Getting Govt. Subsidies – Amount Saving Formula

Planning to start a new business? First thing that comes up in mind is the large investments to be done to start such business. No business can succeed without taking risks whether it be investment risk, financing risk or operational risk. One has to undertake such risks to take their business at new levels of heights. Now if we talk about investment risk, a lot of funds are required to be invested, sometimes at the cost of personal capital also.

Here’s how you get Govt.’s assistance for huge amount savings.

Subsidies constitute major part of government expenditures aims at providing assistance to budding entrepreneurs. Central Government is now encouraging such entrepreneurs by running various subsidy schemes all over India. These government oriented subsides are majorly beneficial for Manufacturing/Industrial units who have either (i) applied for sanctioning of a Term Loan against Machinery & allied equipments OR (ii) whose full/part disbursement is pending from Bank’s end in case already applied for such Term Loan (such subsidy percent varies from 15 per cent to 50 per cent totally depending upon the work to be carried out by such units).

Major Central Govt. Subsidy Schemes are illustrated as follows –

1.      Credit Linked Capital Subsidy Scheme (CLCSS)

This scheme is being run by Ministry of Small Scale Industries for Technology Upgradation of Small Scale Industries and amount being subsidized shall be up to maximum of 15% of cost of Plant & Machinery (subject to maximum ceiling of Rs. 15 lakhs).

2.      Capital Investment Subsidy Scheme

Being run by National Horticulture Board, this scheme covers Construction, Expansion/Modernization of Cold Storage for Horticulture produce wherein amount of subsidy is subject to 35% of ‘Capital Cost of Project’ in general areas and 50% in North-east region, Hilly & Scheduled areas.

3.      Development of commercial Horticulture

This scheme is run by National Horticulture Board for development of commercial horticulture through production & post-harvest Management of horticulture Crops where maximum amount of subsidy being 50% of ‘Original Cost of Project’.

4.      Subsidy scheme for only Integrated Post-Harvest Management Project

Being run by National Horticulture Board for development, maximum amount of subsidy is 35% of ‘Capital Cost of Project’ in general areas (subject to a maximum of Rs.50.75 lakhs) and 50% of ‘Capital Cost of Project’ in North-eeast region, Hilly & Scheduled areas (subject to a maximum of Rs.72.50 lakhs)

5.      Subsidy scheme for boosting Seed Production in Private Sector

Maximum amount of subsidy under this scheme (being run by National Seed Corporation which is under the administrative control of Ministtry of Agriculture & Farmers Welfare) is 40% in general areas and 50% in Hilly & Scheduled areas (subject to a maximum ‘Capital Cost of Project’ being Rs. 150 lakhs).

By providing initial financial assistance to small-scale industries, the Government of India has taken a big leap in encouraging many prospective entrepreneurs across the country to start their own business without worrying about the initial funding problems.

Do not miss our next update on Latest Amendments.
 

You may drop in your queries at team@clicknfile.in or directly get in touch with our finance/tax experts @ 8872032114, 8872032116, 8872013116

Some recent updates that you would not like to miss –

1.    15.03.2017 (Wednesday) is the last day for Payment of Advance Income Tax by all assessees including 44AD cases (100%).

2.   Ministry of Finance has withdrawn Service Tax Exemption to Education Institutions other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. The new amendment will be applicable w.e.f. 1st day of April, 2017.

3.      The scope of definition of “Person” as per GST is proposed to include (i) Limited Liability Partenership, (ii) Any Corporation established by or under any Central, State or Provincial Act or a government company as defined in Sec 2(45) of Companies Act, 2013, (iii) Any body corporate incorporated by or under the laws of a country outside India (foreign company or body corporate), (iv) Trust and (v) Association of persons/body of individuals outside India.

4.      Now Income Tax Department will issue statutory legal notice to taxpayers who haven’t responded to cash deposit verifications after demonetization.

5.      GST council clears final draft of CGST & IGST law. UTGST & SGST bills shall be finalized at next meeting of Council on 16th March 2017.

