Karnataka Apartment Owners Association

In Karnataka, there are three types of apartment communities that can be formed. A promoter can float a company or cooperative society under KOFA. These are two options. Alternatively, the third option envisaged in KOFA is for the builder/promoter to form an association of owners under the KAOA.

What is the Apartment Owners Association?
Apartment Owners Association is a voluntary organization that is formed by the owners of the apartment. The association is responsible for providing services such as maintenance of amenities and enforcing regulations. It also works for the welfare of the residents by initiating events. The association may or may not be registered. 

Apartment Owners Association is formed under the respective city government association act. At the time of registration, all owners of the apartment should gather in one place. The owners can give a power of attorney to the builder to register the association. The registered association enjoys legal benefits and protects its members.

What are the things required to form the Apartment Owners Association? 
Key things to remember while forming the association:

• To form the association, a minimum of seven members are required. This association includes an apartment owner, a general body, associate member, and a management committee that includes a president, vice president, secretary, and treasurer.
• Create a memorandum which states the name of the society, its objectives, name, and occupation of the residents
• By-laws which is used to govern the society
• The by-laws and memorandum should be printed and duly signed by the members. It is filed with the register of the society and should pay a nominal registration fee.

What are the documents required for registration?
The following documents are required for registration:

• Society name and address
• Duly signed proposal letter by the executive committee that is addressed to the Registrar of Societies
• Associations memorandum
• Proceedings of the first general body meeting
• A standard fee 

What are the benefits of registering the association?
A registered association enjoys all legal benefits. Some of the advantages of a registered  association are:

• Rules violation – If the association is registered, action can be taken against residents who violate the apartment rules such as delay in payment of maintenance fee, late-night partying, residential space used for commercial purpose, etc. 
• Addressing grievance – Grievances such as security, maintenance, new requirements, etc. can be addressed. The registered association can also promote and start cultural activities, community activities, and charitable drives.
• Safety of residents – The association is responsible for ensuring residents security by implementing laws. Which in turn, results in maintaining harmony and discipline within the society. E.g. – Limiting the number of visitors entering the apartments due to the pandemic 
• Legal action against builder – The association can settle disputes with the builder regarding poor construction, for violating building codes, etc. The case can be filed at the National Consumer Disputes Redressal Commission (NCDRC).
• Record maintenance – It is important to maintain the details of common facilities and ownership schemes to ensure transparency and smooth functioning. The information is carried in the Deed of Declaration for future legal purposes.
• Taxation – Paying taxes which includes property taxes, applicable GST, and other taxes becomes easy for a registered association.  
• Banking – It is easy for a registered association to open a bank account and carry out banking procedures.

What are the contents of by-law?
The by-law includes the following:

• The objectives and aims of the society
• The rules and regulations that have to be followed by the residents of the society
• Details of income and expense account
• Details about maintenance fees, penalties, transfer charges, common area expenses, etc.
• Minutes of the apartment general meeting which is held once in six months 
• Details about selecting an association member and office-bearers. It also includes a list of office bearers who can take care of monetary transactions and issue cheques.
• Details on how the association aims to help and maintain harmony among residents
• Any other FAQ’S

Who has the right to cancel the AOA?
The Registrar has the right to cancel the AOA when the association fails to meet statutory obligations and in case of huge disputes among the members of the association. 

What is the timeline to get the association registered?
The association should be registered under the respective state’s Society Registration Act within 3 months and is exempted only in some serious situations.

How are the members of the association elected?
The members of the association are elected unanimously by the members of the apartment. The elected members of the association hold office for one year and re-elections are conducted once a year or mid-year if all the members give mutual consent.

For the local governments such as BBMP, there are additional hidden gems. The KAOA says that each apartment owner is liable to pay local taxes for his or her apartment and proportional undivided share. So that resolves the question of who pays property tax on the common areas. That is not to say the KAOA is perfect. It is a 40 year old law to which many improvements can be made. However, the key point is that a very logical framework already exists.

Reality

Unfortunately, the ground reality today is that very few builders do things the right way. Most apartments have associations registered under the societies act. Banks continue to give mortgages despite the fact that clear title is not passed on to the buyers due to the manner in which transactions are conducted. The registrars and sub-registrars continue to register any document that purports to be an apartment sale deed without paying heed to the requirements placed on them by the KAOA.

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Angel Tax

However, it is time for startups to breathe at ease as angel tax is about to be a thing of past. As per media reports, the income tax department has notified about 120 startups that they are exempted of angel tax.

