Categories
Chartered Accountants

How We Can Save Tax in 2023 in India

Saving tax is an important aspect of financial planning, and with the start of a new financial year, it is essential to start thinking about how to save tax in 2023. Here are some tips to help you reduce your tax liability:

Invest in tax-saving instruments:

The government provides tax benefits to individuals who invest in certain tax-saving instruments. Some of the popular tax-saving instruments include Public Provident Fund (PPF), National Pension Scheme (NPS), Equity-Linked Saving Scheme (ELSS), and tax-saving fixed deposits. By investing in these instruments, you can claim a deduction of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act.

Purchase health insurance:

Medical expenses can put a significant strain on your finances. Therefore, it is a good idea to purchase health insurance. Not only does it provide financial protection against medical emergencies, but it also helps you save tax. You can claim a deduction of up to Rs. 25,000 under Section 80D of the Income Tax Act.

Claim HRA exemption:

If you are a salaried individual and live in a rented accommodation, you can claim House Rent Allowance (HRA) exemption. The amount of exemption is based on the actual rent paid, and the salary structure of the individual. By claiming HRA exemption, you can significantly reduce your tax liability.

Utilize LTA and LTA exemption:

Leave Travel Allowance (LTA) is a component of the salary that can be used for travel expenses. The government provides an exemption on the LTA amount, which is equivalent to the actual travel expenses incurred. The exemption is available for two trips in a block of four years. Therefore, it is a good idea to plan your travel in such a way that you can utilize the LTA exemption.

Donate to charity:

Donating to charity is a noble cause, and it can also help you save tax. Under Section 80G of the Income Tax Act, you can claim a deduction for the amount donated to eligible charitable institutions. The deduction amount varies based on the charity organization.

Opt for the new tax regime:

The government introduced a new tax regime in 2020, which provides lower tax rates but eliminates most of the exemptions and deductions. Therefore, it is important to analyze your tax liability under both the old and new tax regimes and choose the one that is more beneficial.

In conclusion, these are some of the ways to save tax in 2023. It is important to plan your finances and invest in tax-saving instruments to reduce your tax liability. You should also consult a tax expert to ensure that you are availing all the tax benefits available to you.

How DMC Global Can Help To Save Tax:

DMC Global is a Gurgaon-based company that provides a range of financial and investment services, including taxation services. The company’s team of experts includes tax professionals who specialize in tax planning and compliance.

DMC Global’s tax professionals can guide individuals and businesses in Gurgaon to save tax by identifying opportunities to reduce tax liability through various legal and ethical means. They have a deep understanding of the Indian tax system and can provide comprehensive tax solutions that align with their clients’ goals and needs.

The company’s tax services include tax planning and compliance, tax optimization, tax return preparation and filing, tax audits and assessments, and more. They can help clients navigate complex tax laws and regulations, and ensure compliance with all relevant tax laws.

The DMC Global team also stays up-to-date with the latest changes in tax laws and regulations, ensuring that their clients are aware of any new tax-saving opportunities that may arise. They use their knowledge and experience to help their clients make informed decisions and maximize tax savings.

In addition to taxation services, DMC Global provides a range of other financial and investment services, including wealth management, financial planning, portfolio management, and more. They cater to a diverse range of clients, including individuals, small businesses, and large corporations.

In conclusion, DMC Global is a reliable option for those seeking taxation services in Gurgaon. Their team of tax professionals can guide individuals and businesses to save tax in a legal and ethical manner. They provide comprehensive tax solutions and stay up-to-date with the latest tax laws and regulations, ensuring that their clients make informed decisions and maximize tax savings

 

Categories
Income Tax

Factor Associated With Income Tax Services In India

India is full of rules and regulations when it comes to the process of tax calculation. This calculation Income tax services in India is associated with calculating the tax that an assessee is liable to pay. The constitution of India clearly states that in entry 82 of the Union list of schedule VII that the central government has the power to collect a certain amount of tax from the one who gains revenue from the territory.

Although the amount of tax varies from person to person and also differ in situations.

Factors Associated With Income Tax 

The one and most basic factor that decides on how much tax is one are liable to pay is dependent upon one’s income. Here the Assessee could refer to a variety of entities including-

Earning in India

Individuals from abroad

Firms from different sizes( small and medium-sized enterprises and units, multinational corporate companies). The department is a part of the revenue department and is headed by the ministry of finance of the government of India.

In this case Income tax services in India, the department collects the tax from the public and ensures that every step is taken to make a process a successful step. The calculation of the income tax is one of the important steps in determining the tax that an Assessee is liable to pay to the department.

