June 23, 2024

Conversion of LLP to Private Limited Company

Companies Act 2013 / CA Bhuvnesh Goyal / June 23, 2024

An LLP is the simplest form of Incorporated Business in India that is easy to start and lighter on the compliance aspect compared to the company form of organization. There is no hard and fast rule whether a business should begin as LLP or a Private Limited Company. As per the Law, there is no restriction on the kind of business you may do in the LLP form of business. However, it is presumed that the LLP form of business is very well suited for professionals such as Architects, Doctors, Engineers, CA, CS and Lawyers. Due to fewer compliance requirements, small businesses and startups prefer a Limited Liability Partnership (LLP) over a Private Limited. In the case of LLP, the statutory audit by CA is required only when the turnover of the LLP is more than 40 Lakhs or where the capital is over Rs. 25 Lakhs. In other words, when the LLP grows, the compliance requirement is similar to that of a Private Limited Company. Further, the LLP is investor-friendly, and for every small change in the ownership, the LLP agreement has to be changed. In contrast, the shareholding changes can be done easily in a Private Limited Company. For these reasons, many LLP converts as Private Limited Company; Several businesses started in India as Limited Liability Partnership (LLP), may now wish to convert into a private limited company for more growth in business or for infusing equity capital. An LLP can be converted into a Pvt. Ltd. company as per the provisions contained in Section 366 of the Companies Act, 2013 and Company (Authorised to Register) Rules, 2014. However, there are various requirements which need to be satisfied for converting an LLP into a Private Limited Company, for instance, an LLP must have at least 7 partners, approval from all the partners is required, advertisement in newspaper is to be done in a local and a national newspaper, a No Objection Certificate (NOC) is required from the ROC When is LLP the Best Choice? Limited Liability Partnership (LLP) is Ideal for service sectors, professionals, startups, and small businesses seeking Limited Liability, aiming to reduce annual compliance and audit costs. It is also suitable for those not looking to secure funds from Angel Investors or Venture Capital firms in the initial phase and not intending to issue shares to employees through ESOP When is a Private Limited Company the Best Choice? A private Limited Company is suitable for those investors who are big businesses, startups, and capital-intensive businesses and need funding from Venture Capitalists and Investors, need borrowings from banks, need foreign funding, and offer ESOPs to employees. What are the Benefits of Converting LLP into a Private Limited Company? Facilitated Growth: Converting to a private limited company supports business growth and expansion. Convenient Capital Raising: Private limited companies find it more convenient to attract investments from investors compared to LLPs. Equity can be offered to make them business partners, or debentures can be issued to secure debt capital. Flexible Share Issuance: Companies can increase capital at any time by issuing equity shares. Additionally, employee bonuses in the form of ESOPs can be allocated. Lower Taxation: Companies enjoy a lower income tax rate of 25%, as opposed to LLPs with a flat rate of 30%. Tax Benefits: The conversion from LLP to a company is exempt from capital gains tax. It also permits the carryforward of unabsorbed depreciation and losses. Potential for Public Listing: Private limited companies have the flexibility to be transformed into public limited companies in the future, facilitating expanded operations and the potential to raise capital from the public. Preservation of Goodwill: Converting from an LLP to a private limited company allows the business to retain its established brand name and goodwill. Enhanced Foreign Investments: Private limited companies generally encounter fewer hurdles in attracting investments from foreign investors compared to LLPs. Eligibility Requirement For Conversion of LLP to Company Any person who is not disqualified as per the act A company considered in the Companies Act 1956 or Companies Act 2013 An LLP considered under the LLP Act 2008 An LLP is considered as a foreign LLP A company considered as a foreign company Who is not Eligible for Becoming a Partner in LLP? An individual with a condition that he might be in no unsound mind and has been declared by competent authorities and jurisdiction. A minor/ HUF/ Partnership Firm An AOP (Association of Persons) or BOI (Body of Individuals) An Artificial Judicial Person/ Corporate Sole A Co-operative Society registered under any law in the mentioned time period A body corporate which the Central Government might mention on the behalf by notification in the Official Gazette. Who Can Become a Member of LLP? Any person or a body corporate can become a member of an LLP. Who is not Capable of Becoming a Member of LLP? The person who cannot become a member of LLP is If he is found to be unsound by the Court of competent jurisdiction and if it is proved; If he comes under ‘undischarged insolvent; or If his application shows to be arbitrated as insolvent but the application is still on hold. Who is Appointed as a Designated Partner in LLP? An LLP stands for the Limited Liability Partnership and is ruled according to the rules of the LLP (Limited Liability Partnership) Act, 2008. As the years are passing, the LLP is becoming famous as compared to the ‘Private’ or a ‘Limited Company’ form of business and this is only possible because the nature of the LLP is easier and the compliances are lesser. Each and every LLP must have at least 2 partners and both of them must be designated partners who must participate in daily basis activities and works in the support of the partners. After the appointment, the partner or a designated partner can be removed, changed, or appointed. Who cannot be Appointed as a Designated Partner in LLP? Person who has been adjudged insolvent in the last five years. Person who has not clear payments to his

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(PSARA) License Renewal and Cancellation Process in Rajasthan

