November, 2024 | CA B K Goyal & Co LLP

India’s Finance Minister highlights Global South’s role in shaping MultilateralDevelopment Banks

Updates / Shruti / November 5, 2024

Union Finance Minister Nirmala Sitharaman highlighted the contributions of the Global South to the foundations of multilateral development banks at the 1944 Bretton Woods conference and emphasized on embedding diverse voices in decision-making to ensure a truly inclusive and global development framework. Finance Minister noted the pivotal contributions of the Global South to the foundations of Multilateral Development Banks (MDBs) at the 1944 Bretton Woods Conference. 1944 Conference led to establishment of World Bank and International Monetary Fund. Union Finance Minister Nirmala Sitharaman underscored the contributions of the Global South to the foundations of multilateral development banks at the 1944 Bretton Woods conference, stressing the importance of diverse voices in decision-making for a more inclusive global development framework. Sitharaman made these remarks during the Development Committee Plenary session on “A Future-Ready World Bank Group” at the 2024 World Bank Annual Meetings in Washington, DC. In her intervention at the session, Sitharaman urged the World Bank to promote a two-way exchange of innovations, drawing from the transformative experiences of the Global South in areas like digital inclusion and sustainable energy. The Finance Minister also praised the World Bank’s initiatives over the past year to optimize balance sheet measures to increase its financial capacity, considering the growing global economic challenges and the pressing need of emerging economies to finance their developmental needs. She further reiterated India’s stance that the World Bank should adopt a strictly evidence-based and data-driven approach when preparing global indices and country comparators such as the Worldwide Governance Indicators and the new B-Ready index.She affirmed hope that the World Bank would chart the future path with a renewed commitment by addressing key priorities, empowering regions, and fostering partnerships, to create a future-ready institution capable of accelerating progress toward the 2030 SDGs and beyond. In addition to her participation at the World Bank session, Sitharaman attended the IMFC Plenary session on “MD’s Global Policy Agenda” at the International Monetary Fund (IMF) Annual Meetings. She acknowledged the resilience of the global economy in 2024, highlighting that while output is nearing potential in some economies and headline inflation is stabilizing around central bank targets, challenges remain. Sitharaman noted downside risks such as geopolitical tensions and the weakening medium-term growth prospects. The Ministry of Finance posted on X, “Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman today participated in the IMFC Plenary session on ‘MD’s Global Policy Agenda’ at the International Monetary Fund (IMF) during the Annual Meetings 2024 in Washington, DC. The Union Finance Minister said that in 2024 the global economy has shown remarkable resilience; while output is nearing its potential in some major economies, headline inflation has generally moderated and moved closer to the central banks’ targets.” Addressing the IMF’s approach, Sitharaman underscored the importance of a balanced and impartial stance in the Fund’s policy advice, especially for countries with debt vulnerabilities. She expressed optimism about the ongoing Review of the Transparency Policy and Open Archives Policy, noting that these initiatives could strengthen the IMF’s role as a trusted advisor and promote greater transparency in its multilateral surveillance. On the sidelines of the meetings, Sitharaman held a bilateral discussion with Standard Chartered CEO Bill Winters. Winters expressed appreciation for her support of the India-UK Financial Partnership, and Sitharaman encouraged the bank to explore further engagement opportunities in India’s GIFT City, an emerging international financial hub. She also welcomed input from Standard Chartered in developing India’s Climate Finance Taxonomy Framework, a component of the Union Budget’s climate-related announcements. Contribution of Global South to MDBs Establishment of New Institutions such as New Development Bank, Asian Infrastructure Investment Bank etc. With economic growth, Global South Countries like India and China have increased their financial commitments to MDBs. Advocacy for Inclusivity and MDB reforms by emphasizing on embedding diverse voices in decision-making processes at MDBs. India’s Recommendations for MDBs Promote a two-way exchange of innovations, drawing from experiences of Global South in areas like Digital Inclusion and Sustainable Energy while meeting the need of development financing to Global South. Adopt a more competitive pricing model to foster broader participation, incentivise middle-income countries to borrow more and deepen development impact. Adopt a strictly evidence-based and data-driven approach when preparing global indices such as the Worldwide Governance Indicators and the new B-Ready index.

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Rural Entrepreneurship Development Program

