“Central Board of Direct Taxes (CBDT) has decided to extend the due date for filing of ITRs & Tax Audit Reports from 30th Sep,2019 to 31st of Oct,2019”

The Central Board of Direct Taxes (CBDT) has decided to extend the deadline for filing of ITRs and Tax Audits Reports by a month.  Given the relentless demands by Chartered Accountants (CAs) and tax consultants, the CBDT has given a breather till October 31. It will also provide some respite to smaller companies too, who are struggling with GST filings.

The CBDT tweeted: “On consideration of representations recd from across the country, CBDT has decided to extend the due date for filing of ITRs & Tax Audit Reports from 30th Sep, 2019 to 31st of Oct, 2019 in respect of persons whose accounts are required to be audited. Formal notification will follow”.

Govt Likely To Amend EPF Rules To Allow Switching From EPS To NPS

On 23 August, the Ministry of Labour and Employment had issued a preliminary draft on "Amendment in the Employees Provident Funds and Miscellaneous Provisions (EPF & MP) Act, 1952." The last date to submit one's comments on the draft bill which proposes major changes to EPF Act is 22 September.

Here are some of the major amendments proposed:

1. Allow replacement of EPS with NPS

The bill proposed to allow EPF members to choose to switch their contribution currently made towards EPS (Employees' Pension Scheme) to NPS (National Pension Scheme).

At present, while the whole of employees' contribution goes towards EPF, 8.33 percent of the 12 percent contribution made by the employer is made to EPS.

"It is proposed to insert new sections viz. sections 168 and 16C in the Act to give option to EPFO subscribers to opt for National Pension System (NPS), etc....in lieu of benefits under EPF & MP Act," the draft bill said.

"The option to revert back to mechanism under EPF & MP Act is also being proposed," it added.

2. Definition of wages for EPF contribution calculation

The draft bill seeks to change the definition of 'wages' as per the EPF Act to that with the recent Code on Wages, 2019 bill passed by Parliament.

"In the present form the computational basis for determining provident fund contribution is basic wage, DA and retaining allowance. The amendment seeks to fix computational basis at 'wage' with the further stipulation that allowances paid above 50% or as notified percentage, of all remuneration will be included in wage," it said.

This will affect those that earn a basic salary of less than Rs 15,000 per month.

As per a recent Supreme Court hearing, if the basic pay does not exceed Rs 15,000 per month, the calculation of EPF contribution should take into consideration all other allowances (when it exceeds 50% of the pay), except for house rent allowance, overtime allowance, bonus, commission or presents by the employer.

Employers may either reduce the take-home salary or increase their CTC per employee.

3. Employee contribution to EPF to be made optional if below a certain threshold of monthly income

"The budget -2015-16 (Para 62), included an announcement that for employees below a certain threshold of monthly income, contribution to Employees Provident Fund (EPF) should be optional, without affecting or reducing the employer's contribution.

Therefore, flexibility has been proposed to introduce in the Act to prescribe different rates of contribution for such period for any class of employee. This flexibility will enable, through notification, modification of the rates of contribution depending on various factors like age, income, gender etc. No change in employers' contribution has been proposed," the bill said.

4. Making EPF contribution a priority over debt in case of bankruptcy

The bill seeks to reword the EPF Act for the section that provides for priority of payment of contribution over other debts.

The section mentions Presidency Towns Insolvency Act, 1909 and Provincial Insolvency Act 1920, both of which have been subsumed by the Insolvency and Bankruptcy Code, 2016.

The substitution will be made accordingly.

5. Exemption of certain establishments from EPFO

"The present Act does not stipulate any pre condition for grant of exemption. The Standing Committee on Labour in its 26th report on "Exempted Organisations I Trusts I 

Establishments from EPFO: Performance, Issues and Challenges" presented to Lok Sabha on 07.04.2017, had, inter-alia, recommended that proper strong guidelines may be prepared with regard to past performance, net worth, group performance etc. as well as minimum strength of workers, collections, contributions, corpus of the companies establishments,to grant exemption," the bill said.

Updates on the latest GST decisions and reactions of the latest round of stimulus.

The Goods and Services Tax (GST) council meeting in Goa concluded hours after after the government slashed corporate taxes, aiming to reviving private investment and lifting growth from a six-year low that has caused job losses and fueled discontent in the countryside.

Domestic companies will pay 22 per cent tax on their income from April 1, 2019, versus 30 per cent previously, Finance Minister Nirmala Sitharaman said Friday. The effective rate, including all additional levies, will be 25.2% and applicable on companies that aren't availing any incentives or exemptions.

Sitharaman's announcements and the GST council's meeting comes at a time when India's annual economic growth fell to a 25-quarter low of 5% in April-June period.

