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Indian Income Tax Act has provisions for tax collection at source or TCS. In these provisions, certain persons are required to collect a specified percentage of tax from their buyers on exceptional transactions. Most of these transactions are trading or business in nature. It does not affect the common man. What is Tax Collected at Source (TCS)? Tax collected at source (TCS) is the tax collected by the seller from the buyer on sale so that it can be deposited with the tax authorities. Section 206C of the Income-tax Act governs the goods on which the seller has to collect tax from the buyers. Such persons must have the Tax Collection Account Number to be able to collect TCS. Example: If a box of chocolates costs Rs.100, the buyer pays Rs.20 which is the tax collected at the point of sale. The funds are then transferred to a certain approved branch of a bank that has been authorised to accept payments. The seller is only responsible for collecting this tax from the customer and is not liable for paying it himself or herself. The tax is intended to be collected while selling items, conducting transactions, receiving a payment in cash from the buyer, or issuing a cheque or draft, whichever method is paid first. TCS Rate Chart as applicable for the Financial Year 2023-2024 (Assessment Year 2024-2025) – Section Deductee*    Nature of transaction Threshold Limit (Rs) TDS Rate 192 R, NR Payment of salary Basic exemption limit of employee Normal Slab Rates 192A R, NR Premature withdrawal from EPF 50,000  10%    Budget 2023: TDS rate for EPF withdrawals without a PAN number is now 20%, from the previous maximum marginal rate 193 R Interest on securities Debentures- 5,000    8% Savings (Taxable) Bonds 2003 or 7.75% Savings (Taxable) Bonds 2018- 10,000    Other securities- No limit 10%Budget 2023: Exemption of TDS on interest from listed debentures has been removed. Therefore, tax has to be deducted on interest on such specified securities. 194 R Payment of any dividend 5,000 10% 194A R Interest from other than interest from securities (from deposits with banks/post office/co-operative society) Senior Citizens- 50,000    Others- 40,000 10% 194A R Interest from other than interest on securities u/s 193 and interest from banks/post office/co-operative society.   For e.g., interest from friends and relatives 5,000 10% 194B R, NR, FC Income from lottery winnings, card games, crossword puzzles, and other games of any type Aggregate income from lottery winnings, card games, crossword puzzles etc- 10,000   Online Gamine- Refer 194BA 30% 194BA R, NR, FC Income from online games Nil 30% 194BB R, NR, FC Income from horse race winnings 10,000  Aggregate winnings during a financial year not single transaction 30% 194C R Payment to contractor/sub-contractor:- Single transaction- 30,000   Aggregate transactions- 1,00,000       a) Individuals/HUF   1%     b) Other than Individuals/HUF   2% 194D R Insurance commission to:         a) Domestic Companies 15,000 10%     b) Other than companies 15,000 5% Budget 2024 – This rate is reduced to 2% with effect from 1st April 2025 194DA R Income from the insurance pay-out, while payment of any sum in respect of a life insurance policy. 1,00,000 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 194E NR, FC Payment to non-resident sportsmen/sports association No limit 20%  *This rate shall be increased by applicable surcharge and 4% cess 194EE R, NR Payment of amount standing to the credit of a person under National Savings Scheme (NSS) 2,500 10% 194F R, NR Payment for the repurchase of the unit by Unit Trust of India (UTI) or a Mutual Fund No limit 20% Budget 2024 –  This section is proposed to be omitted with effect from 1st October 2024 194G R, NR, FC Payments, commission, etc., on the sale of lottery tickets 15,000 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 194H R Commission or brokerage 15,000 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 194-I R Rent:         194-I(a) Rent on  plant and machinery 2,40,000 2%     194-I(b) Rent on  land/building/furniture/fitting 2,40,000 10%   194-IA R Payment in consideration of transfer of certain immovable property other than agricultural land. 50,00,000 1% 194-IB R Rent payment by an individual or HUF not covered u/s. 194-I 50,000 per month 5% Budget 2024 – This rate is reduced to 2% with effect from 1st October 2024 194-IC R Payment under Joint Development Agreements (JDA) to Individual/HUF No limit 10 194J R Any sum paid by way of fee for professional services 30,000 10% 194J R Any sum paid by way of remuneration/fee/commission to a director 30,000 10% 194J R Any sum paid for not carrying out any activity concerning any business; 30,000 10% 194J R Any sum paid for not sharing any know-how, patent, copyright, etc. 30,000 10% 194J R Any sum paid as a fee for technical services 30,000 2% 194J R Any sum paid by way of royalty towards the sale or distribution, or exhibition of cinematographic films 30,000 2% 194J R Any sum paid as fees for technical services, but the payee is engaged in the business of operation of the call center. Prior to June 1, 2017, the rate was 10% 30,000 2% 194K R Payment of any income for units of a mutual fund, for example, dividend No limit 10% 194LA R Payment in respect of compensation on acquiring certain immovable property 2,50,000 10% 194LB NR, FC Payment of interest on infrastructure debt fund to Non-Resident No limit 5%  *This rate shall be increased by applicable surcharge and 4% cess 194LC NR, FC Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against loan agreement or the issue of long-term bonds No limit 5% 194LC NR, FC Payment of interest for the loan borrowed in foreign currency by an Indian company or business trust against the issue of long-term

