November 2024

Section 24 – Finance Acts

Finance Acts / /

Amendment of section 57 In section 57 of the Income-tax Act,— (a)   in clause (i), after the words “in the case of dividends,”, the words, brackets, letter and figures “other than that referred in sub-clause (f) of clause (22) of section 2″ shall be inserted with effect from the 1st day of October, 2024; (b)   in clause (iia), before the Explanation, the following proviso shall be inserted with effect from the 1st day of April, 2025, namely:—     ‘Provided that in a case where income-tax is computed under clause (ii) of sub-section (1A) of section 115BAC, the provisions of this clause shall have effect as if for the words “fifteen thousand rupees”, the words “twenty-five thousand rupees” had been substituted;’. (c)   after the proviso, the following proviso shall be inserted with effect from the 1st day of October, 2024, namely:—     “Provided further that no deduction shall be allowed in case of dividend income of the nature referred to in sub-clause (f) of clause (22) of section 2.”.

Section 24 – Finance Acts Read More »

Section 23 – Finance Acts

Finance Acts / /

Amendment of section 56 In section 56 of the Income-tax Act, in sub-section (2), in clause (viib), after the second proviso, the following proviso shall be inserted with effect from the 1st day of April, 2025, namely:— “Provided also that the provisions of this clause shall not apply on or after the 1st day of April, 2025.”.

Section 23 – Finance Acts Read More »

Section 22 – Finance Acts

Finance Acts / /

Amendment of section 55 In section 55 of the Income-tax Act, in sub-section (2), in clause (ac), in the Explanation, in clause (a), in sub-clause (iii), after item (A), the following item shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2018, namely:— “(AA) not listed on a recognised stock exchange as on the 31st day of January, 2018, or which became the property of the assessee in consideration of share which is not listed on such exchange as on the 31st day of January, 2018 by way of transaction not regarded as transfer under section 47, as the case may be, but listed on such exchange subsequent to the date of transfer (where such transfer is in respect of sale of unlisted equity shares under an offer for sale to the public included in an initial public offer);”.

Section 22 – Finance Acts Read More »

Section 21 – Finance Acts

Finance Acts / /

Amendment of section 50AA In section 50AA of the Income-tax Act,— (a)   for the portion beginning with the words “Notwithstanding anything contained in” and ending with the words “short-term capital asset:”, the following shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:—     “Notwithstanding anything contained in clause (42A) of section 2 or section 48, where the capital asset— (a)   is a unit of a Specified Mutual Fund acquired on or after the 1st day of April, 2023 or a Market Linked Debenture; or (b)   is an unlisted bond or an unlisted debenture which is transferred or redeemed or matures on or after the 23rd day of July, 2024,     the full value of consideration received or accruing as a result of the transfer or redemption or maturity of such debenture or unit or bond as reduced by— (i)   the cost of acquisition of the debenture or unit or bond; and (ii)   the expenditure incurred wholly and exclusively in connection with such transfer or redemption or maturity,     shall be deemed to be the capital gains arising from the transfer of a short-term capital asset:”; (b)   in the Explanation, for clause (ii), the following clause shall be substituted with effect from the 1st day of April, 2026, namely:—     ‘(ii) “Specified Mutual Fund” means,— (a)   a Mutual Fund by whatever name called, which invests more than sixty-five per cent of its total proceeds in debt and money market instruments; or (b)   a fund which invests sixty-five per cent or more of its total proceeds in units of a fund referred to in sub-clause (a): Provided that the percentage of investment in debt and money market instruments or in units of a fund, as the case may be, in respect of the Specified Mutual Fund, shall be computed with reference to the annual average of the daily closing figures: Provided further that for the purposes of this clause, “debt and money market instruments” shall include any securities, by whatever name called, classified or regulated as debt and money market instruments by the Securities and Exchange Board of India.’.

