New Labour uniform codes

Labour uniform codes

As per the information gathered by me from news/media/notifications, etc on new 4 labour uniform codes- few provisions are being implemented w.e.f. 1-7-22 by Central Govt and rest shall be notified by States as per their “State – Reforms of Labour Code” and dates for implementation shall be as per their state’s gazette notification, the central rules are as under: (Attaching latest booklet on the matter)

*W.e.f 1.7.2022*

1. Working hours can be varied from 10 to 12 hours but an aggregate 48 hours exists so can do 4 day week and three days layoff/weekly off – as per requirement. The Government is also working on the work from home concept.

2. Basic is mandatory 50% of CTC. So pf in any case 12% on Basic that is 50% of CTC.

*Important Note:* Basic can not be less than 50% of CTC but in Minimum wages – that consists of Basic + DA as part of basic therefore for those employees who are getting minimum wages can not be further bifurcated.

NEW LABOUR LAW REFORM CODES: (total 29 existing labour laws merged in 4 new Reform Codes)

The central government has notified four labour codes, namely,

1. the Code on Wages, 2019, on August 8, 2019; (amalgamated 4 laws)
2. the Industrial Relations Code, 2020, (amalgamated 3 laws)
3. the Code on Social Security, 2020, (amalgamated 9 laws) and
4. the Occupational Safety, Health and Working Conditions Code, 2020 on September 29, 2020. (amalgamated 13 laws)

COMPONENTS OF THE MINIMUM WAGE:-

The statutory minimum wage is based on the gross wage payable for a normal working week, i.e. before overtime payments.

MINIMUM WAGE COMPONENTS:

1. the basic wage agreed in your contract;
2. performance-related payments and allowances for shift work, irregular hours, etc.;
3. weekly or monthly fixed payments for the turnover you generate;
4. work-related payments by third parties, e.g. tips or payments agreed between you and your employer;
(The total of these amounts may not be lower than the minimum wage.)

INCOME NOT INCLUDED IN THE MINIMUM WAGE:

Some income components are not included in the calculation of the minimum wage:

1. overtime pay;
2. leave allowance;
3. profit shares;
4. special payments, e.g. incidental payments received for reaching sales targets;
5. future payments you receive subject to certain conditions (e.g. pension and saving schemes to which the employer contributes);
6. expense allowances;
7. end-of-year allowances.

PART-TIME WORK AND THE MINIMUM WAGE

Your gross minimum wage depends on how many hours you work. If you work part time the gross minimum wage is proportionately lower.

Therefore, you are requested to be in touch with experts on the subject for implementing dates of Labour Codes state wise because our company works pan-India.

Read our other blog – Latest Taxation, GST and Other Updates

Chartered Accountant in Pimpri Chinchwad

TDS on Sale of Property by NRI in India – Latest 2022

Properties sold in India by NRIs are liable for taxation and TDS is required to be deducted under the Indian income tax laws. An NRI who wants to sell a property situated in India has to pay tax on capital gains.

In this article, we will discuss the applicability of TDS on Sale of Property by NRI in India.

Tax implications for NRIs selling property in India

Your tax liability on the sale of your property in India will depend on the period of time for which you have held it. If you sell a property that you have owned for more than 2 years, then you will be liable to pay a long-term capital gains tax. In case a property is held for 2 years or fewer, the short-term capital gains tax will be applicable.

The date of the purchase of the property by the original owner will be considered for calculating capital gains on an inherited property.

TDS on sale of property by NRI in India

TDS (Tax Deducted at Source) shall be deducted whenever any property is sold/ purchased. The buyer needs to deduct some amount (called TDS) and pay the balance to the seller.

The amount to be deducted depends on the residential status of the seller. In case the seller is a resident Indian, 1% of the sale price of the property will be deducted as TDS.

In the case of an NRI seller, the amount of TDS to be deducted will depend on the quantum of money received by the seller.

