity from prosecution.

5.    Directors will not be disqualified u/s 164(2) of the companies act.

6.    Company can have simultaneous benefit of either going for  "Dormant" status or go for striking off. Both at 25% of actual fees.

 

Click here to view the circular. 

Below mentioned are the consequences which arise if you did not file your ROC annual returns, the consequences are as follows:

Consequences of Non-Compliances

Penal and Prosecution

Section 92 read with 137 of the Companies Act 2013 provides for penalty at Rs  1000 per day extending up to Rs  10 Lacs and also Imprisonment of directors up-to a term of 6 months.

 

Disqualification of Directors

Also Section 164(2) provides for Disqualification of Director if the company has not filed annual returns for 3 or more consecutive years. The disqualification which was earlier only restricted to public companies is now also extended to Private limited Companies.

We would request you to kindly avail the benefit of this scheme at the earliest to avoid any show cause notice from Ministry of Corporate Affairs (MCA).3

This is an opportunity to ratify the defaults in ROC Annual fillings. 

CA Anand Mutha

anandmutha@armutha.in 

इन्शुरन्स मध्ये गुंतवणूक खरच फायदेमंद असते का?

इन्शुरन्स मध्ये गुंतवणूक खरच फायदेमंद असते का?

बचत करणे हा माणसाचा स्वभाव आहे. भारतीय बचतीसाठी विशेषकरून ओळखले जातात.  परंतु या बचत केलेल्या रकमेची योग्य प्रकारे गुंतवणूक करणे  जास्त महत्वाचे आहे.  
माणसाचे आयुष्य ही एक अनिश्‍चित अशी गोष्ट असल्याने आपल्या प्रियजनांना आर्थिक सुरक्षितता मिळावी या हेतूने विमा उतरविला जातो. अनेकदा विमा योजनांमधले खाचखळगे न तपासले जात नाहीत. विम्याच्या गुंतवणूकीकडे डोळसपणाने बघण्याची गरज आहे.
आयुष्याच्या विम्याबद्दल - कालच्यापेक्षा आज असलेली सजगता काकणभर अधिक असली, तरी आयुर्विमा उतरवताना आपण अनेक घोडचुका करत असतो. त्या कदाचित आपल्यालाही नकळत घडत असल्या, तरी त्यांचा परिणाम दीर्घकालीन आणि थेट तुमच्या प्रियजनांच्या राहणीमानाशी खेळ करणारा असू शकतो.

विमा पॉलिसी दोन प्रकारच्या असतात. एक - गुंतवणूक आणि विमा यांचे मिश्रण असलेली पॉलिसी. दोन : शुद्ध विम्याचे संरक्षण देणारी टर्म पॉलिसी. आपण विम्याला अजूनही गुंतवणुकीचे साधन मानण्याची घोडचूक करतो. विमा हा गुंतवणूकांहून खूप वेगळा आणि त्याहूनही अत्यंत महत्त्वाचा असा प्रांत आहे. आपण बव्हंशी वेळा "सर्व्हायव्हल बेनिफिट (जर पॉलिसीधारकाचा पॉलिसीच्या मुदतकाळात मृत्यू झाला नाही, तर त्याला मुदतपूर्तीच्या वेळी मिळणारी रक्कम)' देणाऱ्या विमा योजनेत गुंततो. अशा विम्याच्या योजनांमध्ये गुंतवणूक आणि विमा यांचे घातक मिश्रण असते. यामुळे तुमचा विम्याचा हप्ता प्रचंड रकमेचा आणि त्या मानाने विमा संरक्षण मात्र किरकोळ रकमेचे, अशी स्थिती निर्माण होते. आयुर्विम्याला विम्याच्याच चष्म्यातून पाहायला हवे, हे आपण विसरतो; आणि एका मोठ्या तोट्याच्या व्यवहारात उडी घेतो. आयुर्विमा द्यायचा, तर तो "टर्म' स्वरूपाचाच असला पाहिजे. आपण आपल्या गाडीचा विमा उतरवतो आणि विमा-काळात काही विपरीत घडले नाही, तर विम्याची रक्कम परत मिळत नाही. याच तत्त्वावर माणसाच्या आयुष्याला विमा संरक्षण देणाऱ्या "टर्म इन्शुरन्स' या विम्याच्या प्रॉडक्‍टची मांडणी आहे. हा शुद्ध आणि निखळ स्वरूपाचा विमा असल्याने, टर्म इन्शुरन्समध्ये हप्ता कमी रकमेचा आणि त्या मानाने विमा संरक्षण भरभक्कम रकमेचे असते. उदाहरणार्थ : 25 वर्षे वयाच्या व्यक्तीचा 35 वर्षांच्या कालावधीचा एक कोटी रुपयांचा टर्म इन्शुरन्स उतरवला, तर त्याला वर्षाला केवळ 19000  ते 25000 रुपये हप्ता बसतो. हेच जर त्याने "एंडोवमेंट' प्रकारचा (म्हणजे सरव्हायवल बेनिफिट असलेला) प्रचंड वार्षिक हफ्ता असलेला  इन्शुरन्स काढला तर वार्षिक हफ्ता साधारण 3 ते 4 लाख येऊ शकतो. तसेच टर्म इन्शुरन्स व्यतिरिक्त दुसर्‍या विमा योजना कितीही फायदेमंद वाटत असल्या तरी माझ्या पाहण्यात कुठलीच योजना वाषिर्क 3.5% पेक्षा जास्त परतावा देत नाही.  तात्पर्य  टर्म इन्शुरन्स उतरवून आपल्या आयुष्यातील आयुर्विमा हे प्रकरण हाताळणे आणि उर्वरित रक्कम शुद्ध गुंतवणूक योजनेत गुंतवून जास्तीत जास्त नफा मिळवणे, असे आपले धोरण असायला हवे.