You can link your Aadhar card to a bank account offline using SMS, mobile banking, ATMs, and other methods. In the event that you do not connect your Aadhar card to your bank account, you will forfeit the funds and advantages of the scheme. By utilising your cell phone number, the mAadhaar app, or the official website of the Unique Identification Authority of India (UIDAI), you can determine whether your bank account and Aadhar card are linked. You may find out here how to verify the status of the Aadhaar and bank account linkage using different online ways. The government has made it mandatory to link Aadhaar and bank accounts only for receiving government scheme benefits and other benefits provided by the government. However, it is not mandatory to link the Aadhaar card with a bank account to access banking services.  Thus, it is optional to link your Aadhaar card with your bank account. Linking your Aadhaar card with your bank account is only mandatory to access numerous government subsidies and benefits, which include welfare schemes, direct cash transfers, scholarships, and pensions. Importance of Linking Aadhaar with Your Bank Account Improved financial security: You can ensure increased financial security by linking your Aadhaar card with your bank account. This minimises the chances of theft and financial fraud leading to monetary losses.  Ease of identity verification: Aadhaar card contains all your demographic and biometric data so financial institutions can cross-verify their identity. This ensures that only you can access your bank account, providing maximum security.  Seamless online transactions: Numerous Aadhaar-enabled payment systems (AEPS) eliminate your need to remember PINs and passwords. Hence, it simplifies financial transactions from your account.  Ease of account management: Linking your Aadhaar card with your bank account simplifies the KYC process. This helps consolidate identity and address proof, reducing the documentation process for financial transactions.  Seamless digital payments: Digital payments are extremely common for account holders. Upon linking your bank account with an Aadhaar card, you can access various credit facilities and contribute to the growth of a cashless economy.  Additional benefits: With the evolving technology, linking an Aadhaar card with a bank account provides an innovative solution to prevent fraud of any type. These solutions include eKYC, biometric-based authentication, and more.  How to Check Aadhaar Bank Linking Status? Step 1 – Visit the official website of UIDAI. Step 2 – Click on the ‘Check Aadhaar/Bank Linking Status’ option. Step 3 – A new bank map page will appear on the screen. Step 4 – Enter your Unique Identification number (UID) or Virtual ID. Step 5 – Click on the ‘Send OTP’ option. Step 6 – Enter the OTP you receive on your registered mobile number. Step 7 – Click on the ‘Submit’ button. Step 8 – The bank account which is linked with your Aadhaar will be shown on the screen. Steps to Check Aadhaar and Bank Account Linking Status via mAadhaar Step 1 – Open the mAadhaar app and log in to your account. Step 2 – Tap on the ‘My Aadhaar’ option. Step 3 – Tap on ‘Aadhaar-Bank Account Link Status’. Step 4 – Enter your Aadhaar number and captcha code. Step 5 – Tap on the ‘Request OTP’ button. Step 6 – Enter the OTP you receive on your registered mobile number. Step 7 – Tap on ‘Verify’ to check if your bank account is linked to your Aadhaar. FAQs How many bank accounts can I link to my Aadhaar? You can link only one bank account to your Aadhaar. Is it possible to check my Aadhaar and bank account linking status if my mobile number and Aadhaar are not linked? No, your mobile number must be linked to your Aadhaar for checking the Aadhaar and bank account linking status.

Form 11 comprises an annual return i.e to be furnished by all LLPs no matter what the turnover is in that year. Also, Limited Liability Partnership (LLP) does not have any operations or business in the fiscal year, Form 11 is required to be furnished. Apart from the basic details about the Name, and Address of LLP, details of Partners/ Designated Partners the additional information also to be shown such as: Total contribution by/to partners of the LLP Information of the notices obtained for the penalties levied, and compounding offences happened in the fiscal year.  Form 11 is due on 30th May of each year. All LLPs registered under Limited Liability Act, 2008 have to annually file two forms – Form 11 and Form 8. Annual Return: Form 11 is to be submitted within 60 days of closure of the financial year i.e 30th May of each year. (Financial year closes on 31st March.) Statement of Account and Solvency: Form 8 is to be submitted within 30 days from the expiry of six months from the closure of the financial year i.e 30th October of each year. What is Form 11 and How to file it? Form 11 is an Annual return that is to be filled by all LLPs irrespective of turnover during the year. Even when an LLP does not carry out any operations or business during the financial year, Form 11 needs to be filed. Apart from Basic information about Name, Address of LLP, details of Partners/ Designated Partners, other details that need to be declared are : Total contribution by/to partners of the LLP Details of notices received towards Penalties imposed / compounding offenses committed during the financial year It must be e-filed on the MCA portal. The e-form has to be downloaded and filled in an offline mode. The pre-fill option is available to minimize your efforts and the Pre-scrutiny button is present to validate the data filled in. This is done before you submit the form online. What are the prerequisites? LLPIN (Limited Liability Partnership Identification number) allotted to the LLP is needed to pre-fill the basic data. Declaration about contribution/sums received by all the partners of the LLP Payment of fees with respect to e-Form 4 (Notice of appointment, cessation, and change in designation of a designated partner or partner) and processing of e-form 4 should be completed (If applicable). Get DSC of your Designated Partner ready! Important Aspects to note while filing Annual return for LLP Using the pre-scrutiny button available on the Form can help validate the data entered. This will help in processing the data error-free (Without mistakes). Wherever figures are declared