FREQUENTLY ASKED QUESTIONS


Filing of Form 15CB is mandatory only when the remittance or the aggregate of such remittances exceeds 5 lakh rupees during the Financial Year (i.e., When Part C of 15CA is required to be filed).


An Indian Party (IP) / Resident Individual (RI) which has made an Overseas Direct Investment (ODI) has to submit an Annual Performance Report (APR) in Form ODI Part III to the Reserve Bank by 30th of June every year in respect of each Joint Venture (JV) / Wholly Owned Subsidiary (WOS) outside India.


The BO /PO of a foreign entity, excluding a Liaison Office, are permitted to acquire property for their own use and to carry out permitted/incidental activities but not for leasing or renting out the property. However, entities from specified countries require prior approval of the RBI to acquire immovable property in India for a BO/PO. BO's/LO's/PO's have general permission to carry out permitted/ incidental activities from leased property subject to the lease period not exceeding five years.


The annual return on Foreign Liabilities and Assets (FLA) is required to be submitted directly by all the Indian companies which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year i.e. who holds foreign Assets or Liabilities in their Balance Sheets.


SPICe+ is the only form for the incorporation of all types of companies. Yes, it is sufficient for the entire process of Incorporation.


In the case of an Indian Active Company, Form MGT-7, and AOC-4 and in the case of a Foreign Company, Form FC-3.


A person is allowed to be the Director of a maximum of 20 Companies provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.


For the Purposes of Rule 11UA (2), An internal Auditor cannot issue a Share Valuation Certificate.


Carve-in’s and Carve-Outs are the main differences between IND AS & IFRS. Carve-outs are the differences from IFRS which are due to differences in application of accounting principles and practices and economic conditions prevailing in India while Carve-ins are the additional guidance which are given over and above IFRS


Digital Signature Certificates (DSC) are the digital equivalent (that is electronic format) of physical or paper certificates. Examples of physical certificates are drivers' licenses, passports or membership cards. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver's license identifies someone who can legally drive in a particular country.

Likewise, a digital certificate can be presented electronically to prove your identity, to access information or services on the Internet or to sign certain documents digitally.


Alcohol for human consumption, Electricity, Petroleum Products like Petroleum crude, motor spirit (petrol), high-speed diesel, natural gas, and aviation turbine fuel, etc, does not fall under the purview of GST in India at present. However, the taxes for these are attracted as per the structure before the introduction of GST.


Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country.

Exports will be treated as zero-rated supplies. No tax will be payable on exports of goods or services, however, credit of input tax credit will be available and the same will be available as refund to the exporters. The Exporter will have an option to either pay tax on the output and claim refund of IGST or export under Bond without payment of IGST and claim a refund of Input Tax Credit (ITC).


Yes, but only those activities which are specified in Schedule I to the CGST Act / SGST Act. The said provision has been adopted in the IGST Act as well as in UTGST Act also.


Composite supply is a supply consisting of two or more taxable supplies of goods or services or both or any combination thereof, which are bundled in a natural course and are supplied in conjunction with each other in the ordinary course of business and where one of which is a principal supply.

Mixed supply is a combination of more than one individual supplies of goods or services or any combination thereof made in conjunction with each other for a single price, which can ordinarily be supplied separately.


 It means that the liability to pay tax is on the recipient of the supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply.


The threshold for composition scheme is Rs. 150 Lakhs of aggregate turnover in the preceding financial year. The benefit of the composition scheme can be availed up to the turnover of Rs. 150 Lakhs in the current financial year.


All registered persons having the same Permanent Account Number (PAN) have to opt for composition scheme. If a registered person opts for the normal scheme, others become ineligible for the composition scheme.


Refund of the unutilized input tax credit is not allowed in cases where the goods exported out of India are subjected to export duty - as per the second proviso to Section 54(3) of CGST/SGST Act.


It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income.

These forms can be downloaded from www.incometaxindiaefiling.gov.in/home


As per the FEMA Act,

An Indian Citizen who stays abroad for (a) employment/ carrying on business or (b) vacation outside India or (c) stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Persons posted in U.N. organizations and officials deputed abroad by Central/ State Government and Public Sector Undertakings on temporary assignments are also treated as non-resident.

As per the Income Tax Act,

An individual is Non-Resident Indian if any of the following conditions are not satisfied:

  • He stayed in India for 182 days or more during the previous year, or
  • he stayed in India for 365 days or more during the four preceding years and stays in India for at least 60 days (182 days in case of an Indian citizen or a person of Indian Origin coming on a visit to India or in case of an Indian citizen going abroad for employment) during the previous year.

The following chart highlights the tax incidence in the case of different persons:

                              Nature of income

 

                  Residential status

   ROR (*)

    RNOR (*) 

   NR (*)

Income which accrues or arises in India

Taxable

Taxable

Taxable

Income which is deemed to accrue or arise in India

Taxable

Taxable

Taxable

Income which is received in India

Taxable

Taxable

Taxable

Income which is deemed to be received in India;

Taxable

Taxable

Taxable

Income accruing outside India from a business controlled from India or from a profession set up in India

Taxable

Taxable 

Not    Taxable

Income other than above (i.e., income which has no relation with India)

Taxable

Not Taxable

Not  Taxable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*) ROR me resident and ordinarily resident, RNOR me resident but not ordinarily resident, NR me non-resident.


Section 14 of the Income-tax Act has classified the income of a taxpayer under five different heads of income, viz.:

  1. Salaries
  2. Income from house property
  3. Profits and gains of business or profession
  4. Capital gains
  5. Income from other sources

No, you cannot claim the deduction of personal expenses while computing the taxable income. While computing income under various heads, a deduction can be claimed only for those expenses which are provided under the Income-tax Act.


Form-16 is a certificate of TDS. In this case, it will not apply. However, your employer must issue a salary statement.


The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law is called tax audit.

The report of tax audit is to be given by the chartered accountant in Form Nos. 3CA/3CB and 3CD.


A person covered by section 44AB should get his accounts audited and should obtain the audit report on or before 30th September (extended to 30th November for the persons liable to file Transfer Pricing Form) of the relevant assessment year.


Yes, the residential status of a person earning income is very much relevant for determining the taxability of such income in his hands.

Taxability of any income in the hands of a person depends on the following two things:

  • Residential status of the person as per the Income-tax Law; and
  • Nature of income earned by him.

 Companies

31st October

Any person (other than companies), whose accounts are to be audited and the working partner of a firm whose accounts are to be audited

31st October

In case of Companies for which Transfer Pricing provisions are applicable

31st December

In all other cases

31st July


Yes. In such a case, the name and location of the branch or the designation of the person responsible for deducting/collecting tax, whichever is applicable, should be clearly given in the application for allotment of TAN.


In respect of various items liable under TDS, the Income-tax Law has prescribed a threshold limit. If the expenditure incurred/payment made during the year is below the threshold limit, then there is no requirement to deduct tax at source.