6.      GST Council have decided to levy 5% rate on dhabas and small restaurants under GST.

Have a great day ahead!

Ultimate Guide to Wind-up a Private Limited or One Person Company

There are many companies that are incorporated under Companies Act 2013 and consequently it is mandatory to follow its legal compliances as well. But there are times when business becomes inoperative or defunct during the course of running such business due to one or the other reason or has been inoperative since its incorporation. Non-fulfilment of legal compliances within the time prescribed attracts numerous fines and penalties, including prohibition imposed on the directors from starting another company.

It is preferable to close or wind up such company to ensure both cost and time saving by following certain set of legal procedures as prescribed by The Ministry of Corporate Affairs. In order to ease such complex procedure of winding up of company, Ministry has decided to modify the existing route by launching new rules viz. Removal of Names of Companies from the Register of Companies, Rules 2016 applicable from date of publication in the Official Gazette for easy closure of Private Limited or One Person Company with less legal formalities.

It usually takes 25 to 30 days to wind up an inoperative/defunct company and get its name struck off from Register of Companies maintained by Registrar of Companies. Forms which shall be filed for the purpose of Winding up or Closure of Companies shall be certified by a Chartered Accountant in whole time practice or Company Secretary in whole time Practice or Cost Accountant in whole time practice, as the case may be.

For removal of names of companies from the Register of Companies, following set of conditions must be satisfied –

1.      the company has failed to commence its business within one year of its incorporation; or

2.    the company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455; or

3.     the company has filed an application under sub-section (2) of section 248 for removing the name from the register of companies on the grounds mentioned in sub-section (1) of section 248.

Section 248 (2) – Power of Registrar to remove name of company from register of companies

Without prejudice to the provisions of sub-section (1), a company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent members in terms of paid-up share capital, file an application in the prescribed manner to the Registrar for removing the name of the company from the register of companies on all or any of the grounds specified in sub-section (1) and the Registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner:

Provided that in the case of a company regulated under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application.

Section 249 (1) – Restrictions on making application under section 248 in certain situations

An application under sub-section (2) of section 248 on behalf of a company shall not be made if, at any time in the previous three months, the company—

(a) has changed its name or shifted its registered office from one State to another;

(b) has made a disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business;

(c) has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company, or complying with any statutory requirement;

(d) has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded; or

(e) is being wound up under Chapter XX, whether voluntarily or by the Tribunal.

Following categories of companies shall not be removed from the register of Companies under this rule –

1.      listed companies;

2.   companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;

3.      vanishing companies*;

4.    companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;

5.     companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;

6.      companies against which any prosecution for an offence is pending in any court;

7.   companies whose application for compounding is pending before the competent authority for compounding the offences committed by the company or any of its officers in default;

8.   companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;

9.      companies having charges which are pending for satisfaction; and

10.  Companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.

Any application or pending proceeding for striking off or Form-FTE filed with the Registrar of Companies prior to the commencement of these rules but not disposed of by such authority for want of any information or document shall, on its submission, to the satisfaction of the authority, be disposed of in accordance with the rules made under the Companies Act, 1956 (1 of 1956).

* “Vanishing Company” means a company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange which has failed to file its returns with the Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable.

Do not miss our next update on Latest Amendments.

You may drop in your queries at team@clicknfile.in or directly get in touch with our finance/tax experts @ 8872032114, 8872032116, 8872013116

Some recent updates that you would not like to miss –

1.   In case of continuous supply of services, the time of supply shall be the due date of payment, if ascertainable from the contract. If not ascertainable, it will be earliest of date of receipt of payment or the date of issue of invoice or completion of event where payment is linked to completion of event.

2.    Input Tax Credit can be taken up to the month of September of the following Financial Year to which invoice pertains or date of filing of annual return, whichever is earlier.

3.    GST council is likely to retain a clause in the law that will require service providers to register in every state where they operate, despite recent representations.