GST Council Meeting Outcome-

1. Hotel Tariffs Rs. 7,500 and above GST at 18%.

2. Hotel Tariffs Rs. 1,000 upto 7,500 GST at 12%.

3. Hotel Tariffs below Rs. 1,000 GST at Nil rate.

4. Outside Catering GST rate reduced at 5%.

5. Diamond Job-work GST rate reduced at 1.5% and Other Job-work GST rate reduced to 12% from 18%.

6. Council amended rules regarding Refund by Appellate Authority.

7. Council amended rules regarding GST Practitioners and Consumer Welfare Fund.

8. Cups/Plates made from Flowers leaves GST rate Nil from 5%.

9. GST Annual Returns GSTR-9, 9A Optional for those with turnover upto 2cr for FY 17-18 & 18-19.

10. Those with turnover above 2cr to still file GSTR9.

11. No relief in case of GSTR-9C as it’s applicable only where turnover exceeds 2cr.

12. GSTR-9 also to be made “Saral".

"Revised Rates of Minimum wages for various scheduled employment in Central which is effected from 

 1^stOctober’19"  

Updates by ESIC Department where the changes has been made w.e.f. 1-10-2019

·         Employees must be registered online on the date of appointment, the online system shall                      allow maximum 10 days to register the new employee.      

·         Contribution against employee must be deposited within the due date. You shall not be                        able to deposit contribution online after 42 days from the end date of the contribution                          period.

Income Tax Deductions & Exemptions FY 2019-20

The Income Tax Slab Rates remain unchanged for the Financial Year 2019-2020. However, Individuals with Taxable Income up to Rs 5,00,000/- per annum may avail Tax Credit up to Rs 12,500/- under Section 87A on the Income Tax payable. Thereby, implying that Individuals with Income up to Rs 5,00,000/- will not have any Tax Liability for the Financial Year 2019-20 and Assessment Year 2020-2021. Standard Deduction benefit has been increased to Rs 50,000/- for the Financial Year 2019-20. For FY 2019-20, Income Tax Deductions and Exemption is available to reduce the Taxable Income, allowing Individuals to minimize the Tax Implications.

Income Tax Calculation for Various Income Slabs 

Income Tax Slabs and Rates For Financial Year 2019-20

Income Tax Deductions and Exemption available under various Sections and the investment options available to the Individuals.

Income Tax Deductions U/S 80C

Income Tax Deduction and Exemption is available to the Individuals under Section 80C, 80CCD, 80CCC up to the extent of Rs 1,50,000/-. These sections are now effectively clubbed under Section 80C with the aggregate deduction ceiling of Rs 1,50,000/-. Investment options for Income Tax Deduction and Exemption under Section 80C has been shared in form of image (pic above). Please refer to the link shared below to know in detail about the Investment plans.

Public Provident Fund

ELSS Funds

National Savings Certificate (NSC)

Life Insurance Plans

Senior Citizens Savings Scheme (SCSS)

Repayment of Principal of House Loan taken is also eligible for Deduction along with Registration Fee and Stamp Duty paid towards the same. However, the benefit is restricted to the maximum deduction limit of Rs 1,50,000/-. Provided the Individual does not transfer the property before expiry 5 years from the Financial Year in which it was obtained.

The deduction on Registration Fee and Stamp Duty is also available to Individuals who have not availed Home Loan.

Income Tax Deductions U/S 80 CCD (1b)

Investment up to Rs 50,000/- is eligible for deduction up and over the deduction available U/S Section 80C on Contribution made to National Pension Scheme (NPS) and Atal Pension Yojana (APY).

Individuals may invest in both the schemes and avail cumulative deduction upto Rs 50,000/- on the investment.

Income Tax Deductions U/S 80D

Further deductions up and above the Deductions availed U/S 80C & 80CCD (1b) is available U/S 80D on payment made towards Health Insurance Premium. It covers the premium paid on the Health Insurance cover for self and family. Deduction of Rs 25,000/- can be availed for the premium paid for Self, Spouse and dependent children. Deduction goes up to Rs 50,000/- on premium paid towards the Mediclaim Insurance for Senior Citizen parents.

Income Tax Deductions U/S 80DDB

Tax Deduction to the extent of Rs 40,000/- incurred as treatment cost for specified medical disease for Self or dependent relative is also available. In case of Senior Citizens the limit goes up to Rs 1,00,000/-.

This deduction is available only in cases of specified diseases such as Cancer, Kidney Failure, AIDS, Haemophilia, AIDS, Dementia, Neurological Disorder, etc.

