CA SUNIL ARORA

Mr. Sunil Arora, the senior most partner of the firm, has an experience of over 38 years in the matters related to finance and taxation.His special forte includes direct tax consultancy in areas of capital gains, search and seizure, survey and representation before the various I.T authorities. He has vast knowledge and expertise with regards to business consultancy services and foreign collaborations.

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Blog by CA Sunil Arora on Reasons to Believe u/s Section 132 of the Income Tax Act, 1961

on December 16, 2022

1961 Income Tax Act

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Amendment regarding MSME under Section 43B of Income Tax Act,1961

Amendment regarding MSME under Section 43B of Income Tax Act,1961 1. MSME units make a major contribution towards the economy and for generation of employment in our country. The legislature brought into the statute Micro-Small and Medium Enterprise Development Act, 2006 for protection and growth of a MSME units. Some of the relevant provisions of the act are as under: 1.1 The payment to MSME units has to be made within a certain timeframe which has been provided as 15 days from acceptance of goods or services in accordance with Section 15 of the MSMED Act, 2006. 1.2 The aforesaid period of 15 days can be extended to a maximum of 45 days by a written contract between MSME unit and the buyer. 1.3 Interest is payable to the MSME unit in case of delay in payment beyond the aforesaid time limits. 2. Section 43B of the Income Tax Act, 1961 has been amended with effect from 1 st April, 2023 wherein provision has been introduced to allow an expense incurred towards a micro ...

Taxability of Employees Contribution towards ESI Provident Fund etc.

Issues in TCS of 206C (1H)

Issues in TCS of 206(1H) Issues in TCS of 206C (1H) by Sunil Arora & Associates New provision w.r.t Collection of Tax at source u/s 206C(1H) has come into effect from 01\10\2020. Few points w.r.t the same are briefly summarized here under. The provision is applicable to every seller of goods who had turnover exceeding Rs 10 cr. for the F.Y ended 31\03\2020. Tax @ 0.1% is to be collected from the buyer of the goods where in aggregate of receipt of consideration from the buyer is more than Rs.50 lacs in any previous years. Rate of Tax for F.Y. 2020 - 21 is 0.075%. The provision is not applicable in case of export of goods, sale to Central/ State government/Local authority/embassy/High Commission etc. It also does not apply to sale of scrap, minerals, timber, liquor, etc. which are already covered by TCS u/s 206C (1). For the purpose of F.Y. 2020 -21: Receipts during the period 01\04\2020 to 30\09\2020 from a buyer are to be included for calculating the th...

Ascertaining Indexed Cost of Acquisition where payment has been made in instalments

Blog by CA Sunil Arora on Ascertaining Indexed Cost of Acquisition where payment has been made in instalments. Acquisition of properties have over the years changed to a format wherein the buyer enters into an agreement to acquire the property at the initial stages of development wherein a part of amount is paid upfront and the rest of the amount is paid subsequently in instalments. This is the usual situation when a flat is booked by the buyer at the initial stages of launch of the project. Subsequently when this property is sold by the said person there are issues with respect to date of acquisition as well as the indexation of cost of acquisition for the purpose of calculating capital gains in the hands of the assessee as the payment has been made in instalments during the construction of the property. Hon’ble Mumbai bench of ITAT in its judgement dated 22.08.2022 in the case of Nitin Prakash Vs. DCIT vide appeal number ITA No. 817/Mumbai/2015 & ITA No. 1540/Mumbai/2018 has reit...

False or omitted entries? Watch out penalty u/s 271AAD of the Income Tax Act, 1961.

After introduction of section 271AAD in the Income Tax Act, 1961 the assessee needs to be very vigilant and ensure that no false entry to evade tax is recorded in the books of accounts of the assessee. The said section has been introduced with effect from 01/04/2020 and the same primarily provides for a penalty equivalent the amount of any false entry in the books of account of the assessee. The objective of introduction of section 271AAD is to curb the recording of any bills in the books of accounts of the assessee wherein the goods and services mentioned in the bills have not actually been received by the assessee. The penalty of equivalent amount of any such bill recorded in the books of accounts also seems to be justified as the purpose of the same is to act as deterrent for the assessee to indulge into any such practice. The section also empowers the assessing officer to impose the penalty of the equivalent amount on any other person who causes the assessee to record any such ...