learn / CA Bhuvnesh Goyal / June 23, 2024

The Private Security Agencies Regulation Act (PSARA), 2005 plays a crucial role in regulating the operations of private security agencies in India. Enacted to ensure the safety and security of citizens, this act requires all private security agencies to obtain a valid PSARA license before they can legally offer their services to clients. The license serves as a testament to the agency’s compliance with essential regulations and standards set forth by the PSARA Act.Private security agencies provide an array of services, including guarding, surveillance, investigation, and protection of assets and individuals. These agencies may cater to a diverse clientele, ranging from corporate entities and residential complexes to events and public gatherings. The PSARA license not only adds credibility to the agency but also assures its clients that the services they are being provided are coming from a recognized and accountable organization. Overview of Private Security Agency (PSARA) License Renewal Every private security agency in India must obtain and maintain a Private Security Agency (PSA) license under the Private Security Agencies (Regulations) Act, 2005. The respective state’s Home Department issues this license, which is valid for five years. Upon the expiration of the PSA license, the agency must renew it within 60 days, or else it will need to apply for a new license. The renewal process involves submitting certain documents, such as proof of financial solvency, renewed insurance policies, and employment verification forms. Additionally, the agency must adhere to the guidelines and regulations specified by the Private Security Agencies (Regulations) Act, 2005, at all times and ensure that its security guards and personnel are trained and licensed. Failure to follow with these regulations can result in the revocation of the PSA license and legal penalties. Overview of Private Security Agency (PSARA) License Cancellation The Private Security Agency (PSARA) license is mandatory for all private security agencies operating in India. The respective state governments issue it and regulate the operations of private security agencies in the state. In recent years, PSARA license cancellation has occurred due to non-compliance with the regulations set by the concerned authorities. The cancellation of the PSARA license can happen for various reasons, including violation of the terms and conditions of the license, non-payment of license fees, non-submission of required documents, and non-compliance with security guidelines and protocols. The license cancellation can severely affect the affected private security agency and its employees. All private security agencies must strictly comply with all rules and regulations to avoid PSARA license cancellation. They must maintain high integrity, professionalism, and ethical conduct in their operations. Additionally, private security agencies must submit all required documents, renew the license on time, and make the necessary payments to the concerned authorities. Failure to follow with these requirements can result to the cancellation of the PSARA license. Benefits/Advantages/Disadvantages of Private Security Agency (PSARA) License Renewal and Cancellation Benefits/Advantages of Private Security Agency (PSARA) License Renewal: Compliance with Legal Requirement: A valid PSARA license is a legal requirement for operating a security agency. Renewal of the license ensures compliance with legal requirements. Business Continuity: Renewal of the license ensures uninterrupted client services, and the agency can continue operating without legal challenges. Trust and Credibility: Renewal of the license indicates that the security agency is committed to providing quality services. It also helps in building trust and credibility with clients. Disadvantages of Private Security Agency (PSARA) License Renewal: Cost: Renewal of the license involves fees and expenses, which may impact the financial viability of the security agency. Time-Consuming: Renewal of the license takes time, and the agency may face challenges in meeting client needs during this period. Benefits/Advantages of Private Security Agency (PSARA) License Cancellation: Improvement in Quality: Canceling the license of substandard security agencies improves the quality of services provided to clients. Protection of Clients: Canceling the license of security agencies that do not comply with legal requirements protects clients from substandard services and potential legal challenges. Disadvantages of Private Security Agency (PSARA) License Cancellation: Loss of Revenue: Cancellation of the license can lead to a loss of revenue for the security agency, resulting in financial difficulties. Unemployment: Cancellation of the license can lead to unemployment for the security agency’s employees, affecting their livelihood. Documents Required for Private Security Agency (PSARA) License Renewal and Cancellation Renewal of Private Security Agency (PSARA) License: Application form for renewal of PSARA license. Copy of the previous PSARA license. Copies of the Articles of Association & MOA. Copy of the partnership deed or certificate of incorporation. Copy of the PAN card. Copy of the security clearance certificate. Copy of the insurance policies. Copy of the details of the employees. Copy of the annual report and audited account statements. Copy of the address proof. Copy of the police verification record of the employees. Copy of the service tax or GST registration. Copy of the training certification of the security guards. Copy of the fee receipt for renewal of PSARA license. Any other relevant document Cancellation of Private Security Agency (PSARA) License Proper application for cancellation of PSARA license. Copy of the PSARA license. Copy of the MOA and Articles of Association. Copy of the partnership deed or certificate of incorporation Copy of the PAN card. Copy of the address proof. Copy of the police verification record of the employees. Copy of the insurance policies. Copy of the service tax or GST registration. Any other relevant document. Process of Private Security Agency (PSARA) License Renewal and Cancellation Renewal Process: Before the license expiry, the private security agency (PSA) should apply for license renewal to the respective controlling authority (CA) in Form VII. The application should be submitted at least 30 days before the license expiry, along with the prescribed fees and necessary documents. The documents required for renewal are: Valid police verification certificate of the licensee and its employees. Certificate of incorporation or partnership deed or business registration certificate. PAN card and address proof of the licensee. Security deposit in the form of bank guarantee, cash, or any other mode prescribed by the CA. The controlling authority will verify all the documents and inspect the