Government Schemes / Shruti / November 5, 2024

Establishing businesses is important for a country’s progress as it augments economic and employment growth. State and central governments are continuously launching new and attractive schemes to encourage their citizens to come up with innovative business ideas. Setting up an enterprise depends on one’s capacity, which differs from person to person. If the enterprise must come up in a rural environment, the dynamics are more complex compared to the urban context. Rural enterprises are business entities, which by the means of effective use of local resources, promote revenue generation and act as agents of social change at the grassroots level. These entities not only play a pivotal role in the wholistic development of the rural economy but also contribute to the economic growth of our nation. The establishment of a large number of profitable enterprises in a region can bring in government investment, attract private participation, generate local employment, bring partnerships and secure funding apart from channelising idle savings into business entities. According to the Government of India, “Any industry located in a rural area, village or town with a population of 20,000 or below and an investment of INR three crores in plant and machinery is classified as a village industry.” It is a revised definition of the previous one provided by Khadi & Village Industries Commission.As of March 31, 2022, India has more than 63 million MSMEs, out of which about 94 per cent are micro-enterprises. According to official data released on April 30, 2022, the country’s 6.33 crore MSMEs employ about 12 crore workers. According to World Bank Data 2019, about 65 per cent of the Indian population, most of them (about 58 per cent, as per 2018-19 PLFS data) earn their livelihood from agriculture and allied sectors. Objective of Rural Entrepreneurship Development Programme The Rural Entrepreneurship Development Programme aims to develop entrepreneurial and activity-oriented skills among the unemployed rural youths willing to create small or micro-enterprises by assisting agencies and NGOs involved in the conducting of Entrepreneurship Development Programs. Hence, the Rural Entrepreneurship Development Programme indirectly supports entrepreneurs through various agencies and NGOs. Challenges faced by rural entrepreneurs While India has marginally improved its ranking in terms of the ease of doing business index, the challenges and concerns faced by rural entrepreneurs in running and scaling their enterprises persist.The concerns range from the prevalent societal and gender-based biases to a lack of understanding of business, entrepreneurship and access to the requisite skills essential to run such enterprises. The entrepreneurs who have the courage to work on a business idea often face challenges in understanding the needs of the market, the viability of their product and its suitability for manufacture.Furthermore, those enterprises who manage to establish themselves in the market and generate some early-stage revenue often face difficulties. These range from inconsistent market linkages, severe competition from urban markets, a lack of infrastructural facilities and logistical challenges, inadequate understanding of the government support mechanisms available for them to unskilled labour for the effective delivery of product/service.Other challenges include the availability of working capital, the adoption to technology and the inability to diversify their products range. Rural Entrepreneurship Development Programs REDPs are conducted for a certain skill and unemployed rural youth are trained in these programs. The trainee has to be in the age limit of 18 and 50 years. Training period could differ from a minimum period of 4 weeks to a maximum period of eight weeks. Each program would support about 25-30 participants. Programs are held with the support of NGOs and the NGOs must be a registered and with a minimum experience of 3 years. Programs could be residential or non-residential. The NGO must have essential infrastructure, faculty support of their own or invite guest faculty. Pre-Training Phase In the pre-training phase, a detailed survey is done for identifying prospective business activities or market. Then publicity, awareness and motivational campaign are conducted for Entrepreneurship development in coordination with Banks or Government Departments or other NGOs. Training Phase Entrepreneurship Development Programs are typically 6-8 weeks long. Training module comprises the following: Achievement motivation Opportunity identification and guidance Knowledge related to supporting agencies and schemes Preparation of project reports/profiles Management of resources (men, material, money) Marketing aspects Book-keeping/Accounting The training program would include case-studies on prospective activities, field visits, practical work, visit to thriving units, etc., Post-Training Post training, the program endeavours to facilitate in the hand-holding or syndication of bank loan or creation of the MSME unit for a period of a minimum of 2 years. Recovery roadmap India has made tremendous progress towards creating a new business environment for enabling an increased participation of stakeholders in the workforce via enterprise creation. However, acceleration of these numbers is possible through the introduction of some key models, such as a marketing cooperative to promote products manufactured by rural enterprises thereby eliminating middlemen. The establishment of common facility centres, particularly for production, can also boost rural entrepreneurship. Building business acumen through capacity building and training is crucial for entrepreneurial success. It, coupled with an access to financial linkages at concessional interest rates, flexible repayment options and waiving of collateral security will spur the growth in this sector. FAQs What is the Rural Entrepreneurship Development Program (REDP)? The Rural Entrepreneurship Development Program (REDP) is an initiative aimed at promoting entrepreneurship in rural areas. It provides training, resources, and support to rural individuals to help them establish and sustain small businesses, encouraging economic growth and employment in rural communities. Who implements the REDP? REDP is typically implemented by various government agencies, financial institutions, NGOs, and organizations focused on rural development. In India, the program is often supported by institutions like the National Bank for Agriculture and Rural Development (NABARD) and other rural development bodies.