Section 21 – Finance Acts Read More »

All private properties cannot form part ofthe material resources of the community:Supreme Court (SC)

Updates / /
Article 39(b)

Article 39(b): All Private Properties Cannot Form Part of the ‘Material Resources of the Community’, Supreme Court On November 05, 2024 (Yesterday), the Supreme Court (SC) of India delivered a long-awaited decision on the question ‘whether private resources fall within the definition of material resource of the community under Article 39(b) of the Constitution of India (one of the Directive Principles of the State Policy)’. By an 8:1 majority, the SC held that all private properties cannot form part of the ‘material resources of the community,’ which the State should distribute as best to serve the common good as mentioned under Article 39(b) of the Indian Constitution. The nine-judge bench of Chief Justice of India (CJI) DY Chandrachud, Justice B.V. Nagarathna, Justice J.B. Pardiwala, Justice Rajesh Bindal, Justice Augustine George Masih, Justice Hrishikesh Roy, Justice Sudhanshu Dhulia, Justice Manoj Misra, and Justice Satish Chandra Sharma delivered the judgment. CJI Chandrachud authored the majority opinion including his and six other judge’s views, while Justice Nagarathna partially concurred and Justice Dhulia delivered a dissenting opinion. The CJI in his judgment said, “Not every resource owned by an individual can be considered a ‘material resource of the community’ merely because it meets the qualifier of material needs.”  While hearing the matter, the view of Justice Krishna Iyer, in the 1978 judgment ‘State of Karnataka vs. Ranganatha Reddy’, that private properties can be regarded as community resources was addressed. The same decision was further endorsed in the 1983 judgment ‘Sanjeev Coke Manufacturing Company vs. Bharat Coking Coal Ltd.’ of the top court. The majority opinion opined, “The direct question referred to this bench is whether the phrase ‘material resources of the community’ used in Article 39(b) includes privately owned resources. Theoretically, the answer is yes, the phrase may include privately owned resources. However, this Court is unable to subscribe to the expansive view adopted in the minority judgment authored by Justice Krishna Iyer in Ranganatha Reddy and subsequently relied on by this Court in Sanjeev Coke. Not every resource owned by an individual can be considered a ‘material resource of the community’ merely because it meets the qualifier of material needs.” The CJI also said, “The inquiry about whether the resource in question falls within the ambit of Article 39(b) must be context-specific and subject to a non-exhaustive list of factors such as the nature of the resource and its characteristics; the impact of the resource on the well-being of the community; the scarcity of the resource; and the consequences of such a resource being concentrated in the hands of private players. The Public Trust Doctrine evolved by this Court may also help identify resources which fall within the ambit of the phrase material resource of the community.”  Moreover, the majority opinion authored by the CJI also said that the interpretation of Article 39(b) adopted in the Ranganatha Reddy and Sanjeev Coke judgments is rooted in a particular economic ideology and the belief that an economic structure that prioritizes the acquisition of private property by the state is beneficial for the nation. The judgment further reads, “Justice Krishna Iyer (in Ranganatha Reddy and Bhimsinghji) and Justice Chinappa Reddy (in Sanjeev Coke) consistently referred to the vision of the framers as the basis to advance this economic ideology as the guiding principle of the provision.” The majority opinion also concluded, “The term ‘distribution’ has a wide connotation. The various forms of distribution which can be adopted by the state cannot be exhaustively detailed. However, it may include the vesting of the concerned resources in the state or nationalization. In the specific case, the Court must determine whether the distribution subserves the common good.” Justice Dhulia, in his dissenting opinion, observed, “what and when do the “privately owned resources” come within the definition of “material resources” is not for this Court to declare. This is not required. The key factor is whether such resources would subserve common good. Clearly the acquisition, ownership or even control of every privately owned resource will not subserve common good. Yet at this stage we cannot come out with a catalogue of do’s and don’ts. We must leave this exercise to the wisdom of the legislatures.” On the other hand, Justice Nagarathna illustrated her concurring views regarding the matter. She said, “In my view, the judgments of this Court in Ranganatha Reddy, Sanjeev Coke, Abu Kavur Bai, and Basantibai correctly decided the issues that fell for consideration and do not call for any interference on the merits of the matters and as explained above. The observations of the Judges in those decisions would not call for any critique in the present times. Neither is it justified nor warranted.” Earlier in May this year, the SC bench reserved the judgment in the matter after hearing the matter for 5 days.