Tax Deduction U/S 80E

Deduction is also available on the education loan for higher studies (Graduation or Post Graduation) in the fields of Medicine, Engineering, Management, or Science. The deduction is available from the 1^st year and subsequently for next 7 years. Deduction is available on the EMI paid as interest on the loan.

Tax Deduction U/S 80G

Deductions are also available for the donations made to notified NGO’s, Charitable Institutions are eligible for 50% or 100% deduction as provided under the act. However the maximum limit to the deduction claimed is 10% of the Adjusted Gross Total Income after claiming other deductions.

Some of the Prescribed Notable Institutions where 100% Deduction is available without qualifying limit:

National Defense Fund

Prime Minister Relief Fund

Swacch Bharat Kosh

National Sports Fund

National Children’s Fund

Clean Ganga Fund and many more….!!!

Tax Deduction U/S 80GG

Deduction available in respect of House Rent Paid, the least of the following:

Rent paid less 10% of the total income. Rs. 5000/- per month. (Maximum Deduction available is 60,000/-) 25% of total income, provided that Assesse or the spouse or minor child should not own residential accommodation at the place of employment, or anywhere else and is not receipt of House Rent Allowance. The deduction is available provided the Individual, does not receive any benefit of deduction U/S 10 (13A) for House Rent Allowance.

Tax Deduction U/S 24(b)

Deductions up to Rs 2,00,000/- is available on the interest paid on the Loan availed for purchase/construction of self occupied House Property. However the acquisition and construction of such house property should be completed within 5 years from the end of Financial year in which Home Loan was taken. The sum should be borrowed on or after 01/04/1999 to be eligible for deduction.

Note: As announced in the Budget 2019 for FY 2019-20, Additional Deduction of Rs 1,50,000/- is available on affordable housings up to the value of Rs 45 lakhs. The deduction is applicable on loans taken up to 31^st March 2020.

Tax Deduction U/S 80DD & U

Deduction of Rs 75,000 U/S 80DD is available to meet the expenses and medical treatment of disabled dependent person. In case of severe disability (more than 80%) the Deduction limit is raised to Rs 1,25,000/-.

Deduction of Rs 75,000 U/S 80U is available to meet the expenses and medical treatment of Resident Individual (Self). In case of severe disability (more than 80%) the Deduction limit is Rs 1,25,000/-.

Tax Deduction U/S 80TTA/B

Deduction from Gross Total Income up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account (not time deposits) with a bank, co-operative society or post office.

The interest free income has been extended up to Rs 50,000/- in case of Senior Citizens under Section 80TTB.

Tax Deduction U/S 80EE

Additional Deduction of Rs 50,000/- on interest paid on home loan is available for 1^st time home buyers on loans up to 35 lacs, provided the value of house does not exceed 50 lacs. This deduction is up and above the Rs 2,00,000/- available on account of interest paid on loan. Deduction is available per Financial Year till the period the loan has been fully repaid.

Loan should be sanctioned by a Financial Institution or Housing Finance Company, provided Loan must be sanctioned between 01/04/2016 to 31/03/2017.

Income Tax Deductions and Exemptions under Section 80C to 80U discussed taken in to consideration.

Income tax Slabs & Rates FY 2019- 20, AY 2020-21
Income tax Slabs	General Category	Sr.Citizen	Very Sr. Citizen
Upto Rs. 2. 5Lakh	NIL	NIL	NIL
Rs.2.5 Lakh to 3.0 Lakh	5%	NIL	Nil
Rs.3.0 Lakh to Rs.5.0 lakh	5%	5%	NIL
Rs.5.0 Lakh to Rs.10.0 Lakh	20%	20%	20%
Above 10.0 Lakh	30%	30%	30%

Surcharge:

1. If the total income between Rs 50 Lakhs and Rs 1 crore, a surcharge of 10% will be levied.
2. 15% surcharge on income tax if the total income is over and above Rs 1 cr.

Employees Provident Fund Or EPF Rules For Employer

Hello, in this post, we will discuss the guide to EPF rules for employer. We will cover the following:

• Employees Provident fund act 1952 – An Introduction
• Recent changes to EPF
• Deduction of EPF
• EPF rules for employer
• Regular EPF – Related tasks for employers

Employees Provident Fund Act, 1952

Employees Provident Fund was established in the year 1952. Hence, the Act is named as Employees Provident Fund and Miscellaneous Provisions Act, 1952. This act extends to the whole of India except Jammu and Kashmir.

Basically, the Provident Fund is a welfare scheme for the benefits of the employees. Both employer and employee contribute their share of amount but the whole of the amount is deposited by the employer. The employer deducts the employee share from the salary of the employee. So, the accumulated amount can be withdrawn if certain conditions are met.

