Everything You Must Know About PAN Card As Issued By IT Department

Income Tax (IT) Department, India has been making a number of improvements in its services as of late, especially in regard to digitization. To contribute its fair share to the same, the department is starting the online service of issuing instant e-PAN (electronic Permanent Account Number) quite soon, reports the Times of India.

Up until now, the applicants receive their PAN card around 15 days after they fill up a required form and submit it along with all relevant documents. The issuing of instant e-PAN means the recipients will not have to wait to get their PAN card.

The instant e-PAN will be issued on the basis of your Aadhaar details. Therefore, you need to provide only your basic details such as your name and phone number, etc. and your Aadhaar details. Then, you need to get these verified by using an OTP (One-Time Password) on your registered (with Aadhaar) mobile number. The rest of the details will be picked automatically from your Aadhaar Card such as your father’s name and your date of birth. You don’t need to submit or upload any physical document in that case, according to the report.

Once the department verifies your Aadhaar details via the OTP, you will receive a digitally signed e-PAN instantly which contains a QR-code. This code has your demographic data apart from your photograph. As per an official’s statement in the report, the data in the QR-code will be encrypted as a security measure so as not to give any chance to forgery or digital photoshopping.

The issuing will be done free of cost and the online facility will save a great deal of your time. Besides, you don’t need to visit their office in person. In the words of the official provided to TOI

“The move is part of greater digitisation of income tax services and aimed at providing the facility without anyone having to visit any office.”

The department ran an eight-day pilot test to examine the proposed e-PAN service. Now, after its successful outputs, they are going to roll out the service nationwide in the upcoming few weeks.

Who Can Apply For PAN Card

  • Individuals including both majors and minors
  • Partnership Firm
  • Limited Liability Partnership
  • Trusts
  • Companies
  • Local Authorities
  • Registered Association of Persons
  • Artificial Judicial Person
  • NRIs, OCIs (Overseas Citizens of India), PIOs (Persons of Indian Origin), and foreigners falling under the purview of Income Tax Act of 1961

Importance Of PAN Card – Why You Need One

While we have so many essential identity documents in India such as Aadhaar Card and Passport, the importance of PAN Card is irreplaceable. There are so many scenarios in which the linking of PAN is essential.

Initially, the motive behind issuing this card was to prevent tax invasion as your PAN, linking all your financial transactions, provides a thorough record to the IT department for tax transactions. However, now PAN is used in other ways as well.

IT Returns Filing

The primary reason for applying for a PAN is to file Income Tax returns. Those who have taxable income must own a PAN card.

Applying for a credit or debit card

To apply for a credit or debit card, you need to provide your PAN to the bank or financial institution in question.

Opening a bank account

To open a new account in private, co-operative, or public bank, PAN is required.

Property

While buying, renting, or selling a property, you need to submit your PAN details as well as that of the person who you’re doing the property deal.

Making investments

You need a PAN card if you want to make investments in securities (such as mutual funds, equities, bonds, debentures) exceeding Rs. 50,000.

Proof of Identity

Your PAN card is one of the major documents that are accepted as your identity proof in India. It is used as an identity proof of your age, also. If you want to apply for passport, driving license, voter ID, electricity connection, etc., you need your PAN details.

Purchase of jewelry

For buying any type of statement jewelry amounting to more than Rs. 5,00,000, you need to furnish your PAN details.

Buying or selling a motor vehicle

You need PAN if you want to buy or sell a motor vehicle that exceeds the amount worth Rs. 5,00,000.

Foreign Exchange

To convert your Indian currency into a foreign one while you’re traveling abroad, you must supply your PAN card to the bank or money exchange bureau where you’ve headed to convert the money.

Fixed Deposits

You need to submit your PAN info to the concerned bank if you’re applying for a Fixed Deposit (FD) worth Rs. 50,000 and above.

Insurance Payments

You need to supply your PAN information when making an insurance payment amounting to over Rs. 50,000 a year.

Cash Deposits

RBI has made it mandatory for all banks to require the Pan details of the person who is making cash deposits more than worth Rs. 50,000 at a time.

Loans

Applying for any type of loan requires you to provide your PAN information to the bank or other lending institution/individual in question.

Telephone Connections

For those applying for a new landline phone or mobile phone connection, submitting your Pan details is necessary to the concerned operators or service providers.

What if you don’t have a PAN card yet?