in the forms, these must be entered as they stand on 31st March. Details of LLP and/ or company in which partners/ designated partners( DP) is/are directors/ partner. (It is mandatory to attach this detail in case any partner/ DP is a partner in any LLP and/ or director in any other company). The e-form needs certification of a practicing Company Secretary compulsorily if either of the following conditions is satisfied: Total contribution made by Partners is more than Rs. 50 lakhs OR Turnover of LLP is more than Rs. 5 crores What are the Documents to be submitted along with Form 11? Details of LLP and/ or company in which partners/ designated partners (DP) are directors/ partners (It is mandatory to attach these details in case any partner/ DP is a partner in any LLP and/ or director in any other company)   Any other information can be provided as an optional attachment to this e-Form What are the consequences of late filing Form 11? Late Fees: Penalty of Rs. 100 per day is chargeable till the date of filing.  File LLP Form 11 Step 1: Open MCA V3 homepage Step 2: Login to MCA portal with genuine credentials1 Step 3: Click “MCA services” and then choose “LLP E-Filing” Step 4: Select Form-11 Open “Annual Return of Limited Liability Partnership (LLP)” from the dropdown Step 5: Input LLP Information Step 9: Complete the application Step 11: Click on submit form after successful save at each step Step 12: SRN is generated upon after submitting the form. (The SRN can be operated by the user for any forthcoming resemblance with MCA.) Step 13: Download the webform and affix DSC Step 14: Upload the DSC affixed pdf document to MCA V3 portal Step 15: Pay Fees (In point the user does not modify or successfully upload the DSC affixed PDF within 15 days of SRN generation and complete the payment within 7 days of successful upload of DSC affixed document or due date of filing of the form + 2 days, whichever is earlier, the SRN will be cancelled.) Step 16: Download the paid Challan/ Acknowledgement. FAQs What is LLP Form 11? LLP Form 11 is an annual return that must be filed by Limited Liability Partnerships (LLPs) in India. It contains information about the LLP’s partners, contributions, and changes during the financial year. Who is required to file LLP Form 11? All LLPs registered in India are required to file Form 11, irrespective of their turnover or profits. This includes both active and dormant LLPs.

EPF is a retirement benefits scheme under the Employees Provident Fund and Miscellaneous Act, 1952, where an employee has to pay a certain contribution towards the scheme and an equal contribution is paid by the employer as well on a month on month basis. The Scheme is managed by Employee Provident Fund Organization (EPFO).  The employee gets a lump sum amount including self and employer’s contribution with interest on both, on retirement and during the service period (under certain circumstances as stipulated). The principal amount and the accrued interest are exempt from income tax during withdrawal and thus an attractive retirement plan for the salaried class. The Scheme covers all entities in which 20 or more employees are employed and certain entities are covered, subject to certain conditions and exemptions even if the required 20 staff criteria are not met. EPF Interest Rate 2024 The EPF Interest Rate for 2024 is fixed at 8.25%. This rate is valid for all EPF contribution made from 1st April 2023 to 31st March 2024.  The EPF interest is calculated monthly on the EPF contributions but deposited into the EPF account only on 31st March of the applicable financial year. Thus, the total interest for the year will be credited at the end of the financial year. Interest for the FY 2023-24 is 8.25%. Hence, for every month interest calculation, the interest rate will be considered as 0.688%, i.e. 8.25%/12. An EPF account becomes inoperative or dormant if EPF contributions are not made into an EPF account for a continuous 36 months. EPF interest will be credited to the employees’ accounts until they become inoperative or dormant. However, interest will not be credited to the inactive EPF accounts.  Current & Historical EPF Interest Rates The Interest rate of EPF is reviewed every year after consultation with the Ministry of Finance by EPFO’s Central Board of Trustees. The PF interest rate of 2024 is fixed at 8.25%. Provident fund Interest rates for the last five years are mentioned below: Year EPF Interest Rate 2016-17 8.65% 2017-18 8.55% 2018-19 8.65% 2019-20 8.65% 2020-2021 8.55% 2021-2022 8.55% 2022-2023 8.15% EPF Interest Rates 2023-24 The interest rate on EPF is reviewed on a yearly basis. The EPF interest rate for the fiscal year 2023-24 is 8.15%. When the EPFO announces the interest rate for a fiscal year and the year closes, the interest rate is computed for the month-by-month closing balance and then for the entire year. The year in which the new interest rates are published remains valid for the following fiscal year, i.e. from the year beginning on April 1st of one year to the year ending on March 31st of the following year. Here are a few key points to remember about EPF Interest Rate: The interest rate of 8.15% has come into effect and will be applicable to EPF deposits. Even though the interest is calculated monthly, it is only deposited to the Employees’ Provident Fund account once a year on March 31st of the applicable fiscal year. The transferred interest is added to the next month’s balance, i.e. April’s balance, and is then used to calculate interest. If no contributions are made to an EPF account for 36 months in a row, the account becomes dormant or inoperative. Employees who have not reached retirement age might earn interest on their inactive accounts. Interest is not paid on funds put in retired employees’ inactive accounts. The interest collected on dormant accounts is taxed at the member’s slab rate. The employee will not receive any interest for payments made by the company to the Employees’ Pension Scheme. However, beyond the age of 58, a pension is provided out of this amount. EPF Contribution Rate Employee contribution to EPF: 12% of salary. Employer contribution to EPF: 3.67% of salary. Employer contribution to EPS: 8.33% of salary subject to a ceiling of Rs. 15,000 salary, i.e. Rs. 1,250. Details Required to Calculate EPF Interest Rate The current age of an employee. Current EPF balance. Monthly basic and dearness allowance of up to a maximum of Rs.15,000. Percentage of contribution to EPF. Retirement age. Calculation of EPF Interest The employee’s contribution is 12% of basic salary + dearness allowance, while the employer’s 12% contribution is divided into two parts – 8.33% towards EPS account upto a maximum of Rs 1,250 per month and balance amount is transferred to the EPF account.  