TDS rates applicable on the sale of property owned by NRIs are as under:

1. Long-term capital gains tax on the sale of property held for more than 2 years: 20%.
2. Short-term capital gains tax on the sale of property held for less than 2 years: As per the income tax slab of the NRI seller.

Surcharges and cess would also be charged on the capital gains. Here are the effective rates of TDS on the sale of property by NRI for long-term capital gains.

Particulars	(A) Long-term capital gains tax	(B) Surcharge on LTCG tax	(C =A + B) Total tax (incl surcharge)	(D) Health & education cess	(C+D) Applicable TDS rate (incl surcharge + cess)
Sale price < Rs. 50 lakh	20%	Nil	20%	4% of total tax	20.8%
Sale price Rs. 50 lakh to Rs. 1 crore	20%	10% of LTCG tax	22%	4% of total tax	22.8%
Above Rs. 1 crore	20%	15% of LTCG tax	23%	4% of total tax	23.92%

TDS on sale of property by NRI in India

The maximum surcharge rate on tax payable on dividend income and capital gain mentioned in Section 112 of the Income Tax Act has been capped at 15% as announced in Union Budget 2022.

Hence, regardless of whether the value of the property sold by an NRI is Rs. 1 crore or Rs. 5 crores, or even Rs. 10 crore–the rate of TDS will remain the same i.e. 23.92%.

In the case of short-term capital gains, surcharge and cess would be added to the applicable tax rate as per your income tax slab in the same manner as in the case of long-term capital gains.

The TDS shall be deducted when any payment is made to the NRI seller for the purchase of property, even if the advance is being paid. The TDS shall be deposited by the buyer with the Income Tax Dept.

The TDS on the purchase of property from NRI shall be deducted regardless of the transaction value of the property. Even if the price of the property is less than Rs. 50 lakh, the TDS shall be deducted.

Chartered Accountant in Pimpri Chinchwad

Refund of Swiss VAT to foreigners – Switzerland

Do you have expenses for entrepreneurial activities in Switzerland as a recipient of services with a registered office, domicile, or permanent establishment outside Switzerland, and would you like a VAT refund?

The legal basis for VAT refunds can be found in Art. 107, s. 1, b of the Swiss VAT Act and to art. 151 to 156 of the VAT Ordinance (OTVA).

The Federal Administrative Court has just confirmed the practice of the AFC concerning the content of the certificate required for the reimbursement of Swiss VAT paid by foreign companies.

What should the certificate issued by the foreign authority contain?

To be entitled to reimbursement, a foreign company must, among other things, prove to the Swiss tax authorities (AFC) that it has the status of the company in the country in which it is domiciled, or in which it has its headquarters or a permanent establishment (see art 151, paragraph 1, letter d, OTVA).

The certificate issued by the foreign tax authority must be valid for the reimbursement period (calendar year).

Insofar as reciprocity is granted, and the country has a VAT system (see list of these countries on the AFC website), it is essential that the certificate confirms that the applicant is registered with the register of persons liable for VAT during the period for which the VAT refund is requested, or indicates the date from which the applicant is entered in the register of persons subject to VAT.

Insofar as reciprocity is granted, and the country does not have a VAT system (see list of these countries on the AFC website), it is essential that the company certificate confirm the applicant’s status as an entrepreneur during the period for which the VAT refund is requested, or indicates the date from which the applicant has the status of the contractor.

Attention, if the above conditions are not met, the AFC will not be able to process the request, nor refund the Swiss VAT!

Chartered Accountant in Pimpri Chinchwad

Windfall tax: Will India impose it too?

This question has been a buzz in Indian media for the past few weeks. But what is this windfall tax that Indian media is going on about?

What is the windfall Tax?

When a company benefits from something that they are not responsible for and, as a result of that, enjoys the financial gain, that gain is referred to as windfall profits.

Governments, typically, levy a one-time tax over and above the normal rates of tax on such profits, and that is called windfall tax.