In case you don’t have a PAN card yet, you can easily apply it online on the IT department’s official website without making further delays. Until then the Income Tax Department has also introduced a new rule in September this year which states that you can use your Aadhaar card details interchangeably wherever you need your PAN number.

Besides, you can fill in Form 60. Under the Income Tax Rules, 1962, this form states that you don’t have a PAN card and that your income level is below taxable income as per the IT department.

5 Reasons why you should go for internal auditing

An internal audit might not look a necessary thing to a lot of people, but it’s important. It’s, specifically, the case with small businesses that don’t feel like spending on the little resources they have on internal audits. This, however, is a sheer ignorance.

Internal audits play a major role if you want to provide your clients with efficient and secure services. And that’s exactly what your business goals are, isn’t it? In case you feel you’re lacking somewhere in these programs, take help of advisory and planning services of an expert to help you get started with the financial activities such as auditing.

What is internal auditing?

Auditing financial statements means keeping accurate records of all your financial transactions. While you can get your statements audited internally by crisscrossing the work of one department to another, it’s better to hire an expert to make a report on the accuracy of the statements. That’s because the former will require a complete training program for your employees. The best chartered accountants in Ambala, India are always available with their excellent auditing services.

Internal auditing has its own share of importance in filling the gaps in a company’s policies and procedures. They are held to manage risks and ensure a company’s policies are in compliance with the relevant laws and regulations. Let’s take a look at everything internal auditing can do for your business.

Why is internal auditing important?

  1. It provides an objective insight

There’s hard to audit your own financial statements impartially. Therefore, you’ll have to take a helping hand to make a fair judgment. While you can train your own employees to do the task, taking the helping hand of a professional is always a more economical idea. Besides, they can achieve the objective insight more accurately.

  1. It boosts the efficiency of operations

The objective insight into the policies and procedures of your company ensures that you’re operations are on the right track. And if any gap is found, you can mend it at the right time. By monitoring, reviewing, and mending your processes, you can attain more efficiency and effectiveness in your operations.

  1. It examines risks and safeguards assets

Internal auditing is a key tool to assess risks. The management and stakeholders come to identify any changes in the environment. Besides, they get to know which risks to prioritize and which to address later. In this way, they can make an effective remediation plan at the right time. if there is any gap found in the environment, you can overcome it systematically.

  1. It ensures compliance with laws and regulations

If a company performs an internal audit on a regular basis, it can make sure the policies and procedures are complying with all the relevant laws and regulations. In this way, it saves you from costly fines you can face in a non-compliance state and prepares you for the next external audit. Isn’t this a big relief?

  1. It makes your business name more reliable

Once the financial audit officials have kept up their faith in your internal audits, your authenticity improves and your clients can trust you more. Carrying out an internal auditing program from time to time highlights your professionalism as well.

If cross-training your employees to audit departments does not sound like your move, you can always look for expert financial advisors to get best management consultancy services for all your financial matters.

6 Things a Chartered Accountant Does for You

A number of elements contribute to the success of a business. Consider, for example, product and service quality, brand value and marketing skills. But what is it that manages all of these things? All businesses need the helping hand of a chartered accountant whose financial advisory and planning services can escort you from zero to zenith within days.

The general conception is this that a chartered accountant is only needed to file tax returns and make balance sheets of your company – but there’s much more to it. A seasoned financial advisor is an essential asset to shape your business’s current structure and ensure your company’s growth graph always points north.

Bookkeeping

Bookkeeping or record keeping is the foundation of a business’s financial system. It means keeping all the records of your financial transactions for your business. If done properly, bookkeeping can be one of the primary reasons for your business expansion. That’s what a CA takes care of. He analyzes all your transactions, looks into the possibility of claiming for tax relief, prevents any undue expense, and makes provisions for business expansions whenever possible.

Formulating Business Plans

It’s the extensive knowledge in their field and strategic understanding of the current and potential situation that help chartered accountants in planning business growth.

The professionals in the field are well-versed in all terms and terminology of accounting. Once they get familiar with your brand, they can proficiently analyze how productive a business plan and strategy can be for you. Additionally, they can fine tune your existing business plans to make the most of all possible opportunities.

Auditing

Auditing refers to the official inspection of a company’s accounts and records, and it’s an extremely tedious task. However, hiring a professional CA will make things sail smoothly as they are brilliant at their job and can prevent any hiccups from interrupting your business affairs.

Cost Controls

Yes, true…chartered accountants are expert in making budgets by balancing the fixed and variable costs incurred by companies. In fact, no one other than a CA is a good option when it comes to cost controlling and increased profits, both in dull and fast expanding days.