For example, if an employee’s basic salary + dearness allowance is Rs. 50,000:  Employee contribution to EPF (12% of Rs. 50,000): Rs. 6,000. Employer contribution to EPS (8.33% of Rs. 15,000): Rs. 1,250. Employer contribution to EPF (6,000 – 1,250): Rs. 4,750. The total EPF contribution for a month will be ( Rs. 6,000 + Rs. 4750): Rs. 10,750. Total EPF contribution in the above case for the first month of joining the service = Rs. 10,750. Interest Rate: 8.25% / 12 months = 0.688% Interest on the EPF contribution for the 1st month = Nil EPF account balance at the end of 1st month = Rs. 10,750 EPF contribution in the 2nd month = Rs. 10,750Total amount accumulated in the 2nd month of service=Rs. 21,500 Interest accrued on the EPF contribution in the 2nd month = Rs. 21,500 * 0.688%= Rs.147.92 Total EPF contribution balance at the end of 2nd month = Rs. 21,500 EPF contribution in 3rd month= Rs. 10,750 Total amount accumulated in 3rd month= Rs. 32,250  Interest on the EPF contribution as on 2nd month= Rs. 32,250 * 0.688% = Rs.221.88Total EPF contribution balance at the end of 3rd month= Rs. 32,250  FAQs What are the Withdrawal permissions from EPF amount including epf interest under the rule? In normal circumstances, an employee is able to withdraw the principal amount including the accrued interest upon retirement. However, anyone over 54 years of age is permitted to withdraw 90% of the accumulated balance. If an individual is out of employment for 60 days or more, the employee is entitled to withdraw the entire accumulated balance on that date. Can you avail advances against your EPF balance? The contribution to the scheme is meant to take care of the post-retirement needs however one does not have to wait until retirement to avail financial assistance

The Central Sales Tax Act, 1956 defines the guidelines which determine if a trade can be categorised as a sale or purchase of goods by way of inter-state commerce in order to outline the conditions and restrictions regarding the tax that is imposed. Introduction: The structure and sections of the Indian tax system is fairly comprehensive, with simple and coherent variation in power between local, state and central governments. The taxes on earnings, service tax, central excise, and customs obligations are imposed by the central government. Income cited does not comprise of profits made from agriculture. The sixth alteration in the Constitution of India totally revolutionized the picture of taxation in the country by declaring the Central Sales Tax (which is now referred to as CST). The revision brought about the duties on procurement or trade of merchandises and services between states particularly within the authority of the constitutional power of the Indian Parliament. The limits shall be put on the hegemonies of state legislatures affecting to the tax impositions on purchasing or selling of goods within the state where they are of distinct consequence in the state-to-state trade or exchange. According to the Article 266 of the Indian Constitution, it is plainly detailed that government cannot impose tax on a person until or unless it is lawfully authorized. So while completing this step, the Central and Sales Tax of 1956 was approved, which directs and leads the current Central Sales Tax System. Central Sales Tax is imposed by the Central Government of India as specified in the Entry 92-A of List I (Union List) of the Seventh Schedule to the Indian Constitution. But it can be only collected by that particular state government from where the products were vended. So any proceeds thus gathered is to be submitted to the same State Government that levies the tax. The current Central Sales Tax rate in our nation is only three percent. Central Sales Tax is levied only on those dealings between two or more states and is not applicable for those happened within the state. Section 3 (a)/ (b) of the Sales Tax Act explicitly states this. And if any such deal between people from two different states document the shifting of merchandise, then it is known as interstate transaction. A sale, made by transference of title deeds to products, when they are in any kind of inter-state trade or movement. Categorization of Goods and Services Central Sales Tax Act has also given added significance to specific products and services so as to surge their spread. Section 2-(d) of the Sales Tax Act categorizes these merchandise into two: Declared Goods: Declared goods are those merchandises/ imports that have been given singular prominence thanks to Section 14. Cereals, sugar, cotton, pulses, crude oil, oilseeds and jute are a few examples for the same. Other Goods: The rates of tax on these goods are much lesser as compared to the declared ones. Central Sales Tax Transaction Forms Manufacturers, dealers, brokers, exporters and industrialists, during the course of business deal, have to provide certain statements in the agreed format to the wholesalers and consumers. These forms are printed and delivered by sales tax officials and has to be drafted in three copies. Some essential forms are listed below: Form D: Every sale made to the Government is taxed at the rate of four percent or pertinent sales tax rate for the specific sale within the state, whichever is lesser. To enjoy this discount on CST, Form D is provided by the government department that buys those products. Form I: This form is provided by the businessman or dealer living or operating in a Special Economic Zone (SEZ). This form offers rebate on the Central Sales Tax as there are no taxes imposed when the deal is made to a dealer from SEZ. Documentation for Central Sales Tax ID Proof: Copy of PAN Card, Driving License, Passport, Voter’s ID, Aadhaar Card or any government photo-bearing ID issued by government Residence proof: Copy of any of the above (except PAN Card), Ration Card, Rental/ Lease Agreement, any of your recent utility bill Four to six passport sized photos Address proof of the business establishment First sale or purchase invoice Duplicate copy of LR / GR and proof of payment along with bank statement Guarantee, security and / or reference letter Nevertheless, the documentation procedure varies from state to state because state government has the liberty to frame the rules and guidelines and amend them for their people. Procedure to get Central Sales Tax Registration Are you an industrialist, merchant, exporter or broker? Steps involved in registering for central sales tax (CST) is exactly the same as that of VAT. First thing to do is to get your TIN registration number. Confused? TIN stands for Taxpayer Identification Number and is a unique 11-digit number issued by the Department for Commercial Tax of corresponding states. This has to be specified in every VAT dealing and business correspondence. TIN number is also a way to categorize merchants and brokers registered under VAT. It is a single number and is allocated to the traders to register for each of the three taxes, namely, CST, VAT and Service Tax. The first two digits of TIN denote the state from which it is availed. But the purpose of the remaining nine digits of the TIN number usually vary for each state. It is applicable whether the commercial operations are intrastate or inter-state. Under the Indian Income Tax. FAQs What is CST Registration? CST (Central Sales Tax) Registration is a registration process for businesses that engage in inter-state sales of goods. It allows sellers to collect and pay Central Sales Tax on sales made to buyers in other states. Who needs to obtain CST Registration? Any dealer or business entity that sells goods to buyers in other states is required to obtain CST Registration. This includes manufacturers, wholesalers, retailers, and other traders involved in inter-state transactions.

Transfer pricing can be defined as the value which is attached to the goods or services transferred between related parties. In other words, transfer pricing is the price that is paid for goods or services transferred from one unit of an organization to its other units situated in different countries (with exceptions). Transfer price, also known as transfer cost, is the price at which related parties transact with each other, such as during the trade of supplies or labor between departments. Transfer prices may be used in transactions between a company and its subsidiaries, or between divisions of the same company in different countries. Transfer Price Transfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately run entities. It is common for multi-entity corporations to be consolidated on a financial reporting basis; however, they may report each entity separately for tax purposes. A transfer price arises for accounting purposes when related parties, such as divisions within a company or a company and its subsidiary, report their own profits. When these related parties are required to transact with each other, a transfer price is used to determine costs. Transfer prices generally do not differ much from the market price. If the price does differ, then one of the entities is at a disadvantage and would ultimately start buying from the market to get a better price. For example, assume entity A and entity B are two unique segments of Company ABC. Entity A builds and sells wheels, and entity B assembles and sells bicycles. Entity A may also sell wheels to entity B through an intracompany transaction. If entity A offers entity B a rate lower than market value, entity B will have a lower cost of goods sold (COGS) and higher earnings than it otherwise would have. However, doing so would also hurt entity A’s sales revenue. If, on the other hand, entity A offers entity B a rate higher than market value, then entity A would have higher sales revenue than it would have if it sold to an external customer. Entity B would have higher COGS and lower profits. In either situation, one entity benefits while the other is hurt by a transfer price that varies from market value. Purposes of Transfer Pricing Generating separate profit for each of the divisions and enabling performance evaluation of each division separately. Transfer prices would affect not just the reported profits of every centre, but would also affect the allocation of a company’s resources (Cost incurred by one centre will be considered as the resources utilized by them). Transactions Subject to Transfer Pricing The following are some of the typical international transactions which are governed by the transfer pricing rules: Sale of finished goods Purchase of raw material Purchase of fixed assets Sale or purchase of machinery etc. Sale or purchase of intangibles Reimbursement of expenses paid/received IT enabled services Support services Software development services Technical Service fees Management fees Royalty fees Corporate Guarantee fees Loan received or paid Importance of Transfer Pricing For the purpose of management accounting and reporting, multinational companies (MNCs) have some amount of discretion while defining how to distribute the profits and expenses to the subsidiaries located in various countries. Sometimes a subsidiary of a company might be divided into segments or might be accounted for as a standalone business. In these cases, transfer pricing helps in allocating revenue and expenses to such subsidiaries in the right manner. The profitability of a subsidiary depends on the prices at which the inter-company transactions occur. These days the inter-company