Business daily Livemint reported that about 150 firms had applied for tax relief of which 120 have received the tag of ‘startup’. The intimation was sent to startups in the last few days under a new scheme announced in February which brings an end the much talked about angel tax in the startup community.

On February 19 this year, the Department for Promotion of Industry and Internal Trade (DPIIT), in an announcement, broaden the definition of a ‘startup’ and exempted investors and entrepreneurs from the so-called ‘draconian’ angel tax. As per the new norms, an entity is a startup up to 10-years of its establishment and its turnover hasn’t exceeded INR 100 crores.

Anuj Golecha, Co-Founder, Venture Catalysts says with the relaxation of angel tax norms, the government has given a major relief to startups. Earlier there were a lot of redundancies, stretched timelines, and red-tapism due to the procedures, which will now be eliminated.

“This move will further ensure a conducive environment and enable quick processes for budding entrepreneurs. These numerous measures have widened the scope of startups and eased investment in startups across the network, which is a very positive development,” he said.

Even though the government has addressed the problem, investors are now keen to understand if they could implement the notification smoothly. Anil Joshi from Unicorn Ventures is sure these reforms will evolve and the government will actively keep making changes as system demands.

“However, if they are not implemented properly then I fear that angels may dissociate themselves from investments as no one wants to get into scrutiny for investment from tax paid income,” he added.

What Next?

Now that angel tax will have been relaxed and it will haunt fewer startups, can India truly be startup nation? Well, honestly – there is a long way to go.

Presently, India stands tall among the top countries as a startup nation. However, at the ground, the government and ecosystem have a lot of work to do to truly call India a startup nation.

From StartupIndia to DigitalIndia, there have been several initiatives that have been kicked off by the central government while on the other side even states have tried to nurture entrepreneurship in their regions. But often while discussing regulator related issues, we often forget to seek Indian Inc’s participation to develop the ecosystem.

“We need active participation from corporates to make the ecosystem more vibrant.  They need to actively involve with startups for a solution and also actively scout for acquisition,” Joshi says.

On the other hand, Lakshmi Potluri-CEO, DCF Ventures says the efforts of both the state and central government have started to show. Having said, rural and non-tech entrepreneurs still need a lot of nurturing and handholding to grow into scalable businesses.

“Entrepreneurs outside tier I cities with great ideas are yet to be tapped and nurtured as access to information/mentors is limited or nonexistent. The ecosystem should look at creating opportunities to showcase a variety of startups to the industry in different domestic, industry shows, global platforms, etc.  Lastly, more cross border best practices exchange from successful ecosystems such as Israel, Germany etc., will be a wonderful opportunity and insight for those who are running such startup/entrepreneurship facilitation ecosystems,” she adds.

Source : Press Reports

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Legal Complainces for StartUps

Startups are prone to go haywire in terms of delivery, execution, and setup costs. Amongst everything, it gets taxing to think and execute tasks related to tax. But this is an important financial element that one can not afford to overlook. A startup may incur losses in initial years and those go unaccounted. But then there are chances to save a new business from further financial losses by shielding it with tax benefits.

Here are five important tax tips for startups useful at many levels – from starting to each stage of progress.

1. Compliance With Tax Norms Makes Life Easier

As a startup, you would want to focus all your efforts and energies in offering better solutions to your customers. The entire concept of compliance is to set you free from other legal requirements and do what you do best – focus on core business. Tax norms help businesses to get clarity on implications of tax in the finances. Once done, the aim should be to have better financial planning by keeping in mind the applicable taxability and other compliance-related expenditures.

2. Hire/Consult Tax Professionals

Professionals in the industry can help you to execute all the necessary formalities, ensuring completion of all those nitty-gritty of the subject matter involved. For some, you will also need advice from tax experts on how to plan your finances by incorporating the tax implications concerned.

Opt for business professional services to ensure complete control over tax-related compliance. Having a professional consultant on-board will also help you prepare for any unforeseen contingencies. Expert opinion in the case of compliance is recommended in case of tax-related compliance queries.

3. Learn About the Broad Norms

Awareness plays a major role when it comes to knowing the legalities involved in running a business. And since the tax is one of the core concerns that new businesses have, an overall & general know-how becomes indispensable. It is essential that startups get acquainted with the applicable laws and provisions. Complying with such standards may prove to be a daunting task given the wide scope and comprehending deeper aspects involved. The Income Tax Act of India, 1961, allows legal authorities to strictly govern income tax along with rigorous checks and harsh penalties imposed upon defaulters.