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Excise Tax

Government Schemes / Shruti / November 5, 2024

Taxation plays a vital role in the economy and makes a significant contribution to it. In India, the tax structure encompasses different types of taxes and duties like excise duty. To streamline the process of paying taxes and claiming returns, it is essential for individuals whose income comes under a taxable bracket to become familiar with the different types of taxes and duties. What is Excise Duty? Excise duty is a kind of indirect tax charged on the sale of certain products. The customer does not pay excise duty directly to the authorities, but it is added to the cost of the product by the producer or merchant and then passed on to the consumer by way of increased prices. The Excise Duty Act, 1944 governs the regulations related to excise duty in India and the tax is administered by the Central Board of Excise and Customs. Fundamentally, excise duty is a tax levied on domestically produced goods. Generally, it is charged on their production and sale and is also known as CENVAT or Central Value Added Tax. Central Excise duty is an indirect form of taxation and is collected from a customer by a retailer or an intermediary. It is paid when goods are transferred from the production unit to a warehouse. This particular tax is governed by two sets of acts – Central Excise Act, 1944 and Central Excise Tariff Act, 1985. Ideally, the Central Board of Excise and Customs is responsible for the collection of excise duty. With the introduction of GST, several indirect taxes have been subsumed, including excise tax. Nonetheless, it is still applicable to a few items like petroleum, liquor, etc. Types of Excise Duty Basic Excise Duty: Basic Excise Duty is levied under Section 3 of the Central Excises and Salt Act, 1944. Under this section, all excisable products apart from salt, manufactured of produced in India, are subject to Basic Excise Duty. Central Value Added Tax or CENVAT, as it is also called, is charged at the rates mentioned in the Central Excise Tariff Act. Special Excise Duty: Central Excise Duty is charged under Section 37 of the Finance Act, 1978. It is levied on all excisable products that are subject to Basic Excise Duty under Section 3 of the Central Excises and Salt Act, 1944. The rate at which Special Excise Duty is charged is mentioned in the Second Schedule to Central Excise Tariff Act, 1985. Education Cess on Excise Duty: According to Section 93 of Finance (No. 2) Act, 2004, Education Cess is an excise duty that must be computed on the aggregate of all excise duties including special excise duty or other excise duties, but not including Education Cess of excisable goods. Natural Calamity Contingent Duty: Section 136 of the Finance Act, 2001, has imposed the Natural Calamity Contingent Duty under clause 129 of the Finance Bill, 2001. The Natural Calamity Contingent Duty is charged on cigarettes, chewing tobacco, and pan masala. Excise Duty in case of clearances by Export Oriented Units: The Export Oriented Units have an obligation to export all the goods produced by them. However, if their final product is cleared in a domestic tariff area, the rate at which excise duty is charged will be the same as customs duty on a similar article if imported in India. Duties under other Acts: Certain duties as well as cesses are charged on manufactured goods under other Acts. The taxes, however, are collected under the administrative machinery of central excise. The rules and provisions of the Central Excise Act are responsible for the levy as well as collection of these duties and/or cesses/ Additional Duty on Goods of Special Importance: Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957 is levied on certain goods of special importance. The ‘Additional Duty’ is charged along with excise duty. The Additional Duty on Goods of Special Importance scheme was implemented due to the suggestions made to the Government by manufacturers. The suggestions were made to avoid multiple taxes and duties at different levels. The levy of all taxes as well as their collection at one stage by one authority was expected to make it convenient to not only pay the tax, but to also administer it. Therefore, the Central and State Governments agreed to charge additional duty on certain items instead of charging sales tax. The additional duty was distributed among different states, and the State Government share the revenue from this duty based on the percentages specified in the second schedule of the Act. Additional Customs Duty commonly known as Countervailing Duty (CVD): This duty is charged on imports. Additional Duty on Mineral Products: Under the Mineral Products (Additional Duties of Excise and Customs) Act, 1958, additional duty must be paid on mineral products such as motor spirit, furnace oil, diesel and kerosene. Duty on Medical and Toilet Preparations: Under the Medical and Toilet Preparations (Excise Duties) Act, 1955, excise duty is charged on medical preparations. Special Additional Duty of Customs: Special Additional Duty of Customs is charged on items that are bound under the Information Technology Agreement (apart from information technology software), and also on certain raw materials or inputs for the manufacture of IT or electronic products. When Should You Pay Excise Duty Excise duty must be paid at the time the items are removed. Assessees must pay excise duty on items manufactured or produced. Excise duty should be paid on the fifth day of the following month from the date the products were taken from the warehouse or factory for the purpose of sale, according to Rule no. 8 of the Central Excise (Amendment) Rules, 2002. If excise duty is paid online through netbanking, the payment is due on the sixth day of the next month. If the payment is paid in March, it must be made by March 31. Differences between Custom Duty and Excise Duty These pointers below highlight differences between custom duty and excise duty – Parameters Excise Duty Custom Duty Place of manufacture It is levied on goods that are produced in India. It is levied on goods

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Is GST Applicable on Reimbursement

Goods & Service Tax / Shruti / November 5, 2024

Travel expense is an unavoidable element of conducting business in today’s globalized world. Employees frequently travel to different places to attend meetings, conferences, training sessions, or fulfill various professional duties. These costs typically include transportation, lodging, meals, and other incidental expenses. Employers usually establish reimbursement policies to offset these costs and allow employees to recover the funds they have spent out of their own pocket. However, the reimbursement of travel expenses becomes more complex when considering Goods and Services Tax (GST). The applicability of GST to the reimbursement depends on the nature and circumstances of the incurred expenses What does reimbursement of expenses mean? Travel expense reimbursement involves compensating employees for the costs they personally incurred during a business trip. Such costs typically cover transportation, meals, accommodation, and other services directly associated with the business objectives of the trip. While employers can claim reimbursement costs as tax deductions, employees are generally unable to deduct these expenses. To receive reimbursement, employees must furnish proper documentation substantiating that the expenses were indeed business-related. Examples of travel expenses that can be reimbursed: Airfare, train fare, bus fare, taxi fare, or car rental fees for traveling to and from the destination Mileage allowance or fuel costs for using a personal vehicle for business travel Parking fees, tolls, and other transportation-related expenses Hotel charges for overnight stays Meals and incidental expenses (such as tips, laundry, phone calls, etc.) within reasonable limits Conference fees, seminar fees, or other professional development costs Reimbursement of expenses refers to the repayment of money spent by a person. In business transactions, this usually happens when a supplier incurs expenditure on behalf of the recipient who is supposed to incur the said expenditure. There are two types of expenses that may get reimbursed to the supplier under GST: Incidental expenses incurred by the supplier in the course of supply. This could be in the form of commission, packing, travelling expenses, etc., and form a part of the supply value. These expenses are usually incurred before or at the time of delivery of the goods or supply of the services. Expenses that the supplier incurs as a pure agent. These are expenses that the supplier has incurred on behalf of the recipient but do not form a part of the supply value. Examples include registration fees or taxes paid to the government, transportation charges paid to a third-party transporter that the recipient has authorised the supplier to incur, etc. What is the difference between reimbursement and allowance? Reimbursement involves the employer compensating the employee for verified expenses related to travel, medical care, or education. The employee must furnish receipts or other evidence of the expenditure. This form of compensation is not classified as income and remains non-taxable for the employee. On the other hand, an allowance is a fixed sum that the employer provides to the employee in advance or alongside their salary, irrespective of whether the anticipated expense is incurred. No proof of the expense is required from the employee. Unlike reimbursement, allowances are considered as income and are subject to taxation for the employee unless specific conditions exempt them. What is the impact of GST on reimbursement of expenses? All reimbursements of expenses shall form a part of the value of supply, except when incurred as a pure agent. To break this down- Section 15 of the CGST Act provides that the value of a supply of goods or services or both shall be the transaction value. This is the price paid or payable for the supply of these goods or services and applies where the supplier and the recipient are not related, and the price is the sole consideration for the supply. Section 15(2) clause (c) states that any incidental expenses charged by the supplier to the recipient and any other amount charged for anything done during the supply until the time of delivery of the goods or supply of the services shall be included in the value of the supply. Hence, any goods or services provided by the supplier, for which a consideration is charged from the recipient, shall be included in the transaction value and chargeable to tax. With regard to reimbursement of expenses incurred as a pure agent, Rule 33 of the CGST valuation rules provides that any expenditure incurred as a pure agent will be excluded from the value of supply, and hence, from the aggregate turnover as well. However, the supplier will need to satisfy the following conditions for the exclusion from the value of supply: The supplier acts as a pure agent of the recipient when he makes a payment to a third party after authorisation by such recipient. The payment that the pure agent made on behalf of the recipient is indicated separately on the invoice issued by the pure agent to the recipient. The supplies procured by the pure agent from the third party are in addition to the supplier supplies’ services on his account. GST on Reimbursement of Travel Expenses GST Rates for Travel Services: Without the option of Input Tax Credits (ITC), a 5% GST is applied to the gross tour price. With ITC, an 18% GST rate is applied. Place of Supply for Travel Services: The location of the service provider, the recipient, and the nature of the service determines the place of supply. For example, in hotel reservations, the place of supply is the city where the hotel is located. GST Implications for Reimbursement of Travel Expenses by Employers to Employees: Employers can claim a GST credit if they reimburse employees for taxable expenses related to business activities. Reimbursement from another party may be subject to GST or exempt, depending on the nature of the reimbursement. GST Implications for Reimbursement of Travel Expenses by Service Providers to Clients: Expenses incurred on behalf of a client during the supply of taxable services are excluded from the value of supply for tax purposes under certain conditions. Conditions include acting as a pure agent, indicating the payment separately in