All private properties cannot form part ofthe material resources of the community:Supreme Court (SC) Read More »

Finance Ministry proposes 4th phase of consolidation of Regional Rural Banks (RRBs) asper reports

Updates / /
Finance Ministry proposes 4th phase of consolidation of Regional Rural Banks

The proposed merger reduces the number of RRBs from 43 to 28 to make them more efficient. Consolidation is also derived from vision of One State-One RRB.   Consolidation of RRBsRRBs have been consolidated in a phased manner based on recommendations of Dr. Vyas Committee (2001).Consolidation began in 2004-05 which resulted in reduction of such institutions from 196 to 43 till 2020-21 through 3phases of amalgamation.Significance of consolidation: Minimised overhead expenses, technology adoption, enhanced capital base and area ofoperation, and increased exposure. In a bid to achieve operational efficiency and cost rationalisation, the Finance Ministry has initiated the fourth round of consolidation for Regional Rural Banks (RRBs) and the number of such banks is likely to come down to 28 from 43 at present. As per the roadmap prepared by the Finance Ministry, 15 RRBs operating in various states would be merged. Among states that will see consolidation of RRBs include Andhra Pradesh, which has the maximum number of RRBs (4), Uttar Pradesh and West Bengal (3 each), and Bihar, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan (2 each) In the case of Telangana, the amalgamation of RRBs will be subject to bifurcation of assets and liabilities of Andhra Pradesh Grameena Vikas Bank (APGVB) between APGVB and Telangana Grameena Bank. “Given the rural expansion of RRBs and agro-climatic or geographical ethos and in order to retain the USP of RRBs viz the closeness to communities, it is the felt need to embark on further consolidation of RRBs towards the goal of ‘One State-One RRB’ so as to derive the benefit of scale efficiency and cost rationalisation,” Department of Financial Services said in a communication to head of state-owned banks. Consolidation of RRBs started in 2004-05 and after three phases of amalgamation, the number has come down to 43 from 196. This has helped RRBs “minimise their overhead expenses, optimise the use of technology, enhance the capital base and area of operation, and increase their exposure”. “Given the rural expansion of RRBs and agro-climatic/geographical ethos and in order to retain the USP of RRBs viz. closeness to communities, it is the felt need to embark on further consolidation of RRBs  .

Finance Ministry proposes 4th phase of consolidation of Regional Rural Banks (RRBs) asper reports Read More »

Craftsvilla Seller Registration

learn / /
Craftsvilla Seller Registration

Craftsvilla is an Indian-based e-commerce platform that sells ethnic items for women, such as ethnic clothing, ethnic footwear, ethnic fashion accessories, ethnic handcrafted home accessories, lifestyle products, and beauty products from the industry. Craftsvilla, created in 2011 by Monica & Manoj Gupta, is an online marketplace for exclusive handmade, handmade, organic, and gift products. The firm claims to have more than 25,000 sellers on its website, offering nearly 3.5 million products. Worldwide, the Craftsvilla ship is free of charge for items worth over $250. The start-up claims to sell more than 4 million items to over 25,000 artisans and designers. The products are classified into different categories, each further divided into sub-segments, such as jewelry, handbags, home décor, clothes, food & health, footwear, etc. With almost 80% of buyers being women, Craftsvilla is so famous for ethnic wear. The push would be to improve craftsmanship and make it readily available. They try to keep things bright and vibrant, which draws customers from the 18-35 age group. About 50 percent of the orders come from cities in Tier 2. And as with e-commerce portals in India, Cash On Delivery makes up 50 percent of revenues (COD). What is Craft villa.com? Craft villa.com is basically an online platform for selling ethnic products, natural and organic products, etc like Flipkart, Amazon, etc. However, Craftsvilla offers a variety of products like sarees, lehenga, jewelry, handmade accessories, salwar suits, etc.  Craftsvilla becomes a bridge between the local seller and customers. It enhances the profits of the local seller, creates their business brand and preserves the culture of India and their locality. It is not mandatory that the seller must be of state level but any local seller can become a seller on Craftsvilla by following a simple process. Craftsvilla provides the facility of shipping products online. Documents required for Craftsvilla Seller Registration PAN Card GST Registration (if in case applicable) Identity proof Canceled cheque Bank Account details Trademark registration certificate, (if there is any). VAT/TIN Craftsvilla Registration – Requirements Business Registration There is no requirement for a specific type of business entity to become a seller on Craftsvilla. But, we recommended Craftsvilla sellers to be registered as a LLP or Private Limited Company to enjoy limited liability protection and easy access to credit. Further, being registered as a corporate entity would ensure that the business is scalable and transferable in the future. In addition, listing on other ecommerce portals would also be easier and faster while being registered as a corporate entity. VAT or Service Tax Registration To sell on Craftsvilla, VAT or TIN registration is not mandatorily required. VAT registration or service tax registration maybe required if the seller proposes to sell taxable goods or services through the platform. However, to complete the seller registration process, VAT or service tax registration details or documents is not mandatorily required. PAN and Bank Account PAN of the seller is mandatorily required on Craftsvilla. In addition, bank account details of the seller along like account holder name, account number, IFSC code and bank details are required to process payment to the seller. Trademark Registration On beginning to sell on online platforms, any brand would get a lot of exposure. Hence, its important to ensure that the brand is trademarked to avoid counterfeit goods or competitor listing for the same product in the long term. Hence, its recommended that sellers selling their own brand of goods or services on Craftsvilla  obtain Trademark registration. FAQs What is Craftsvilla? Craftsvilla is an online marketplace that specializes in ethnic products, including apparel, accessories, home decor, and handcrafted items. It allows artisans, designers, and sellers to showcase and sell their products to customers across India and internationally. Who can register as a seller on Craftsvilla? Anyone who creates or sells ethnic and handcrafted products, such as artisans, designers, small businesses, or independent sellers, can register on Craftsvilla. Sellers should have unique, authentic products in categories like apparel, accessories, jewelry, home decor, or other ethnic items.

