Applicability of Income Tax Return Forms to be filed for AY 2017-18

It's that time of the year when we have to file income tax return. But which one & when? Let's find out!

ITR No.		Who can use the return	Who cannot use the return	Is Annexure Required	How can the return be filed	Can Paper return be filed	Is Audit compulsory	Is Digital Signature Certificate Compulsory
1	Individual whose total Income for the AY 2017-18 includes: a)  Income from Salary/Pension b) Income from ONE house property (no brought forward loss) c) Income from other sources (Exceptions noted in next column)		1. The income should not include income from more than one house property 2.If there is brought forward loss from house property from any previous year 3.Income from other sources include Lottery income, income from race horses and income taxable u/s 115BBDA or income  of the nature referred in section 115BBE 4.Income under the head Capital Gains 5. Agricultural Income in excess of Rs 5000 6.Income from Business or Profession 7.Loss under the head “Income from other sources” 8.Person claiming relief u/s90 or 91 9.Any resident having any asset (including financial interest in any entity)located outside India or signing authority in any account located outside India 10.Any resident having income from any source outside India Note: Such Individuals can file ITR 2	No	1.By Furnishing return in paper form 2.By furnishing return electronically under digital signature 3.By transmitting the data in the return electronically under Electronic verification Code(EVC) 4.By transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR V	Yes, but only in below mentioned two conditions: 1.An individual of the age of 80 years or more at any time during the previous year 2.An individual whose  income does not exceed Rs 5 lakhs and no refund is claimed in the return	No	No
2	1.Individual and HUF who cannot file ITR1 2.Income under the head “Profits and gains from Business & Profession” is received form Partnership only (not proprietorship)		Individual and HUF having income from Business or Profession from Proprietorship Note: Such individual/ HUF can file ITR 3	No	1.By furnishing return electronically under digital signature 2.By transmitting the data in the return electronically under Electronic verification Code(EVC) 3.By transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR V	No	No	No
3	Individual/HUF carrying out proprietary business or profession		N.A.	No	1.By furnishing return electronically under digital signature 2.By transmitting the data in the return electronically under Electronic verification Code(EVC 3.By transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR V	No	No, the accounts are required to be audited only u/s 44AB(If conditions of the section are met)	No, only in the case where accounts are required to be audited u/s 44AB
4(Sugam)	Individual/ HUF/ Partnership Firm whose total income for the AY 2017-18 includes : 1.Business or Profession income are computed in accordance with section 44AD, 44 AE or 44ADA 2.Salary/Pension 3.ncome from One House Property(Excluding where loss is brought forward from previous year) 4.Income from other sources (Excluding winning from lottery or Race Horses)		1.The income should not include income from more than one house property 2.If there is brought forward loss from house property from any previous year 3.Income from other sources include Lottery income, income from race horses and 4.Income under the head Capital Gains 5.Agricultural Income in excess of Rs 5000 6.Income from speculative business 7.ncome from agency business or income in the nature of commission or brokerage 8.Person claiming relief u/s 90 or 91 9.Any resident having any asset (including financial interest in any entity)located outside India or signing authority in any account located outside India 10.Any resident having income from any source outside India Note: In such case, the assessee can file regular ITR 3 or 5 as the case may be.		1.By Furnishing return in paper form 2.By furnishing return electronically under digital signature 3.By transmitting the data in the return electronically under Electronic verification Code(EVC) 4.By transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR V	Yes, but only in below mentioned two conditions: 1.An individual of the age of 80 years or more at any time during the previous year 2.An individual whose  income does not exceed Rs 5 lakhs and no refund is claimed in the return	No	No
5.	LLP/ AOP/BOI/Artificial Juridical Person/co-operative societies/ registered societies and Local authority		Person filing return u/s 139(4A)/ 139(4B)/ 139(4C)/ 139(4D)/ 139(4E)/139(4F) Note: Assessee can file ITR 7	No	1.By furnishing return electronically under digital signature 2.By transmitting the data in the return electronically under Electronic verification Code(EVC) 3.By transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR V	No	No, the accounts are required to be audited only u/s 44AB(If conditions of the section are met)	No, only in the case where accounts are required to be audited u/s 44AB
6	Companies (except company claiming exemption u/s11)		Companies claiming exemption u/s 11	No	Only electronically under digital signature	No	No, the accounts are required to be audited only u/s 44AB(If conditions of the section are met)	Yes in all cases
7	Person furnishing return u/s 139(4A)/ 139(4B)/ 139(4C)/ 139(4D)/ 139(4E)/139(4F)		NA	No	1.By furnishing return electronically under digital signature 2.By transmitting the data in the return electronically under Electronic verification Code(EVC) 3.By transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR V Note: Political parties should compulsorily file return electronically under digital signature	No	No, the accounts are required to be audited only u/s 44AB(If conditions of the section are met)	No, Only political party has to file return under digital signature

Notes:

1.      It is advisable to check your Tax Credit Statement ( Form 26 AS). If there is any discrepancy between TDS claimed and TDS as appearing in form 26AS, there is delay in processing of refund.

2.      Individuals filing ITR 1 will be required to provide details of cash deposited between 09/11/16 to 30/12/2016 in their bank account or any other account (such as loan account). However the details are required to be furnished only if the aggregate amount deposited exceeds Rs 2 lakhs.

3.      Where the Return Form is furnished by manually sending the ITRV, the assessee should print out two copies of Form ITR-V. One copy of ITR-V, duly signed by the assessee, has to be sent by post to - Post Bag No. 1, Electronic City Office, Bengaluru— 560 100, Karnataka. The other copy may be retained by the assessee for his record.