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Gujarat Property

learn / Shruti / November 5, 2024

Land registration in Gujarat offers several benefits, including legal protection, proof of ownership, and access to government services such as property tax payment and property transfer. In Gujarat, the stamp duty for land registration varies based on the location and type of land. The stamp duty is generally 5% of the property value for urban areas and 3.5% for rural areas. In addition to stamp duty, there may be other charges, such as registration fees and surcharges, that also apply. There are two ways to register a property in Gujarat: online and offline Online Registration The online registration process is available through the Garvi portal (https://garvi.gujarat.gov.in/). To register online, you will need to create an account and provide the following information: Details of the property, such as the location, size, and type Details of the seller and buyer The sale deed The stamp duty and registration fees Once you have submitted all of the required information, the Garvi portal will generate a registration number. You can then use this number to track the progress of your registration. Offline Registration The offline registration process can be done at any sub-registrar office in Gujarat. To register offline, you will need to submit the following documents: The sale deed The property card The encumbrance certificate An affidavit stating that the property is free from any legal disputes The stamp duty and registration fees Amendment Registration (Gujarat Amendment) Act, 2013 While there was a Registration (Gujarat Amendment) Bill, 2013, it did not become law. The bill was introduced in the Gujarat Legislative Assembly but was not passed. However, there have been subsequent amendments to the Registration Act in Gujarat in 2018 and 2020 that have incorporated some of the provisions that were originally proposed in the 2013 bill. Registration (Gujarat Amendment) Act, 2018 E-registration: This amendment made it possible to register documents electronically. This has made the registration process more convenient and efficient. Power of attorney: This amendment introduced new provisions to regulate the use of power of attorney for property transactions. This was done to prevent fraud and misuse of power of attorney. Registration (Gujarat Amendment) Act, 2020 Fraudulent practices: This amendment introduced new penalties for fraudulent practices in registration, including those committed through electronic means. Misuse of power of attorney: This amendment also introduced new penalties for the misuse of power of attorney for property transactions. Section 17 Registration (Gujarat Amendment) Act – Compulsory Registration Section 17 of the Registration (Gujarat Amendment) Act outlines which types of deeds must be registered under the law. Think of it as a “play it safe” list, ensuring legal validity and clarity for certain crucial transactions. Here’s what falls under this category: Property Deals: Any document extinguishing or creating a title to immovable property worth over Rs. 100 needs registration. This includes gifts, sales, and exchanges of land and buildings. Long-Term Leases: Leases for immovable property exceeding one year or on a year-to-year basis also require registration. Section 18 of Registration (Gujarat Amendment) Act Section 18 of the Act deals with deeds where registration is not mandatory but can be beneficial for added security. Think of it as an “extra insurance” option. Here are some examples: Small Property Deals: For immovable property transactions below Rs. 100, registration is optional. Short-Term Leases: Leases for less than one year can be registered for added security, but it’s not required by law. Payment Acknowledgements: Documents acknowledging payment for any consideration, even if related to property, can be registered for documentation purposes. Court Orders Transferring Property: Orders or decrees from a court transferring immovable property worth less than Rs. 100 can be optionally registered. What are the documents required for Property Registration in Gujarat? Sale Deed / Conveyance Deed Property Card Land Revenue Receipts Stamp Duty and Registration Fee Receipts Identity Proof and Address Proof of the Buyer and Seller PAN Card of the Buyer and Seller Power of Attorney (if applicable) NOC from the concerned authority (if applicable) Encumbrance Certificate Property Tax Receipts Stamp Duty for Gujarat Deed Registration The stamp duty rates for registering the sale or conveyance deed of immovable property in Gujarat are as follows: S.No Stamp Duty Description Rate 1 The basic rate of Stamp duty 3.50 percent 2 Surcharge at the rate of forty percent 1.4 percent on the basic rate 3 Total Stamp duty 4.90 percent Stamp duty of Rs. 4.90 is payable for every Rs. 100 for Gujarat Property Registration. FAQs What is the process for land registration in Gujarat? The process for land registration in Gujarat involves submitting the necessary documents, paying the required fees, and completing the registration process at the local sub-registrar’s office. The documents required include proof of ownership, a title deed, sale deed, property tax receipts, and other relevant documents. What are the benefits of land registration in Gujarat? Land registration in Gujarat offers several benefits, including legal protection, proof of ownership, and access to government services such as property tax payment and property transfer. Registered land can also be used as collateral for loans and other financial transactions, making it a valuable asset.

