Due date for GSTR 2 & 3 for July 2017 Extended

To facilitate trade, last date for filing GSTR-2 & GSTR-3 for July 2017 extended to 30th Nov & 11th Dec 2017 respectively.

— GST@GoI (@askGST_GoI) October 30, 2017

Waiver of late fee on filing of GSTR-3B

To facilitate taxpayers, late fee on filing of GSTR-3B for Aug & Sept has been waived. Late fee paid will be credited back to taxpayer ledger.

We are now at Bannerghatta Road!

Happy Diwali

Decoding the Rupee Cost Averaging Strategy

"More Wait, Less Fluctuation"

By using Rupee Cost approach, you avoid the complex or even impossible duty of trying to figure out the exact best time to invest. Rupee cost averaging is an approach in which you invest a fixed amount of money at regular intervals. This in turn ensures that you buy more shares of an investment when prices are low and less when they are high. This automatically falls in line with the age-old principle of buy low and sell high. The rupee cost averaging effect - averages out the costs of your units and hence lessens the results of short-term market fluctuation on your investments. This is the system followed in SIPs (Systematic Investment Plans) of mutual funds.

Getting it right:

Decide on the amount you can invest on a regular and long-term basis

Select an investment you want to hold for the long-term

Invest at regular intervals (weekly, monthly or quarterly)

Understanding the Basics of ELSS

What is ELSS?

ELSS is the short form of Equity Linked Savings Scheme.

Now, being an equity oriented mutual fund it invests more than 65% of its investment in Equities, the ELSS has market risks as well as rewards. Apart from it, under Section 80C of Income Tax Act, ELSS also helps you save taxes. You can invest in ELSS through the Demat account via ECS or through Cheque.

What is the Lock-in Period of ELSS?

ELSS has a lock-in period of 3 Years.

Which means that you cannot sell your funds before three years from the date when you invested.

This Lock-in period is applicable to each portion individually, i.e., if you invested x amount in April 2015, and y amount in February 2016, you’ll be allowed to withdraw the full returns of x in April 2018 and of y in February 2019. However, you can keep the invested amount for more than Three years.

Two Options of ELSS Funds

While you invest in ELSS, you’ll be given two alternatives.  Dividend Option and Growth Option.

Dividend Option

This lets you receive the dividend on your investments at Regular intervals. This lets your returns be reinvested in the same ELSS, summing up to be a larger amount.

Growth Option

With this option, you get timely returns on your investment. Plus, these returns are not Taxable. This option involves market risks, but the returns are worth it.

As ELSS is an equity fund, it’s prone to market risks. So, it doesn’t always assure good returns. One needs to do proper research and figure out it’s performance over the course of years.

How to choose the right fund?

One should always check the record of particular ELSS fund before investing in it. Compare the returns of the short-term (six months to a year), medium-term (three years) and long-term (five-six years) horizons with the benchmark you have set for your future.

It is also advisable not to put a lump amount in an ELSS fund at once. One always has the Systematic Investment Plan (SIP), in which they are allowed to put monthly amount (minimum Rs.500).

Head of Income and Taxation

The returns of ELSS fall under the head Income from Capital Gains.

After one year of investing, the returns on ELSS are considered Long term Capital Gain. Thus, when you withdraw the full amount after the lock-in period of Three years, the amount will be considered Long term Capital Gain.

This amount is not Taxable.

On the other hand, the annual amount invested in ELSS is fully deductible from taxes provided it is upto 1,50,000. Meaning, if you have the annual income of 10,00,000 and you invest 2,00,000 in your ELSS, the total taxable income will be Rs. 10,00,000 minus Rs. 1,50,000 (limit prescribed by government), which is Rs. 8,50,000.

Sale and purchase of ELSS are subject to Securities Transaction Tax (STT) and as per section 10(38) of the income tax act, long term capital gains on sale of securities which are subject to STT are exempt from tax.

However, if you suffer loss at the end of lock-in period, you can’t set it off against other incomes.

In order to Invest money that helps with Tax Deductions, one can also consider the option of ULIP. Here’s how ULIP and ELSS are different:

Attributes	ELSS	ULIP
Nature	It is solely an investment option.	It is a combination of insurance and investment.
Investment	They are Equity based funds that primarily invest in shares or options related to shares	One part of the amount goes to investment while the remaining part is invested in debt or equity related products.
Lock in Period	The lock-in period is of 3 years	The lock-in period is of 5 years
Return on your Investment	This type of investment is pretty transparent about how the fund operates and the places where investments are done. This makes the returns easily understandable	There are hidden fees deducted when one pays the premium. Fees like morality charges, administration expenses, fund management fees. The balance amount is invested.
Tenure	You are not compelled to hang on for many years because of the simplicity of the process.	Experts comment that you need to wait till almost 12-15 years to get the best overall Returns.

For Tax Planning assistance contact us at +91 9900397777/ info@preethamandco.com

Tips for Managing Health and Wealth

Uncovering The MUDRA Loan-Funding the Unfunded

MUDRA has been formed with primary objective of developing the micro enterprise sector in the country by extending various support including financial support in the form of refinance, so as to achieve the goal of “funding the unfunded”.