सी.ऐ. आनंद मुथा
anandmutha@armutha.in

कर वाचविण्यासाठी हिंदू अविभक्त कुटुंब

प्रत्येक व्यक्तीला  त्याच्या टॅक्स वाचविण्यामध्ये  स्वारस्य आहे. इन्कम टॅक्स कायद्याच्या  विविध तरतुदींच्या फायदा घेऊन कर बचत शक्य आहे.

अनेक करदाते  इन्कम टॅक्स वाचविण्यासाठी बेकायदेशीर मार्गाचा अवलंब करतांना आढळतात. तथापि, इन्कम टॅक्स बचत कायदेशीर मार्गाने शक्य आहे.

इन्कम टॅक्स बचतीच्या अशा अनेक मार्गांमध्ये एक महत्वाचा मार्ग आहे हिंदू अविभक्त कुटुंब (Hindu Undivided Family/ HUF). इथे  याची नोंद करावी कि हिंदू अविभक्त कुटुंब हि इन्कम टॅक्स कायद्याच्या दृष्टीने संपूर्णतः वेगळी व्यक्ती आहे. समजा तुमच्या कुटुंबात पती आणि पत्नी आणि दोन सज्ञान किंवा अज्ञान मुले असतील तर ज्या प्रमाणे त्या प्रत्येकाचे वेगळे PAN असेल त्याचप्रमाणे तुमच्या हिंदू अविभक्त कुटुंबाचे सुद्धा वेगळे PAN काढावे लागेल.

बर्याच वेळेस कलम 80 सी ने दिलेल्या वजावाटीचा पूर्णतः उपयोग केला जातो. अशावेळी हिंदू अविभक्त कुटुंब  80 सी चा लाभ घेण्यासाठी एक अनोखा आणि नवीन पर्याय उपलब्ध करून देतो.  हिंदू अविभक्त कुटुंबाला स्वताचे स्वतंत्र अस्तित्व असल्याने इन्कम टॅक्स कायद्याच्या इतर तरतुदी सुद्धा लागू पडतात. या तरतुदी त्याला एका व्यक्ती ला असल्याप्रमाणे लागू पडत असल्याने हिंदू अविभक्त कुटुंबाला  ०%, १०%, २०% आणि ३०% या प्रमाणे कर लागू होतो. म्हणजेच तुम्ही जर कर ३०% दराने भरत असाल तर तुम्ही हिंदू अविभक्त कुटुंबाचा  उपयोग करून कायदेशीर रित्या मुबलक कर वाचवू शकता.

CA Anand Mutha
anandmutha@armutha.in

Limited liability partnership Vs Private Limited Company

Limited Liability Partnership Vs Private limited Company

Limited Liability Partnership (LLP) is a corporate business vehicle that provides both the benefits of a company and flexibility of a partnership firm i.e. limited liability and allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement.

Considering the compliances required to be made by the Private Limited Companies as laid down in The companies Act, 2013, the LLP form of organization is now a very convenient form for starting of any business.

Benefits of LLP over limited company:

1.   No limit on owners of business

LLP requires minimum 2 partners. There is no limit on maximum partners unlike a private limited company wherein there is a restriction of not having more than 200 members.