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rti right to information

learn / CA Bhuvnesh Goyal / June 23, 2024

The basic object of the Right to Information Act is to empower the citizens,promote transparency and accountability in the working of the Government,contain corruption, and make our democracy work for the people in real sense.It goes without saying that an informed citizen is better equipped to keep necessary vigil on the instruments of governance and make the government more accountable to the governed.The Act is a big step towards making the citizens informed about the activities of the Government.NIC as a Public Authority designated Public Information Officer (PIO) and Appellate Authority (AA) for citizens to secure access to information and published the Proactive Disclosures in accordance with the provisions of the Act in October 2005. The Right to Information The right to information is a fundamental right under Article 19 (1) of the Indian Constitution. In 1976, in the Raj Narain vs the State of Uttar Pradesh case, the Supreme Court ruled that Right to information will be treated as a fundamental right under article 19. The Supreme Court held that in Indian democracy, people are the masters and they have the right to know about the working of the government. Thus the government enacted the Right to Information act in 2005 which provides machinery for exercising this fundamental right. The act is one of the most important acts which empowers ordinary citizens to question the government and its working. This has been widely used by citizens and media to uncover corruption, progress in government work, expenses-related information, etc. The primary goal of the Right to Information Act is to empower citizens, promote openness and accountability in government operations, combat corruption, and make our democracy truly function for the people. It goes without saying that an informed citizen is better equipped to keep a required track on governance instruments and hold the government responsible to the governed. The Act is a significant step in informing citizens about the activities of the government. All constitutional authorities, agencies, owned and controlled, also those organisations which are substantially financed by the government comes under the purview of the act. The act also mandates public authorities of union government or state government, to provide timely response to the citizens’ request for information. What type of information can be requested through RTI? The citizens can seek any information from the government authorities that the government can disclose to the parliament. Some information that can affect the sovereignty and the integrity of India is exempted from the purview of RTI. Information relating to internal security, relations with foreign countries, intellectual property rights (IPR), cabinet discussions are exempted from RTI. Objectives of the RTI Act Empower citizens to question the government. The act promotes transparency and accountability in the working of the government. The act also helps in containing corruption in the government and work for the people in a better way. The act envisages building better-informed citizens who would keep necessary vigil about the functioning of the government machinery. Important provisions under the Right to Information Act, 2005 Section 2(h): Public authorities mean all authorities and bodies under the union government, state government or local bodies. The civil societies that are substantially funded, directly or indirectly, by the public funds also fall within the ambit of RTI. Section 4 1(b): Government has to maintain and proactively disclose information. Section 6: Prescribes a simple procedure for securing information. Section 7: Prescribes a time frame for providing information(s) by PIOs. Section 8: Only minimum information exempted from disclosure. Section 8 (1) mentions exemptions against furnishing information under the RTI Act. Section 8 (2) provides for disclosure of information exempted under the Official Secrets Act, 1923 if the larger public interest is served. Section 19: Two-tier mechanism for appeal. Section 20: Provides penalties in case of failure to provide information on time, incorrect, incomplete or misleading or distorted information. Section 23: Lower courts are barred from entertaining suits or applications. However, the writ jurisdiction of the Supreme Court of India and high courts under Articles 32 and 226 of the Constitution remains unaffected. Significance of the RTI Act The RTI Act, 2005 empowers the citizen to question the secrecy and abuse of power practised in governance. It is through the information commissions at the central and state levels that access to such information is provided. RTI information can be regarded as a public good, for it is relevant to the interests of citizens and is a crucial pillar for the functioning of a transparent and vibrant democracy. The information obtained not only helps in making government accountable but also useful for other purposes which would serve the overall interests of the society. Every year, around six million applications are filed under the RTI Act, making it the most extensively used sunshine legislation globally. These applications seek information on a range of issues, from holding the government accountable for the delivery of basic rights and entitlements to questioning the highest offices of the country. Using the RTI Act, people have sought information that governments would not like to reveal as it may expose corruption, human rights violations, and wrongdoings by the state. The access to information about policies, decisions and actions of the government that affect the lives of citizens is an instrument to ensure accountability. The Supreme Court has, in several judgments, held that the RTI is a fundamental right flowing from Articles 19 and 21 of the Constitution, which guarantee to citizens the freedom of speech and expression and the right to life, respectively. Recent Amendments The RTI amendment Bill 2013 removes political parties from the ambit of the definition of public authorities and hence from the purview of the RTI Act. The draft provision 2017 which provides for closure of case in case of death of applicant can lead to more attacks on the lives of whistleblowers. The proposed RTI Amendment Act 2018 is aimed at giving the Centre the power to fix the tenures and salaries of state and central information commissioners, which are statutorily protected under the RTI

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India Post Mobile Banking Application

learn / CA Bhuvnesh Goyal / June 23, 2024

India Post Payments Bank or IPPB is an initiative by India Post to provide banking services in the remotest locations of the country and further the cause of financial inclusion. The Bank also provides various services to the customers like balance check, mini statement, customer support, etcIndian Postal Department has recently launched a new India Post Mobile Banking Application to facilitate the post offices customers. This application enables the PO account holders to transfer funds that include deposits into PPF accounts and other post office schemes online. In order to make transactions through the Department of Post’s new app, the customers must hold a post office savings account in a Core Banking Solution (CBS)-enabled post office. Services Offered by India Post Payment Check account balance Locate Post Office Request for doorstep banking Avail information on products and services Avail digital banking information India Post Payment Bank Balance Check through Mobile Banking You can use India Post Payments Bank mobile banking IPPB app to check your account balance: Download the App from Google Play or App Store. Login to the mobile app via username and password. Your account summary will appear on the screen. India Post Payment Bank Balance Check through Net Banking Customers of India Post Payment Bank need to register their mobile number to avail net banking services of the bank. Below-mentioned are the mandatory details required to access net banking in India Post Payment Bank: Savings/current account ATM debit card number/DOB Registered mobile number Customer ID/CIF Upon logging in to the net banking account, the customer can view the account balance on the screen. India Post Payment Bank Balance Check through UPI Open any UPI app on your smartphone Login through the set code or biometrics Tap on the account you want to check balance of Tap on check balance Enter the passcode to verify Your account balance will be displayed on your screen India Post Payment Bank Balance Check through Passbook India Post Payments Bank makes available a passbook to every account holder at the time of account opening with the bank. Accountholders can easily update their passbook by visiting their nearest bank branch. They can easily check all the transactions (debit and credit) along with the account balance. India Post Payment Bank Balance Check through ATM India Post Payments Bank account holders can visit their nearest ATM or any other bank ATM to do India Post Payments Bank balance enquiry instantly. You will only be required to follow the below-mentioned steps to do the same: Visit the nearest ATM Insert the ATM Card Select “Balance Enquiry / Balance Check” option India Post Payments Bank account balance will be displayed on the ATM screen Eligibility Criteria The customers must hold PO savings account in CBS post office. The customers must have a valid login id and transaction credentials for the Internet banking Process. If the net banking is not enabled, mobile should be enabled after enabling the net banking option at CIF (customer ID) level by the SOL (service outlet). In the case, net banking is not enabled, then the mobile to be accessed after the authorization of net banking at CIF (customer ID) level by the service outlet (SOL). Either single or Joint ‘B’ account type customers are eligible The customers who hold either single or joint ‘B’ account type are eligible. The joint ‘A’ account holders, minor, Illiterate, branch office accounts will not be eligible to avail the mobile banking facility. Pre-requisites- The following pre-requisites to be fulfilled by the savings account holder to avail the mobile banking facility that is as follows: The customer should have the valid email address, PAN card and registered mobile number. CIF ID or customer ID to be printed on the first page of the bank passbook. The passbook details to be updated with the correct details such as name, date of birth, father’s name, gender, identity and address proof. Benefits of India Post Mobile Banking App A mini statement of savings account and PPF accounts can be viewed with the mobile banking app. The users can check for the balance of savings account, Recurring Deposit (RD), Public Provident Fund (PPF) and other accounts with the complete details of transactions. This mobile banking app enables the users to take a photo of their bill and the application will immediately upload all the important billing details due to which the users can set up a one-time or recurring payment. The users can transfer funds to other users’ PO savings account. The users can also transfer fund from savings accounts to own linked PPF accounts. The service request for opening the RD account and stop cheques can also be raised through this app. The users can view a list of their most frequent actions and accordingly, it allows to customize the dashboard, menu or interface as per the needs. Application Process of India Post Mobile Banking App The India Post Mobile Banking App provides a simpler and convenient way to handle all the accounts with a safe and secure banking process. All eligible users as per above criteria can register for the India Post Mobile Banking at any CBS head or sub-post office but not in the branch offices. The savings account holder has to submit the duly-filled application form (Post office savings bank (POSB) ATM card/Mobile/Internet/SMS banking service request form) available with the post office. The KYC of the said account holder to be completed. If the KYC process is not completed, then the user has to undergo the KYC process at the time of submitting their request application form. The application form to be submitted only in the CBS post office where the savings bank account is held. Once the form is submitted at the branch, the user mobile banking facility will be enabled after 24 hours. Account Activation Process Step 1: After enabling mobile banking facility, the user can install the mobile banking app from the Google Play Store. Step 2: Install the Mobile Banking app and click on the “Activate Mobile Banking” button. Step 3: The