transactions are facing increased scrutiny by the governments. Here, when transfer pricing is applied, it could impact shareholders wealth as this influences company’s taxable income and its after-tax, free cash flow. It is important that a business having cross-border intercompany transactions should understand the transfer pricing concept, particularly for the compliance requirements as per law and to eliminate the risks of non-compliance. Transfer Pricing Methodologies The Organisation for Economic Co-operation and Development (OECD) guidelines discuss the transfer pricing methods which could be used for examining the arms-length price of the controlled transactions. Here, arms-length price refers to the price which is applied or proposed or charged when unrelated parties enter into similar transactions in an uncontrolled condition. The following are three of the most commonly used transfer pricing methodologies. For the purpose of understanding,  associated enterprises refer to an enterprise that directly or indirectly participates in the management or capital or control of another enterprise. Comparable Uncontrolled Price (CUP) Method Under the CUP method, a price that is charged in an uncontrolled transaction between the comparable firms is recognized and evaluated with a verified entity price for determining the Arm’s Length Price. Example: A Ltd. purchases 10,000 MT metal from B Ltd. its subsidiary @INR 30,000 /MT. Also purchase from C Ltd. 2,500 MT @ INR 40,000/MT.  A Ltd. received a discount of INR 500 /MT as a quantity discount from B Ltd. B Ltd. allows credit of one month at 1.25% pm. The transaction with B Ltd. is at FOB (Free on board) whereas with C Ltd. is at CIF (Cost, Insurance, and Freight). The cost of freight and Insurance is INR 1,000. Here, the terms of transactions are not the same and hence, it has affected the cost of the crude metal. Hence, adjustments are needed. Adjustments required for differences in; 1. Quantity discount: In case a similar discount is offered by C Ltd., the price that was charged by C Ltd. would have been lower by INR 500/MT.  2. Freight & Insurance (FOB Vs CIF): In case the purchase from C Ltd. was also on FOB, then the price charged by C Ltd. would have been lesser. Hence, the cost of freight & insurance must be reduced from the purchase price. 3. Credit period: In case similar credit was offered by C Ltd., then the price charged by them would have been more after factoring in such cost. Hence, 1.25% pm must be added to the purchase price.  Cost Plus Method

State Bank of India (SBI) offers a vast array of loans to cater to the financial needs of the Small and Micro Enterprises (SME) sector. Individuals who are engaged in income-generating activities in the manufacturing, trading, and services sectors can avail loans ranging between Rs.5 lakh and Rs.500 crore. The interest rates charged on these loans range between Amount of Loan The minimum and maximum amount of loan can be acquired specified below: Minimum: The minimum loan amount of above Rs.50 Lakhs can be obtained. Maximum: The maximum loan amount of up to Rs. 500Lakhs can be obtained. Security Primary Security: Hypothecation of stocks and assignment of receivables. Collateral Security: Minimum 35% collateral (in the form of SARFAESI compliant land/building, and liquid securities in the way of Bank Deposits, LIC, NSC, KVP pledged or specified to the Bank). Guarantee:  Personal guarantee of all the Directors or Partners or Promoters of the unit. Purpose of SME eBiz Loan SBI SME eBiz Loan is a cash credit facility introduced by SBI to provide financial assistance to people who sell products online through e-commerce portals. It is a small business loan given to authorised sellers of products on e-commerce websites such as Amazon or Flipkart. Processing Fee First Year: 1.00% of limit sanctioned and additionally with the applicable taxes. Second year onwards: 0.35% and additionally with the applicable taxes. Eligibility Criteria The sellers registered on e-Commerce portal for selling products online with at least six months track report on any of the major e-Commerce player are eligible to avail the SME eBiz Loan benefits. Documents Required Documents regarding registration of firm/shop/manufacturing unit. Registration certificate of the firm under MSME. Copies of sales-tax return filing documents. Copies of income tax-return filing documents. Drug license (if running a pharmaceutical manufacturing/selling enterprise). Application Procedure for SME eBiz Loan Visit Official Portal of SBI Step 1: The applicant has to visit the official portal of the State Bank of India. Small and Medium Enterprise Step 2: Click on “SME” tab which is present on the homepage of the portal. Step 3: After clicking on “SME” tab a pop-up screen appears where you have to select the “SME” link from the list of options. Apply for SME Step 4: On the next page, click on “Click here to Apply” button to apply for SBI SME eBiz Loan online. Complete the Details Step 5: Now, the form will appear on the next page fill the form with the required details such as Name of Company Date of firm creation Address of the firm Operating address of the firm E-mail address of the firm Contact Details Sector/Industry code Permanent Account Number GST Number. Submit your Application Step 6: After entering the details, click on the “Submit” button to submit your details successfully. Upload the Documents Step 7: Finally upload the documents required along with the application form to complete the process. FAQs What is the SBI SME eBiz Loan? The SBI SME eBiz Loan is a financial product offered by the State Bank of India (SBI) to meet the working capital and term loan requirements of Micro, Small, and Medium Enterprises (MSMEs). It is designed to provide easy access to funds for business expansion, equipment purchase, and operational needs.   Who is eligible for the SBI SME eBiz Loan? Be registered under the MSME Act. Have a minimum operational history, which may vary based on specific loan conditions. Maintain a good credit score and financial history.