Why Now?

So what’s happening is global oil and gas prices are at a peak level due to the Russia-Ukraine conflict. If we take the example of any Indian upstream oil companies, say ONGC, or Oil India. They declared an all-time high net profit in the fiscal year 2021-22.

ONGC declared that its net profit grew by 258% to reach ₹40,306 crores. While the Oil India announced a net profit of ₹3,887.31 crore, which is 123% higher than in the preceding year.

As the Indian government has recently gone for the cut in Central Excise Duty and considering that it is spending more on food and fertilizer there is the requirement of any alternate levy to full fill this gap and one of the solutions could be levying a windfall tax on oil companies.

Countries like Italy and the UK have already imposed a windfall tax over the past couple of weeks.

Will such tax increase the Price of the Fuel?

Very unlikely, as this tax is not part of the input or output cost, but levied only on profit.

Is India really considering such a levy of tax?

While there is no formal denial by the government, upstream oil companies have said they have heard nothing about this.

Let me know your thoughts on whether you believe that such a tax should be levied or not?

#oilcompanies #tax #fi ntaxfirst#indianeconomy

Chartered Accountant in Pimpri Chinchwad

Test of Control (TOC) vs Test of Details (TOD)

In a process of Statutory Audit, the Test of Control and Test of Details are two important stages and it also makes an important question from the interview pov.

I have discussed a comparison of both gathered from my experience.

TOC is a type of audit procedure we perform to evaluate whether a client’s internal control works effectively. Thus, we perform the test to obtain evidence of effectiveness before we can rely on controls. In case controls are weak, we will need to increase our substantive tests.

So, we take out the samples from SCOT (Significant class of Transactions), test various assertions, capture the details of the given sample, and match them with supporting documents. The sample size depends on the population and frequency of control.

Based on the TOC, we determine the extent of TOD. Test of Details is a substantive procedure used to collect evidence to verify individual transactions or balances.

So, after a combined assessment of risk and control (CRA), we define the tolerable error (TE) for deviations and obtain the samples for transactions to do the testing. The goal here is to confirm that supporting docs match with each other and the source.

I have only explained the surface of it and there are a lot of other things done throughout this.

I hope it was worth a read! Do add your learnings in the comments.

Windfall tax: Will India impose it too?

This question has been a buzz in Indian media for the past few weeks. But what is this windfall tax that Indian media is going on about?

What is the windfall Tax?

When a company benefits from something that they are not responsible for and, as a result of that, enjoys the financial gain, that gain is referred to as windfall profits.

Governments, typically, levy a one-time tax over and above the normal rates of tax on such profits, and that is called windfall tax.

Why Now?

ONGC declared that its net profit grew by 258% to reach ₹40,306 crores. While the Oil India announced a net profit of ₹3,887.31 crore, which is 123% higher than in the preceding year.

Countries like Italy and the UK have already imposed a windfall tax over the past couple of weeks.

Will such tax increase the Price of the Fuel?

Very unlikely, as this tax is not part of the input or output cost, but levied only on profit.

Is India really considering such a levy of tax?

While there is no formal denial by the government, upstream oil companies have said they have heard nothing about this.

Let me know your thoughts on whether you believe that such a tax should be levied or not?

#oilcompanies #tax #fi ntaxfirst#indianeconomy

Chartered Accountant in Pimpri Chinchwad

Rights Of Homebuyers under – The Insolvency and Bankruptcy Code, 2016

Rights Of Homebuyers under IBC – The Insolvency and Bankruptcy Code, 2016 (“IBC”), as originally enacted, did not provide adequate protection and recognition of the interests of homebuyers in real estate projects. While the Homebuyers are vital stakeholders in real estate projects, the IBC, as initially crafted, did not protect them. This is because they were treated only as ‘other creditors’, not at par with financial and operational creditors, thus they were not only unable to start proceedings under the IBC but had no statutory voting rights in the Committee of Creditors.