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Self Assessment Tax Online Payment

Income Tax / CA Bhuvnesh Goyal / June 23, 2024

When it comes to managing your finances, staying up-to-date with tax payments is crucial. While many people anticipate receiving a refund when filing their income tax return, there are instances where you may owe additional taxes instead. This could happen due to underpayment during the tax year, adjustments in deductions, or changes in income. In such cases, you may need to make additional payments to the Income Tax Department to settle your outstanding balance. If you’re filing an original ITR, revised ITR, updated income tax return (ITR-U), or a belated return, you might encounter penalties and interest charges. Minor heads may change depending on the payment you are making. For example, If you are paying for some outstanding demand then you might need to choose Regular Assessment tax (400) or if you are paying regular tax then you need to choose self-assessment tax (300). Understanding how to make these payments online is essential for avoiding further complications and ensuring your tax matters are in order. What is Self Assessment Tax and How to Pay it Online? Self Assessment Tax is the portion of tax paid by individuals on their taxable income that is not subjected to TDS (Tax Deducted at Source) or Advance Tax payments. It enables taxpayers to reconcile their total income, compute tax liability, and pay any outstanding dues. To pay Self Assessment Tax online, you can visit the income tax department’s official website, select the appropriate challan, fill in the required details, and make the payment using net banking or debit card options. Why Should You Pay Self Assessment Tax? Paying Self Assessment Tax is crucial as it ensures compliance with the tax laws of our country. Failing to pay your due taxes or underpaying it can lead to penalties, interest charges, and legal consequences. It is essential for fulfilling one’s tax obligations honestly and in a timely manner. Self assessment is one of the easiest ways of filing income tax returns online. You can follow the instructions given on the Income Tax e-filing website to file self-assessment and calculate your outstanding dues by checking Form 26AS or AIS. Furthermore, there is no strict deadline; you have an entire financial year to file your self assessment returns. Characteristics of Self Assessment Tax It is payable by individuals, including salaried employees, freelancers, professionals, and business owners. It is calculated on the total income derived from various sources, excluding the amount already subjected to TDS or advance tax payments. It is calculated, filed, and paid by taxpayers themselves and not through an employer or other entities. It must be paid before the annual income tax return filing deadline. It is applicable when your total tax liability exceeds the TDS deducted amount. Interest is levied on delayed payment of Self Assessment Tax. Eligibility for e-Tax Payment Starting from April 1, 2008, certain taxpayers are required to make their tax payments online. This mandatory requirement includes the following categories of taxpayers: All corporate assesses: This includes all companies, regardless of their size or type of business. All assesses (other than companies) to whom the provisions of section 44AB of the Income Tax Act, 1961 are applicable: This refers to non-corporate taxpayers who meet the criteria specified in section 44AB of the Income Tax Act, 1961. Section 44AB pertains to the mandatory tax audit requirements for businesses or individuals meeting specific financial thresholds. Benefits of Income Tax Online Payment Convenience: Online payment methods offer a high level of convenience. Taxpayers can make payments from anywhere, anytime, as long as they have an internet connection. This eliminates needing to visit a tax office or mail a physical payment. Time-saving: Online payment systems streamline the process, allowing taxpayers to complete their transactions quickly. It eliminates the need for manual paperwork, filling out forms, and waiting in long queues. Accuracy: Online payment platforms often have built-in calculators that help taxpayers determine the correct amount of tax owed. This reduces the chances of errors in calculations and ensures accurate payment. Instant confirmation: When making an online payment, taxpayers receive immediate confirmation that their payment has been processed. This provides peace of mind and eliminates uncertainty about whether the payment was received and credited. Secure transactions: Reputable online payment platforms employ robust security measures to protect users’ financial information. Encryption techniques and secure servers ensure that sensitive data is transmitted and stored safely. Reminder notifications: Some online payment platforms offer reminder services, sending notifications to taxpayers when payment deadlines are approaching. This helps taxpayers stay organized and avoid late payment penalties. Verification: By visiting the website of the Tax Information Network, you can verify if the IT department has received the payment or not. Documents required for paying Income Tax Online Form 16 Form 16 Salary slips and bank statement Form 16A, Form 16 B, or Form 16C Interest certificates issued by bank or post office Form 26AS Tax saving investment proof Aadhaar Card PAN Card Home loan statement Capital gain Statement How to e-Pay Income Tax Online? Step 1: To begin, go to the official Income Tax portal at https://www.incometax.gov.in/iec/foportal/. Then, find and select “e-Pay Tax” from the menu on the left side of the screen Step 2: Enter the PAN/TAN details along with your mobile number. (If you’re making the payment on someone else’s behalf, use their PAN number; however, you can input your mobile number regardless of the payer). Subsequently, you’ll receive a One-Time Password (OTP) on your registered mobile number. Enter the OTP and proceed by clicking ‘continue.’ Step 3: Once you’ve entered the OTP, a new page will appear confirming the successful verification of your mobile number. Proceed by clicking the ‘continue’ button. Step 4: On this page, you’ll find multiple payment options available. If you’re making an income tax payment such as advance tax or additional tax, locate the first payment box labeled ‘Income Tax’ and click on the proceed button. Step 5: Choose the assessment year and your payment type from the drop-down menu. If you’re paying additional tax, interest, or a penalty for late ITR filing, select “Self-Assessment Tax (300)” and then click on ‘Continue.’ Step 6: Fill the payment amount correctly under the relevant categories.