The Indian Contract Act, of 1872 primarily governed the employment contract in India. An employment agreement is a mutual contract between the Employee and the employer that rules the terms of employment. Like any other agreement under the standard law system, the vital requirements of the employment contract letter include an offer, consideration, acceptance, lawful object, competent parties, and free consent. Legally Binding In India: Employment Bond Employment bonds are employment contracts with a negative covenant. Under the Indian Regulation, employment contracts with negative covenants are legal and legally enforceable if the parties settle with their free consent, i.e. without coercion, fraud, mistake, undue influence, and misrepresentation. The Indian courts have held that in the incident of a breach of Contract by the Employee. The employer should be allowed to recover damages only if the company had substantial expenses. Indian law mandates the employment bonds to be “rational” and legal. The term rational remains undefined anywhere in Indian law, so the courts have given meaning to “rational” depending on the circumstances and facts of the cases. The intention which has emerged till now is that conditions specified in the Agreement should be essential to protect the company’s interest and compensate for the loss reasoned by the break of the Contract. Also, the penalty or obligatory employment period agreed upon should not be exorbitant. Legal Implications of Employment Contracts in India An employment contract sets out the terms and conditions of employment, including salary, working hours, job duties, and benefits. It also includes provisions regarding termination of employment, notice periods, and non-compete clauses. The legal implications of employment contracts in India are significant and have to be taken seriously by both employers and employees. From the employee’s point of view, it is essential to carefully review and understand the terms of the employment contract before signing. Employees should read the contract thoroughly, negotiate the terms if necessary, seek legal advice if required, and understand the consequences of a breach before signing the agreement. While employment contracts provide protection to employees by outlining their rights and obligations, they also create legal obligations for both the employer and the employee. Employers are required to provide the agreed-upon terms and conditions, while employees must fulfill their job duties. Termination of employment is a crucial aspect of an employment contract, and the contract specifies the grounds for termination of employment and the notice period required. Employers must comply with these provisions when terminating an employee’s contract, failing which the employee can challenge the termination in court. Non-compete clauses are also included in some employment contracts to restrict employees from working for competing companies after leaving their current employer. Non-compete clauses are legally enforceable in India if they are reasonable and necessary to protect the employer’s legitimate business interests. Employee Bond in India An employee bond is a legal agreement between an employer and an employee that requires the employee to work for the employer for a specified period. Employee bonds are common in certain industries, such as IT and BPOs, where companies invest heavily in employee training. While employee bonds are legally valid in the court of law in India if they are reasonable and do not violate any laws, they have been controversial in India, with many experts criticizing them for being exploitative and restrictive. From an employee’s perspective, it is essential to understand the terms of the employee bond before signing. The bond must be in writing, and the employee must sign it voluntarily. The bond must specify the duration of the bond, the compensation payable if the employee breaches the bond, and the reasons for the bond. If employees violate any of the terms of the employee bond, they may be subject to penalties or legal action. From the employer’s perspective, employee bonds can be a useful tool for retaining employees and preventing them from leaving for better opportunities. However, employers cannot use employee bonds as a tool to exploit or unfairly restrict employees. If an employer breaches the terms of the employee bond or violates any employment laws, employees may be able to take legal action against the employer. What are the main clauses and terms of an employment contract? We’ve compiled a list of the most crucial phrases and conditions that should be included in the contract. Though this list is thorough, an employer or organisation can always add additional terms and conditions to protect their employer’s interests. Parties– Both the employer and the employee are parties to the agreement, and both must sign it. Location of Work- The place where the employee will be working should be specified in the agreement. Effective Date– The effective date is the date on which the agreement takes effect; in this case, the employee’s joining date will be used as the effective date. Working Hours and Job Timings- The agreement should explicitly outline the working hours and work timings. Job Description- The agreement should contain the key responsibilities that the employee will be responsible for, as well as the job description that was included in the offer letter that was provided to the employee. Details about the department in which the employee will be working, as well as information about his trainer/reporting head, should be included. Legal policy- The details of the public holidays and paid leaves an employee is entitled to within a year should be included in the leave policy. Probationary Period- At the start of the job, a probationary period may be agreed upon. The probationary period cannot exceed six months. In a fixed-term job, the probationary period cannot be longer than half the duration of the contract. Employees are paid their regular salaries throughout this time. Remuneration- The gross wage that is being offered to the employee must be specified in the agreement. Any salary deductions, such as taxes, insurance, and so on, must be indicated in the contract. The mechanism of reward payment must be agreed upon by both parties. Notice Time- Both the employer and the employee must be given a notice period. Neither party should

