Latest Blogs from SBS and Company LLP

    In this edition, we bring you to quite a few interesting articles.
    The article on ‘Affordable Housing – Income Tax & GST Perspective’ deals with tax incentives under both the taxation laws for a business which is engaged in making the goal of this government true. We have also commented on certain issues from both the taxation laws with respect to affordable housing.

    We also have an article on ‘Gifts, Discounts, Credit & Impact thereof’, wherein one of the issues in GST with respect to the gifts, discounts and impact of credit is detailed. This is based on the recent rulings of AAR and Circulars issued by CBIC on the said subject.

    The next article is on ‘MSME vis-à-vis Internal Audit’, which brings the importance of internal audit for MSMEs and the key challenges faced by Auditor in auditing such auditees.

    The final one is on the new section introduced by Finance (No.2) Bill, 2019 in direct taxation, which deals with deduction of tax by individuals or HUFs when using the services of contractor or professionals. We have also contributed certain FAQs for the benefit of Clients.

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    Key Topis:

    AUDIT

    • STANDARDS ON QUALITY CONTROLS (SQC’S)

    DIRECT TAX

    • SECTION 112A OF INCOME TAX ACT, 1961

    FEMA

    • FEM (GURANTEES) REGULATIONS, 2000

    Updates:

    COMPANIES ACT, 2013

    • RULES,CIRCULARS,NOTIFICATIONS AND ORDERS ISSUED IN THE MONTH OF JUNE-2019

    Contents

    Amendments to Income Tax Act, 1961.

    Section 2(19AA) - Demerger

    Section 9(viii) – Income deemed to accrue or arise in India vis-à-vis Section 56(2)(x)

    Section 9A – Extended time to achieve monthly average corpus by specified funds – FIIs.

    Section 10 – Certain Incomes not to be included in Total Income – Certain Interest Payable to NRs.

    Section 12AA – Amendments in Procedure for Registration of Trust or Institution.

    Section 40 – Payer not be treated as Assesse in Default in case of payments to NRs.

    Section 43B – Deduction of Interest on payment basis to loans extended by specified NBFCs.

    Section 43D – Payment of Tax on Interest on receipt basis by specified NBFCs.

    Section 47 – Securities dealt by Category III AIFs – Not to be treated as Transfer

    Section 50CA – Relaxation for Notified Persons from provisions of FVC – Other than Quoted Share.

    Section 54GB – Extension for Investment in Eligible Start-Up on transfer of Residential Property.

    Section 56(2)(viib) – Extension of Non-Applicability to Category II AIFs & Other notified Companies.

    Section 56(2)(x) – Class of Persons to which such section is not applicable.

    Section 79 – Relaxation for Eligible Start-ups to carry forward and set off loss – Shareholding.

    Section 80C – Contribution to Pension Scheme by Employee of Central Government

    Section 80CCD – Increase of Deduction – Contribution to Pension Scheme – By Central Government

    Section 80EEA – Deduction of Interest – Rs 1.5 Lakhs – New Affordable Residential Apartment

    Section 80EEB – Deduction of Interest – Rs 1.5 lakhs – Purchase of Electric Vehicle.

    Section 80IBA – Affordable Residential Housing – Aligned with GST laws – Hyderabad as Metro.

    Section 80LA- Deduction for Unit in IFSC – Any 10 Years out of 15 Years – 100%..

    Section 92CE – Clarification in Secondary Adjustments & Additional Tax @ 18% - Option of Assessee.

    Section 115O – Relaxation from Payment of DDT of Unit in IFSC out of Accumulated Income

    Section 115QA – BBT for Listed Companies too

    Section 115R – Exemption for unit in IFSC from payment of tax on distributed income

    Section 139 – Certain Transactions – Mandatory Filing of Return

    Section 139A – PAN or Aadhar, anything is fine

    Section 194IA – Consideration for Immovable Property for 1% deduction of tax

    Section 194M – Personal Use – 5% tax deduction at source – If exceeds Rs 50 lakhs

    Section 194N - Cash Withdrawals – 2% tax deduction at source – If exceeds Rs 1 Crore

    Section 269SU – Provision for prescribed mode for accepting payment in electronic modes

    Rates of Taxes – Surcharge & Domestic Companies

    Amendments to Prohibition of Benami Property Transactions Act, 1988

    Section 23 – Insertion of Explanation – No Investigation by IO after issuance of SCN.. 

    Section 24 – SCN and Attachment of Property in Benami Transaction – IO.. 

    Section 26 – Adjudication of Benami Property – Adjudicating Authority

    Section 54A – Penalty for non-compliance with summons and furnishing of information

    Section 55 – Prosecution to be sanctioned by Competent Authority – Not Board anymore

    Amendment to Reserve Bank of India Act, 1934

    Section 45IA – Enhancement of NOF – NBFC

    Section 45ID – Power to Remove Directors from Office of NBFC

    Section 45IE – Power to Supersession of Board of Directors of NBFC

    Section 45MAA – Action against Auditors – Debar from Audit of Banks – 3 Years at a time

    Section 45MBA – Resolution of NBFC

    Section 45NAA – Power in respect of Group Companies

    Amendments to Central Goods & Services Tax Laws

    Section 10 –Composition Scheme – Supplier of Services

    Section 44 – Inter-se transfer in Electronic Cash Ledger 

    Section 50 – Interest to be paid on net basis

    Section 54 – Refund – Power to CG to refund State Tax too

    Section 101A & Others – National Appellate Authority for Advance Rulings

    Amendments to Customs Act

    Section 110 – Provisional Attachment of Bank Accounts

    Section 140 – Power of Arrest – Offences Outside India

    Amendments to Service Tax Laws

    Retrospective Exemption – Liquor License Fee

    Retrospective – Exemption – Premium/Salami – Long Term Lease

    Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

    Section 121 – Indirect Tax Enactments – Applicability of Scheme.

    Section 123 – Relief available under LDR

    Section 124 – Persons Ineligible for making declaration

    Modus Operandi 

    Section 128 – Discharge Certificate – Conclusive Proof 

    Section 129 – Restrictions of Scheme

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    Income from Other Sources

    (Section 56)

    Introduction:

    • Income that is taxable under the Income Tax Act 1961 (“Act”) shall fall under the Head “Income from Other Source” if it is not chargeable under any other heads of income.
    • Heads of Income covered under the act are as below:

     Income from:

    • Salaries (Sec. 15)
    • House Property (Sec. 22)
    • Profits and Gains of Business or Profession (Sec. 28)
    • Capital Gains (Sec. 45)
    • Income from Other sources (Sec. 56)

    From the above, it was clear that incomes not falling under first four heads as above shall b be charged under the head “Income from Other Sources”.

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    SA 701 Communicating Key Audit matters in the independent Auditor’s report

    This article aims to explain the concept of Key Audit matters that are part of new Auditor’s report.

                    SA 701 deals with the Auditor’s responsibility to communicate key Audit matters in the Auditor’s report. It is intended for addressing both the judgement of an Auditor as to what is required to be communicated in Audit report and the content and form of such communication. The purpose of communicating key audit matters is to enhance the communicative value of the auditor’s report.

    This SA applies to audits of complete sets of general purpose financial statements of listed entities and circumstances when the auditor otherwise decides to communicate key audit matters in the auditor’s report. This SA also applies when the auditor is required by law or regulation to communicate key audit matters in the auditor’s report.

    This SA is effective for audits of financial statements for periods beginning on or after April 1, 2018

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