4. Know Your Rights and Benefits as a Taxpayer

Tax regulations will certainly impact your business as it has its own set of implications that your business cannot escape from. The best thing is to know the rights that you enjoy as a taxpayer. For example, 100per cent tax exemption on profit gains for the first three years with the exception of Minimum Alternate Tax (MAT, 18.5per cent). Then there are exemptions on capital gain tax, the abolition of angel investment tax, and SEBI directed Funds of Funds. Such benefits must be observed and startups should leverage plenty such tax laws and regulation. Doing so will also improve the acceptability levels with VCs, investors, and banks.

5. Deeper Insights for Future Planning

Allocating resources is the key to the streamline all the other business activities and accordingly channelize the finances for the team. For better returns and future financial goals, avoiding taxation can prove disastrous. Startups should dwell deeper to gain important insights that will help those at the helm of affairs to take right decisions. You will learn to allocate resources – channel your finances for better returns – envision financial goalkeeping taxability in mind. There are chances that your future launch may get affected by the tax norms and other requirements. Ensure a tight watch over every minuscule change in the tax regime and align it for your business requirements.

Most of the new startups are stringent with taxation but they lack clear information since the subject has many branches associated with it. Startups should also ensure a pervasive compliance management system with Chartered Accountants, lawyers and tax professionals mentoring it. Try incorporating technology to manage all the compliances with utmost diligence to ensure timely tax payments and completion of all legal formalities pertaining to it.

Source : Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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VidyaSunil & Associates

VidyaSunil & Associates is into practice of Tax Compliance, Company / Corporate Law Compliance, Accounts, Audit, Fund Raising, GST, Start Up Consultancy established with a objective to provide wide Spectrum of Activities under One Roof.

We aim to be part of your team & provide value added services in a smooth and efficient manner while leaving you to focus on developing your business. We provide a long-term solution that understands your business through personalized “Solution Based Consulting”.

Professional Services are catered in below mentioned expertise fields:

We provide the best advise & practice for Startups / SME / MSME on matters relating to Business Planning & Development, Mergers & Acquisitions (M&A), Business Valuation, Tax Compliance – (Direct & Indirect Taxes).

We are specialized in catering to IT / Non IT / Health Care & Startups – Out Sourced CFO Services / Virtual CFO Services: Accounting / Book Keeping (complaint with I GAAP / IFRS) including Implementation. MIS Reports, Cash Flow Analysis, Financial Modeling, M&A, Costing & Budgeting.

Tax Compliance includes Direct & Indirect Taxes ( including Handling of Litigations/ Attending to Personal Hearings ) Expertise services in Commercial Taxes – GST / KVAT, Central Excise, Service Tax, SEZ, STPI, Import Export Consultations, FEMA & Allied taxes.

Acting Consultant / Advisor & Mentor to various Startups / SME & MSME Ventures.

We are founded by a team of experts in accounting, auditing and taxation services as now grown and diversified into a multi-dimensional consulting firm having footprint not just in the conventional areas like Statutory Audit,  Internal Audit, GST Audit, Investigation but also in new sphere as well.

Our Services:

 We offer a wide array of professional services in the areas mentioned below: 

 Accounting and Payroll Services

︎Setting up of accounting system

︎Book keeping and general accounting services

︎Preparation of Financial Statements

︎Cash Forecasting

︎Budgeting

︎Financial reporting & Analysis

︎Liaison with Financial Institutions and  Banks

Strategizing, Planning and Compliance, Advisory and Representation

︎Direct Taxes (Income Tax, TDS, Wealth Tax)

︎Indirect Taxes (GST, PT & Others)

︎Assistance in Statutory Compliances

︎Filing of Income Tax Returns for Individuals, Partnership forms, LLP, Private Limited companies

︎Calculation, Review, Reconciliation, Payment & Filing of GST, PT, TDS, e-TDS, PF, ESI, etc.,

Statutory Registrations and Compliances

︎Registration of entities as a proprietary concern, partnership firm, private limited company, public limited company, trust, AOP etc 

︎Registration with different Statutory bodies of PAN, TAN, GST, Professional Tax, Shop & ︎Establishment (Labour Licence), Provide

︎Export & Import Licence, MSMED, etc.

︎Assistance for compliance with the procedures of company law including maintenance of statutory registers, filing of statutory return

︎Meetings and other day to day operational matters.

