Finance Facts: Education

10 Best Money Management Tips

July 12, 2017

Hectic jobs, busy schedules through the week and no time for self, means that our personal finances take a back seat.

To ensure that you have the essentials covered, we have designed a 10-week action plan for you. Just one task every week for 10 weeks (most of them do-able in just an hour on the weekend) will ensure that you are feeling at the top of your finances.

Start with automating your bill payments: Rent, electricity, WiFi, cable bills are monthly affairs. Do away with manually paying off each by setting an automatic debit instruction. This one task takes this mundane monthly activity off your plate and you can focus on the more important or interesting things.
Reduce the number of bank accounts that you have because one bank account is all you need: Your task for week 2, is to consolidate all your bank accounts into one and make your life easier. This will help you see all of your savings in one place and know exactly how liquid your money is.
Third week task is to reduce your credit cards to one. This exercise helps you use only one credit card for all your bill payments and other expenses. This removes the task of keeping tabs on multiple card statements. Besides, having only one credit card helps you pay off the debt every month on time and avoid falling prey to the vicious debt cycle.
Your next task is to calculate how much do you owe in terms of loans and debts to other institutions, to arrive at your personal net worth. This will indicate how financially sound you are. Outstanding credit card bills, student loans, car loans, home loans or any other personal loans - make a list of how much do you owe and how much time do you have remaining to pay it off.
Once you know how financially sound you are, you need to check if you have the right health insurance plan in place. You need to get this for your family (dependents) as well. Along with safety from health hazards, getting insured also gives you tax benefits.
Once your health is secure, get on with financially cushioning yourself with Rs. 1 lakh. Make this your SOS fund that you invest in debt funds and do not disturb, for random expenditure. Strive towards creating this fund, in your week 6. This amount will give you the peace of mind you didn’t have earlier.
After safeguarding your loved ones and yourself, you now need to communicate the same to them. Make sure your family always knows where all your money is. This will help them assist you, should you be in a difficult situation and do not have access to important documents.
In week 8, start with insuring your life. Understand the difference between term insurance and life insurance. A good rule of thumb is to insure for 300 times the monthly amount you need. Stay insured, stay safe.
After most of your familial responsibilities are taken care of, you need to focus on getting the optimal usage of your income. Start saving taxes by investing in ELSS funds to get maximum benefit from your investments, as compared to other tax-saving instruments.
You have a pretty much taken care of all your responsibilities at present. It’s time to plan ahead and think of retirement. If you haven’t started already, you’ve got to start right away and start putting money aside for your old age, when you would be retired and your money would be facing inflation.
These tasks will get your finances in order for a long time to come. The time you then save and the money you invest well, will help you enjoy the finer things in life and attain peace of mind, along with financial security.

Business

GST : F.A.Q on GST Registration and Migration

July 10, 2017

Which businesses are categorised as existing taxpayers?

Any legal entity registered under any tax laws as prescribed by the state or central government is considered an existing taxpayer. These include like Value Added Tax Act, Central Excise Act and Service Tax Act. Others include entry tax, luxury tax, and entertainment tax, except for those levied by local bodies.

How must one enroll into GST?
All existing taxpayers will be moved to GST. A GST portal has been created for taxpayers; there is no paper-based enrollment. Enrollment is free of charge

Can you use your existing login for the GST portal?
When you first login to the GST Common Portal, you need to provide the username and password that you received from the State VAT or Centre Tax Department. However, for the subsequent login, you need to create a username and password during the enrolment procedure at the GST Common Portal. You can then use the username and password that you created to login at the GST Common Portal.

What to do when you haven’t received the provisional ID?
One must contact the helpdesk, who will in turn let you know what went wrong with your application. If the problem of issuance still persists, then you must get in touch with the state VAT department. It is also possible that you have received the id, but it’s not working. This may happen if you’ve changed your PAN after December 2015. If that is the case then you must contact the commercial tax or VAT officer and ask them to communicate your new PAN along with VAT-TIN to GSTN. Say if you haven’t changed your PAN, then immediately get in touch with the help desk.