4.      Due date for filing return is as follows:

·         If the accounts are not required to be audited – 30^th July 2017

·         If the accounts are required to be audited         –30^th September 2017

5.      Tax slab for AY 2017-18

1.      In case of every individual (other than resident individual who is of the age of 60 years or more at any time during the financial year 2016-17) –

	Income (Rs)	Tax Liability (Rs)
1	Upto 2,50,000	Nil
2	Between 2,50,001 – 5,00,000	10% of income in excess of 2,50,000
3	Between 5,00,001 – 10,00,000	25,000 + 20% of income in excess of 5,00,000
4	Above 10,00,000	1,25,000 + 30% of income in excess of 10,00,000

2.      In case of every individual who is of the age of 60 years or more but less than 80 years  at any time during the financial year 2016-17–

	Income (Rs)	Tax Liability (Rs)
1	Upto 3,00,000	Nil
2	Between 3,00,001 – 5,00,000	10% of income in excess of 3,00,000
3	Between 5,00,001 – 10,00,000	20,000 + 20% of income in excess of 5,00,000
4	Above 10,00,000	1,20,000 + 30% of income in excess of 10,00,000

3.      In case of every individual who is of the age of 80 years or more at any time during the financial year 2016-17–

	Income (Rs)	Tax Liability (Rs)
1	Upto 5,00,000	Nil
2	Between 5,00,001 – 10,00,000	20% of income in excess of 5,00,000
3	Above 10,00,000	1,00,000 + 30% of income in excess of 10,00,000

Be informed and file correct return to avoid tax notice! Wish you all a very happy July!

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Why Agricultural Income should NOT be taxed in India

Since the time Chief Economic Advisor Arvind Subramaniam made a statement that India needs to tax agricultural income on rich farmers, editorial of every paper is speaking in favor of it. The whole idea of taxing agricultural income is to increase the tax base and hence generate more revenue. I, however, hold a different view due to below mentioned reasons:

1. Increasing the tax base - According to National Sample Survey, almost 90% farmers in India have less than 2 acres of holding. That means only a little over 10% of farmers would fall under the tax net. Amongst them, only 50% earns a substantial amount which would increase the government's revenue. That means the argument that taxing agricultural income would increase the tax base does not hold true. There are lakhs of small business houses who understate their income. Bring them under the tax ambit. Also, the accounts of NGOs, educational institutions, marriage halls etc which claim exemption under the category of Charitable Institutions need to be honestly and thoroughly checked. It would not only generate income for the state but would also solve many social problems like ever increasing school fees.The government should therefore concentrate on how to bring such entities under the tax net rather than taxing the farmers.

2. Increase in Government's Revenue - In India there are a little more than 4 lakh people claiming exemption of agricultural income. The case of Kaveri seeds and Monsanto India is generally put forward to support the claim as these two companies have claimed exemption in crores on account of agricultural income. My argument is that in order to tax these two companies, if we tax other farmers who though earn well but not as much as their other counterparts, it would be gross injustice to them. What the government should instead do is to stop the monopoly of these companies so that the income is distributed to other farmers as well. Make a level playing field, let other parties enter the competition an see the results.

3. What to tax and when - What should be the taxing event, when the output is produced or when it is sold in the market? What should be taxed? Is it the total output or the net output (Gross - self consumption)? Can all crops be taxed, whether commercial or otherwise? In a country like India which is heavily monsoon dependent, can there be uniformity in tax laws each year? Few months back there was a lot of hue and cry about the prices of Tur Daal. Can there be tax in such case when despite of bumper production our demand outpaced the supply and hence we have to resort to imports? Will it not worsen the situation by increasing the prices?

4. Accounting Issues - If big farmers are indeed to be treated at par with companies or professionals, they have to account for all the transactions carried on in their course of business. It is difficult to expect from the farmers to maintain the records. Making up a profit and loss account would be extremely difficult in such a case.

5. Increase in the prices of food articles - Taxing the agricultural income means increase the prices of the food articles. We are still struggling to keep the retail inflation within limits, any increase in the price of essential items would worsen the situation.

6. Political Suicide - Agriculture is a very sensitive issue in India. It is a sector which is often rocked with the news of farmers suicide. Taxing it would mean antagonising the sentiments of millions of Indians. Not only the farmers but also salaried class Indians empathize with them. On top of it the Opposition will make a lot of hue and cry and it is very unlikely that the law could be passed, just like the case of land ordinance. Thus, it is very unlikely that any political party would dare to take such step. Taxing it, at least for now, would be a political suicide.

In all the arguments making the news, the point which is lost is that the Income Tax officer has got the power to check the authenticity of the claim of agricultural income filed in the return. If they are unsatisfied with the claim they can disallow it. However, for that to happen our machinery needs to be transparent. The corruption in the Income Tax department is well known. Though the government has taken certain steps to clean the system, yet a lot remains to be done.

The government is desperate to curb the black money. Only if the government can check the exemption wrongly claimed by the people (including political parties), the need to tax it won't arise. There are lot many sectors which government can target to generate income, putting burden on the agricultural class is definitely not a work able idea. I rest my case.

Thanks for reading!

GST Concept & Status

  

Introduction

The introduction of Goods and Services Tax (GST) would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax, it would mitigate cascading or double taxation in a major way and pave the way for a common national market. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated to be around 25%-30%. Introduction of GST would also make Indian products competitive in the domestic and international markets. Studies show that this would have a boosting impact on economic growth. Last but not the least, this tax, because of its transparent and self-policing character, would be easier to administer.