Maharashtra AAR – 18% GST payable on PV DC cables

The Maharashtra Authority of Advance Ruling (AAR), consisting of Rajiv Magoo and T.R. Ramnani, has ruled that 18% GST is payable on PV DC cables.

The applicant is in the business of manufacturing and supplying solar cables, commonly known as photo-voltaic DC cables (PVDC cables) under various brand names. The cables are made from copper conductors with cross-linked polyolefin (XLPO) insulation and are used between solar modules and inverters in a photovoltaic system.

The applicant supplies cables to its customers for the commissioning and stationing of solar power generating systems (SPGS). The cables connect a solar panel or array with inverters only for the purpose of carrying electricity between solar panels and inverters. The cables are exclusively used by manufacturers of SPGS, Procurement, Construction Company (EPC Company), for setting up a solar power plant as inputs for transmitting direct current from a PV module in SPGS. The cables are specifically designed and tailor-made for solar power projects. Thus, the cables have restricted applications and are used in a photovoltaic system only for the generation and transmission of solar energy.

The applicant has sought an advance ruling on the issue in respect of GST rates on PV DC Cables manufactured and supplied by Leoni Cable Solutions (India) Pvt Ltd to its customers who are into the business of manufacturing solar power generating systems or EPC companies setting up a solar power plant.

The AAR noted that the PV DC cables manufactured and supplied by the applicant to its customers would be classified under Entry number 395 of Schedule III of Notification No. 1/2017-Central Tax (Rate) (as amended) dated June 28, 2017, and liable to GST at 18%.

Applicant’s Name: Leoni Cable Solutions (India) Pvt Ltd

Chartered Accountant in Pimpri Chinchwad

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Form 10BD, return of donation – Income Tax update for Trusts

Dear Trustees,

Re: New Provision of Income Tax to be followed by you.
As informed donation received by you to be filled in the form, you should electronically upload & sign no 10BD and should be uploaded before 15th May 2022 and every year.

The following details are to be filled up:

1. Name of the donor.
2. Address of donor.
3. Nature of donation.
4. Mode of receipt.
5. Amount of donation.
6. Section code under which donation was received.
7. PAN no. /Aadhar no./Tax Identification no. of the donor.

After uploading Form 10BD, Form 10BE is to be downloaded and this Certificate of Donation is to be issued to the Donor before 31st May of every year and contains the following details.

1) Name of Charitable Organization.
2) PAN
3) Aadhar
4) Approval number u/s 80G

There is a heavy penalty for not filling the form, Rs. 200 per day for Delay in uploading FORM 10BD. The Assessing Officer may also impose a penalty of a minimum of Rs. 10,000 to a maximum of Rs. 1 Lakh.

Department has made live form 10BD, return of donation. 31st May is the last date. Reporting template, instruction, and notification are there for quick reference.
#cbdt #tax #incometaxupdate #directtax #ca #incometax #incometaxreturn #taxplanning

Operational creditors to furnish extracts of GSTR-1, GSTR-3B, and e-way bills – IBC

Operational creditors to furnish extracts of GSTR-1, GSTR-3B, and e-way bills, with the application for initiation of the corporate insolvency resolution process.

The amendment provides the operational creditors to furnish extracts of Form GSTR-1, Form GSTR-3B, and e-way bills, wherever applicable, along with the application filed under section 9 of the Insolvency and Bankruptcy Code, 2016. These additional sets of documents can be used as evidence of transactions with the corporate debtor, debt, and default, easing the process of admission. These documents will also be submitted as part of the claims submitted to the resolution professional to help collate of claims. Further, creditors filing applications under section 7 or 9 of the Code are required to furnish details of their PAN and Email ID to ensure smooth correspondence.

Contact us – Income Tax Return, Future and Options Losses Carry Forward, Capital Gains Return, Tax Audit, GST Return, ITR Filing, GST Registration, etc.

Chartered Accountant in Pimpri Chinchwad