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Income Tax Rebate Under Section 87A

Income Tax / Shruti / November 5, 2024

The income tax rebate under Section 87A provides some relief to the taxpayers who fall under the tax category of 10%. Any individual whose annual net income does not exceed Rs.5 Lakh qualifies to claim tax rebate under Section 87A of the Income Tax Act, 1961. This implies an individual can get a rebate on the tax of up to Rs.2,000. In this way, the deduction will be either Rs.2000 or 100% of the salary of an individual, whichever is smaller. One more noteworthy point of section 87A of income tax is it is offered only to individuals and not the people of Hindu Undivided Families, BOI/ AOP, Company, or any firm. Moreover, the total rebate amount should not exceed the amount of the income tax calculated before the deduction on the total income of the person with which he/she will be charged for the assessment year. Rebate u/s 87A for FY 2023-24 (AY 2024-25) Budget 2023 proposed several amendments, and the aim was to make the new tax regime more lucrative. For FY 2023-24(AY 2024-25), the rebate limit has been increased to Rs. 7,00,000 under the new tax regime. This means a resident individual with taxable income up to Rs 7,00,000 will receive Rs 25,000 or the amount of tax payable (whichever is lower) as tax relief. However, for the old tax regime, the threshold limit will remain the same, i.e.12,500 for income up to Rs 5,00,000. Please Note:- This is applicable from the financial year FY 2023-24 (AY 2024-25). Financial Year Limit on total taxable Income Amount of rebate allowed u/s 87A 2023-2024 Rs. 5,00,000Rs.7,00,000 Rs. 12,500Rs. 25,000 2022-2023 Rs. 5,00,000 Rs. 12,500 (under the old regime)Rs.12,500 (under the new regime) 2021-22 Rs. 5,00,000 Rs. 12,500 2020-21 Rs. 5,00,000 Rs. 12,500 2019-20 Rs. 5,00,000 Rs. 12,500 2018-19 Rs. 3,50,000 Rs. 2,500 2017-18 Rs. 3,50,000 Rs. 2,500 2016-17 Rs. 5,00,000 Rs. 5,000 2015-16 Rs. 5,00,000 Rs. 2,000 2014-15 Rs. 5,00,000 Rs. 2,000 2013-14 Rs. 5,00,000 Rs. 2,000 Eligibility Criteria for Claiming Tax Rebate Under Section 87A The rebate is meant only for individual taxpayers. If you belong to a HUF or you want it for your firm or company, this rebate cannot be availed. There are no gender-based restrictions for this section, i.e. men and women can both avail the benefits. The net taxable income of an individual should not be more than ₹5,00,000 for the FY 2023- 2024. As per the laws, a maximum rebate of INR 12,500 can be availed under this section. To put it in a nutshell, if the taxes that you are liable to pay are INR 12,500 or less, this rebate can be availed by you. Income Slab (in Rs) Tax payable before cess (in Rs) Rebate u/s 87A (in Rs) Tax Payable + 4% Cess (in Rs) 2,70,000 1000 1000 0 3,60,000 3000 3000 0 4,90,000 12000 12000 0 12,00,000 1,72,500 0 1,79,400 Section 87A Eligibility Criteria for FY 2023-24 and FY 2024-25 An individual can claim a tax rebate us 87A provided he or she meets the following conditions: The individual must be an Indian resident. The total income, deductions under Section 80, has to be less than or equal to Rs. 3,50,000. Note – The rebate that can be claimed in the financial years stated above is limited to Rs. 2,500. This means that if the total payable tax is below Rs 2,500, that amount will be the respective rebate under section 87A. Let’s understand this in a better way by considering the details in the following tabulated format: Taxable income Income Tax Applicable Rebate under Section 87A Total Tax Payable Rs. 3 lakhs Rs. 2,500 Rs. 2,500 Nil Rs. 3.1 lakhs Rs. 3,000 Rs. 2,500 Rs. 500 Rs. 3.2 lakhs Rs. 3,500 Rs. 2,500 Rs. 1,000 Rs. 3.3 lakhs Rs. 4,000 Rs. 2,500 Rs. 1,500 Rs. 3.4 lakhs Rs. 4,500 Rs. 2,500 Rs. 2,000 Rs. 3.5 lakhs Rs. 5,000 Rs. 2,500 Rs. 2,500 Rs. 3.6 lakhs Rs. 5,500 Nil Rs. 5,500 Rs. 3.7 lakhs Rs. 6,000 Nil Rs. 6,000 Rs. 3.8 lakhs Rs. 6,500 Nil Rs. 6,500 Rebate u/s 87A was introduced with the motive of providing relief to the taxpayers who fall in the lowest tax bracket. The implementation of this section armed the government by providing direct benefits to the respective section without a reduction in the overall tax rates. The frequently changing limits of 87A are evidence of the same. How to Claim Rebate u/s 87A? Calculate your Gross Total Income(GTI). Reduce the deductions under sections 80C to 80U. Calculate your Tax Payable as per Income Tax slabs. The amount of rebate is tax calculated or Rs 25000/12500, whichever is lower ( if your total income does not exceed Rs 7 lakhs in the case of the new tax regime and Rs. 5 lakhs in case of the old tax regime.) The taxes payable for the FY 2023-24 (AY 2024-25) under the old regime are as under: Tax Payable Rebate u/s 87A Less than Rs. 12,500 Equal to the tax amount payable Exactly Rs. 12,500 Rs. 12,500 More than Rs. 12,500 NIL Rebate granted under section 87A will depend upon your taxes payable for the FY 2023-24 (AY 2024-25) under the new regime. As under: Tax Payable Rebate u/s 87A Less than Rs. 25,000 Equal to the tax amount payable Exactly Rs. 25,000 Rs. 25,000 More than Rs. 25,000 NIL Let us consider an example to understand the calculations better Suppose the Total Taxable Income of Mr. Virat, who opted for the new regime, isA) Rs. 5 LakhsB) Rs. 7 LakhsC) Rs. 8 Lakhs Calculation of rebate u/s 87A and Tax Payable for the FY 2023-24 (AY 2024-25) Particulars Amount Amount Amount Total Taxable Income 5,00,000 7,00,000 8,00,000 Less: Basic Exemption Limit 300000 300000 300000 Taxable Income after Basic exemption limit 200000 400000 500000 Tax Payable 10000 25000 35000 Less: Rebate under section 87ALower of1) Tax Payable or2) Rs 12,500/25000 10000 25000 NIL* Balance Tax Payable NIL NIL 35000 Add: Health & Education Cess @ 4% – – 1400 Final Tax payable – – 36400