Craftsvilla Seller Registration Read More »

Kailash Mansarovar Pilgrimage Scheme

Government Schemes / /
kailash mansarovar pilgrimage scheme

The scheme “Kailash Mansarovar Yatra” is implemented by the Religious Trusts and Endowments Department, Government of Madhya Pradesh. The objective of this scheme is to provide financial assistance to the pilgrims of the state going on the Kailash Mansarovar Yatra. Such persons of Madhya Pradesh, who have completed the journey of Kailash Mansarovar after finding a place in the list of persons selected by the Ministry of External Affairs, Government of India, they will have to present the certificate of the actual expenses incurred on the journey after the journey and the expenses incurred on such journey, 50% of the expenditure will be reimbursed by the State Government up to a maximum of ₹30,000/-. Eligibility The applicant should be a native of Rajasthan. The applicant must have completed the Kailash Mansarovar Yatra after being selected by the Ministry of External Affairs, Government of India. Only individuals who have been selected by the Ministry of External Affairs, Government of India, for the pilgrimage are eligible for the benefits of this scheme. The applicant should not be an income taxpayer. Each individual is eligible for the grant only once in their lifetime. Note 1: To avail of the benefits of this scheme, pilgrims must submit all documents detailing their actual expenses incurred during the journey.Note 2: If both husband and wife are selected for the pilgrimage, their eligibility for travel benefits will be as per the guidelines of the Ministry of External Affairs, Government of India. Documents Required Passport-size photograph Identity proof i.e. Aadhaar card Domicile certificate of Madhya Pradesh Details of expenditure incurred on the journey Copy of passport Certificate of completion of Kailash Mansarovar Yatra Certificate regarding selection by the Ministry of External Affairs, Government of India Bank passbook/bank account details Any other required documents Application Process Eligible pilgrims should apply for financial assistance/grant using the prescribed form, along with records of their pilgrimage certified by the Ministry of External Affairs, Government of India, to the concerned District Collector, Madhya Pradesh within 60 days of completing their pilgrimage. The office of the concerned Collector will disburse the grant amount after verifying the submitted records. FAQs How will the grant amount be disbursed? The grant amount will be disbursed by the office of the concerned District Collector after verifying the submitted records. How long do I have to apply for the financial assistance? Applicants must submit their application within 60 days of completing their pilgrimage.