GST on Residential Rentals

Renting of Residential Dwellings Ca Saurav Jha Sunil Arora & Associates Chartered Accountants The government in its endeavour to enhance tax revenues has been looking at various new avenues to increase the tax collection. The footprint of GST in this regard is also being expanded. One such new service which has come under GST with effect from 18/07/2022 is the services with respect to the rentals from residential properties. The rentals from commercial properties has already been under GST for the last many years but prior to the notification no 05/2022 – CT (Rate) dated 13th day of July-2022, the rent from residential premises was not liable to GST. In accordance with the aforesaid notification the rentals of residential premises would also become liable for a levy of GST in case the recipient of services that means the tenant is a registered person under GST. The provisions are not applicable in case the recipient of services that means the tenant is not a registered person on th...

Amounts payable to Micro and Small Enterprises to be allowed only on payment

CA Sunil Arora Sunil Arora & Associates Chartered Accountants In the budget presented on 1st of February 2023, the Hon’ble Finance Minister of the country has proposed that any sum which is payable to micro and small enterprises will be allowed as a deduction for computing the taxable income of the assessee in the year of payment, in case the same is not paid within the time limit specified under Section 15 of the MSMED Act, 2006. The proposed amendment to Section 43B of the Income Tax Act, 1961 is being brought into the statute for promoting timely payments to micro and small enterprises. The proposed amendment provides that any sum payable by the assessee to micro and small enterprises beyond the time limit specified in Section 15 of the MSMED Act, 2006 shall be allowed as a deduction only in the year of payment. Section 15 of the MSMED Act, 2006 provides that the payments to micro and small enterprises must be made within the time as per the written agreement with them which can...

CA Sunil Arora on Litigation with respect to notices under Section 148 of the Income Tax Act:

Blog by CA Sunil Arora on Litigation with respect to notices under Section 148 of the Income Tax Act: Reassessment provisions under the Income Tax Act, 1961 have been recently witnessing huge litigation primarily arising out of notices u/s 148 issued after 31/3/2020 as well as 31/3/2021 in accordance with Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The issue became contentious due to substitution of relevant section 147 to 151 by the Finance Act, 2021. Thousands of writs were filed before various high Courts and after divergent views the matter ultimately culminated with the orders of the Hon’ble Supreme Court exercising its powers under Article 142 of the Constitution of India in the case of Union of India vs. Ashish Agarwal (2022) 138 Taxmann.com 64 (SC) holding that the notices issued under section 148 up to 30/06/2021 be treated as show cause notices under section 148A(b) of the amended provisions of the Act. In fact the Apex court validated ...

Deduction of tax at source from payments made for personal purposes.

Deduction of tax at source from payments made for personal purposes. There is a general perception that the concept of deduction of tax at source is applicable only in the case of payments made in connection with business of the assessee. During the last few years, the scope of deduction of tax at source has been extended to a number of personal payments as well. Some of the said provisions are briefly discussed hereinafter. Section 194IA: Tax @ 1% of the payment made, for acquisition of immovable property, has to be deducted at source, even if the said property is being acquired for personal use, by a person, not carrying on any business or profession. Section 194IB: Tax @ 5% is to be deducted at source, from payments made to any person, by any individual or HUF, on account of rent for any premises. The said deduction is applicable, in case the rent is more than Rs 50,000 PM, even if the premises are for the personal residence of an assesse, who may not necessarily be carrying on any ...

Tax Collection at Source on Sale of goods w.e.f. 01/10/2020

CA SUNIL ARORA CA Sunil Arora: Tax Collection at Source on Sale of goods w.e.f. 01/10/2020 To augment ease of doing business in India, the Government has increased one more compliance for any person who is selling any goods. The new provision is applicable to Sellers having turnover exceeding Rs. 10 Crores in the previous Financial year i.e. year ended 31/03/2020. Section 206C(1H) becomes operative w.e.f. 01/10/2020 which provides for tax collection at source @ 0.1% on sale of goods exceeding Rs. 50 Lacs in any Financial Year to any buyer. Implying thereby that a seller of goods will add and collect the aforesaid TCS @ 0.1% on sales to any person exceeding Rs. 50 Lacs in a year and deposit the said amount with the revenue department. All though the provision is applicable w.e.f. 01/10/2020 the sale for the purpose of the threshold limit of Rs. 50 Lacs will have to be calculated w.e.f. 01/04/2020 for the current year. PAN of the Buyer is Mandatory The seller also must obtain PAN of...

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