GST and Centre-State Financial Relations

Currently, fiscal powers between the Centre and the States are clearly demarcated in the Constitution with almost no overlap between the respective domains. The Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while the States have the powers to levy tax on sale of goods. In case of inter-State sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the originating States. As for services, it is the Centre alone that is empowered to levy service tax. Since the States are not empowered to levy any tax on the sale or purchase of goods in the course of their importation into or exportation from India, the Centre levies and collects this tax as additional duties of customs, which is in addition to the Basic Customs Duty. This additional duty of customs (commonly known as CVD and SAD) counter balances excise duties, sales tax, State VAT and other taxes levied on the like domestic product. Introduction of GST would require amendments in the Constitution so as to concurrently empower the Centre and the States to levy and collect the GST.

 

The assignment of concurrent jurisdiction to the Centre and the States for the levy of GST would require a unique institutional mechanism that would ensure that decisions about the structure, design and operation of GST are taken jointly by the two. For it to be effective, such a mechanism also needs to have Constitutional force.

Constitution (One Hundred and First) Amendment Act, 2016

To address all these and other issues, the Constitution (122nd Amendment) Bill was introduced in the 16th Lok Sabha on 19.12.2014. The Bill provides for a levy of GST on supply of all goods or services except for Alcohol for human consumption. The tax shall be levied as Dual GST separately but concurrently by the Union (central tax - CGST) and the States (including UnionTerritories with legislatures) (State tax - SGST) / Union territories without legislatures (Union territory tax- UTGST). The Parliament would have exclusive power to levy GST (integrated tax - IGST) on inter-State trade or commerce (including imports) in goods or services. The Central Government will have the power to levy excise duty in addition to the GST on tobacco and tobacco products. The tax on supply of five specified petroleum products namely crude, high speed diesel, petrol, ATF and natural gas would be levied from a later date on the recommendation of GST Council.

 

The Constitution Amendment Bill was passed by the Lok Sabha in May, 2015. The Bill was referred to the Select Committee of Rajya Sabha on 12.05.2015. The Select Committee had submitted its Report on the Bill on 22.07.2015. The Bill with certain amendments was finally passed in the Rajya Sabha and thereafter by Lok Sabha in August, 2016. Further the bill had been ratified by required number of States and received assent of the President on 8th September, 2016 and has since been enacted as Constitution (101st Amendment) Act, 2016 w.e.f. 16th September, 2016.

Goods and Services Tax Council (GSTC)

The GSTC has been notified with effect from 12th September, 2016. GSTC is being assisted by a Secretariat. Thirteen meetings of the GSTC have been held so far. The following major decisions have been taken by the GSTC:

 

(i) The threshold exemption limit would be Rs. 20 lakh. For special category States enumerated in article 279A of the Constitution, threshold exemption limit has been fixed at Rs. 10 lakh.

(ii) Composition threshold shall be Rs. 50 lakh. Composition scheme shall not be available to inter-State suppliers, service providers (except restaurant service) and specified category of manufacturers.

 

(iii) Existing tax incentive schemes of Central or State governments may be continued by respective government by way of reimbursement through budgetary route. The schemes, in the present form, would not continue in GST.

 

(iv) There would be four tax rates namely 5%, 12%, 18% and 28%.

Besides, some goods and services would be under the list of exempt items. Rate for precious metals is yet to be fixed. A cess over the peak rate of 28% on certain specified luxury and demerit goods would be imposed for a period of five years to compensate States for any revenue loss on account of implementation of GST. The Council has asked the Committee of officers to fit various goods and services in these four slabs keeping in view the present incidence of tax.

(v) The five laws namely CGST Law, UTGST Law, IGST Law, SGST Law and GST Compensation Law have been recommended.

(vi) In order to ensure single interface, all administrative control over 90% of taxpayers having turnover below Rs. 1.5 crore would vest with State tax administration and over 10% with the Central tax administration. Further all administrative control over taxpayers having turnover above Rs. 1.5 crore shall be divided equally in the ratio of 50% each for the Central and State tax administration.

(vii) Powers under the IGST Act shall also be cross-empowered on the same basis as under CGST and SGST Acts with few exceptions.

(viii) Power to collect GST in territorial waters shall be delegated by Central Government to the States.

(ix) Formula and mechanism for GST Compensation Cess has been finalised.

(x) Four rules on input tax credit, composition levy, transitional provisions and valuation have been recommended. Further five Rules on registration, invoice, payments, returns and refund, finalized in September, 2016 and as amended in light of the GST bills introduced in the Parliament, have also been recommended.

 

Salient Features of GST

 

The salient features of GST are asunder:

 

(i) GST would be applicable on “supply” of goods or services as against the present concept of tax on the manufacture of goods or on sale of goods or on provision of services.

 

(ii) GST would be based on the principle of destination based consumption taxation as against the present principle of origin based taxation.

 

(iii) It would be a dual GST with the Centre and the States simultaneously levying it on a common base. The GST to be levied by the Centre would be called Central GST (CGST) and that to be levied by the States [including Union territories with legislature] would be called State GST (SGST). Union territories without legislature would levy Union territory GST (UTGST).

 

(iv) An Integrated GST (IGST) would be levied on inter-State supply (including stock transfers) of goods or services. This would be collected by the Centre so that the credit chain is not disrupted.

