A Brief Overview of TDS under Section 194IA

We know that income tax liability arises for the seller at the time of transfer of an immovable proper subject to the provisions of capital gain tax.However, the responsibility to deduct tax and submit it with the Government lies on the buyer and not on the seller. This section deals with the liability of a buyer to deduct TDS at the time of purchase of an immovable property.

As per the provisions of Section 194IA, when a buyer buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than Rs 50 lakhs, he has to deduct tax at source (TDS) when he pays the seller. This section is applicable with effect from 1stJune 2013. 


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A Brief Overview of TDS on Payment to Resident Contractors

It is a newly inserted section in Budget 2019 which is applicable from 1stSeptember, 2019. This section was introduced to cover some specified high value transactions of personal nature which were previously excluded from TDS provisions. The tax authorities observed that some individual and HUFs make very high payments to the professionals towards commission, contract fees or fees for rendering professional or technical services. As these individual/HUF are not subject to tax audit u/s 44AB, they are not liable to deduct TDS on such transactions; hence, the introduction of Section 194M to cover such high value transactions.


Section 43B of the Income Tax Act 1961

As per Section 43B of the income tax act, 1961 certain expenditure / payments which are otherwise eligible for deduction under the Act shall be allowed as a deduction only in the year of actual payment irrespective of the year of accrual of such expenditure. The section provides a list of such expenses allowed as deduction only on actual payment under the head ‘Income from business and profession’.

If an assessee fails to make payment of such specified expenses till the end of the relevant financial year in which such expenses were incurred, then he will not be able to claim deduction for these expenses. However, the assessee is given time to pay these amounts before he files his return of income or the due date for filing his return of income whichever is earlier. The assessee can show the proof of making such payment and claim the deduction in the same year (in which the amount was accrued).


Constitution of Audit Committee and relevant Provisions under the Companies Act 2013

Section 177 of Companies Act, 2013 lays down the provision the composition and the functions of the committee of audit Committee. The Audit Committee plays critical role in assessment of the Companies’ Financial Information and makes sure that the information is accurate and complete. Further, this section has also made whistle-blowing policy mandatory in India. The Audit Committee is one of the main pillars of the corporate governance system in public companies.

The main objective of an Audit Committee is to improve the integrity in the Financial Statements. It is also responsible for monitoring the internal control process and risk management systems. Charged with the responsibility to oversight of financial reporting and disclosure, the Audit Committee aims to enhance the confidence in the integrity of the company’s financial reports and announcements, the internal control processes and procedures and the risk management systems. 


TDS on Commission or Brokerage

The word commission has several meanings, but in general terms commission means a fee that a person or business receives or pays out when a business transaction is completed. Commission income is an amount earned in exchange for transacting a sale of a product or providing a service. Commission income is usually a percentage of sale proceeds, but it could also be a flat rate depending on the sales commission agreement between the owner of a product and the seller of that product.

A brokerage is a fee charged by a broker to execute transactions or provide specialized services. Brokers charge brokerage fees for services such as purchases, sales, consultations, negotiations, and delivery. There are many types of brokerage fees charged in various industries such as financial services, insurance, real estate, and delivery services. Brokerage fees, also known as broker fees, are based on a percentage of the transaction, as a flat fee, or a hybrid of the two. Brokerage fees vary according to the industry and type of broker.In this article we will cover TDS sections applicable to payment of ‘commission or brokerage’. 


Process and Importance of Stock Audit for Manufacturing

An inventory audit or Stock Audit can be as simple as just taking a physical count of stock and inventory to verify a match to the accounting records. Auditing inventory is an important aspect of gathering evidence, especially for manufacturing or retail-based businesses. It can represent a large balance of assets or capital. During the Stock Audit Procedure the independent auditor observes the inventory and gives an opinion on whether the financial records of inventory accurately represent the physical inventory being carried. 

Financial Management