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Mahaswayam Portal

Government Schemes / CA Bhuvnesh Goyal / June 23, 2024

Maharashtra government has launched an integrated web platform for Mahaswayam job seekers. The Mahaswayam portal combines skilling, employment, and entrepreneurship to serve as a one-stop-shop for all parties interested in the Skill India Mission. Mahaswayam: Rojgar employment registration Maharashtra goals This website provides all users with a single point of access to information on skill training, job openings, and entrepreneurship development programs. People can search for employment on the Mahaswayam portal and firms can employ the youth by registering on the portal. The portal offers a variety of services and promotes the Government of India’s skill training program. Maharashtra’s government has set a goal of developing 4.5 crore skilled workers by 2022. Each year, 45 lakh of skilled workers will be given opportunities to better their life. eligibility criteria To register, a candidate must be a Maharashtra resident. Anyone aged 14 or older can register as a job seeker. Job seekers can only register if they are unemployed. From time to time, the candidate must update information such as educational qualifications, experience, acquired skills, contact information, etc. Mahaswayam portal: Benefits Unemployed youth of the state can register here and look for jobs available in order to earn some income. Through this portal, information related to skills, training, job vacancy, etc., can be found at one place thus, simplifying the work. Training institutions can advertise themselves here and also earn registration money apart from the publicity and advertisements. The portal also helps promote the skill training mission of the Government of India. Mahaswayam: Mode of selection Written exam Skill test Viva voce test psychological test Document verification Medical examination Mahaswayam: Mahaself employment registration facilities Corporation plan Self employment scheme Self employment loan online Documents for loan eligibility, loan sanction, terms and conditions, loan documents, etc Application status Loan repayment status EMI calculator Helpline number Mahaswayam online registration Maharojgar online registration If you want to register on the Maharashtra job portal’s Job Seekers area, follow the procedures below: To register, go to mahaswayam.gov.in first. Now, on the home page, click the “EMPLOYMENT” button in the navigation menu. You will now be directed to the rojgar mahaswayam portal – Direct Link. By inputting your talents, sectors, education, and district information, you can search for relevant positions from the jobs list. Job searchers must first register on the internet portal to apply for the position. To register, candidates must go to the “Jobseeker Login” area and select the “Register” option. The updated Jobseeker registration form will now appear in front of you. Fill out the form completely, including your name, surname, date of birth, Aadhar ID, and cellphone number, before entering the captcha code and clicking “Next.” Now, in the box on the following page, enter the OTP you received on your phone and click the “Confirm” button. On the next page, you’ll see personal information, qualifications, and contact information. Fill in all of the required information and click the Create Account button. The registered mobile number and email address will receive an SMS/email. While registering, make sure your profile matches. If your profile is already on the portal, i.e., if you have registered, a matching profile will show in front of you, which you can confirm or build a new profile for. You can easily connect to Mahaswayam with your login credentials on the login page found on the home page after successfully creating your account, i.e., after registering. Candidates can choose a suitable job from the list on the “Mahaswayam” web portal after finishing the entire process of mahaswayam rojgar registration and login. Mahaswayam: Offline registration Visit an employment exchange in your area. Ask for a registration form from the exchange and fill it. Attach copies of all documents required. Carry your original documents as well for verification. Submit the form at the employment exchange. Obtain receipt of submission of form. FAQs What is the Mahaswayam portal? The Mahaswayam portal is an integrated platform designed to provide information and services related to employment, skill development, and entrepreneurship in Maharashtra. Who can use the Mahaswayam portal? The portal can be used by job seekers, employers, training providers, and entrepreneurs in Maharashtra. 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City Compensatory Allowance (CCA)

