Utsav Garg & Associates

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27/06/2021

Cash transactions restriction under Income Tax rules:-
1. As per section 269ST of the Act No person shall receive an amount of Rs. 2,00,000 (2 Lakhs) or more:
a) in aggregate from a person in a day, or
b) in respect of a single transaction, or
c) in respect of transactions relating to one event or occassion
from person
otherwise than by an account payee cheque or an otherwise than by an account payee bank draftor use of electronic clearing system through a bank account or such electronic modes like Paytm , Google pay etc.
Failure to comply with the provision of this section would attract penalty under section 271DA. Such penalty shall be equal to the amount of such receipt.
2. As per section 269SS subject to specified exceptions, a person shall not take or accept aggregate loan/deposit from other person in cash of Rs. 20000 (Twenty thousand) or more.
Advance recieved in cash for transfer of immovable property also covered under this section.
If a person failed to comply with the provision of this section he shall be liable to pay by way of penalty, a sum equal to the amount of loan or deposit or advance taken for immovable property taken or accepted.
3. As per section 269T a person shall not repaid any loan /deposit (together with interest payable thereon) in cash if the amount of loan or deposit or advance for immovable property is Rs 20000 or more.
If a person failed to comply with the provison of this section he shall be liable to pay by way of penalty , a sum equal to the amount of loan or deposit or amount of advance taken for Immovable property repaid.
4. As per section 40A(3) of the Act, Disallowance applicable to self-employed for business expenses if paid in cash: Self-employed tax payers cannot claim any expenditure beyond Rs. 10,000/- if paid for in cash to a person on a single day. For payments made to a transporter, the law provides for a higher threshold of Rs. 35,000/-. This threshold is applicable not only for revenue expenditures but also apply for payments made for acquisition of any fixed asset failing which you will not be able to capitalise that expenditure and claim depreciation on such expenditure paid in cash.
5. Disallowance applicable to all the taxpayers for amounts paid in cash: The tax laws allow you certain deduction only if the same have been paid otherwise than by cash.
The deduction under Section 80 D, in respect of health insurance premium paid, is available only if it the same been paid otherwise than cash. However, you can claim deduction upto Rs. 5,000/- for your family and your parents each for cash paid for preventive health check-up under Section 80D within the maximum amount admissible under Section 80D.
For cash donations made, you can claim the deduction under Section 80G only if the amount of each donation does not exceed Rs. 2,000/-. For donations made beyond this threshold no deduction is available if the same is made in cash.

23/06/2021

Increased Safe harbour limit of 20% for Home Buyers and Real estate developers selling such residential units deadline ending on 30th June 2021.
In order to boost the demand in the real estate sector and to enable the real estate developers to liquidate their unsold inventoryat a lower rate to home buyers, it is proposed in Finance Budget 2021 to increase the safe harbour threshold from existing 10% to 20% under Section 43CA of the Income Tax Act 1961, if the following conditions are satisfied:-
> The transfer of residential unit tajes place during the period from 12th November, 2020 to 30th June,2021
> The transfer is by way of first time allotment of the residential unit to any person.
> The consideration received or accruing as aresult of such transferdoes not exceed Rs. Two Crores.
So circle rate shall be deemed as sale/purchase consideration only if the variation between the agreement value and circle rate is more than 20%.

21/06/2021

TDS/TCS on non filer at higher rates
W.e.f. 01.07.2021, Section 206AB introduced for higher rate for TDS for the non-filers of income tax return.
TDS rate in this section is higher of folopwing rates:'
> Twice the rate specified in the relevent provision of the Act,
or
> Twice the rate in force
or
> the rate of five percent.
Similarly it is insert a section 206CCA in the act as a provision for higher rate of TCS for non filers of income tax return.
TCS rate in this section is higher of following rates:
> Twice the rate specified in the relevent provision of the Act
or
> the rate of five percent
The above two sections apply to a person who has not filed the returns for both of the two assessment years relevent to the previous years which are immedietly before the previous year in which tax is required to be deducted or colected as the case may be and the aggregate of TDS and TCS in his case is Rs. Fifty thousand or more in each of these two previous years.
These section are not applicable to a non-resident who does not have a Permanent establishment in India.
Note: For non furnishing of PAN Section 206AA or Section 206CC of the act as the case may be applies.

21/06/2021

Tax Deduction at source (TDS) on Purchase of Goods (section 194Q)
W.e.f. 01.07.2021 a person can deduct TDS @ 0.1% for payment of any sum to any resident for purchase of goods.
> Tax is only required where total sales , gross receipts or turnover from the business carried on by him exceeds Rs. 10 crores during the preceding financial Year.
> Tax is only required to be deducted if the purchase of goods by him from the seller is of the value or aggregate of such value exceeding Rs. Fifty Lakhs.
>If on a transaction TCS is required under section 206C(1H) as well as TDS under this Section then on that transaction only TDS shall be carried out.
> If the Seller not provide its PAN than TDS shall be at the rate of Five Percent (5%).
Example: Mr. A Purchases goods worth Rs. 80 Lakhs from Mr. B than
Case 01 .If the Turnover of both Mr. A and Mr. B was More than Rs. 10 Crores in Preceeding Financial Year (2020-21)
Mr A is required to deduct TDS on (80 Lakhs - 50 Lakhs) @ .1% i.e Rs. 3000
Case 02. If the Turnover of Mr. A was more than 10 crores in FY (2020-21) and Mr B Turnover was less than 10 Crores.
Mr A is required to deduct TDS on (RS. 80 lakhs - 50 Lakhs) @ .1% i.e Rs. 3000
Case 03. If the Turnover of Mr A was less than 10 Crores and Mr B Turnover was more than 10 Crores In F.Y. 2020-21
Mr. B collect TCS @ 0.1% on (80 Lakhs -50 Lakhs) i.e Rs. 3000. as per Section 206C(1H)
Case 04. If the Turnover of both Mr A and Mr B was less than 10 Crores in F.Y. 2020-21
Both section 194 Q and 206C(1H) not attracted so not required to Deduct TDS or Collect TCS under these sections.

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