Under the aegis of Pradhan Mantri Mudra Yojana (PMMY), MUDRA has created products/schemes. The interventions have been named 'Shishu', 'Kishor' and 'Tarun' to signify the stage of growth / development and funding needs of the beneficiary micro unit/entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to:

Shishu : covering loans upto  50,000/-

Kishor : covering loans above  50,000/- and upto  5 lakh

Tarun   : covering loans above  5 lakh and upto  10 lakh

Within the framework and overall objective of development and growth of micro enterprises sector under Shishu, Kishor and Tarun, the products being offered by MUDRA are so designed, to meet requirements of different sectors / business activities as well as business / entrepreneur segments.

Key Takeaways from 22nd GST Council Meet

Businesses with annual turnover of upto INR 1.5 Crores

Quarterly filing of GSTR 1, 2 and 3 along with the payment of tax from 3rd Quarter of the Financial Year, i.e October to December 2017. GSTR 1,2 and 3 are to be filed monthly for the months of July, August and September. Till December, monthly filing of GSTR 3B is also required.

Need not pay GST at the time of receipt of advances for supply of goods.

Nitty-Gritty of 15G & 15H Forms

These forms are the self-declaration submitted to bank for non-deduction of tax on interest on fixed deposits. Many people don’t know or they are confused about the eligibility criteria and time limits for filing 15G/ 15H.

When TDS is deducted by banks?

In case of Interest from fixed deposits, the threshold limit above which banks are require to deduct TDS at the time of payment/ credit is Rs.10,000. Thus once the aggregate amount of interest reaches above Rs.10,000, banks start deducting TDS at time of payment/ credit.

Why submit 15G and 15H Forms?

By submitting 15G/ 15H forms, you are asking the banker not to deduct TDS on interest income from fixed deposits. But beware of the eligibility criteria’s attached with the submission of these forms as non-compliance or incorrect compliance of any of the attached conditions can lead to severe penalties.

15G Form:

He should be Individual/ HUF;

Person should be resident of India;

He must have Permanent Account Number (PAN);

Tax on estimated total income (including the interest from fixed deposit) at the end of the year should be NIL;

Total interest income to be earned should be less than basic exemption limit (Rs.250000 for F.Y. 2017-18)

15H Form:

Persons aged 60 years or more are eligible to submit this form. In addition should adhere to attached conditions:

Person should be resident of India;

He should be Individual/ HUF;

He must have Permanent Account Number (PAN);

Tax on estimated total income (including the interest from fixed deposit) at the end of the year should be NIL;

Taxation of Foreign Salary Income

If you are ever been sent to work on a project abroad, that foreign salary income earned abroad will be taxable in India, provided you are resident in India. The important thing to understand first is the difference between citizenship of a country and residential status. These are two separate concepts. For taxability purpose one needs to consider Residential Status and residential status is determined on the basis of physical presence of an individual in India during the Financial Year. In case of income earned abroad, if you its taxed outside India as well, you can take benefit of DTAA (Double Taxation Avoidance Agreement).

Benefit of DTAA (Double Taxation Avoidance Agreement):

For the purpose of charge of Income Tax, what is significant is the first Receipt of Income. So, any money remitted to India would not make it an income received in India. Although foreign salary will be taxable in India, he would be given relief for any taxes paid in foreign for salary earned there. As the name suggests, India has entered into Double taxation avoidance agreements with many countries to make sure that a person’s income is not taxed twice in two different countries.  So, if salary is taxed in foreign country then credit of taxes paid in US on such income may be claimed in India under the Double Taxation Avoidance Agreement (DTAA) entered between India and US. The benefit of double taxation is provided broadly in two ways i.e; Exemption from double taxation method and Tax Credit (Relief) method.

*Knowing your Residential Status as per Income Tax Act:

An individual is said to be Resident in India for the financial year if any of the following condition is satisfied:

He/She is in India for a period of 182 days or more in that financial year. OR

He/She is in India for 60 days or more during that financial year and has been in India for 365 days or more during 4 previous year immediately preceding the relevant financial year. (In case you leave India for the purpose of employment outside India then consider 182 days instead 60 days.)  

For computing the period of stay, it is not necessary that the stay should be for a continuous period.

For Expert assistance in claiming DTAA benefits contact us at +91 9900397777/ info@preethamandco.com

As the nation pays tribute to Father of the Nation, Mahatma Gandhi on his 148th birth anniversary on October 2, we must sit back and ponder at the values and principles that he stood for all his life. Truth, non-violence, austerity, minimalistic and simple life style, perseverance, strength of character was his hallmark. He is one of the greatest leaders who have shaped and influenced world’s history. With his unshakable faith in himself and the people, humility, conviction and love for the nation, he showed the world that true strength lies not in brawn but brain, not in controlling but serving the people, not in revenge but forgiveness and not in changing the world but changing yourself. He once said: “I claim to be an average man of less than average ability. I have not the shadow of a doubt that any man or woman can achieve what I have, if he or she would make the same effort and cultivate the same hope and faith.” The message is loud and clear that even a person with average skills can achieve amazing feats provided he is committed and makes consistent efforts towards his goal. We must imbibe these qualities to achieve success in all your endeavour’s; this only would be a worthy tribute to the revered leader.

All about Bitcoin.

"Rs.1,000 investment in the Bitcoin in 2010 would have got you Rs.6.6 crore today." So its worth knowing something about it. One Bitcoin is currently equivalent to Rs.2,79,419.00 (as on 01st October 2017)

Bitcoin is a worldwide crypto-currency and digital payment system. Its called the first decentralized digital currency, since the system works without a central repository or single administrator. It was invented by an unknown programmer. Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally. Bitcoin is received, stored, and sent using software known as a Bitcoin Wallet.