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Kanyashree Prakalpa

Government Schemes / Shruti / November 5, 2024

Kanyashree Prakalpa seeks to improve the status and well-being of girls, specifically those from socio-economically disadvantaged families through Conditional Cash Transfers by:Incentivizing them to continue in education for a longer period, and complete secondary or higher secondary education, or equivalent in technical or vocational steams, thereby giving them a better footing in both the economic and social spheres.Disincentivizing marriage till at least the age of 18, the legal age of marriage, thereby reducing the risks of early pregnancies, associated risks of maternal and child mortality, and other debilitating health conditions, including that malnutrition.It was also decided that the Scheme should confer more than just monetary support; it should be a means of financial inclusion and a tool of empowerment for adolescent girls. The scheme’s benefits are therefore paid directly to bank accounts in the girls’ names, leaving the decision of utilizing the money in their hands.To reinforce the positive impact of increased education and delayed marriages, the scheme also works to enhance the social power and self-esteem of girls through a targeted behavior change communication strategy. The communication strategy not only builds awareness of the scheme, but includes adolescent-friendly approaches like events, competitions, and Kanyashree clubs, and the endorsement of strong women figures as role models to promote social and psychological empowerment.As more and more girls remain in school, it is envisaged that they will use the opportunity to gain skills and knowledge to help them become economically independent. Even if girls do get married soon after they turn 18, it is expected that their education and enhanced social and emotional development will give them a better foundation for their adult lives. And over time, as entire generations of women enter marriages only after they have some degree of economic independence, it is expected that the practice of child marriage will be completely eradicated. Women will attain their right to health, education, and socio-economic equality. What is Kanyashree Prakalpa Scheme? West Bengal Kanyashree Prakalpa is a conditional cash transfer scheme launched by the Government of West Bengal in 2013. The scheme aims to empower and support the education of girl students from economically disadvantaged backgrounds in the state. Under the Kanyashree Prakalpa Scheme, girls between the ages of 13 and 18 receive an annual scholarship, known as the Kanyashree scholarship, to support their educational expenses. Additionally, there is a one-time grant called the Kanyashree K2, which is provided to girls when they turn 18 years of age, provided they are unmarried and have continued their education. What are the Features of the Kanyashree Prakalpa Scheme? The scheme has two main financial components: Kanyashree Bond: A one-time grant of Rs. 25,000 to unmarried girls of 18 years of age who are pursuing regular education or vocational/ sports training. Annual Scholarship: An annual scholarship of Rs. 1,000 to unmarried girls aged 13-18 years who are enrolled in Class 8 or above. Income Criteria: The scheme is open to girls from families with an annual income of less than Rs. 1.2 lakhs. The capping on annual income is not applicable for girls who have lost both parents, are physically challenged (40% disability), or are inmates of a J.J. Home under the J.J. Act, 2000. Discouragement of child marriage: The scheme also discourages child marriage by providing a one-time grant of Rs. 25,000 for higher education to girls who remain unmarried until they are 18 years old. Awareness and Outreach: Kanyashree Prakalpa involves the establishment of Kanyashree clubs in schools and colleges to engage students in discussions and activities related to gender equality and education. Collaboration with Other Programs: To maximize its impact, the Kanyashree Prakalpa scheme collaborates with various existing government programs, like Swachh Bharat Abhiyan (Clean India Mission) and the National Health Mission, to address issues related to sanitation, health, and hygiene. Beneficiaries: Approximately 18 lakh (1.8 million) girl students receive an annual scholarship, and approximately 3.5 lakh (0.35 million) girls receive a one-time grant of Rs. 25,000 each year under Kanyashree Prakalpa. Eligibility Age limit: Girls between the ages of 13 and 18 years are eligible for the scheme. Girls who have already turned 18 years of age are eligible to apply for the one-time grant under the scheme. Annual income limit: The scheme applies to girls from families with an annual income of up to Rs. 1.2 lakhs. The income of the girl’s parents or guardians will be taken into consideration while determining eligibility for the scheme. Educational criteria: Girls who are studying in classes 8 to 12 in government-aided or recognized schools are eligible to apply for the annual scholarship provided under the scheme. Marital status: Unmarried Girls are eligible to apply for the one-time grant provided under the scheme. Girls who are already married are not eligible for the scheme. Citizenship: The scheme applies only to girls who are residents of West Bengal and studying in schools or colleges in the state. Documents Required Age proof document – a copy of the birth certificate A statement of declaration of being unmarried Income certificate Certificate of enrolment and attendance by Head of Institution of Education or Training Copy of certificate of disability (for disabled girls) Photocopy of bank passbook Kanyashree Prakalpa Scheme Application Procedure Step 1: Eligible girl student has to collect the application form from the respective educational institution. Step 2: Fill the following details to get the scholarship Personal Details Address Educational Institution Address Step 3: The applicant should sign on the application form and also get their parent’s signature. Apply along with documents to the respective educational institution. Step 4: Head of Department will verify the details furnished by the students and put an official stamp. Step 5: Obtain acknowledgement slip and keep application number for future reference. Step 6: After the successful submission of the application form, all details will be uploaded on the official webpage of Kanyashree.