4.      If payments are made after three months of the date of the invoice of the supplier then the proposed GST Legislation appears to deny tax credit in relation to input services for such payments.

5.    The government has asked all banks to provide mobile banking facility to all customers by March 31 in a bid to push digital transactions.

6. Due Date for E-payment of Service tax for the month of February by Companies: 06.03.2017 and Payment of TDS/TCS deducted/collected in February: 07.03.2017.

7.      100% penalty shall be imposed on person accepting cash for more than Rs.3,00,000/- for accepting it. No such penalty shall be imposed on cash payer.

Have a great day ahead!

What all you need to know about Income Tax Return Filing!

Earning income appears fascinating to everyone. But when it comes to pay taxes on such earned income, everyone has to think twice. When do I need to pay taxes? How much tax I need to pay? What procedure needs to be followed while paying taxes? Which certain things need to consider while paying taxes? What are the benefits of filing Income Tax Return (ITR)? What happens if I file my returns late? Do I have to incur any penalty if I don’t file my return?

Quoting your income to Income Tax Department is mandatory if your earned income is above threshold limit of Rs.2,50,000 in case of an individual up to 60 years of age, Rs.3,00,000 in case of Senior Citizen, Rs.5,00,000 in case of Super-Senior Citizen. However, a rebate shall be allowed under section 87A up to a maximum of Rs.2,500 (earlier Rs.5,000) if such earned income is below Rs.5 lakhs. ITR filing is a medium to quote various incomes to IT Department. It is a document that needs to be filed mandatorily if your income exceeds above threshold limit.

Generally, due date of filing of ITR is 31^st July of relevant assessment year (for e.g. due date for filing of ITR of financial year ended on 31.03.2017 shall be 31.07.2017) for persons who are not covered under Tax Audit provisions of Income Tax Act 1961. But in case you missed such due date then you shall have the option of filing of such ITR till 31^st March of relevant assessment year with interest charged on delayed tax payment. For companies and persons covered under Tax Audit provisions, return shall be mandatorily filed on or before 30^th September of relevant assessment year, failing which can attract heavy penalties.

Now a section 234F of Income Tax Act 1961 of late filing fee has been introduced by our Hon’ble Finance Minister, by virtue of which if a taxpayer fails to file income tax return on or before the due date, then a late filing fee of Rs. 5,000 (if such return shall get filed after 31.07.2018 and before 31.12.2018) and Rs. 10,000 (if such return shall get filed after 31.12.2018) shall be leviable/chargeable. However, for small taxpayers whose income is less than Rs.5 lakhs, fee shall be Rs.1000 on account of late filing of such income tax return. Such amended provisions shall be applicable from assessment year 2018-19 onwards (i.e. a taxpayer now has to compulsorily file Tax Return for year ending 31^st March 2018, by 31^st July 2018 – else penalty shall be imposed).

Benefits of filing of ITR

1.      Income Tax Department get records of your earned income.

2.    Sanctioning of bank loans for various purposes like term loans, business loans, CC limit, educational loans, home loans etc. requires ITR for its smooth processing.

3.      For obtainment of VISA for travelling abroad, one must have his/her ITR filed.

4.      Accidental claim in third party insurance

5.   To open bank accounts, to make investments, to purchase vehicle, for registration of immovable property purchased, for buying any type of insurance policies, one must file his/her ITR.

Some recent updates that you would not like to miss – (1^st March 2017)

1.     Under GST, if GSTRs are filed after due date then it would attract late fee of Rs.100 per day for each return i.e. GSTR-1, 2, 3 etc. up to a maximum of Rs.5000.

2.     Under GST, Input Service Distribution (ISD) registration is for one office of the taxpayer which will be different from the normal registration. Hence, ISD is required to be registered separately other than the existing taxpayer registration.

3.      Under GST, supply of service includes transfer of right to use goods because transfer of title is not there in such supplies. Such transactions are specifically treated as supply of service.

4.      Merely because the moneys flow through the person, it cannot be automatically inferred that it is income in the hands of such person.

Have a great day ahead!