 

 

(v) Import of goods would be treated as inter-State supplies and would be subject to IGST in addition to the applicable customs duties.

 

(vi) Import of services would be treated as inter-State supplies and would be subject to IGST.

 

(vii) CGST, SGST /UTGST & IGST would be levied at rates to be mutually agreed upon by the Centre and the States under the aegis of the GSTC.

 

(viii) GST would replace the following taxes currently levied and collected by the Centre:

 

a) Central Excise Duty;

b) Duties of Excise (Medicinal and Toilet Preparations);

c) Additional Duties of Excise (Goods of Special Importance);

d) Additional Duties of Excise (Textiles and Textile Products);

e) Additional Duties of Customs (commonly known as CVD);

f) Special Additional Duty of Customs (SAD);

g) Service Tax;

h) Cesses and surcharges in so far as they relate to supply of goods or services.

 

(ix) State taxes that would be subsumed within the GST are:

 

a) State VAT;

b) Central Sales Tax;

c) Purchase Tax;

d) Luxury Tax;

e) Entry Tax (All forms);

f) Entertainment Tax (except those levied by the local bodies);

g) Taxes on advertisements;

h) Taxes on lotteries, betting and gambling;

i) State cesses and surcharges insofar as they relate to supply of goods or services.

 

 

(x) GST would apply to all goods and services except Alcohol for human consumption.

 

(xi) GST on five specified petroleum products (Crude, Petrol, Diesel, ATF & Natural gas) would be applicable from a date to be recommended by the GSTC.

 

(xii) Tobacco and tobacco products would be subject to GST. In addition, the Centre would continue to levy Central Excise duty.

 

(xiii) A common threshold exemption would apply to both CGST and SGST. Taxpayers with an annual turnover of Rs. 20 lakh (Rs. 10 lakh for special category States as specified in article 279A of the Constitution) would be exempt from GST. A compounding option (i.e. to pay tax at a flat rate without credits) would be available to small taxpayers (including to specified category of manufacturers and service providers) having an annual turnover of up to Rs. 50 lakh. The threshold exemption and compounding scheme would be optional.

 

(xiv) The list of exempted goods and services would be kept to a minimum and it would be harmonized for the Centre and the States as well as across States as far as possible.

 

(xv) Exports would be zero-rated.

 

(xvi) Credit of CGST paid on inputs may be used only for paying CGST on the output and the credit of SGST/UTGST paid on inputs may be used only for paying SGST/UTGST. In other words, the two streams of input tax credit (ITC) cannot be cross utilized, except in specified circumstances of inter-State supplies for payment of IGST.

 

The credit would be permitted to be utilized in the following manner:

 

a) ITC of CGST allowed for payment of CGST & IGST in that order;

b) ITC of SGST allowed for payment of SGST & IGST in that order;

 

 

c) ITC of UTGST allowed for payment of UTGST & IGST in that order;

d) ITC of IGST allowed for payment of IGST, CGST & SGST/UTGST in that order.

 

ITC of CGST cannot be used for payment of SGST/UTGST and vice versa.

 

(xvii) Accounts would be settled periodically between the Centre and the State to ensure that the credit of SGST used for payment of IGST is transferred by the originating State to the Centre. Similarly the IGST used for payment of SGST would be transferred by Centre to the destination State. Further the SGST portion of IGST collected on B2C supplies would also be transferred by Centre to the destination State. The transfer of funds would be carried out on the basis of information contained in the returns filed by the taxpayers.

 

(xviii) Input Tax Credit (ITC) to be broad based by making it available in respect of taxes paid on any supply of goods or services or both used or intended to be used in the course or furtherance of business.

 

(xix) Electronic filing of returns by different class of persons at different cut-off dates.

 

(xx) Various modes of payment of tax available to the taxpayer including internet banking, debit/ credit card and National Electronic Funds Transfer (NEFT) / Real Time Gross Settlement (RTGS).

 

(xxi) Obligation on certain persons including government departments, local authorities and government agencies, who are recipients of supply, to deduct tax at the rate of 1% from the payment made or credited to the supplier where total value of supply, under a contract, exceeds two lakh and fifty thousand rupees (Rs. 2.5 lac).

  

(xxii) Refund of tax to be sought by taxpayer or by any other person who has borne the incidence of tax within two years from the relevant date.

 

(xxiii) Obligation on electronic commerce operators to collect ‘tax at source’, at such rate not exceeding two per cent. (2%) of net value of taxable supplies, out of payments to suppliers supplying goods or services through their portals.

 

(xxiv) System of self-assessment of the taxes payable by the registered person.

 

(xxv) Audit of registered persons to be conducted in order to verify compliance with the provisions of Act.

 

(xxvi) Limitation period for raising demand is three (3) years from the due date of filing of annual return or from the date of erroneous refund for raising demand for short-payment or non-payment of tax or erroneous refund and its adjudication in normal cases.

 

(xxvii) Limitation period for raising demand is five (5) years from the due date of filing of annual return or from the date of erroneous refund for raising demand for short-payment or non-payment of tax or erroneous refund and its adjudication in case of fraud, suppression or willful mis-statement.

 

(xxviii) Arrears of tax to be recovered using various modes including detaining and sale of goods, movable and immovable property of defaulting taxable person.

 

(xxix) Officers would have restrictive powers of inspection, search, seizure and arrest.

 

(xxx) Goods and Services Tax Appellate Tribunal would be constituted by the Central Government for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority. States would adopt the provisions relating to Tribunal in respective SGST Act.

 

(xxxi) Provision for penalties for contravention of the provision of the proposed legislation has been made.

