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2017

For whom the presumptive taxation scheme of section 44ADA is designed?

  • The presumptive taxation scheme of section 44ADA is designed to give relief to small taxpayers engaged in specified profession.

Eligible persons who can take advantage of the presumptive taxation scheme of section 44ADA

  • A person resident in India engaged in following professions can take advantage of presumptive taxation scheme of section 44ADA:
    1. Legal
    2. Medical
    3. Engineering or architectural
    4. Accountancy
    5. Technical consultancy
    6. Interior decoration
    7. Any other profession as notified by CBDT

2017
  • With inflation catching the headlines too often have you been worried about expenses draining your income? The Income Tax Act offers some reason to lift your spirits amidst the gloom of expenses. There are more than a handful of expenses that help you slash taxes.

House Rent

  • If your landlord has increased the rent the ‘n’ th time and zooming real estate prices have been keeping your dream house out of your reach then the rising rent has a silver lining of tax saving. You can claim the lowest of – a. The actual HRA, b. 40% of the basic pay (50% for metros) or c. rent paid less 10% of basic pay.

2017
  • The future of Indian logistic industry looks bright, thanks to e-commerce penetration, economy revival, proposed GST implementation and government initiatives like Make in India, National Integrated Logistic Policy, 100% FDI in warehouses, food storage facilities, etc. In the Indian logistics industry, transportation enjoys a lion’s share of 60% while warehousing, freight forwarding, value-added logistics, etc. together contribute only 40%. Experts predict India’s GDP growth to be robust. This means that logistics industry will also grow by leaps and bounds as it is directly correlated with economic activity. Considering this fact, the Indian logistic industry is predicted to grow at CAGR of 15-20% between F.Y. 2016 and F.Y. 2020.
  • This doesn’t mean that logistics industry in India isn’t plagued by any problem. It suffers from many issues like higher logistic costs and complex tax structure. GST Act can become its savoir. The implementation of Goods and Service Tax bill is hoped to bring down the logistic costs up to 20% from the current levels, however, development of a robust logistics infrastructure is extremely crucial to bring down persistently high logistics costs. Indian logistics industry is identified by 4 major parts which are transportation, warehousing, freight forwarding and value-added logistics. Transportation which has the major share in the industry comprises of means like road, rail, air and water. However, India being an emerging economy, is heavily dependent on transportation through rail and road.

2017
  • Manufacturing industry has been a growth driver for various developed countries in the past but India’s manufacturing sector has always been a lackluster performer. India’s complex tax structure can partly be blamed for the stagnant growth of this industry. Government knows the importance of this sector and has therefore taken several steps in the recent past to make India a manufacturing hub at global level. The new GST regime is also a step which will act as a catalyst for driving growth of manufacturing industry. It will have a far-reaching impact on business avenues, compelling organisations to realign bottlenecks such as production cost, production time, supply chain, compliance, logistics, etc. with the changing indirect tax structure.
  • There are still a lot of gaps in GST Act so it is difficult to make predictions about its impact on industry. However, using the information available we have done impact analysis of GST on manufacturing industry.

Compliance requirements may increase

  • GST will demand businesses to set-up mechanism for meeting the requirements of GST. Increased compliance will close loopholes in the tax framework but increase costs initially for businesses. Once businesses adapt themselves to meet the requirements of GST, compliance costs will come down drastically.

2017
  • It’s has been over 60 days since government demonetised 500 and 1,000 rupees notes. It was a major decision which had its impact on all sections of the society. Demonetisation has given a new direction to the way people do monetary transactions in India. Just like a coin has a flip side, demonetisation too has its advantages and disadvantages.

Advantages of Demonetisation

  1. A major advantage of demonetisation is that it helped the government track black money. Large sums of black money was kept hidden by tax evaders. Demonetisation helped government uncover huge amount of unaccounted cash. According to estimates made by RBI, people have deposited more than rupees 3 lakh crores worth of black money in the bank accounts. This has helped the government in slowing down the plague of parallel economy.
  2. A major reason behind demonetisation was that a big part of black money was being used for funding terrorism, gambling, in inflating the price of major assets classes like real estate, gold and other social evils. Demonetisation is acting as an effective countermeasure against such activities. Now all such activities will get reduced for some time and also it will take years for people to generate that amount of black money again and hence in a way it helps in putting an end this circle of people doing illegal activities to earn black money and using that black money to do more illegal activities.

2017

This Article discusses about:

  • Meaning of presumptive taxation scheme,
  • Presumptive Taxation Scheme of Section 44AD,
  • Section 44ADA, Section 44AE,
  • For whom the presumptive taxation scheme of is designed?,
  • Businesses not covered under the presumptive taxation scheme,
  • No need to maintain books of account as prescribed under section 44AA,
  • Eligible taxpayer and eligible business for the purpose of the presumptive taxation scheme.

Financial Management