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Duplicate PAN Card

learn / Shruti / November 5, 2024

Every PAN allotted by the Income Tax Department is valid for a lifetime. There are instances where one can lose the PAN Card, or it can even be stolen, and in certain situations, it could be damaged. In such cases, the Income Tax Department issues a duplicate PAN Card on request. When a request for the duplicate PAN Card is raised, the PAN details and number remain the same without a change, only a new PAN Card is issued, and all the other information remains as it was in the lost/stolen, or damaged PAN. The Income Tax Department has made it very easy to get a duplicate PAN Card What is a Duplicate PAN Card? A duplicate PAN card is a document issued by the income tax department to a PAN bearer when the card is lost, misplaced, or damaged. People frequently expose crucial papers to various threats daily and then question how to recover them. The Income Tax Department has made it quite simple to obtain a duplicate PAN card. Let’s see how it goes. When to Apply for a Duplicate PAN Card? Loss/theft: Because people frequently carry their PAN cards in their wallets or pockets, they will probably be lost if their wallet/purse is stolen. Multiple applications to the department are fairly prevalent in India. In case of theft, an FIR of theft needs to be filed, and a copy of the FIR needs to be sent along with the application and other supporting documents. Misplaced: There are several instances where people leave the card somewhere and then are unaware of where they keep it. Damaged: The sole option for any type of damage to the current PAN card needs to be led to the PAN Card reprint. Documents Required to Apply for Duplicate PAN Card Self-attested identity documents include a driver’s license, Aadhaar card, voter ID, etc. Address proof that has been self-attested, such as bank account statements, utility bills, Aadhaar, and so on. A PAN allocation letter or a self-attested copy of the PAN Card. Self-attested documents with your birth date, such as a birth certificate, passport, matriculation certificate, etc. How to Apply for a Duplicate PAN Card? Visit TIN-NSDL and choose the application type “Changes or corrections in existing PAN data/Reprint of PAN card (specify ‘No changes in existing PAN data’). (If your PAN card is lost, forgotten, or stolen, you should reprint it without altering any of the information.) Fill in the essential fields and then submit the form. A token number will be produced and delivered to the email address you entered on the previous page. Make a note of the token number for future reference, and then proceed with the application filing. Fill out the essential information in the “Personal Details” tab and choose the mode of submission for your PAN application form. The three possible modes are as follows: Physically provide application paperwork: The acknowledgement form generated after payment must be printed, together with the copies of the papers requested, and mailed to the NSDL’s PAN services section. Submit digitally using e-KYC and e-sign (paperless): Aadhaar is required to use this option, and all of the information provided in your Aadhaar card should be utilized alone in the duplicate PAN card application. An OTP will be given to the Aadhaar-registered phone to verify the information supplied. It is not necessary to upload a photo, signature, or any other paper. When using this option to submit the completed form, a digital signature (DSC) will be required to e-sign the form. iii. Submit scanned photos through e-sign: Aadhaar is required for this option, however, you must submit scan images of your portrait, signature, and other documents. Only an OTP will be required to authenticate the application form. Then you must decide whether you require a physical PAN card or an e-PAN card. If you choose an e-PAN card, you must supply a valid email address. The digitally signed e-PAN card will be sent to the email address given. Before applying, fill out the “Contact & other details” and “Document details” pages. You will be routed to the payment page, and once you have made your payment, an acknowledgement will be created. Using the 15-digit acknowledgement number generated, you may verify the status of your duplicate PAN card. After the department accepts the application, the duplicate PAN card will be sent out within two weeks. FAQs How long will it take to get a duplicate PAN Card? You will get your duplicate PAN Card within the time frame of 15-20 days from the date of application. Do I have to re-link my Aadhaar with PAN after getting a duplicate one? If your PAN number has not changed, you do not need to link your Aadhaar to your PAN.

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Infrastructure Investment Trust (InvIT)

