Important FAQs regarding TDS on Income from Commission or Brokerage

The provisions of section 194H of the Income Tax Act, 1961 governs the TDS deductible on commission or brokerage income. As per the provisions of section 194H of the Income Tax Act, 1961, any person making payment of any income in respect of commission/brokerage is required to deduct TDS. In case of Individual / Hindu Undivided Family (HUF) provisions of section 194H applies only if the total sales / gross receipts or turnover exceeds the monetary limit specified under section 44AB (a) or (b). From FY 2020-21, individual and HUF whose turnover from the business is above Rs 1 crore or gross receipts from the profession are above Rs 50 lakh are also required to deduct TDS. Section 194H does not include an insurance commission referred to in section 194D.


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Updates on GST Return Filing System for Small Taxpayers

The Central Government is looking to overhaul the return filing system with a view to providing some relief to taxpayers with aggregate turnover under GST less than Rs. 5 crores. In this regard, it has released certain notifications to lay down a new scheme of return filing for such taxpayers. We have tried to summarize the changes/options in simple terms below.


 Audit under Income Tax Act 1961

Before understanding what is a tax audit, let us understand the term ‘audit’. Dictionary meaning of the term ‘Audit’ suggests that it is an official inspection of an organization’s accounts and production of the report, typically by an independent body. It is also referred to as a systematic review or assessment of something.

A Tax Audit is an audit, made compulsory by the Income Tax Act if the annual gross turnover/receipts of the assessee exceed the specified limit. Tax audit is conducted in Sec 44AB of the Income Tax Act by a Chartered Accountant. Simply Tax Audit means, an audit of matters related to tax. There are various kinds of audit being conducted under different laws such as company audit/statutory audit conducted under company law provisions, cost audit, stock audit etc. Similarly, income tax law also mandates an audit called ‘Tax Audit’. As the name itself suggests, a tax audit is an examination or review of accounts of any business or profession carried out by taxpayers from an income tax viewpoint. It makes the process of income computation for filing of return of income easier.


GSTR 9A Annual Return Form for Composition Tax Payers

The GSTR 9A is an annual GST composition return form that has to be mandatorily filed by composition scheme taxpayers. The GSTR 9A form constitutes consolidated details of SGST, CGST and IGST paid during a given financial year. It constitutes all quarterly returns filed by the composition scheme holders (dealers/vendors) during a particular financial year. Each quarterly return must further reflect all sub-tax categories i.e CGST, SGST and IGST.


Employee Stock Option Plan ESOP

Employee Stock Option Plan (ESOP) is an employee benefit scheme under which the company encourages its employees to acquire ownership in the form of shares. These shares are allotted to the employees at a rate considerably lesser than the prevailing market rate. Apart from the employee-benefit motive, ESOPs are also meant to align the interests of the employees with that of the shareholders. It is believed that the employees, who are also the shareholders, will focus better on company performance and growth so that the value of their shares appreciates.

Many companies use employee stock options plans to compensate, retain, and attract employees. These plans are contracts between a company and its employees that give employees the right to buy a specific number of the company’s shares at a fixed price within a certain period of time. The fixed price is often called the grant or exercise price. Employees who are granted stock options hope to profit by exercising their options to buy shares at the exercise price when the shares are trading at a price that is higher than the exercise price.


A Statistical Analysis of Indias shirking GDP Growth

Strict nationwide lockdown due to the novel coronavirus (COVID-19) during the first quarter of the financial year 2020-21 has resulted in very limited economic activity in the country during that quarter. As a result, India’s Gross Domestic Product (GDP) for the April-June quarter (Q1) slipped by a sharp 23.9 per cent, as per provisional estimates released by Ministry of Statistics and Programme Implementation (MoSPI) on 31st August, 2020. The GDP had expanded by 5.2 per cent in the corresponding quarter of 2019-20.

Financial Management