learn / CA Bhuvnesh Goyal / June 23, 2024

Since the cost of living in metropolitan cities and some of the larger cities is extremely high, several companies provide additional allowance as compensation known as City Compensatory Allowance. This amount is completely taxable under the IT Act. City Compensatory Allowance is an allowance provided by an employer (companies- both public and private or any other organisation) to their employees as part of their salary to meet the higher cost of living. It is generally provided to employees of metropolitan cities, tier-1 and tier-2 cities to compensate for their higher living standards. They are fixed monthly payments and are different across different cities, employee designations and organisations. However, for employees of central government or public sector undertaking etc., CCA generally ranges from 10 to 20% of the Cost to Company (CTC). It remains fixed irrespective of the pay scales or employee designations. They vary from place to place and from company to company mainly because CCA is determined either in accordance with the cost of living index or the company’s employment policies. No law governs the payment of CCA. Therefore, the above are general practices laid down and are not indicative of any specific rules or regulations. It is pertinent to note that the employer pays these allowances at his discretion and is not compelled by any Act, rules or regulations to do so. Therefore, one cannot enforce the payment of such allowances from their employer and that the employer is free to provide CCA at such terms as he may decide. What is City Compensatory Allowance (CCA)? City Compensatory Allowance (CCA) is a type of allowance offered by companies to their employees to compensate for the high cost of living in metropolises and large cities. This is typically offered to employees staying in Tier 1 cities and in some cases Tier 2 cities at the discretion of the employer. CCA is fully taxable under Indian income tax laws. City Compensatory Allowance or CCA is an allowance provided by companies, (public sector or private sector), to its employees to compensate for the higher cost of living in metropolitan or Tier-1 cities. In some cases, CCA is also offered for employees working in Tier-2 cities as well. City Compensatory Allowance is offered at the discretion of the employer. CCA is computed as per the pay scale and grade of an employee and not as per the basic salary. Thus it differs between cities. For instance, an employee working in Mumbai would receive a higher CCA as compared to someone working in Delhi. There is no upper or lower ceiling for CCA, and for all taxation purposes, CCA is fully taxable if the amount exceeds Rs. 900/ Who is Eligible for CCA? City Compensatory Allowance is provided to employees of both public sector enterprises as well as private sector enterprises. There is no fixed eligibility criterion for CCA, but it is usually offered to middle or lower-level employees to help them meet their living expenses in metropolitan cities. Top management or higher-level employees do not receive CCA, as their pay scale has already been developed while keeping into account their standards of living. Specific classes of employees working with an organization registered under the Companies Act and living in specific large cities qualify to receive a CCA from their employer. There is no cap on the amount of CCA that can be provided to an employee, and it is entirely at the employer’s discretion. How is CCA Calculated? Employers have the discretion to determine the pay structure they follow. For example, they can pay consolidated salaries or divide the salary into basic plus allowances. They would not be breaching any labour laws by doing so. Employers’ primary criterion for computing CCA is the cost of living index in a particular city and its respective employment policies. In a private organization where different categories of employees have different pay scales, the City Compensatory Allowance is paid as a fixed amount and not as a percentage of the basic pay. For employees working with central government departments or Public Sector Undertakings, CCA is computed as a percentage of the CTC (Cost to the company) and can vary between 10% and 20%. Generally, the CCA for all employees living in a particular city will be the same, i.e., it will not vary according to the employee’s position. This means that under normal circumstances, an employee working as a clerk and one working as a manager in a company in Delhi will receive the same amount as the City Compensatory Allowance. Taxability of CCA and other fully taxable allowances The Act does not provide for any exemptions for CCA and is therefore fully taxable in the hands of the employee. Few other allowances which are fully taxable under the Act are indicated below: Entertainment Allowance Dearness Allowance Overtime Allowance Fixed Medical Allowance Servant Allowance Project Allowance Tiffin/lunch/dinner Allowance Transport Allowance other than to blind/deaf & dumb/ orthopedically handicapped employees For tax nerds: As per Section 2(24)(iiib) of the Act, the term ‘income’ includes any allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at a place where he ordinarily resides or to compensate him for the increased cost of living. Such allowances are income in the hands of the employee and fully taxable unless specifically exempted under the Act as per CBDT Circular No. 701 dated 23 March 1995. The judiciary has upheld this position in various cases. Such income is also not enlisted as fringe benefits provided by the employer under section 115WB, which requires the employer to remit taxes on such expenditure. Therefore, from the above provisions, we can conclude that CCA shall be taxable in the hands of the employee as ‘Salary’ income. Maximum and Minimum Limit of City Compensatory Allowance As specified above, no specific rules and regulations govern the calculation of the City Compensatory Allowance (CCA). It is entirely at the discretion of the employer to offer a particular amount as CCA. If an employer

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Rajasthan Mukhyamantri Yuva Sambal Yojana