Financial Compliance

With the growth of a business, many complexities revolving around business procedures and tax requirements shoot up. Now, this is where you can put the expertise of an expert financial advisor to good use. A specialist in the field will assist you in effective tax planning and consultancy to cut down the tax you pay to the government. Besides, they use their experience, knowledge, and foresight to prepare in advance for approaching taxes. You can always count on professional CAs to be in compliance with all the relevant regulations and stipulations.

Merger and Acquisition

It is the valuable counsel of an expert CA that can be utilized to expand business operations through mergers and acquisitions. A knowledgeable chartered accountant will analyze the financial and legal implications to decide if the deal is profitable in regards to the present costs and potential growth.

While there’s much more an experienced CA can do for your business, these 6 are the ultimate services which, if given a careful consideration, can help you script a success story for your business. In case your business needs the expertise of one of the best-chartered accountants in Ambala, India, contact us for assistance.

5 Major Changes in Income Tax Rules from April 1, 2018

As per financial calendar, New Year starts from April 1, bringing changes to many things in personal finance and every tax payer needs to be aware of the new rules in income tax as these not only impact our earnings but also our day-to-day lives.  Right from the introduction of LTCG in equities to the introduction of standard deduction for salaried employees, a number of tax changes have been announced by the Finance Minister. Let’s go through the major 5 tax changes you need to know.

  1. Pay LTCG tax on stock market investments

Profits made through stock market investments are not exempted anymore. Now, you will have to pay 10% tax on your profits if you held equity-oriented mutual funds and stocks for one year. The tax implements to only those whose profits exceed Rs 100,000 in a financial year.

Please note that your profits made till Jan 31, 2018 are protected, as the rule will come into effect for profits made after 31st Jan.

  1. Higher CESS

A new CESS has been proposed: Health and Education CESS. This time it has been increased by the government from 3 percent to 4 percent for individual taxpayers on the amount paid as income tax.

  1. Senior citizens can get medical treatment for specified diseases

Currently, resident individuals and HUFs (Hindu Undivided Families) get benefit of the deduction for the amount proposed for the medical treatment of diseases like malignant cancers, AIDS, etc.  For now the deduction of amount is limited to Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens. The new budget has proposed to make enhancements in the deduction limit and increased it to Rs 100,000 equally for both senior as well as very senior citizen categories.

  1. Income tax benefit on NPS withdrawal

In budget 2018, Indian finance minister announced the extended benefit of tax-free withdrawal on NPS (National Pension System) to non-employee subscribers. At present, non-employee subscribers are not allowed to enjoy this exemption.  The new budget proposes to extend the benefit of tax-free withdrawal from NPS.

  1. Reintroduction of standard deduction

W.e.f financial year 2006-07, standard deduction (available only for salaried people) got abolished. Now the government has again introduced standard deduction and provided exemption relating to transport allowance and medical expenses. This is surely going to benefit more than 2.5 crore salaried employees.  Due to the introduction of standard deduction by the government, the salaried class of India is going to enjoy a flat deduction of Rs 40,000 from the income they pay as tax.

5 Best Ways on How to Save Tax Legally

Have you ever considered that how to save tax on your income? Whether you are a first-timer or old-hand taxpayer, if you’re not planning your taxes in a proper manner, then there is a probability that you are paying more taxes than you should. Most people find the process of tax laws really complex that they are startled to deal with it. We recommend you to don’t fall into the category of startled people. Saving tax is, honestly, not as complex as you think. There are many things which can help in saving tax for you. This post covers some completely legal ways that can be used by you to save tax. Let’s check them out:

  1. Tuition Fees

People spend a significant amount of their income to make their kids educated. I-T laws help you compensate those expenses by reducing your taxes. You can anytime claim such deductions as per the 80C of I-T Act.

  1. Education Loan Repayment

These days, a heavy rise in the cost of various education courses has been witnessed and to do such courses people often opt for education loans. Similar to deduction available on the tuition fees, education loan EMI’s submitted by you can also bring tax benefits. As per the 80E section of Income Tax Act, you can get the tax benefit for the interest paid by you on your education loan.

  1. Medical Insurance

Health check-up and medical expenses are a part of every individual’s life. If you spend some money from your income on medical insurance or towards preventive health check-up, then as per tax laws you can get some tax gains. According to the section 80D of Income Tax Act, an individual can get a deduction up to 60,000 Rs. To get the benefit, you are advised not to pay your premiums for Medical Insurance in cash.