2.   No requirement of minimum contribution

       As against company there is no minimum capital requirement in LLP. An LLP can be formed with least possible capital.

Particulars	Company	LLP
Minimum Capital contribution	Private Company - 1,00,000 Public Company -5,00,000	No such mandatory requirement

Moreover, the contribution of a partner may consist of tangible, movable or immovable or intangible property or other benefit to the LLP.

3.   Lower cost of Formation

The cost of registering LLP is low as compared to cost of incorporating a private limited or a public limited company. An illustration can show the approximate cost involved in formation of private limited company and an LLP.

Particulars	Company	LLP
Legal Cost to incorporate (having capital of Rs. 1 Lakh)	Rs. 10000/-	Rs. 2000/-
Legal Cost to incorporate (having capital of Rs. 5 Lakhs)	Rs. 26000/-	Rs. 4000/-

4.   No requirement of compulsory Audit

All the companies, whether private or public, irrespective of their share capital, are required to get their accounts audited. But in case of LLP, there is no such mandatory requirement. A Limited Liability Partnership is required to get the audit done only if:-

a.    If the contributions of the LLP exceeds Rs. 25 Lakhs, or

b.    If the annual turnover of the LLP exceeds Rs. 40 Lakhs

5.   Lower compliance burden resulting in savings

Approximately at least 8 to10 compliances per annum are required to be made by a private limited company whereas a Limited Liability Partnership is required to file only the Annual Return & a Statement of Accounts & Solvency

6.   Taxation Aspect on LLP

For income tax purpose, LLP is treated at par with partnership firms. Thus, LLP is liable for payment of income tax and share of its partners in LLP is not liable to tax. Thus no dividend distribution tax is payable. Provision of 'deemed dividend' under income tax law, is not applicable to LLP.

Section 40(b): Interest to partners, any payment of salary, bonus, commission or remuneration allowed as deduction in the hands of Limited Liability Partnership

7.   Dividend Distribution Tax (DDT) not applicable

In the case of a company, if the owners to withdraw profits from company, an additional tax liability in the form of DDT @ 15% (plus surcharge & education cess) is payable by company. However no such tax is payable in the case of LLP and profits of a LLP can be easily withdrawn by the partners.

8.               Converting from Partnership to LLP

LLP and general partnership is being treated as equivalent (except for recovery purpose) in the Act, the conversion from a general partnership firm to an LLP will have no tax implication, if the rights and obligation of the partners remain the same after conversion and if there is no transfer of any asset or liability after conversion. If there is a violation of these conditions , the provision of capital gain will apply.

9.               Converting from company to LLP

Conversion from company is possible. The capital gain on conversion of company in to LLP is exempt if the conditions of section 47(xiiib) are followed.

10.               Demerits of LLP

LLP as well have some limitations within. Some of them can be summarized as below.

a)   Any act of the partner without the other partner, may bind the LLP

b)   LLP Cannot raise money from public Contributed by CA Anand Mutha CA Nidhi Chatwani

VAT AND PROFESSION TAX CHANGES 2014 BUDGET

Dear All,

Maharashtra Act XXVII of 2014 has received assent of the Governor on 26th June, 2014 and highlights of the changes in respect of Maharashtra VAT and Profession Tax are as follows -

- VAT Registration limit increased to 10 lakhs
- Dealers other than importers, whose turnover during the FY 2013-14 not exceeded registration limit of Rs.10 lakhs, can apply for cancellation on or before 30-09-2014 and will be cancelled w.e.f. 1-10-2014.
- Late Fee reduced to Rs.2,000/- if filed within 30 days from due date.
- Provision giving power to Commisioner on application by dealer for giving directions in respect of assessment deleted.
- If order cancelling the Assessment on an application u/s 23(11) is not passed within 3 months from end of the month in which application is made, assessment will be deemed to be cancelled.
- No stay against the dues on account of non-production of certificates or declaration if two years has passed from the end of year for which claim relates, unless 100% tax in respect of such claim is paid.
- Penalty for concealment is restricted to 100% of tax evasion but will not be less than 25% of tax evasion u/s 29(3)
- If dealer has filed late return on or after 1-8-2012 and paid late fee also, penalty if levied will not be recovered.
- No 30(4) penal interest is payable on additional liability on account of non-production of certificates or declarations.
- No 30(4) penal interest if tax paid as per revised return is less than 10% of tax paid with original return.
- TDS by person who awards quarrying lease or quarrying permit in respect of minor minerals.
- Facility to apply for refund per return filed extended to units covered under Package Scheme of Incentives 2013.
- VAT Audit limt raised to 1 crore
- Turnover of Sales for VAT Audit to include value of goods transferred outside state not by reason of sale
- Dealers holding liquor licenses mentioned in clause (b) omitted form VAT Audit unless covered due to turnover limit
- Power of waiver of Audit penalty if filed within one month deleted.
- Profession Tax limit for salaried persons increased to Rs.7,500/-
- Power given to State Government to waive or reduce late fee
- Exemption extended to person who is suffering from mental retardation specified