(xxxii) Advance Ruling Authority would be constituted by States in order to enable the taxpayer to seek a binding clarity on taxation matters from the department. Centre would adopt such authority under CGST Act.
 (xxxiii) An anti-profiteering clause has been provided in order to ensure that business passes on the benefit of reduced tax incidence on goods or services or both to the consumers.
 

(xxxiv) Elaborate transitional provisions have been provided for smooth transition of existing taxpayers to GST regime. 

Benefits of GST

(A) Make in India

(i) Will help to create a unified common national market for India, giving a boost to Foreign investment and “Make in India” campaign;

 

(ii) Will prevent cascading of taxes as Input Tax Credit will be available across goods and services at every stage of supply;

 

(iii) Harmonization of laws, procedures and rates of tax;

 

(iv) It will boost export and manufacturing activity, generate more employment and thus increase GDP with gainful employment leading to substantive economic growth;

 

(v) Ultimately it will help in poverty eradication by generating more employment and more financial resources;

 

(vi) More efficient neutralization of taxes especially for exports thereby making our products more competitive in the international market and give boost to Indian Exports;

 

(vii) Improve the overall investment climate in the country which will naturally benefit the development in the states;

 

(viii) Uniform SGST and IGST rates will reduce the incentive for evasion by eliminating rate arbitrage between neighboring States and that between intra and inter-State sales;

(ix) Average tax burden on companies is likely to come down which is expected to reduce prices and lower prices mean more consumption, which in turn means more production thereby helping in the growth of the industries . This will create India as a “Manufacturing hub”.

 (B) Ease of Doing Business

(i) Simpler tax regime with fewer exemptions;

 

(ii) Reductions in the multiplicity of taxes that are at present governing our indirect tax system leading to simplification and uniformity;

 

(iii) Reduction in compliance costs - No multiple record keeping for a variety of taxes - so lesser investment of resources and manpower in maintaining records;

 

(iv) Simplified and automated procedures for various processes such as registration, returns, refunds, tax payments, etc;

 

(v) All interaction to be through the common GSTN portal - so less public interface between the taxpayer and the tax administration;

 

(vi) Will improve environment of compliance as all returns to be filed online, input credits to be verified online, encouraging more paper trail of transactions;

 

(vii) Common procedures for registration of taxpayers, refund of taxes, uniform formats of tax return, common tax base, common system of classification of goods and services will lend greater certainty to taxation system;

 

(viii) Timelines to be provided for important activities like obtaining registration, refunds, etc;

 

(ix) Electronic matching of input tax credits all - across India thus making the process more transparent and accountable.

 

(C) Benefit to Consumers:

(i) Final price of goods is expected to be lower due to seamless flow of input tax credit between the manufacturer, retailer and service supplier;

 

(ii) It is expected that a relatively large segment of small retailers will be either exempted from tax or will suffer very low tax rates under a compounding scheme- purchases from such entities will cost less for the consumers;

 

(iii) Average tax burden on companies is likely to come down which is expected to reduce prices and lower prices mean more consumption.

Ref: http://www.cbec.gov.in/htdocs-cbec/gst

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What after qualifying CA?Job or private practice?

Well, isn't it that almost all CA students sometime in their journey to become a CA has faced such a dilemma? Practice or Job? Our choice of firm for articleship depends on this one question! But seldom we get the answer. Let me try to solve the mystery for you.

1. Exposure - In job you get exposure only for a particular domain. Say, if you get into Assurance (Audit) department of any corporate, you will just be doing audit work. Nothing more! That too, if you get any particular industry (say manufacturing or healthcare), you will work in that only. That means you will specialize in one particular field. To grow from there is up to your own talent. Go for further specializations, certifications etc. to keep yourself update with the latest developments in your field and rise the corporate ladder with confidence and lot of perks. The exposure that corporate gives cannot be matched. They work for very high profile clients and therefore you get practical exposure to all things that you study in your curriculum (like IFRS, Derivative valuations, AS 30,31,32 etc.) Remember, that would be in particular field only and you will be totally cut off from other areas until of course you are very keen to update yourself of all the developments related to other domains as well. Trust me, it will require lot of hard work!

On the contrary in practice, you get exposed to various fields. Accounting, Taxation, Audit, Compliance, Legal etc. You keep yourself updated with various things. You apply bit of everything that you have studied. It is like jack of all trades. But, it is up to you. In case you want to specialize in particular field and provide your services to your clients,go for post qualification courses and do specialization. 

2. Time & Money - If you want to go for job, try your best to at least qualify in first attempt, if not a rank holder. Companies pay more to those candidates who have qualified in one attempt. But, in case you have qualified in subsequent attempt then also do not lose heart! Unemployed CA is a myth and a hype! If you have strong knowledge, companies will come for you. Go for a big brand and profile of your choice for your first job. If you have to choose between package and profile, choose profile and brand name. It may be paying you less but the growth is more. That means subsequent jump in the package will be more as compared to a lesser known company. Jobs pay instantly. So it gives a sense of accomplishment that all your hard work has payed. Your growth depends on your hard work. If you are good, companies will pay you as per your demand.

On the other hand, money does not come easily in practice. It will require lot of hard work for initial few years. You have to put capital from your own pocket. Initially it's all expense. Don't get disheartened! Once you are well settled in your practice, money flows exponentially! Have patience and keep working!

3.Place - Your job may take you anywhere around the globe. You may settle in India (which will of course be metros) or somewhere else in the world. You may have to leave your parents behind (if they do not agree to leave their native place).