If simply we need to understand from where the tax comes from are-

Income from the salary

It refers to the amount which is received to the employees from the employer. Now here salary can be anything like those of wages, bonus, pension, the advance of salary and so on

Income from the house property

It refers to the income which is obtained from land or building.

Income from business to the profession

As per the income tax act, business refers to trade, commerce and manufacture. As per profession, it refers to the activity that requires intellectual and manual skills such as doctors, engineers, singers and musicians.

Income Tax Services In India

Benefits Of Filing Income Tax Return

Filing the income tax is mandatory for all, also you need to be attentive while filing and to keep all necessary rules in mind. Besides this, there are also many benefits which you will be liable to once you start filing income and adapting Income tax services in India. Let us know to some of those-

A company must file an ITR of whether they have a loss or profit during the financial year.

A person who wants to claim an income tax refund.

ITR is mandatory for a person who holds any assets or financial interest in any entity which is located in India.

Individuals who all are filing ITR will undergo several benefits like those of

Apply for loans from banks

If any individual who wishes to apply for a home loan or personal loan must be a part of ITR. The bank before proving the loan amount will ask the three-year statement of income tax so that they can assure that you are a responsible citizen and paying all duties.

Accidental claim for third party insurance

Filing of ITR can help an individual to get assistance towards accidental claims. It is at the time of claim amount insurance company will ask you to show the ITR record and there you can be benefited.

Helpful in obtaining government tenders

Various service providers, contractors, corporate agencies are dependent upon the yearly income tax return. If one is looking to expand his business or looking to obtain government tenders then they must take into consideration the income tax services of India.

Income tax is a tax that is levied by the government on the financial income of individuals. There are many benefits for an individual if they are fulfilling the services of income tax services in India.

Income Tax Services In India:- India is full of rules and regulations when it comes to the process of tax calculation. This calculation Income tax services in India is associated with calculating the tax that an assessee is liable to pay. The constitution of India clearly states that in entry 82 of the Union list of schedule VII that the central government has the power to collect a certain amount of tax from the one who gains revenue from the territory.

Although the amount of tax varies from person to person and also differ in situations.

Factors Associated With Income Tax 

The one and most basic factor that decides on how much tax is one are liable to pay is dependent upon one’s income. Here the Assessee could refer to a variety of entities including-

Earning in India

Individuals from abroad

Firms from different sizes( small and medium-sized enterprises and units, multinational corporate companies). The department is a part of the revenue department and is headed by the ministry of finance of the government of India.

In this case Income tax services in India, the department collects the tax from the public and ensures that every step is taken to make a process a successful step. The calculation of the income tax is one of the important steps in determining the tax that an Assessee is liable to pay to the department.

If simply we need to understand from where the tax comes from are-

Income from the salary

It refers to the amount which is received to the employees from the employer. Now here salary can be anything like those of wages, bonus, pension, the advance of salary and so on

 Income Tax Services In India

Income from the house property

It refers to the income which is obtained from land or building.

Income from business to the profession

As per the income tax act, business refers to trade, commerce and manufacture. As per profession, it refers to the activity that requires intellectual and manual skills such as doctors, engineers, singers and musicians.

Benefits Of Filing Income Tax Return

Filing the income tax is mandatory for all, also you need to be attentive while filing and to keep all necessary rules in mind. Besides this, there are also many benefits which you will be liable to once you start filing income and adapting Income tax services in India. Let us know to some of those-

A company must file an ITR of whether they have a loss or profit during the financial year.

A person who wants to claim an income tax refund.

ITR is mandatory for a person who holds any assets or financial interest in any entity which is located in India.

Individuals who all are filing ITR will undergo several benefits like those of

Apply for loans from banks

If any individual who wishes to apply for a home loan or personal loan must be a part of ITR. The bank before proving the loan amount will ask the three-year statement of income tax so that they can assure that you are a responsible citizen and paying all duties.

Accidental claim for third party insurance

Filing of ITR can help an individual to get assistance towards accidental claims. It is at the time of claim amount insurance company will ask you to show the ITR record and there you can be benefited.

Helpful in obtaining government tenders

Various service providers, contractors, corporate agencies are dependent upon the yearly income tax return. If one is looking to expand his business or looking to obtain government tenders then they must take into consideration the income tax services of India.

Income tax is a tax that is levied by the government on the financial income of individuals. There are many benefits for an individual if they are fulfilling the services of income tax services in India.