アナンドヘビメタファン
For Act XXVII of 2014, visit website http://mahavat.gov.in or www.meraconsultant.com

Do you want to get your Income Tax Refund? Use Right To Information Act 2005

The Right to Information Act, 2005(RTI) is a potent tool for tax payers to find solutions to their everyday problems. Unfortunately, most taxpayers & tax professionals have not understood the scope and potential of the Act. With this article I want to bring to notice use of Right to information Act,2005 for encashing your pending Income tax Refunds.

The Right to Information (RTI) Act came into effect from 12th October, 2005 and is applicable on the whole of India, except Jammu and Kashmir. The Act helps many citizens to obtain information not disclosed publicly.

It must be noted that only assessee can apply under RTI to know the status of his/her income tax refund after one year from date of filing return. But he can be assisted and accompanied by a Chartered Accountant or a Lawyer. 

I do not prefer for making application under RTI immediately. The course of action to be followed is -

1) File a simple letter inquiring about status of your return and status of Refund

2) File first reminder letter  if you do not receive any communication for step 1. (Usually you don't get, do you?) after 15 days from step 1.

3) File second reminder  after 15 days from step 2.

4) File Third reminder letter after 15 days from step 3.

My usual experience is that AO never reply to such communications and not at all bothered by your reminders. 

Now your case becomes ripe enough to file an application under RTI seeking information about -

1)  Status of your return and status of Refund

2)  Information on how AO acted on our letter as filed in step 1 above. 

3)  Information on how AO acted on our reminders as filed in step 2, 3, and 4. 

So far in my cases, the success of RTI applications in the Income Tax department is unbelievably approximately 100 per cent. In each and every case, the RTI application gets attended to immediately and you get pending refunds within 30 days. In fact I got most of the refund on the same day without any need to submit the RTI application. Mere disclosure to AO the intention of filing RTI was enough. 

I advise all professionals as well as assessees to use encourage use of RTI Act, it is an opportunity to minimise corruption and improve accountability. Let professionals become catalysts for Better Bharat Bhavisya through the use of Right to Information.

For more information  you can contact me on anandmutha@armutha.in

By

CA Anand Mutha 

Do you think you can escape from Arrest for Service Tax Dues Prior to 10th May 2013

Service tax law was amended with arrest provisions w.e.f. 10th May 2013. Section 89(1)(d) was amended to provide that non-payment of amount collected as service to government treasury will be liable for prosecution for period up to seven years. A question would come to mind that what would happen in cases where the amount as described in section 89(1)(d) is collected prior to the date when this section became effective i.e. 10th May 2013. 

High Court of Bombay has given its judgement on the same matter which is as below. 

Assessee-director was arrested on 22-1-2014 under section 89(1)(d)(ii), read with sections 90 and 91 for non-payment of service tax of Rs. 2.44 crores by his company despite having collected same from customers - Assessee argued that : (a) said offence had become cognizable vide Finance Act, 2013 only on 10-5-2013; (b) amended provisions could not be applied retrospectively for dues pertaining to prior period; and (c) dues for period on or after 10-5-2013 were only Rs. 5 lakhs i.e., not exceeding Rs. 50 lakhs, therefore, assessee was to be granted bail - Department argued that : (a) in balance sheet dated 31-3-2013, liability to pay tax was admitted; (b) non-payment of outstanding dues was a continuing offence; therefore, amended provisions were applicable - HELD : It being a continuing offence, entire outstanding/arrears as on 10-5-2013 was to be taken into consideration while calculating limit of Rs. 50 lakhs under section 89(1)(d)/(ii) - Since, as on 10-5-2013, there was huge outstanding beyond Rs. 50 Lakhs and said amount continued to be outstanding even at time of arrest, assessee could not be granted bail, more so, when investigation was still ongoing and assessee's payment plan was not agreed to by department [Paras 13 to 15] [In favour of revenue]

Case : Kandrarameshbabu Naidu vs. Superintendent (AE) Service Tax, Mumbai-II