  1. Pension Funds

Preferably, from the day one starts earning money, he/she should start planning the day of their retirement. One of the ideal ways to do so is to invest income in pension funds. Luckily, this can help you reduce your taxes. In such cases, provision related to the tax benefits are covered under various sections that includes Section 80C, Section 80CCC, Section 80CCD(1), Section 80CCD(1B), and Section 80CCD(2).

  1. Home Loan Repayment

You’ll be delighted to know that by paying your home loan EMIs, you can reduce the burden of taxes. Best of all, you can get the advantage of both interest and the principal component of your installments. If the case is that you are paying installments for your first home then a huge amount of tax can be saved. Home Loan Repayment deductions are covered under various sections that include Section 24, Section 80C, and Section 80EE.

Why not start using aforementioned tax saving methods from today onwards and get set to optimize your tax life. If you have some other best ways to save tax on your income in your arsenal then don’t forget to post your views in the comment section below. Happy Tax Savings!

5 Things to Consider While Filing Income Tax Return

Wanna file income tax return on your annual income? If you are not familiar with the fiddly process, better to take assistance of a professional who can do the work for you at the blink of an eye. In case you are planning to file income tax return from your own, you need to keep some things in mind before proceeding. Whether you are filing income tax return online or via post, during the process (which is often exercised at last minute) you may miss some important information or even commit some mistakes. This post covers the list of five such mistakes that should be avoided while filing income tax return. Let’s get started:

  1. Not defining all your income sources

This is the most common mistake people attempt while filing income tax return. Interest earned on FDs or bank saving accounts is often forgotten by many individuals. Let’s tell you that this income is taxable as per your relevant tax slab. Banks, as a rule, deduct 10% TDS on the interest an individual earned on FDs. However, if an individual fall under a higher tax slab, he/she has to pay income tax accordingly. If such incomes are not reported by an individual, it may fetch a notice from the department of Income Tax.

  1. Not paying tax on your house property

There is a notion in the mind of many people that even after having multiple residential properties, there is no need to pay income tax, but in actual it is a misconception. If you have more than one residential property, then you are supposed to pay income tax for that, even if the property is unoccupied and you are not earning any income from it. There is no income tax on the house you occupy. Other than that, tax is to be paid for all other houses you have.

  1. Providing incorrect personal information

Income tax department communicates regarding all the necessary information via email or post, thus it is extremely important to provide all personal details accurately before filing income tax. Your minor mistake can wreck havoc and you might miss some important notifications. Therefore, it’s always necessary to check/recheck your personal information like postal and email address while filing your income tax.

  1. Not informing about the exempted income

There are many types of income that are exempted from tax. Though there is no need to pay income tax for incomes like dividends or long-term gains, reporting about them to the income tax department is a necessity. Remember that, if you are not reporting about such incomes, income tax department may get such details from the investment company or brokerage house.

  1. Not verifying the income tax form before filing

Whether you have opted for filling the income tax form offline or online, mistakes may happen. Therefore, it is recommended that you must cross check the filled-up form carefully in an attempt to avoid any mistakes. Even if you’ve assigned the task of filling your form to your tax consultant or accountant, you need to verify the accuracy of the information by personally checking it.

What are the Major Benefits of GST?

With the aim to make India a unified common marketplace with common tax rates and procedures, the Goods and Services Tax paves the way for an integrated economy at the national level. It subsumes almost all the State as well as Central taxes into a single tax, mitigating the ill effects of cascading and enhancing competitiveness of businesses. The tax is also anticipated to bump up GDP by approximately 2%. Let’s have a look at major benefits of GST.

  1. Elimination of Multiple Taxes

The biggest advantage of GST is that it subsumes most of the indirect taxes being levied nationally. Thus, it abolishes the ‘tax on tax’ effect which has been plaguing the entire supply chain and increasing costs for the end user. This will also give a major boost to the Government’s ‘Make in India’ campaign as goods that are manufactured or supplied in the country will be competitive not only in national markets, but in the international ones too. The Integrated Goods and Services Tax (IGST) will be levied on all imported goods. IGST means State GST plus Central GST, bringing uniformity in taxation on both local as well as imported goods.

  1. Ease of Business Setup

The Goods and Services Tax comes with a unique ‘one country, one tax’ concept that can make the business setup process easy and straightforward. This will be beneficial to do interstate business, preventing unhealthy competition among states. GST is anticipated to bring buoyancy to the Government Revenue by expanding the tax base and enhancing the taxpayer compliance. The tax is likely to provide a major lift to India’s ranking in the Ease of Doing Business Index.