What to do in case of a forgotten password?
Clicking on the ‘Forgot password’ link will give you an OTP, which will be sent to your registered email address and phone number. Use it to reset your password. If you don’t get your OTP on time, hit ‘resend’ and you can get it again. Please note that the OTP you receive is valid for 10 minutes.

Should I give my tax professional’s email address and contact number during GST enrolment?
No, it is not but you have to give out the details of your authorized signatory appointed by you. It is imperative to know who can be an authorized signatory. It depends on which type of business it is. Say if it’s a proprietor type, then the proprietor or anyone appointed by the latter; if it’s a partnership, any authorized partner or anyone authorized by them. If it’s a LLP, company, society or a trust, the person authorized by the board or governing body can act as an authorized signatory.

What are the details that need to be prefilled in the enrolment application?
PAN of the business, legal name of the business, name of the state, reason of liability to obtain registration. You can find your state jurisdiction, ward, circle, sector number, and centre jurisdiction on the VAT registration certificate.

What is DIN?
Director Identification Number given to the directors of a company by the Ministry of Corporate Affairs.

What is the principal place of business and additional place of business?
It’s the primary location within the state where the business is done from. An additional place of business is the place of business where taxpayer carries out business other than the principal place of business.

What is HSN and SAC code?
HSN stands for Harmonized System of Nomenclature that is an internationally accepted product coding system used to maintain uniformity in classification of goods.

SAC stands for Service Accounting Codes which are adopted by the Central Board of Excise and Customs (CBEC) for identification of the services.

Which bank should I provide in the enrolment application?
Submit details of the bank used for carrying out business transactions.

Can I submit my enrolment application at GST common portal without electronically signing the application?
Yes you can, but you’ll have to sign the application at some point as allowed under the GST Act. Electronically signing the application is mandatory for enrolment by companies, foreign companies, LLPs, FLLPs. However, for others is not mandatory.

What to do when your DSC is not registered with GST common portal?
You cannot submit your application if your DSC is not registered with the portal. So the first step would be to get it registered.

What does one mean by ARN?
An Application Reference Number is a unique number assigned to each transaction completed at the GST Common Portal. If you don’t get your ARN within fifteen minutes of your enrolment step, you will get an email detailing out instructions to how to go about it.

In case of losing the internet connection, can one retrieve the saved application?
Go to Dashboard > My Saved Application menu. Click the Edit button to retrieve the saved Enrolment Application.

What if there’s a mismatch with the PAN validation?
You need to resubmit your application with valid details.

My DSC has expired or revoked?
One needs to re-register his/her valid DSC with GST. Login to the portal with valid credentials. Go to Dashboard > Register/ Update DSC menu.

What does e-signature and how does it work?
It’s an online signature to facilitate an Aadhar holder to digitally sign a document. Firstly, the applicant selects the ‘submit the e-signature’ on the verification page. Post that, one validates the Aadhar number and one receives an OTP that needs to be entered in the common portal. Once all that is done, the e-signature process is done with.

How mandatory is Aadhar number?
While it is optional to mention your Aadhar number, but in case you want to use your e-sign, it is imperative to fill in your Aadhar number.

Can an enrolment application be rejected?
Yes, it can rejected in case details submitted are not in tandem with what exist on certain documents. The taxpayer, however, will be given a good chance to explain his/her spot.

Can you make changes post submitting the application?
Yes, you can. The amendments include mobile number and email address, which can be changed after the appointed date.

When will the provisional registration certificate be issued?
It will be available for viewing and download at the Dashboard of the GST Common Portal on the appointed date. However, it is imperative to note that the certificate will be available only if the application is submitted successfully.

The final registration certificate will be issued within six months of the documents being verified by central and state officials.

How to Link Aadhaar card to PAN

June 30, 2017

As per a Supreme Court passed on 9 June 2017, if you have Aadhaar, it is mandatory to link it to PAN and mention the same in your tax returns. However, if you don’t have Aadhaar, you can e-file tax returns without the same for FY2016-17.