The Indian Contract Act, of 1872 primarily governed the employment contract in India. An employment agreement is a mutual contract between the Employee and the employer that rules the terms of employment. Like any other agreement under the standard law system, the vital requirements of the employment contract letter include an offer, consideration, acceptance, lawful object, competent parties, and free consent. What is Interim Dividend? Interim dividend meaning: It is a cash payment given by a firm to its shareholders on a regular basis. Depending on how frequently financial statements are released, they can be paid quarterly or annually. They are often less than dividend payments issued at the conclusion of a fiscal year; these large distributions are typically paid once per quarter during an earnings report known as dividend day. The most frequent interim dividend amount is roughly 10% of shares held in any one payout period.  However, because companies do not always keep all of their cash reserves in liquid assets like stock market securities, such dividends may also include stock options or new shares issued by certain companies. These types of dividends can also be used to predict whether a firm will achieve analyst expectations when it discloses full-year earnings later in the year. Insider trading occurs when non-public information about a company’s finances is released prior to official statements. Calculation and Interim Dividend Example Explained Dividends can be calculated as a proportion of earnings and paid out per share. The interim dividend formula is as follows: (Earnings of the company* Dividend payout ratio)/Number of shares Company X Ltd., for example, allocates 40% of its earnings to its stockholders. So if they earn Rs. 10 lakhs and have 20 lakhs shares outstanding, each share will be worth Rs. (10,00,000*40%) divided by 20,00,000 shares equals a dividend payout of Rs.0.2 per share. Interim Dividend as Per Companies Act Section 2(35) of the Companies Act, 2013 describes the interim dividend as follows: The dividend for a financial year of the company which is called as a final dividend is payable only if the company declares it at its annual general meeting on the recommendation of the Board of directors. The Board of Directors of a firm can declare interim dividend during any financial year or at any time during the period from the closure of the fiscal year till holding of the annual general meeting. An interim dividend will be declared by the board of directors at any time before the closure of fiscal year, whereas a final dividend is reported by the members of a company at its annual general meeting  Payment of Interim Dividend by Board of directors An interim dividend will be paid by the Board of directors of the private limited company. The interim dividend will be paid out of the surplus in the profits and loss accounts or out of profits of the fiscal year for which such dividend is sought to be declared or out of profit generated in the fiscal year till the quarter preceding the date of declaration of the interim dividend. In case the private limited company has incurred a loss during the current financial year up to the end of the quarters immediately preceding the date of declaration of the interim dividend, such interim dividend will not be declared at a rate higher than the average dividends declared by the firm during the immediately preceding three financial years. Procedure for Declaration of Interim Dividend Note on Record Date Before knowing about the procedure for declaration of interim dividend, you should familiarise with the Record Date. The record rate will be decided for ascertaining who are eligible to receive the interim dividend and to pay the interim dividend. The shareholders who are members as on the record rate will be eligible to receive the dividend as approved by the company. Step 1: The private limited company will have to be authorised by its articles for the payment of the dividend. Issue Notice for Holding Meeting Step 2: According to section 173 of the companies act, the company is required to issue notice for holding the meeting of the board of directors of the company to consider the matter. Holding the Meetings Step 3: The company is required to consider the following matters while holding the meetings: Ascertain whether the financial position of the Company allows the payment of Interim dividend out of profits available for distribution. Recommending the rate and quantum of dividend Deciding a record date Pass a Board Resolution for approving the payment of dividend Pass a Resolution for the opening of an account in the name of the private limited company Open Account Step 4: Open the separate account in the name of the company with a scheduled bank and deposit the dividend payable in the prescribed account within five days of the declaration of the dividend. Payment of Dividend Step 5: Dividend payable in cash will be paid by or warrant or Cheque or through any other electronic mode to the shareholder entitled for the payment of the dividend. The dividend will not be paid by a company in respect of any share except to the registered shareholders of such share or to his order or his banker. The dividend will be paid within 30 days from the date of declaration of dividend. Punishment for Failure to Distribute Dividends A dividend has been declared by a private limited company but has not been paid or the warrant has not been posted within thirty days from the date of declaration to any shareholder entitled, every director of the company will be punishable with imprisonment of two years and with a fine of thousand rupees for every day during which such default continues, and the company will be liable to pay an interest at the rate of eighteen per cent per annum. In the following cases, no offence under this section 127 of companies act will be deemed to have been committed: If the dividend could not be paid because of the operation of any law; Directions of the shareholders regarding the payment of dividend cannot be complied with, and the same has been communicated to him In case any a dispute regarding the right to receive the dividend If the dividend has been lawfully adjusted by the company against any sum due to it from the shareholder; or For any other reason, if the dividend is not paid or to post the warrant within the period was not due to any default on the part of the firm. FAQs Who is eligible for an interim dividend? It is a distribution to the shareholders that are issued and paid before a company’s full-year earnings are calculated. Dividends of this type are typically paid to holders of a company’s common stock on a quarterly or semi-annual basis. Does interim dividend mean profit or loss? Like a final dividend, it is a profit appropriation that must be recorded on the debit of the profit or loss appropriation account.