Looking forward to hear back from you for any support/assistance 

Advice for Connect :

VidyaSunil & Associates

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Cell No. : 9739834819 / 9480633382

Notices under GST

According to Section 46 of the CGST, 2017, where a registered person fails to furnish return under section 39, or section 44 or section 45, a notice shall be issued requiring him or her to furnish such return within fifteen days in such form and manner as may be prescribed.

Few section herewith reproduced below for understanding:

Sec 46 of CGST Act –

“Notice to return defaulters – Where a registered person fails to furnish a return under section 39, or section 44 or section 45 a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.”

Sec 62 of CGST Act,2017 –

“(1)Notwithstanding anything to the contrary contained in Section 73 or Section 74 where a registered person fails to furnish the return under section 39 or section 45 even after service of notice under section 46 , the proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 or furnishing of the annual return for the financial year to which the tax not paid relates.

.(2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order shall be deemed to have been withdrawn. But the liability for payment of interest under sub-section (1) of section 50 or for the payment of late fee under section 47 shall continue”

Rule 68 of CGST Rules, 2017 –

“A notice in Form GSTR 3A shall be issued, electronically, to a registered person who fails to furnish return under section 39,or section 44 or section 45 or section 52.” 

Penalty for Non Filers

♠ For non filers the late filing fees are as follows:

NIL Return: Rs 20/per day

Other: Rs 50/Day

Along with late fee interest on delayed payment is also applicable.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Expensive cars, jewellery to become cheaper as TCS to be out of GST working

Under Income Tax Act, tax collection at source is levied at 1% on purchase of vehicles above Rs 10 lakh, jewellery exceeding Rs 5 lakh and bullion over Rs 2 lakh

In a relief to buyers of high-value cars and jewellery, the CBIC has said that the TCS amount would be excluded from the value of goods for computing GST liability.

Under the Income Tax Act, tax collection at source (TCS) is levied at 1 per cent on purchase of motor vehicles above Rs 10 lakh, jewellery exceeding Rs 5 lakh and bullion over Rs 2 lakh. TCS is also levied on other purchases at different rates.

The Central Board of Indirect Taxes and Customs (CBIC) in a circular said that the TCS amount would be excluded from the value of goods while computing the Goods and Services Tax (GST) liability.

Earlier in December, the CBIC had said that the TCS amount would also be included while ascertaining the GST liability on goods on which TCS is applicable under the I-T Act.

In view of the representations received from various stakeholders and after consultation with the Central Board of Direct Taxes (CBDT), the CBIC has decided to exclude the TCS amount paid while valuing the goods for the purpose to levy GST.

The CBDT has clarified that TCS is not a tax on goods but an interim levy on the possible “income” arising from the sale of goods by the buyer and to be adjusted against the final income-tax liability.

“For the purpose of determination of value of supply under GST, Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961 would not be includible as it is an interim levy not having the character of tax,” the CBIC said.

While most industry players already believed that GST should not be levied on the Income tax TCS component, given the otherwise clarification by the Government, they were quite apprehensive of litigation on this aspect”.

“Recent corrigendum of CBIC eased the calculation process by breaking the circular referencing which would also result in marginally rationalising the tax payments (GST and income tax both),” Mohan said.

Source : Press Reports

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GST relief for home buyers on anvil; Piyush Goyal says GST Council will consider this…….

Home buyers may be in for a relief with Finance Minister Piyush Goyal announcing that the GST Council will soon consider changing the GST rate structure on housing. Piyush Goyal said that the GST Council will soon convene its next meeting, in which it will consider GST rate structure on real estate.

Further, ostensibly in an effort to revive under-construction housing projects stuck for need of financing, Piyush Goyal said that he wants banks to meet real estate sector in two weeks. A Group of Ministers headed by Gujarat Deputy Chief Minister Nitin Patel has suggested a 5% GST rate on buildings under construction. However, the GoM has not taken a call yet on the issue of making input tax credit available to property developers under the new proposed structure.

Narendra Modi’s NDA government has recently taken steps to give an impetus to the real estate sector. Piyush Goyal, in Budget 2019, extended tax sops for affordable home developers and removed tax on notional rent for a second housing unit as well as unsold units. He also extended the benefits under Section 80-IBA of the Income Tax Act for one more year — to housing projects.