Now you can link your Aadhaar and PAN through SMS also. The Income Tax Department has urged taxpayers to link their Aadhaar with their PAN, using an SMS-based facility.It can be done by sending an SMS to either 567678 or 56161.

Send SMS to 567678 or 56161 from your registered mobile number in following format:

UIDPAN<SPACE><12 digit Aadhaar><Space><10 digit PAN>

Example: UIDPAN 123456789123 AKPLM2124M

People can also visit the official e-filing website of the department to link the two identities, in both the cases– identical names in the two databases or in case where there is a minor mismatch.

The Income Tax Department has made it easy for taxpayers to link their PAN with Aadhaar with just a 2 step process which does not even require to login or register at the e- filing website. This facility can be used by anyone to link their Aadhaar with PAN.

2 step process to link Aadhaar with PAN

Step 1 :

Just go to www.incometaxindiaefiling.gov.in and click on the link on the left pane – Link Aadhaar

Step 2 :

Provide PAN, Aadhaar no. and ENTER NAME EXACTLY AS GIVEN IN AADHAAR CARD (avoid spelling mistakes) and submit. After verification from UIDAI which is the government website for Aadhaar, the linking will be confirmed.

In case of any minor mismatch in Aadhaar name provided, Aadhaar OTP will be required. Please ensure that the date of birth and gender in PAN and Aadhaar are exactly same.

In a rare case where Aadhaar name is completely different from name in PAN, then the linking will fail and taxpayer will be prompted to change the name in either Aadhaar or in PAN database.

The process of linking Aadhaar with PAN is also available after login to the income tax website.Following are the steps for this :

Step 1.

First register yourself at the income tax e filing portal, if you are not already registered.https://incometaxindiaefiling.gov.in/

Step 2.

Step 3.

On logging in to the site, a pop up window will appear prompting you to link your PAN card with Aadhaar card. If you don’t see the popup, go to blue tab on the top bar named ‘Profile Settings’ and click on ‘Link Aadhaar’.

Step 4.

Details such as name, date of birth and gender will already be mentioned as per the details submitted at the time of registration on the e-Filing portal. Verify the details on screen with the ones mentioned on your Aadhaar card.

Step 5.

If the details match, enter your Aadhaar card number and captcha code and click on the “Link now” button.

Step 6.

A pop-up message will inform you that your Aadhaar card has been successfully linked to your PAN card.

GST Final Rates

June 30, 2017

The Goods and Services Tax is finally about to be rolled out coming weekend and unfortunately for the government, who is leaving no stone unturned to take credit for the biggest tax reform, confusion rules among the small traders.

For instance on as late as 11 June, the GST Council changed the tax rates for as many as 66 items.

The items that witnessed a change in rate included kitchen staples like pickles and mustard to agarbatti, computer printers, cashews, children drawing books and school bags.

This move came within weeks of the Council fitting over 1,200 items into one of the 5, 12, 18 and 28 percent tax slabs. The rates were revised following complaints from various quarters about high tax incidence on various goods and services.

In a relief to SMEs, the Council also increased the threshold of turnover for businesses which can opt for composition scheme to Rs 75 lakh, from Rs 50 lakh proposed earlier.

This allowed traders, manufacturers and restaurant owners with turnover below Rs 75 lakh can opt for the composition scheme and pay taxes at 1, 2, and 5 percent rates respectively.