Kailash Mansarovar Pilgrimage Scheme Read More »

Guide to NSIC Bill Discounting Scheme

Government Schemes / /
Guide to NSIC Bill Discounting Scheme

National Small Industries Corporation (NSIC) offers support and works for the growth and development of Micro, Small, and Medium Enterprises (MSMEs) nationwide. NSIC works under the Ministry of Micro, Small, and Medium Enterprises (MoMSME) for the promotion of these enterprises. NSIC offers Credit support to MSMEs with the help of three major credit facilities: Raw Material Assistance (RMA) against Bank Guarantee Credit Facilitation through Bank Bill Discounting Meaning of Bill Discounting Bill discounting is a short-term finance arrangement where the seller receives its amounts outstanding in advance (before the due date) from a bank or other financial institutions such as NBFCs, after deducting interest and other charges as a discount. At the end of the credit period, the seller needs to repay the bank. Interest Rate offered by Banks under NSIC Scheme With the objective to meet the credit needs of MSME units, the NSIC has signed an MOU (Memorandum of Understanding) with leading nationalized and private sector banks and non-banking financial institutions. Under this pivotal deal with the bank, NSIC enables MSME units to avail the credit support from the banks to successfully operate and manage their business venture. The interest rates levied on MSME loan varies from bank to bank, banks typically charge floating interest rates. Certain significant sectors play a crucial role in deciding the interest rates, including the credibility of the venture and present and future viability and stability. NSIC works with its wide network of branch offices and technical centers spread across the country. Its range of services includes financial assistance, core training, and incubation. NSIC offers integrated support services under finance, technology, marketing, and support services. The corporation also focuses on providing machinery on hire purchase basis and marketing in exports. Salient features of the NSIC Bill discounting scheme NSIC charges nominal interest (up to the usance period) and additional interest if the payment is not received within the usance period. Discount or Interest Rate up to credit or usance period: Normal Interest (% per annum) Micro (%) Small (%) Medium (%) For MSME units having SME 1 Rating 6.5 7 8 For MSME units having SME 2 Rating 7 7.5 8 Other Units 7.5 8 8 An additional rate of interest at the rate of 1.25% per quarter after the credit or usance period will be charged if the amount is not paid within that period.  This additional interest will be over and above the normal interest specified in the table above.  For all proposals sanctioned under this scheme, the following processing fee will be applicable: Processing Fees (% per annum) Micro (%) Small (%) Medium (%) Fresh sanction 1 1 1 Renewals 0.5 1 1 NSIC will also require security in the form of a bank or personal guarantee before it disburses the funds.  Bank guarantees must be equivalent to the value of assistance and issued by approved banks. The personal guarantee should include the guarantee of the proprietor, partner of firms or directors of the company. Eligibility Criteria MSMEs falling under the turnover ranging between Rs. 5 crores or more and up to Rs. 250 crore Enterprise in successful operation for the last 3 years Under collateral for cash credit loans, banks require comprehensive details of the business and its feasibility Past loan repayment record, if applicable Good CIBIL score Documents Photographs of each proprietor, partner or director. Statutory Certificates. Statement of personal assets and liabilities (self-attested). Copy of board resolution stating to deal with NSIC for financial assistance required. a. Last year’s audited financial statements.b. Provisional/current financial statements.c. Projected financial statements. Sanction letter issued by the bank for the credit limit. How to obtain NSIC Bill discounting facility? Amount of assistance/funds needed. Background details of the applicant (e.g. constitution, year of establishment). Statutory registration details (e.g. GST, PAN). Details of sister concern, if any. Details of proprietor, partners or director. Nature of business (e.g. product manufactured or services rendered). Details of order received from eligible seller unit. Security details (e.g. bank or personal guarantee FAQs What is the difference between NSIC and MSME? National Small Industries Corporation (NSIC), is a certified enterprise of the Government of India that works under the Ministry of Micro, Small, and Medium Enterprises (MoMSME) that promotes the growth of Micro, Small, and Medium Enterprises (MSMEs) in India. Whereas, MSME is itself a sector that comprises numerous Micro, Small, and Medium Enterprises. What is an NSIC certificate? NSIC certificate or registration helps to promote MSMEs by offering Single Point Registration for Government purchase and credit rating scheme for small industries.