Recent changes to EPF

§  The claim settlement period for PF withdrawal is now just 10 days

§      Aadhar Card is compulsory for pensioners and subscribers.

§  EPF contribution rate for the newly recruited female employees has been reduced from 12% to 8%. This will be available to the new female employees for the first 3 years of employment.

§  Employers must consider special allowances paid to the employees as a part of the “Basic Wage” for deduction towards provident fund.

  §    EPFO subscribers can now withdraw 75% of their PF after 1 month of       unemployment. Also, the remaining 25% of the amount can be withdrawn after 2   months of unemployment.

  §   Women employees resigning to get married can withdraw their 100% without waiting    for two months.

  §  TDS will attract at the time of payment if the PF accumulated balance is more than Rs. 30,000.

  §  The facility of offline withdrawal has been completely withdrawn.

EPF Deduction

  §  Contribution by an employer -The contribution made by the employer is 12% of the basic salary of the employee. However, this 12% is further subdivided into:

  §  Employee Pension Scheme (EPS) – 8.33%

  §  Employee’s Provident Fund (EPF) – 3.67%

  § Contribution by an employee – Contribution towards EPF is deducted from employee’s salary. This is 12% of the basic salary of the employee.

We all know that, if Basic+DA is less than Rs.15000, then both the employer and employee contribution will be the same. If the amount exceeds Rs.15,000 then you have an option to either contribute based on the original amount or restrict the calculations to Rs. 15,000.

EPF rules for employer

We know that the contributions from employees as well as employers get added to the EPF. The latest changes made in the EPF rules are the following –

Revise of minimum salary limit – The employee with a monthly salary less than or equal to 15000 will have to contribute mandatory towards EPF.

Change in the pension amount – The minimum monthly pension amount was set at Rs. 1000 for the widow of a member of the Employees’ Provident Fund. For children and orphans, it is set at Rs. 250 and 750 per month respectively. The pension amount will be calculated as per the average salary of the last 60 months.

Insurance Coverage – The coverage amount has now been increased to Rs. 3,00,000 per member.

Employer Contribution towards EPS – The employer’s contribution towards EPS is increased to Rs. 1,250 per month irrespective of the salary even if it is below or above Rs. 15,000 per month.

Change in employee limit – Even though an organization has only 10 employees they are eligible for EPF contribution.

Withdrawal of EPF –  Withdrawals are made from EPF account for financing an insurance policy, buying or building a house and other situations mentioned in the EPFO website.

EPF-related tasks for employers

  §  PF Registration

  §  Correction of Personal Details

  §  Generate UAN

  §  Upload KYC

  §  PF Payment

  §  PF Returns

  §  Inform UAN number and EPF ID

The employer who is a part of the EPF scheme has to do some regular tasks. They have to pay to EPFO for the administrative expenses. By the arrival of UAN and online portals, these tasks have become a lot easier.

An employer can also create a trust to manage the EPF contribution. For this reason, an employer is not required to remit EPF contribution as it goes to the private trust. Instead, the trust should provide an equal or higher return than the EPFO.

  §  PF Registration

The employer with the help of Form 11 will register a new employee into the EPF scheme. However, it is not submitted to the EPF office but the employer keeps it with himself and uses it to fill up the online form.

  §  Correction of Personal Details

The employer should verify the authenticity of the employee. Therefore before linking UAN with the Aadhaar, the errors in the personal details of members like wrong spelling should be fixed by the employer.

  §  Generate UAN

The employer generates the UAN for the new employee who does not have an existing UAN. To make a new UAN, the employer has to login UAN employer portal.

  §  Upload KYC

KYC is mandatory for the withdrawal of EPF. The EPFO needs the PAN, Bank account number and Aadhaar or other KYC details of each EPF member. Hence, It is the responsibility of the employer to furnish the KYC details of its employees. But older employees may not have these KYC details.

The employer needs to verify the details before giving approval for an EPF member of the company to upload his/her KYC details online.

  §  PF Payment

An employer has to pay the EPF contribution to the EPFO every month. The employer has to pay EPF contribution within 15 days of the next month. If the deadline is missed the company will be in the defaulter list and they have to pay a penalty for the default period.

  §  PF Returns

An employee has to file a return of monthly payment by logging in to UAN employer portal and filling the ECR. The employer gives details of the employees, their salary as well as contribution. Then EPFO updates the passbook of every employee. It is tallied with the aggregate of the EPF amount paid and employer files an annual return.

  §  Inform UAN number and EPF ID

The employer should inform about the UAN and EPF member ID to its employee. It is usually printed in the salary slip. The employer persuades its employees to activate their UAN in order to do EPF related tasks online.

Here ends the post about the EPF rules for employer.