Here's a table of tax rates on important goods and services, courtesy BMR Advisors, a tax consultancy and advisory firm:

FMCG and retail

HSN	Description of goods	Rate
1904	Puffed rice	Nil
1905	Pappad, bread	Nil
	Water, Tender coconut water	Nil
1901	Mixes and dough	5 percent
1902	Seviyan	5 percent
1905	Pizza bread ,rusks, toasted breads	5 percent
2106	Sweetmeats	5 percent
2009	Fruit juices	12 percent
2101	Roasted Chicory, roasted coffee, yeast preparations	12 percent
2106	Namkeens in ready for consumption form	12 percent
1901-1905	Preparations for infant use, pasta, noodles, pastries, cakes	18 percent
2001-2008	Preserved fruits, vegetables, nuts, fruit jams	18 percent
2101-2106	Extracts, essence and concentrates of tea or mate, sauces preparations , soups, ice-creams, food mixes including instant food mixes	18 percent
2101	Extracts, essences and concentrates of coffee	28 percent
2106	Food preparations not covered elsewhere, protein concentrates, custard powder	28 percent
2202	Aerated waters containing added sugar or sweeting matter or flavor	28 percent plus 12 percent cess
8415	Air-conditioners	28 percent
8418	Refrigerators, freezers and other refrigerating	28 percent
8418	or freezing equipment	28 percent
1905	Biscuits	18 percent
Chapter 61	Articles of apparel and clothing accessories, knitted or crocheted	- 5 percent if value not exceeding Rs 1000 per piece

		- 12 percent if value exceeds Rs 1000 per piece

Chapter 62	Articles of apparel and clothing accessories not knitted or crocheted	- 5 percent if value not exceeding Rs 1000 per piece

		- 12 percent if value exceeds Rs 1000 per piece

Chapter 64	Footwear gaiters and the like parts of such articles	- 5 percent if retail sales price is not exceeding Rs 500 per pair

		- 18 percent for other categories of footwear
Chapter 42	Articles of leather, saddlery, and harness, travel goods, handbags and similar containers; articles of animal gut	- 28 percent
Chapter 71	Natural or cultured pearls, precious or semi- precious metals, metal clad with semi-precious metal and articles thereof, imitation jewellery, coin	- 3 percent

Automobiles

HSN	Description of goods	Rate
87	Electrically operated vehicles, including 2/ 3 wheeled electric motor vehicles	12 percent
8703	Small Cars (length < 4 m ; Petrol < 1200 cc )	28 percent plus 1 percent cess
	Small Cars (length < 4 m ; Diesel < 1500 cc)	28 percent plus 3 percent cess
	Mid Segment Cars (engine < 1500 cc)	28 percent plus 15 percent cess
	Large cars (> 1500 cc)	28 percent plus 15 percent cess
	Sports Utility Vehicles (length > 4m ; engine > 1500 cc; ground clearance > 170 mm)	28 percent plus 15 percent cess
	Mid Segment Hybrid Cars (engine < 1500 cc)	28 percent plus 15 percent cess
	Hybrid motor vehicles > 1500 cc	28 percent plus 15 percent cess
	Hydrogen vehicles based on fuel cell tech > 4m	28 percent plus 15 percent cess
8708	Parts and accessories of motor vehicles of headings 8701 to 8705	28 percent

Information technology - goods

HSN	Description	Rate
8523	Shrink Wrapped software product (on media)	18 percent
8471	Laptops, desktops, peripherals, parts, etc	18 percent
8443	Printers (other than multifunction printers)	18 percent
8528	Monitors and projectors (capable of connecting to ADP)	28 percent
8517	Majority of Networking products	18 percent
8517	Imported mobile phones	12 percent
8517	Domestically manufactured mobile phones	12 percent

Information technology - services

Description of service	Rate
Temporary transfer or permitting the use or enjoyment of any Intellectual Property	12 percent

Electronic supply of software	18 percent (residuary rate)

Software services, ie, development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software	18 percent (residuary rate)

Ambiguity may arise with respect to taxability of electronic software and related services at 12 percent or 18 percent in absence of a specific entry in the rate schedule
IT services including consulting, implementation, advisory	18 percent

Real estate - goods

HSN	Description of goods	Rate
Chapter 72	Steel	18 percent
2523	Cement	28 percent
6802	Marble and granite	28 percent
2515	Blocks of marble and granite	12 percent
Chapter 68	Sand lime bricks and fly ash bricks	12 percent
2505 & 2517	Natural sand, pebbles, gravel	5 percent
8428	Lifts and elevators	28 percent