Guide to NSIC Bill Discounting Scheme Read More »

Appointment of Auditor

learn / /
appointment of auditor

The company is regulated by two bodies the shareholders and the directors. The shareholders provide funds to the director of the company and in return the directors of the company perform business from the funds that are received from the shareholders. Therefore the Board of directors is under an obligation to present the books of accounts to the shareholders in the General meeting; so that the shareholders can have to a close look on where there funds are being invested by the company, for the purpose the same the board of directors appoint an Independent person who is practicing Chartered accountant to conduct Statutory Audit. Purpose for Appointment of Auditor The purpose of the auditors in the company is to protect the interests of the shareholders. The auditor is obligated by law to examine the accounts maintained by the directors and inform them of the true financial position of the company. Auditor gives his independent opinion to the owners or shareholders of the company to protect and keep the company in a safe financial condition. Appointment of the first Auditor in the Company According to Section 139(6) of the Companies Act, the first auditor of a company that is non-governmental should be appointed by the board of directors within 30 days from the date of incorporation or registration of the company.And if the board of directors does not appoint an auditor, it informs the members of the company, who then appoint the auditor at an extraordinary general meeting within 90 days of this notification. Such an auditor, who has been appointed, holds the position of auditor until the end of the first general meeting. Appointment of an Auditor for Different Kinds of Companies Particulars Non-Government Company Listed/Specified Company Government Company Application for 1st Auditor post  Incorporation Appointed by the Board Of Directors.   This has to be done within 30 days from the date of Registration. Appointment can also be done by Members at Extraordinary General Meeting within 90 days of information. Appointed by Board Of Directors. This has to be done within 30 days from the date of Registration. Appointment can also be done by Members at Extraordinary General Meeting within 90 days of the information. Appointed by the  Comptroller and Auditor General of India. This has to be done within 60 days from the date of Registration. Appointment can also be done by Board Of Directors  within 30 days of incorporation. Members can also appoint  at an Extraordinary General Meeting within 60 days of Information. Auditor at First AGM with the written consent and a certificate of Auditor.  The appointment is done by the members He will hold office till the end of the 6th Annual General Meeting (AGM). The appointment shall be in accordance with the conditions laid down by the auditor. The appointment is done by the members for a maximum term of 5/10 consecutive years. Cooling off period of 5 years before next appointment will be there. The appointment is done by the Comptroller and Auditor General of India. He should be appointed within 180 days from the 1st of April. Appointment of Subsequent Auditor The appointment is done by the members and he will hold office till the conclusion of the  6th meeting. The appointment is done by the members for a Maximum term of 5/10 consecutive years. The appointment is done by the Comptroller and Auditor General of India within 180 days from the 1st of April. Casual Vacancy due to resignation and other reasons The appointment is by the members within 3 months of the recommendations of Board and he will hold office till the next AGM. The appointment is by the members within 3 months of the recommendations of Board and he will hold office till the next AGM.  The appointment is done by the Comptroller and Auditor General within 30 days.  Procedure for appointment of Auditors First Auditor: The auditor so appointed will hold office until the end of the first annual general meeting. The company is required to file the ADT-1 form with the Commercial Register along with the prescribed fees.In the case of government companies, the first auditor shall be appointed by the Comptroller and Auditor General of India within sixty days from the date of registration of the company and in case the Comptroller General of India does not appoint a such an auditor within the said period, then the board of directors of the company shall appoint such auditor within thirty days and in case, that the board of directors does not appoint a such an auditor within thirty days, a member’s approval is required within sixty days in an extraordinary Ordinary General Meeting. The first auditor serves until the end of the first annual general meeting. Subsequent appointment of auditor: The appointment is made by the members and he will hold office until the conclusion of the sixth annual general meeting. A resigning auditor may be reappointed at the annual general meeting if: Is not disqualified for reappointment; Did not show reluctance to the company for re-appointment; and No special resolution has been passed to appoint another auditor at the meeting or expressly provides that he will not be re-appointed. The following class of companies appoints or re-appoints: A natural person as an auditor for more than one five consecutive years  Audit firm as auditor for more than two terms of office of five consecutive years FAQs Who can be appointed as an auditor of a company? An auditor must be a qualified Chartered Accountant (CA) or a firm of Chartered Accountants that is registered with the Institute of Chartered Accountants of India (ICAI). In case of a company, the auditor must be an individual or a firm holding a valid certificate of practice issued by ICAI. When should an auditor be appointed for a company? An auditor should be appointed at the first Annual General Meeting (AGM) of the company. For subsequent years, the auditor is typically appointed at the AGM for a term of one year.

Appointment of Auditor Read More »