Government Schemes / CA Bhuvnesh Goyal / June 23, 2024

The objective of Sambal Yojana 2024 or Rajasthan Chief Minister Yuva Sambal Yojana 2024 is to provide financial assistance to the educated unemployed youth in the country because unemployment is a big problem in our country and the youth of the country are not getting employment even after being educated because employment opportunities are less. In such a situation, the government cannot provide employment to all the educated youth, but to give them unemployment allowance, Rajasthan Chief Minister Yuva Sambal Yojana has been started. About the plan Chief Minister Yuva Sambal Yojana is a scheme run by the Rajasthan government. This scheme has been implemented in the entire state of Rajasthan from January 1, 2022. The important objective behind the implementation of this scheme is to provide financial assistance to the unemployed youth of Rajasthan state. There are 3 important points of this scheme :- Providing unemployment allowance. Give skills test. Internship in State Department Unemployment allowance is the allowance which will be given by the government to the beneficiaries during skill testing or internship. Under the skill testing, skill testing will be given to make it easier for the youth to get employment. The duration of skill test is minimum 3 months. Eligible youth will be given skill test by Rajasthan Skill and Livelihood Development Corporation. This will make it easier for the beneficiary to get employment after passing the test. The eligible beneficiary will have to do internship in a government department or any undertaking. It will be mandatory for the beneficiary to devote 4 hours daily during the internship. Without taking internship or skill test the beneficiary cannot avail the benefit of unemployment allowance. To get unemployment allowance, it is mandatory for the applicant to be registered at the local employment office. Only 2 lakh youth will be given unemployment allowance every year. The portal for applying will be opened by the government between 1st April to 30th June every year. Under this scheme, eligible male applicants will be given unemployment allowance of Rs. 4000/- per month, and transgender, female, and specially abled applicants will be given unemployment allowance of Rs. 4500/- per month. Unemployment allowance will be given only for a period of 2 years. If before the completion of 2 years, the beneficiary gets employment or gets self-employment then the allowance will not be payable. Objective Providing unemployment allowance to unemployed youth holding graduate degree. Making the youth capable of employment/self-employment by providing skill training. Benefits under the scheme Under Rajasthan Mukhyamantri Yuva Sambal Yojana, eligible applicants will be given unemployment allowance every month. Apart from unemployment allowance, the applicants will also be given skill test in the government department. The amount of unemployment allowance received under the scheme is as follows:- Male applicant Rs. 4000/- per month female applicant Rs 4500/- per month transgender applicant Rs 4500/- per month specially abled applicant Rs 4500/- per month Eligibility Applicant must be a native of Rajasthan state. The applicant must possess a graduation degree. If the applicant woman is married to a native of Rajasthan state and the applicant woman has a graduate degree, then the woman will be considered eligible under this scheme. The applicant should not be employed in any government, non-government or private sector. The applicant should also not be self-employed. The age of the applicant should not be more than 30 years. The age limit of the following applicants is maximum 35 years under this scheme :- Scheduled caste. Scheduled Tribes. transgender. Woman. Specially abled persons (Disabled persons). It is mandatory for the applicant to be registered at the local employment office before applying. The applicant should not be a beneficiary of any kind of allowance or scholarship through any other means. The applicant should not have been expelled from any government department or institution. Only a maximum of 2 persons in a family will be eligible to receive unemployment allowance. Documents required to avail the benefits 10th mark sheet. Bonafide Certificate. Bachelor Marksheet. Ration card. Jan Aadhar Card. Aadhar card. Caste certificate. Disability certificate. Bank passbook. income certificate. SSO ID of the applicant. Youth ineligible under the scheme Unemployed Engineers who are eligible under No Tender Inviting Scheme. Those unemployed who are continuing studying even after graduation. Those unemployed who are taking benefit of some other scheme. Such unemployed whose family’s annual income is more than Rs 2 lakh. Beneficiaries who have received allowance under previous schemes like Akshat Yojana 2007, Akshat Kaushal Yojana 2009, or Chief Minister Yuva Sambal Yojana 2019. A person employed in any government department or institution. Against whom there are criminal cases. Who has his own employment. Who is receiving assistance under any scheme of Central or State Government. Process Internship Process It is mandatory for unemployment allowance beneficiaries to do an internship. The beneficiary will have to do the internship in any department or undertaking of the State Government. The beneficiary will have to provide 4 hours of service daily for internship. The duration of internship will be 2 years only. It is mandatory for the beneficiary to do an internship as long as the allowance continues. If the beneficiary stops the internship before the period of 2 years, then the allowance will also be stopped by the government. The beneficiary’s allowance will not be deducted if he is absent for one day in a month. If the period of absence increases, the allowance will be deducted proportionately as per rules. The beneficiary will have to upload the internship certificate every month on the portal with his/her SSO ID. The Internship Certificate will be used by the beneficiary only for availing unemployment allowance. Internship certificate is not the basis for preference in any job. Unemployment allowance will be paid after verification of the certificate uploaded on the District Employment Office portal. The beneficiaries doing internship will be given T-shirts, caps and all-weather jackets. Chief Minister Yuva Sambal Yojana Beneficiary Intern will be clearly written on the T-shirt and jacket. It will be mandatory for the

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Prospectus of a Company

Companies Act 2013 / CA Bhuvnesh Goyal / June 23, 2024

One of the major reasons why businesses choose the company form of business is because it allows greater accessibility to funds. A public company that has been incorporated under the Companies Act, 2013 is allowed to raise investments from the general public through different modes. Since a company raises funds from the public, it also becomes necessary that such a company be accountable to the public. Accordingly, to secure the interests of the investors in the company, the Companies Act, 2013 mandates the filing of a prospectus with the Registrar prior to raising funds. A prospectus is a document issued by a company to invite deposits or subscriptions from the public by way of issuing securities of the company. It can be understood as a document or a booklet containing crucial information about the company and its securities for potential investors. Section 2(70) of the Companies Act, 2013 defines a prospectus as “prospectus means any document described or issued as a prospectus and includes a red herring prospectus referred to in section 32 or shelf prospectus referred to in section 31 or any notice, circular, advertisement or other document inviting offers from the public for the subscription or purchase of any securities of body corporate” What is a Prospectus? A prospectus is a legal disclosure document that provides information about an investment offering to the public, and that is required to be filed with the Securities and Exchange Commission (SEC) or local regulator. The prospectus contains information about the company, its management team, recent financial performance, From the perspective of the issuer prospectus is a document that provides all the essential information about the company at the time of raising an investment from the public. It can be understood as an invitation to offer the securities of the company. The public intending to invest in the company can make an offer above the offered price but within the price band. It is upon the company to allot shares to the public in the manner it deems fit. Every time a company has to raise an investment from the public, it is the duty of the company to inform the public about its financial position and the purpose of the investment. A prospectus is the first document through which a company publicises or discloses its financial and other relevant information. Section 28(2) of the Companies Act, 2013 provides that any document through which an offer for sale is made to the public shall be deemed a prospectus. It is pertinent to note that the document has to be issued to the public and not a particular set of persons. Even if an advertisement is made in a newspaper regarding certain shares left for purchase by the company, it shall constitute a prospectus, as has been held by the Hon’ble Calcutta High Court in Pramatha Nath Sanyal v. Kali Kumar Dutt (1924). From the perspective of the Investor In order to be able to make an informed decision regarding an investment, an investor must have access to all the information about a company before investing in it. Institutional investors might receive such information without much trouble. However, it is the retail investors whose interest might be compromised if such information is not provided in due course. Thus, a prospectus becomes the most crucial document for any investor intending to invest in a company. This is also the reason why the company law mandates the filing of a prospectus every time before raising a public investment. It can also be safe to infer here that issuing a prospectus is one of the means of ensuring good corporate governance practices in a company as it encourages transparency, accountability and responsibility. Essentials for a document to be called as a prospectus Invitation to the Public – One of the most important points that one must remember is that a prospectus is an invitation to offer rather than an offer itself. This means that a company makes an open declaration to the public at large that some of its securities are available for subscription. A document shall be deemed to be an invitation to the public only if it is open for any person to subscribe, though there may be a possibility that ultimately the securities may not be issued to him owing to oversubscription or any other disqualification. Invitation by the company – The prospectus must be issued by the company itself that wishes to raise the funds. Even if all the requisite disclosures are made available by the public by some other authority, that would not satisfy the criteria for making the invitation. However, an entity, on behalf of the company or on the authorisation of the company, may follow the stipulated process in order to make an invitation to offer to the public. Hence, an invitation to offer must be made by the company itself or on behalf of the company by some other authority authorised by the company. Nature of document and particulars therein – A prospectus shall be in the nature of an invitation to offer, allowing subscription to the securities of the company. Any document merely disclosing the details of the securities shall not be considered a prospectus. It must fulfil all the required stipulations that have been provided under the Companies Act, which have been discussed in the later section of the article. Information regarding securities of the company – A prospectus is required to contain all the details regarding the securities. The prospectus must specify the nature of securities, whether equity-based or debt-based. It must also specify the category as to whether it is an equity or preference share, debenture, bond, warrant, etc. It must specify the number of securities available for subscription. It must also provide for other particulars, such as redemption, rate of interest, etc., as may be applicable to the category of securities. Types of prospectus under Company Law Shelf prospectus- Drafting a prospectus is a cumbersome process as it requires a number of disclosures and information to be passed on to the investor. It may also