Real estate – services

Description of service	Input tax credit	Rate
Construction of a complex intended for sale to a buyer, wholly or partly, where value of land is included in the amount charged from customer	Full input tax credit allowed	12 percent

	However, in case there is an excess input flow, no refund to be allowed
Composite works contracts (relating to immovable property)	Full input tax credit allowed	18 percent

Energy

HSN	Description of goods	Rate
2701	Coal	5 percent along plus cess at the rate of Rs 400 per tonne
Chapter 84 and 85	Renewable energy devices such as solar power based devices, solar power generating system, wind mills, wind operated electricity generator	5 percent
Chapter 84 and 85	Spare parts for the manufacture of the aforementioned devices	5 percent
8541	PV cells, modules and panels	5 percent
8417	Industrial or laboratory furnaces and ovens, including incinerators, nonelectric	18 percent
8506	Primary cells and primary batteries	28 percent
9801	Project imports	18 percent

Hospitality

Description of services	Credit eligibility	Rate
Tour operator services	Without credit	5 percent
Hotel accommodation
- Hotel where declared tariff is less than Rs 1000 per day or equivalent	-	Exempt
- Hotel having room tariff more than Rs 1000 and less than Rs 2500	With credit	12 percent
- Hotel having room tariff more than Rs 2500 and less than Rs 5000	With credit	18 percent
- 5 star and above rated hotel where room rent is more than Rs 5000 and above per night per person	With credit	28 percent

Restaurant services
- Restaurant with no AC and liquor license at anytime during the year	With credit	12 percent
- AC or having heating facility or having liquor license or both	With credit	18 percent
- Restaurant services in 5 star or above rated hotel	With credit	18 percent

Air travel booking agent services
- Domestic bookings	With credit	18 percent on commission or 5 percent of basic fare
- International bookings	With credit	18 percent on commission or 10 percent of basic fare

Transportation & aviation

Description of services	Credit eligibility	Rate
Transportation of passengers by air for economy class	With credit of only input services	5 percent
Transportation of passengers by air for other than economy class	With credit	12 percent
Transport of goods by air for outbound cargo	With credit	18 percent
Transport of goods by air for inbound cargo	Without credit	Exempted
Transport of goods by air for inbound cargo		Exempted
Lease of aircrafts to scheduled airlines for scheduled operations	With credit	5 percent
Passenger transport by road
- Renting of motorcab	Without credit	5 percent
- Renting of motorcab (If fuel cost is borne by the service recipient)	Not specified	18 percent
- Transport of passengers, by
(i) Air conditioned contract/stage carriage other than motorcab	Without credit	5 percent
(ii) Radio taxi	Without credit	5 percent

Special category goods/ services

HSN	Description of goods	Rate
Chapter 7, Chapter 10, Chapter 3	Foodgrains, pulses, seafood including fish/shrimps, fresh fruits and vegetables	Nil
Chapter 9, Chapter 17, Chapter 20	Sugar, coffee (other than instant coffee), tea and frozen fruits and vegetable	5 percent
Chapter 24	Tobacco leaves	5 percent on a reverse charge basis
Chapter 24	Other tobacco products	28 percent
Chapter 24	Other tobacco products	Cess rate may range from 71 percent to 204 percent
Chapter 24	Cigarettes and biris	28 percent
		Cess rate may vary from 5 percent + Rs.1591 per thousand units to 5 percent + Rs.4170 per thousand units

If you want to know more about the announced rates, please click on the following links. The following files will be downloaded to your computer, and they contain a complete chapter-wise list of the applicable GST rates on goods and services. (via CBEC)

Download Complete Chapter Wise List of GST Rates for Services

Download Complete Chapter Wise List of GST Rates for Goods

TO Learn about GST Transition Provision CLICK HERE

Finance Facts

10 Best Money Management Tips

GST : F.A.Q on GST Registration and Migration

How to Link Aadhaar card to PAN

2 step process to link Aadhaar with PAN

Step 1.

GST Final Rates

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