learn / Shruti / November 5, 2024

Infrastructure Investment Trust (InvITs full form), their units are listed on different trading platforms like stock exchanges and are a wholesome combination of both equity and debt instruments. The primary objective of InvITs is to promote the infrastructure sector of India by encouraging more individuals to invest in it which can be modified according to a given situation. Typically, such a tool is designed to pool money from several investors to be invested in income-generating assets. The cash flow thus generated is distributed among investors as dividend income. When compared to Real Estate Investment Trust or REITs, the structure and operation of both are quite similar. Infrastructure Investment Trusts (InvIT) InvITs are instruments that work like mutual funds. They are designed to pool small sums of money from a number of investors to invest in assets that give cash flow over a period of time. Part of this cash flow would be distributed as dividends back to investors. The minimum investment amount in an InvIT Initial Public Offering (IPO) is Rs 10 lakh, therefore, InvITs are suitable for high net-worth individuals, institutional and non-institutional investors. Similar to stocks, InvITs raise capital through IPOs and are then tradable on stock exchanges. Examples of listed InvITs include the IRB InvIT Fund and India Grid Trust. InvITs are regulated by the Securities and Exchange Board of India (SEBI) (Infrastructure Investment Trusts) Regulations, 2014. Types of InvITs Investment in Revenue-generating Finished Projects – One of the types allows investment in revenue-generating finished projects and tends to invite investors through a public offering. Investment in Projects Under Construction – Additionally, investors are also allowed to invest in projects that are under construction or have been finished. Notably, this type opts for a private placement of its units. What is the Purpose of InvITs? The purpose of InvITs is to enable Infrastructure Companies to repay their debt obligation quickly and effectively. Since infrastructure-oriented projects tend to take time to generate substantial cash flow, InvITs come in handy for paying off loan interests and other expenses conveniently. Structure of InvITs in India An InvIT is established as a trust and is registered with the SEBI. Typically, infrastructure investment trust SEBI comprises 4 elements, namely – Trustee: They are required to be registered with SEBI as debenture trustees. Also, they are required to invest at least 80% into infra assets that generate steady revenue. Sponsor: Typically, a body corporate, LLP, promoter or a company with a net worth of at least Rs. 100 crore classifies as a sponsor. Further, they must hold at least 15% of the total InvITs with a minimum lock-in period of 3 years or as notified by any regulatory requirement. When it comes to a public-private partnership or PPP projects, sponsors serve as a Special Purpose Vehicle (SPV). Investment manager: As a body corporate of LLP, an investment manager supervises all the operational activities surrounding InvITs. Project manager: The authority is mostly responsible for executing projects. However, in the case of PPP projects, it serves as an entity that also supervises ancillary responsibilities. The table below highlights the structure of infrastructure investment trust. Elements Role Trustee Invest a minimum of 80% in infra assets. Sponsor/s Holds 15% of the total InvITs. Investment manager Manages investment and supervises operational activities concerning InvIT. Project manager Executes projects. Who Should Invest in InvITs? InvITs are also listed on exchanges through IPO. However, the minimum amount required to invest in such an IPO is Rs. 10 lakh. Notably, small investors may struggle a little if they intend to invest directly in InvITs through IPO. Regardless, high-net-worth institutions, individuals, etc., tend to find infrastructure investment trust a profitable investment option due to its capacity to invest and its return prospects. Prospects of InvITs in India It is anticipated that investment in InvITs in India has a promising future and may prove beneficial in the following ways. Existing projects would be provided with substantial refinancing options in the long run. It would help disengage developers’ capital to facilitate reinvestment towards new infrastructure projects. It is expected to facilitate the refinancing of current debt with cost-effective capital for the long term. It would encourage international investors to invest in the Indian infrastructure sector. Prospects of increasing opportunity to diversify an investment portfolio with the help of quality infrastructure assets remain. FAQs How to invest in InvIT? One can invest in InvITs by buying and selling in a similar manner to equities. Note Public InvITs are listed on the NSE/BSE, and the units can be traded without lock-in. An individual can open their respective brokerage account and start trading in InvITs that are publicly listed using the instrument symbol.There is no minimum investment limit for InvITs. What are the examples of InvITs? Examples of InvITs include roads, railways, power generators, telecommunications, airports.

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Visa Expense Reimbursement Scheme for Rajasthan Construction Workers for Employment Abroad

Government Schemes / Shruti / November 5, 2024

This scheme, launched by the Rajasthan Government’s Labor Department, is designed to alleviate the financial burden of visa expenses for construction workers seeking employment abroad. By reimbursing these costs, the scheme aims to encourage construction workers to pursue overseas employment opportunities and contribute to the state’s economy through foreign remittances. About Construction workers go abroad to work to improve their financial condition. Due to lack of much income, they have to face visa and other difficulties to work abroad. To solve these problems, the Rajasthan government has started the Visa Expense Reimbursement Scheme for employment abroad to Rajasthan construction workers. The objective of the scheme is to increase the income of construction workers and provide them an opportunity to work abroad. Rajasthan Visa Expense Reimbursement Scheme for Abroad Employment to Construction Workers is also known as Visa Expense Reimbursement Scheme for Abroad Employment to Construction Workers. Benefits of the scheme The beneficiary will be reimbursed an amount up to a maximum of Rs. 5,000/- for expenses incurred on visa for employment abroad. The expenses will be reimbursed to the beneficiary by the Board. Eligibility The applicant must be a native of Rajasthan. The applicant must be registered with the Board. The applicant should be continuously contributing to the Board. The applicant must have obtained permission from the Office of the Protector of Emigrants for employment. Applicants who are engaged in future planning building and other construction work abroad are eligible. Required Documents Proof of residence in Rajasthan/permanent certificate. Certificate of being a registered building worker. Visa. Visa receipt. Bhamashah card. Aadhar card. Passport. Jan Aadhar Card. Bank account information. Appointment letter. Proof of advertisement given by the recruiting agency. Passport size photo of the applicant. Registration number of the recruiting agency. Proof of contract for employment. Mobile number. email id. Application Process Step-1: Applicant have to visit the official portal. Step-2: Click on the option “Register”.Step-3: Then you will be redirected to the SSO registration page. The registration page will appear with the following options. Citizen Step-4: Choose the either one option from the Jan Aadhaar Or Google to process further. Jan Aadhaar : Enter the Jan Aadhaar number, click on the ‘Next’ button, Select your name, the name of the head of the family and all the other members and Click on the ‘Send OTP’ button. Enter the ‘OTP’ and Click on the ‘Verify OTP’ button to Complete the registration. Google : Enter the Gmail ID, click on the ‘Next’ button, Enter the password. A new link appear on screen, now click on new SSO link. SSO id will appear on screen, now create the password. Enter Mobile number, click on registration. FAQs Is there any time limits for submit the application? The beneficiary will have to submit the application form within a maximum period of 3 months after obtaining the validity of the visa. Can applicants from outside Rajasthan apply for the scheme? No, this is only Madhya Pradesh construction worker.

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November 2024