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Enhanced Turnover limit of Rs. 5 Crore for audit under Income Tax Act for assessees whose substantial transactions are through bank accounts – Section 44AB of the IT Act Every person carrying on business and having an annual turnover of Rs. 1 Crore shall normally have to get their accounts audited under the Income Tax Act. However for a business, if the cash receipts against the turnover or cash payments against the expenditure do not exceed 5% of the total receipts and total payments respectively, the turnover limit for audit is Rs. 5 crore instead of Rs. 1 crore.
Deduction in respect of employment of new employees- Section 80JJAA of the IT Act If an assessee, who is engaged in any business and whose books of accounts are subject to audit under the IT Act, employs new staff in a financial year, the assessee, subject to certain conditions, is eligible to claim deduction of 30% of the salary paid to such employees for 3 Assessment Years. This deduction is in addition to the 100% deduction of salary costs that can be claimed as expenses while computing the income.
Section 80 EEB has been introduced effective from Asst./Yr. 2020-21 onwards for promotion of purchase of Electric Vehicles. This section allows an individual to deduct the interest payable by him for a fin./yr. to the extent of Rs. 1,50,000 on the loan availed for the purchase of an electric vehicle from a financial institution while computing the total income for tax purpose.
Failure to link your PAN with Aadhar will make your PAN inoperative and will have to face consequences such as inability to file your Income Tax Returns and could be imposed penalty of Rs. 10,000/- per transaction on entering into transactions where quoting of PAN is mandatory such as opening of Bank / Demat Accounts, applying for Debit / Credit cards, payment of life insurance premium in excess of Rs. 50,000/-, purchase of immovable property for more than Rs.10 Lakhs ,etc. Finance Bill, 2021 has also inserted a new section for levying penalty upto Rs. 1,000/- for failure to link PAN with Aadhar before the due date, which is now extended till 30th June 2021.
With effect from 01st April 2021, all Companies are required to use only accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of accounts along with the date when such changes were made and ensuring that the audit trail cannot be disabled. Is your business ready ?
Any payment in cash by a person having income from business or profession to another person, in a day, exceeding Rs. 10,000 (For Goods Transport Agency Rs 35,000) will be disallowed under the Income Tax Act.
TDS on payments to Non-residents for purchase of immovable property – Section 195 of the IT Act Income Tax @ 20% plus applicable surcharge and cess will have to be deducted and paid as TDS by a buyer on purchase of any long-term property from a non-resident on the total payment. However the buyer can make a digitally signed online application in Form No. 13 before the Assessing Officer for reducing the cost of acquisition, cost of improvements and other allowable deductions from the total payment to arrive at the actual income for the TDS calculation. If the Assessing Officer is satisfied that lower /no deduction of tax at source justifies the actual tax liability, the Officer shall issue a certificate for lower / no deduction which becomes the applicable TDS rate for the buyer.
Deduction in respect of contributions to political parties – Section 80GGC of the IT Act 100% deduction can be claimed for the contributions made, other than by way of cash, by any person to a registered political party in computing the total income for Income Tax purpose. For this one must ensure to obtain a receipt from the political party containing the name, address, PAN and registration number of the political party.
A registered person who is engaged only in sale of goods within the same state and whose turnover is less than Rs. 1.5 crore in the preceding financial year can opt for payment of GST at the following rates on turnover without availing Input Tax Credit and subject to other conditions. a. For a manufacturer / a trader : 1 % b. For Restaurant services : 5% Registered persons, other than the above, whose turnover is less than Rs. 50 Lakhs can also opt for payment of GST at the rate of 6% without availing Input Tax Credit and subject to other conditions. Are you making use of this beneficial provision applicable to small business ?
As per Income Tax Act, any receipt in CASH exceeding Rs. 2,00,000/- by a person from any other person in a day / in respect of a transaction / in respect of an event or occasion could result in an equal amount of penalty to the recipient.
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