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GST Return – What is GST Return? Who Should File, Due Dates, Penalties & Types of GST Returns

Goods & Service Tax / CA Bhuvnesh Goyal / June 23, 2024

A GST return is a document containing details of all income/sales and/or expenses/purchases that a GST-registered taxpayer (every GSTIN) is required to file with the tax administrative authorities. This is used by tax authorities to calculate net tax liability. Under GST, a registered dealer has to file GST returns that broadly include: Purchases Sales Output GST (On sales) Input tax credit (GST paid on purchases) Businesses that are registered under GST have to file the GST returns monthly, quarterly, and annually based on the business. Here it is necessary to provide the details of the sales or purchases of the goods and services along with the tax that is collected and paid. Implementation of a comprehensive Income Tax System like GST in India has ensured that taxpayer services such as registration, returns, and compliance are in range and perfectly aligned. An individual taxpayer filing the GST returns has to file 4 forms for filing the GST returns such as the returns for the supplies, returns for the purchases made, monthly returns, and the annual returns. GST return filing in India is mandatory for all the entities that have a valid GST registration irrespective of the business activity or the sales or the profitability during the period of filing the returns. Hence, even a dormant business that has a valid GST registration must file the GST returns. Who should file GST Returns? GST Return filing in India is to be done by the following: A person having a valid GSTIN has to compulsorily file the GST returns. Also, a person whose annual turnover is crossing Rs. 20 lakh has to obtain a GST registration and file the GST returns mandatorily. In the cases of Special states, the limit for the annual turnover is Rs.10 lakh. Types of GST Registration What are the different types of GST registration in India? GSTR 1- Details of the outward supplies of the taxable goods and or services GSTR 3B-Simple returns in which a summary of the outward supplies along with the input tax credit that is declared and the payment of the tax is affected by the taxpayer. CMP 08-Statement cum challan to make a tax payment by a taxpayer registered under the composition scheme under Section 10 of the CGST Act. GSTR 4-Returns to be filed by the taxpayer that is registered under the composition scheme under Section 10 of the CGST Act GSTR 5-Returns to be filed by a Non-resident taxable person GSTR 6-To be filed by the input service distributor to distribute the eligible input tax credit GSTR 7-Is filed by the government authorities GSTR 8-Details of supplies that are affected through the e-commerce operators and the amount of tax that is collected at the source by them. GSTR 9-Annual return for a normal taxpayer GSTR 9C-Certified reconciliation statement GSTR 10-Is filed by the taxpayer whose GST registration is canceled GSTR 11-Details of the inward supplies are furnished by a person who has UIN and also claims a refund. Documents Required for GST Return Filing Invoices issued to persons with GSTIN or B2B invoices Invoices issued to persons without GSTIN or B2C invoices This needs to be submitted only when its total value is above ₹2.5 lakhs A consolidation of inter-state sales HSN-wise summary of all goods sold Any other debit or credit notes or advance receipts How to File GST Returns? Step 1: Visit the GST portal (www.gst.gov.in). Step 2: A 15-digit GST identification number will be issued based on your state code and PAN number. Step 3: Upload invoices on the GST portal or the software. An invoice reference number will be issued against each invoice. Step 4: After uploading invoices, outward return, inward return, and cumulative monthly return have to be filed online. If there are any errors, you have the option to correct it and refile the returns. Step 5: File the outward supply returns in GSTR-1 form through the information section at the GST Common Portal (GSTN) Step 6: Details of outward supplies furnished by the supplier will be made available in GSTR-2A to the recipient. Step 7: Recipient has to verify, validate, and modify the details of outward supplies, and also file details of credit or debit notes. Step 8: Recipient has to furnish the details of inward supplies of taxable goods and services in GSTR-2 form. Step 9: The supplier can either accept or reject the modifications of the details of inward supplies made available by the recipient in GSTR-1A. What is the penalty for the late filing of GST returns? f you have failed to pay the GST returns, there is an interest and late fee to be paid. The interest is at 18% per annum to be calculated on the amount of outstanding tax. And under the CGST and SGST, there is a late fee of Rs.100 to be paid each day, so the total comes to Rs.200 per day. GST Return Filing in india FAQ’s 1. What Happens If I Miss the Deadline? Missing GST return filing deadlines can lead to penalties and late fees. It’s crucial to file your returns on time to avoid unnecessary financial burdens. 2.What Documents Do I Need for GST Return Filing? To file your GST return, you’ll need invoices, debit notes, credit notes, and other relevant documents. Ensure that all these documents are accurate and in line with the GST law. 3.What is difference between GSTR-3 and 3B? GSTR-3 is a more comprehensive form that requires businesses to provide detailed information related to their sales and purchases, whereas GSTR-3B is a simplified form that requires only basic information.

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