Incentive for low-cost foreign borrowings

As per Section 194LC of the Income Tax Act, a TDS rate of 5 per cent was applicable on interest on rupee-denominated bonds issued outside India before July 1, 2020, by an Indian company to a non-resident or a foreign company. The government, in a bid to encourage foreign exchange inflow, has proposed to further incentivise such low-cost foreign borrowings by completely exempting interest paid on such bonds issued from September 17, 2018, to March 31, 2019, from income tax. Hence, there is no TDS on such interest payment.

CBIC releases formats of GST annual returns

Formats of GST annual returns — GSTR-9, 9A and 9C — have been released. GSTR-9 must be filed by all GST-registered persons on or before December 31, 2018. GSTR-9A must be filed by a composition dealer within the same deadline. These returns are the consolidated summary of the outward and inward supplies declared in all the GST returns filed between July 2017 and March 2018. It is mandatory for taxpayers whose books of accounts are audited, to furnish a reconciliation statement and get a certification from a CA in form GSTR-9C.

TDS and TCS provisions under GST notified

TDS and TCS provisions under GST will be applicable from October 1. TCS must be collected by an e-commerce operator if the operator collects payment on behalf of a seller. The rate should not exceed 2 per cent. Such TCS collected must be deposited to the government within 10 days after the end of the month in which it was collected. TDS must be deducted where contract value exceeds ₹2.5 lakh. This only applies where the payer is a government entity or those notified by the government, as GST Council may suggest from time to time.

Fresh extension on due date for filing GSTR-1

For taxpayers with a turnover of up to ₹1.5 crore, as well as above ₹1.5 crore, the time limit for filing GSTR-1 for the five quarters started July 2017 has been extended to October 31, 2018. For taxpayers with a turnover of above ₹.1.5 crore, the time limit for filing GSTR-1 for the months from October 2018 to March 2019 is till the 11th day of the succeeding month. Taxpayers who migrated from the earlier regime and could not complete their registration under GST because of technical glitches, have been provided with further relief.

Rules on managerial salary changes eased

Up until now, any managerial remuneration of more than 11 per cent of the net profits of a company was subject to government approvals. However, that’s no longer required. Furthermore, the company does not need to file the MR-2 form for approval. Till now, the MR-2 was used to get approvals for the payment/increase/waiver of excess remuneration to the managerial personnel and also for appointment of managerial personnel as per the revised Schedule V. Managerial personal refers to MD, whole-time director or manager.

Compiled by Clear Tax