For practice, you have to settle at one place. If you have done your articleship from the same city where you want to set up your practice, it works to your advantage as you already have contacts. Your CA under whom you have done your articleship may help you in getting some assignments. If you are good at your work and have cordial relation with him, he may take you as a partner in his firm.That way, you not only get contacts but also big clientele. But if your place of articleship and practice is different, it will require some struggle to set your foot at new place. Hard work is the key!

4. Professionalism/Soft skills - It is said that one cannot succeed in professional and personal life if he lacks soft skills.Companies spend a lot of money on training to their employees on soft skills. That way, you enrich yourself without any extra cost, that too from very experienced and professional trainers! Whereas in practice you have to learn these aspects by yourself. It is required very much in practice. Liasoning, communication, problem solving ability etc are to name a few. Institute has also made it compulsory in Orientation and  GMCS curriculum to provide training in soft skills. Just don't attend these classes for completing a course but make it a part of your personality. You will benefit a lot by applying them in your practical life, whether in job or in practice.

5.Boss vs Employee - This we all know! No matter how good a job is, still you are a servant of the company! You will have a boss. You will be answerable and responsible to someone else. You can't take decisions based on your sweet will. But in practice, you are the king! You are answerable to yourself for your own actions. You will be responsible for anything good or bad that may happen as a consequence of your action. You can take risk as per your own will! All decisions would be based on your judgement.You don't have to ask or convince anybody. The learning is remarkable! Each experience makes you a better professional! 

6.Attitude - Last but the most important is your attitude. Do you have a mindset which favors being an employee or you are the one who is ready to take some more pain post qualification to set up his own practice? Can you work under somebody else and take others orders? If yes, you can go for job. If no, go for practice! Practice requires lot of confidence and struggle. Are you ready for that?

Some people suggest that they will work in corporate for some time, make contacts, generate funds and then will set up their practice. It is also a good option but remember, for that you have to stay at one place in your job and will require at least 10 years of corporate experience to accomplish that.It is so because, first of all, when you join a company, it is the entry level. It will require sometime to reach that position where you can actually make contacts. Also, it is difficult to save while you are in the job as one is habituated to an improved standards of living. As your income rises, so do your expenses! Savings do suffer! If you want to go for this option, plan accordingly!

Well, all said, the most important aspect is satisfaction. Go where you are get job satisfaction. You will definitely rise. Don't follow others blindly. Listen to your heart and then take the decisions.

I hope my article help in clearing a bit of air around job vs practice! If you have any other query, feel free o shoot it in the comment box. I promise I will reply!

Thanks for reading!

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Recognize your talent before you choose your carrer

Right from the time we are born, one questions that always haunt us is -beta, bade hoke kya banoge? (What do you want to do in life) At that time, obviously we are too young to answer that. But then there are few people who do reply on our behalf. Like, if you belong to a normal salaried class family and you are boy , then definitely an engineer, if you are a girl, then doctor . If you have a family business, then definitely you are going to join the same. If either of your parent is a professional, say doctor or lawyer or CA, then you are expected to take forward the legacy. Then we are groomed that way, right from our childhood days. Constantly such thoughts are sowed in our mind such that it becomes a part of our personality. However, in the process, something is lost, something which nobody else can tell except we ourselves. That is our own talent! Everyone born on this planet is blessed with some unique ability. The whole purpose of our education system is to bring out the best in students, based on their ability, and then send them into the society to serve at mass. It may be in any form, be it a Doctor, Engineer, Manager, Teacher, Civil Servants, Businessman etc. The aim should be to develop the inherent quality and not only the marketable one! However, the scenario today is just the opposite.The goal has shifted from talent to what quality is in demand?Which one will fetch more money, name & fame? Is it B.Tech + MBA, or CA+MBA or M.B.B.S + MD, Civil Servants or any other course? Roughly, more than 60% students don't chose their career. I don't mean that their parents force them to do so but what I mean is that they follow herd behavior. Something that suits your friend may not be suitable for you. Why to follow others? Determine what YOU really want to do! What are Your abilities? Do you LOVE being what you are Today? Or your heart is lying somewhere else? Is it giving you happiness & satisfaction? The benchmark for judging one's success should be the happiness index and not monetary index. If you really want to be happy, choose a field which is in resonance with your talent and ability. 

It is easy said than done. Some common questions that bother us are:- 

• How to recognize our talent? 
• What if it's too late?
• Has it got any future?
• What if I fail?
• Should I leave my comfort zone to pursue it? 

These are basic questions. Let me try to answer some of them, based on my experiences;

First, How to recognize our talent? This is the most herculean task! To answer it, rewind yourself to your school days. Think about what were the things in which you were the best! Was it teaching some very difficult concept to your friend in easy way, or you were an excellent motivator? Or perhaps an unmatched painter! Or a Guitarist? Or an orator?Or  you just loved cooking? Something in which you excelled! Something that you miss being today. That is your talent! It may be that you were good at many things but out of that, THE ONE QUALITY which describes you, is your talent!

Next is about timings. Well, it's never too late to start! There are numerous stories where people realized their dreams at a very late stage in their life. They were late because either they realized their talent very late or it took them some time to gather courage to move out of their comfort zone! Yet, they succeeded! So could you!

Third is about the future of your talent.Hmm,,my experience says that there is no dearth of market for any kind of talent. If you have it, there will be people who would be interested in paying a good price for it! But it doesn't happen in a day! It takes time. Ups & Downs do happen! Don't stop believing in yourself! Have positive attitude, attitude that every problem comes with solution. Be determined to succeed! Work on your shortcomings! Grab the opportunities!Success will follow!