  1. Less Bureaucracy

The new tax system offers less bureaucracy. Now, you don’t have to pay bribe to any tax officer. You can check your details and pay your tax online in just few clicks. It brings more transparency to indirect tax laws, making the economics and tax value of supplies easily distinguishable. All in all, it helps the industry to take credit and the government to validate the precision of taxes paid and the consumer to know the exact amount of taxes paid.

  1. Improvement in Economy

One of the major GST benefits is that it provides more taxpayers to government by lowering the cost of goods and services. Called as the biggest reform in Indian indirect tax system, the Goods and Services Tax causes an increase in manufacturing processes and improvement in exports and investments. Now, the government provides more facility with the high-budget product in the well-being of Indian citizens in many different ways. Thus, it’s a win-win situation for both the country and citizens.

  1. Less Price Product

For a common man, GST tax applicability means the removal of double charging in the system. With the introduction of this new tax, the money mind game has been ended. It lowers the price of goods and services, helping common man to save more money. On the business front, it give businesses a national platform to grow with a rapid pace.

What is GST and How it Affects You?

India’s biggest indirect tax reform since Independence, the Goods and Services Tax (GST) was launched on July 1, 2017 at Central Hall of Parliament by Prime Minister Narendra Modi and President Pranab Mukherjee. Came up with the principle of ‘one nation, one tax, one market’, the GST subsumes 17 central and state tariffs. With the new-fangled tax, the movement of goods has become much easier and simpler across the nation. Still confused what is GST? Well, not anymore as in this post, we’ve brought to you the answers of the most-asked queries to help you better understand what is the Goods and Services Tax, its rates, and how it affects you. Allow us to explain you in detail.

GST and its Meaning

Abbreviated as GST, the Goods and Services Tax is the only indirect tax for the entire country, making India a unified common marketplace. The tax applies to the supply of goods, right from the producer to the buyer. Through the new tax, the government aspires to construct a solitary extensive tax structure that will subsume all other minor indirect taxes on expenditure such as Service Tax, Local Body Taxes, Purchase Tax, etc. In accordance with government estimates, this tax will boost India’s GDP (Gross Domestic Product) by approximately 2%.

Why GST Needed?

The new tax splits the complex structure of different central as well as state taxes, which frequently overlap with each other, resulting in a uniform taxation system for the whole nation. Now, taxes will be implemented more effectively as all taxes like Value Added Tax (VAT), Octroi, and Excise Duty will be replaced by one single tax. However, there’re still 3 types of taxes: State GST, Central GST, and Integrated GST for inter-state trade.

GST Rates

There are 4 main tax slabs under GST: 5%, 12%, 18%, and 28% that are intended to lower tax incidence on necessary items. The first rate, i.e. 5% is applied to items of mass consumption that are used particularly by common people. The second and third slabs – 12% and 18% accommodate most of the goods and services, while the last slab of 28% has applied mainly to white goods, including washing machines and refrigerators.

Exemptions under GST

Under this tax, the Indian administration has set GST rates on around 1,211 goods and 500 services in the range of 5 to 28%. Various items like petrol, alcohol, diesel, and natural gas are exempted under this tax. Apart from this, the GST Council has also categorized several items under the 0% tax rate. The list incorporates daily-use items like rice, milk, wheat, meat, fish, fresh vegetables, printed books, newspapers, bone meal, and drawing or coloring books, among others.

GST Rate 0%

A number of services such as healthcare, education, and hotels and lodges with tariff below Rs. 1,000 are deprived of the Goods and Services Tax. However, semi-precious and rough stones have GST rate of 0.25%.

Effects of GST

On salaried employees and self-employed professionals

As the tax is valid mainly for businesses, so it won’t directly affect the salaried and self-employed professionals such as lawyers, doctors, to name a few. Nevertheless, it will affect their expenditure, owing to the change in rates of goods and services they avail. Apart from this, they will continue to pay their income tax like before.

On Businesses

The new tax has revolutionized the way businesses have been operated. The removal of several levies and formation of a single market with lower tax rates and fewer tax exemptions has enhanced the ease of doing business and reduced unnecessary proceedings. It also simplifies a complicated chaos of taxes that companies have been subjected to. Further, reduction in transaction costs of doing business has led to a superior competitiveness for the industry and trade.