Categories
Blog Research and Insights

Time of Supply under Reverse Charge Mechanism of GST

Our opinion is sought keeping in view:

  • Provisions of CGST Act, 2017 read with CGST Rules, 2017
  • Indian Accounting Standard-37 “Provisions, Contingent Liabilities and Contingent Assets”

Analysis and Facts:

To further analyze the query, it is imperative to quote the relevant provisions under Indian Accounting Standard-37, at this juncture-

Creation of provisions in the books is a normal accounting practice and this is religiously followed upon at end of a financial year / period. The provisions are required to be made in accordance with the applicable IndAS. Our advice has been sought upon the reverse charge liability under GST arise on provision for expenses recognized in Books of Accounts.

As per Indian Accounting Standard 37 “Provisions, Contingent Liabilities and Contingent Assets”

A provision is a liability of uncertain timing or amount.

A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

A provision shall be recognized when:

  1. an entity has a present obligation (legal or constructive) as a result of a past event;
  2. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
  3. a reliable estimate can be made of the amount of the obligation.

If these conditions are not met, no provision shall be recognized.

As per the definition of ‘provision’ as given in IndAS 37 as stated supra it can be said that provision is made in respect of any expense (capital as well as revenue) incurred by an entity. Also, provision is recognized only in cases where the goods or services have actually been received or partially received because as per IndAS 37, ‘provision’ is to be recognized when it has a present obligation as result of past event.

Further in cases where provision is recognized and the invoice has not been raised / received by the supplier / recipient, as in situations where invoice has actually been raised and received, a ‘liability’ will be accounted for the amount of invoice and there would be no role of any estimation. Needless to mention here that for recognizing a ‘provision’ a reliable estimate is required to be made.

As regards treatment of ‘provision’ under GST law is concerned, implication upon the recipient of supply on recognizing the provision for expenses in respect of receipt of goods or services or both is explained below.

GST implications on Provision for expenses made in books of accounts in respect of receipt of goods or services or both (covered under reverse charge mechanism):

a) Payment of GST:

Under reverse charge mechanism the liability of deposition of tax is on the recipient. In this regard the payment of tax depends upon the time of supply which is determined as per Section 12 and 13 of CGST Act, 2017. The GST implications on recipient is explained below:

  1. Goods: As enumerated in Section 12(3) of CGST Act 2017, In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely:
  1. the date of the receipt of goods; or
  2. the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
  3. the date immediately following thirty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the Supplier.

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.

2. Services: As enumerated in Section 13(3) of CGST Act 2017, In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:––

    1. the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
    2. the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply:

Provided further that in case of supply by associated enterprises, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.

b) Input Tax Credit:

ITC can be availed by recipient in regard to tax paid under reverse charge mechanism in case other conditions for availing the ITC are fulfilled.

Conclusion:

It is pertinent to note that date of Receipt of Services is deliberately omitted in Section 13(3) while deciding TOS in case of RCM of services visavis Date of Receipt of goods is the first criteria when TOS is decided in case of RCM of goods. It leads to clear understanding that as in cases where provision for services is made in books of accounts, but invoice has not been received by recipient / issued by supplier, accordingly the time of supply would not be attracted in case payment of any advance has not been made. Consequently, tax would not be required to be deposited by the recipient of supply. However, whenever payment is made to supplier or in case invoice is received and not paid within 60 days of the date of invoice, the 61st day would be regarded as time of supply and payment of tax would be required to be made accordingly.

However if the services are received and there is inordinate delay in receipt of Invoice it is advisable that the first proviso to Section 13(3) is referred to-

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply:

In case the recipient has recognized provision for expenses towards receipt of services in his books of accounts, the date of entry in books by the recipient would be regarded as time of supply and thus payment of tax would be required to be made by the supplier. This situation may be applicable in lesser cases and rather could be used as a tool by the Tax Department to raise demands.

Disclaimer:

Our conclusions are based on the completeness & accuracy of the facts stated therein & assumptions, which if not entirely complete or accurate, should be communicated to us, as the inaccuracy or incompleteness could have a material impact on our conclusions. The conclusions reached & views expressed in the note are based on our understanding of the law & regulations prevailing as of the date of this note as well as our past experience with the tax and / or regulatory authorities. However, there can be no assurance that the tax authorities or regulators will concur with our views.

Legislation, its judicial interpretation & the policies of the tax and / or regulatory authorities are subject to change from time to time & these may have a bearing on the advice that we have given. Accordingly, any change or amendment in the law or relevant regulations would necessitate a review of our comments & recommendations contained in this note. Unless specifically requested, we have no responsibility to carry out any review of our comments for changes in laws or regulations occurring after the date of this note.

Without prior permission of DMCGLOBAL SERVICES LLP, the contents of this study / note may not be quoted in whole or in part or otherwise referred to in any documents. This document is for the specific purpose and we accept no responsibility or liability to any party.