Next is the fear of failure  ! It is a very genuine concern. I mean, we all have responsibilities! If we fail, who will take care of it? Well. my dear friends, first of all, if you have your heart & soul in your work, it is very unlikely that it will fail! It may happen that it may not work up to your expectations, but calling it a failure would be gross injustice to your hard work. Anyways, to answer that, first determine you risk taking capacity. Next, determine how you would want to go ahead with your idea. Have a backup plan for your finances ( like if both husband & wife are working, one can forego his /her job to pursue his dreams while the other can support monetarily).

Last one is how to get out of our comfort zone? To overcome inertia is a big big task! Have strong will power. Don't delay! Don't hesitate! Determine & follow! Read inspiring stories where people have fought against all odds to achieve their dreams. Be inspired and inspire others!

When I was a student, there were lot of confusion in my mind about my career, Lot many unanswered questions, dilemma etc. Once I got job, I thought that would be an end to all. But that never happened! They still came hovering my mind! However, God has planned something interesting for me! I returned to Lucknow, leaving my well paying job, due to some personal reasons. I started teaching UG and PG students. To my surprise, people two generations younger to me were facing the same questions that once I faced! Nothing changed in these 10 years! Students were still clueless as to what do they wanted to do in life! That means, still our education system was unable to acknowledge the problems faced by the students. That experience changed my life! I realized that this is what I really wanted to do! Education was my field! To teach , to guide and to help students! No matter whether it pays me enough or not, but the satisfaction that I get when students understand the concept,  their expression when their problems are solved is priceless! This is my story. My little contribution to nation building!

Thank You for reading!

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Time Management -I ( Students)

Hello! My dear students, here I am again! On your request I am writing how to manage your time. But, is it really possible to do that? Remember Mahabharata of 90's - "Main Samay hoon! Kaal ka chakra kisi ke liye nhi rukta!" (I am time and I stop for none). That means time will pass, no matter what.  How YOU choose to utilize that time determines success or failure.

God has been very kind to us. He has impartially given us 24 hours. Each one of us get the same amount of time. Neither a second less, nor a second more! But sometimes it appears that the other person has got some extra time to cover all his tasks while we are still struggling to reach half way even though its time to retire for bed! Result? Tension, worry, guilt feeling, mounting pressure etc. Next day we have new tasks to perform over and above of what is left of yesterday. That means we are piling lots of work with limited capacity and ability to finish them. Consequently, we miss deadlines for assignments, couldn't complete our course before exams, no proper revision etc.etc.etc.

What could be the possible reason?  The reason is your choice of work in those 24 hours. How that choice will be determined depends on your planning and determination! Whatever you have determined, do it with full vigor! Did you decide to study or socialize? If  your decision is to study, then to study what? Was it your favorite subject or the neglected one? If you decide to socialize, how much time you have spent on that? Was it the RIGHT TIME to do that?

I have some tips for you. For convenience the topic has been divided into three sections:

1. Regular College days
2. Examination Preparation days
3. During Examination time

Regular College Days

Make a time table of your daily activity. For example:

5:30 AM                     - Wake up

5:30-6:00 AM             - Freshen up/ read newspaper

6:00-7:00 AM             - Exercise

7:00-8:00 AM             - Self study

8:00- 8:30 AM            -Getting ready for college, including breakfast

8:30- 9:00 AM            - Travel time

9:00 AM - 2:00 PM     - College

2:00- 2:30 PM             - Lunch & Travelling

2:30 - 3:30 PM            - Coaching/ Learning other skill set

3:30 - 4:00 PM            - Travelling

4:00 - 4:30 PM            - Rest/Power nap/watching TV etc

4:30 - 6:30 PM            - Self study

6:30 - 6:45 PM            - Rest/ Socializing, including FB, Watsapp etc

6:45 - 9:15 PM            - Self Study

9:15- 9:45 PM             - Dinner

9:45 - 10:30 PM          - Self Study

10:30 PM - 5:30 AM   - Sleep

This is just an example. You can make your own schedule accordingly. Please keep the following points in consideration while preparing your schedule:

• Always take out time for self study. There is no substitute for that. Your college & coaching is waste if you do not put your own efforts. Also, Please DO NOT be completely dependent on coaching. When you join coaching center, they presume that you have certain basic level of knowledge. If you don't have that it is very unlikely that you will be benefited in a substantial way through it. Secondly, always make your concepts through good books rather than solely depending on coaching notes. Notes may be complete for examination purpose, but they do not make concepts. For that you have to work hard. You may pass the exam, but the real battle starts thereafter, for Jobs and career progression. Trust me, if you concepts are loose, you will find it extremely hard in the real world! So concentrate on concepts rather than just examination passing tips! Also, some students tend to make rough notes in class and fair them out afterwards. This is a complete time waste! Fair it out when you are taking down the notes first time itself. Have a strong concentration in class. Nothing can match the class room studies when the teacher is in front of you. So make the most use of it. Lastly, if you do not revise, you will forget! Even the most intelligent child ( I generally don't stick to traditional way of judging one's intelligence, but for understanding let's consider it to be the class topper) will forget what is taught in the class if he skips his regular revisions. 
• Make a time table for the subjects to be studied in a particular day. It may be all the subjects covered either in your college or coaching that day. Allocate time to study ALL the subjects! Spend regular time to study the one which is of least interest to you. That way you will build up your weak area. If you give all your time to one subject only, which is of course of your interest, you will do it at the cost of other subjects, But for passing the examinations, you need to qualify in all the subjects. So study more the subject you like but don't neglect others!
• To study individually or in group is your decision. Usually group study is better as two brains are better than one but only if group studies and not indulge in gossips and other activities. Also group studies can only be successful if they are backed by very strong individual studies. Further, only if all the members of the group contribute to the studies than all can benefit. Otherwise, it will be beneficial to some and detrimental to others.
• Spend at the most 15 - 20 min for reading news paper. That would be all to cover the relevant news and keep you updated.. 
• Spend only 15- 30 min in socializing. If it is online, you cannot afford to spare more than 15 min. When I set the time limit, I mean it for entire day. If you check your mobile at every notification, you don't realize how much time you have wasted! Pre decide at what time you wish to check your notifications. Do not touch your mobile phones between that. Don't attend unnecessary calls. They are a big time waste! Alternatively, if it is meeting your friend in person, make it a short visit to cut it in maximum 30 min. Roaming and talking unnecessarily are unproductive work. Your time is too precious to be spend on these activities. Keep your goodbyes a short one. Talks has no end! Limit them! If you are talking, give your talks a direction which helps you in achieving your goals, like discussing problem you are facing in any subject.
• Travelling time is beyond your control. Getting frustrated over traffic and distance will do no good. Instead, use your travel time. You can prepare for the topic which is going to be covered in the lecture today, revise what has been taught in college, have your lunch or just have a power nap to refresh yourself! That way you save up your time! You will have more time to explore those areas which were neglected because of our tight schedule!
• Have a healthy diet. If your health is doing fine, you will be more energetic and will have good concentration. As far as possible, keep away from junk and market food! Mother's cooked is the tastiest and the healthiest! I know it's difficult, but keep it to the minimum. Restrict yourself to having junk only once a month! 
• Rest do not necessarily mean sleep. It could be a brisk walk or your hobby like singing, dancing, playing guitar, painting or just talking to your mom! Anything that re- energizes you to get back to study table!
• Exercising is very very important. It keeps one in good shape, maintains health and also keep you energized for the whole day!  Don't skip exercise!
• Last but not the least, have a sound sleep. When you sleep, your mind should be free from all worries and tensions!. This phase is extremely necessary as it rejuvenates the body for next day!
• Remember, this is the time where you get ample time to build your concepts. If you have not done it now, you will never find the time to do so.

Examination Preparation days

Now your preparation leaves have started. What to do now?

• Make a schedule of your daily activity along with how much time you are going to spend on each activity. Just like the way in the above given example. Obviously, now major part of your time would be devoted to studies rather than anything else.
• Make a list of all the topics that you are required (and not want) to study in different subjects. You may not choose to complete 100% syllabus (though it is advisable), but the more you skip, the less marks you are probable of getting. For example if you choose to cover 70% of the syllabus, than you can anyways be judged by your attempt of 70% question paper. If you do it 100% correct (which is rare) , the max you can get is 70/100 and never more than that!. Further, you will loose out the concept of that 30% syllabus which you opted to miss. Here I want to mention that quality also matters. If you attempt 100% question paper but effectively write only 60% correct answers, than even though you have attempted a higher percentage of questions, yet you will score low. 
• Allocate specific time to each subject and each topic in it. Give more weight- age to that subject/topic which is your weak point. Keep revising your interest subjects as well. Don't be overconfident! 
• While making your schedule, prepare it in such a fashion that the subject which is due last in your examination schedule, is revised first, whereas, the first exam is revised at the last. That way your memory would be fresh for the first  paper and you will be confident of other subjects as well.
• This phase is not for starting a fresh but for revisions. The more you revise, the better would be the results.

Examination days

Now comes the D day! The examinations have arrived! Stress levels are at all time high! How to manage oneself during this period? 

• Don't start anything new in this period.
• Just revise what you have already studied.
• If your paper did not go as per your expectation, do not ponder over it. You can't change what has already happened. But you can certainly compensate it in next paper. Thinking about past paper will demotivate you. So just forget it!
• Stick to your body clock. Do not change it just because all your friends are studying late night. If rising early suits you, stick to that!. Any change in between can prove extremely costly.
• After your papers, do not discuss it. Rush back to prepare for your next exams. Also, by discussing you may realize your mistakes which you committed in the paper and thereby demoralizing you for next one.
• Relax in between the studies. It is very necessary to bring down the stress levels and freshen up the mind. But do not overdo it. Remember, you have limited time.
• Prepare your clothes, bag, stationary , admit card etc. a day before. It gives you some more time for revision on the day of the exam.
• Arrive at your examination center on time. Neither too early or late.
• Don't see other students either before or during the exams. Be confident of your own preparation. 
• Don't think that if other person is taking 1 or 2 extra sheets, he knows more than you or will get extra marks. Quality matters over quantity! 

That's it! Phew! Is it difficult? No, it just requires a strong will to implement!.

Let me highlight some major time waste activities for students:

1. The list is topped by more than required sleeping.
2. Next is Social Network sites like facebook, G+, Twitter, watsapp etc.
3. Day dreaming.
4. Long telephonic calls
5. Hanging around with friends
6. Watching TV
7.  Spending too much time on reading news paper (basically irrelevant news).
8. Long eating/ bathing hours.
9. Attending all the family functions.

Time is fixed, We cannot change that. But we can certainly change our daily activities to make the best use of it! Hope you find it useful! All the best!

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