Source : Press Reports

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Ministerial group formed to consider tax relief for small businesses

GST Council decides to form a ministerial panel to examine a series of tax and compliance relief proposals for the benefit of MSMEs which form the backbone of the manufacturing sector, the rural economy

Federal indirect tax body the Goods and Services Tax (GST) Council on Saturday decided to form a ministerial panel to examine a series of tax and compliance relief proposals for the benefit of small businesses which form the backbone of the manufacturing sector and the rural economy.

Union finance minister Piyush Goyal, who chaired the Council meeting in the capital, said the panel to be chaired by union minister of state for finance Shiv Pratap Shukla will examine all proposals received so far regarding tax relief for micro, small and medium (MSME) enterprises and make recommendations to the Council.

“All proposals will be reviewed in detail by the ministerial panel in consultation with the fitment and law committees (of officials),” said the minister. The Council decided to try a pilot project for refunding 20% of GST paid on business-to-consumer transactions using Rupay card and BHIM mobile application subject to a cap of ₹100. However, to implement this, the IT system has to get ready first.

Amit Mitra, West Bengal finance minister, said the group of ministers will look into all proposals relating to tax rates and procedure relaxation including the proposal to give relief to MSMEs with sales upto ₹1.5 crores from the central GST (CGST). This would restore the excise duty exemption available to small businesses with sales upto ₹1.5 crore that existed in the pre-GST era, he said.

Mitra said the council decided to run the pilot project for tax refund on select digital transactions after the technology is ready. “One or two states may run the pilot and depending on the experience, further rollout may be considered,” said Mitra. He, however, expressed concerns about giving incentives from GST revenue proceeds, which may not be a good idea in principle.

Bihar Deputy chief minister Sushil Modi said the revenue impact of the refund for select digital transactions may be around ₹980 crore as Rupay and Bhim account for 20% of all digital transactions. Uttar Pradesh, Bihar, Maharashtra and Gujarat have all agreed to join this pilot project, he said. “Compliance will increase. In the longer run, it will encourage formalization of the economy,” said Modi.

Experts said that more than tax cuts, small businesses want easier rules. “More than any financial incentive, MSMEs have been looking forward to easier compliance and faster refunds for exporters,”

R. Muralidharan, senior director at Deloitte India, said that if simplification of procedures are done in true spirit, it will help MSMEs focus on their core business rather than spending a disproportionately high amount of time on compliance matters and this will help in boosting productivity.

Small businesses play a crucial role in supporting the manufacturing sector and in job creation, especially in rural areas. As per a 2016 official survey, MSMEs have created over 11 crore jobs in manufacturing, trade and services, contributing about 29% of gross domestic product (GDP) and about half of total exports. Despite their key role in the economy, they face challenges including access to credit and technology.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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One-time Settlement of VAT, Excise Disputes in the Offing

The scheme, if approved, would allow officials to focus on GST compliance instead of dealing with legacy issues and could also generate instant one-time revenue for the govt.

India could consider offering a one-time settlement to clear legacy central excise duty and value added tax (VAT) issues to ensure they do not linger and act as a drag in the goods and services tax regime. The GST Council, the apex decision-making body for the tax, will take up the proposal at a meeting on August 4.

The scheme, if approved, would allow officials to focus on GST compliance instead of dealing with legacy issues and could also generate instant one-time revenue for the government. “It would clean the slate,” said an official privy to the proposal.

The scheme could cover assessments as well as arrears, according to the proposal that is part of the council’s agenda. GST was rolled out on July 1 last year, replacing a range of central and state taxes including central excise duty, countervailing duty, cesses, VAT , entry tax and purchase tax.

VAT PENDENCY
The VAT regime across the country was not uniform, with states having their own laws and procedures. This meant separate filings by businesses across states in line with each state’s VAT framework.

There is a backlog of two or three VAT assessments for every dealer in each state, according to an industry experts. As a result, tax teams of companies are not only grappling with GST law and compliance requirements, but are also compiling documents, collecting pending statutory forms and preparing reconciliations to complete VAT assessments.

Most tax manpower has shifted to GST and only a few are left to cater to the old tax regime, which is further fuelling pendency.

“For companies with pan-India operations (e.g. in FMCG, consumer electronics), at least two-three assessments are pending in each state. Thus, assuming a company has operations in 20 states, the total number of pending VAT assessments for such company in all states could be in the range of 40 to 50,” .

CENTRE KEEN TO CUT DISPUTES
The government is keen to cut down on unnecessary disputes and litigation. It recently raised the monetary thresholds for filing appeals by the Central Board of Indirect Taxes and Customs as well as the Central Board of Direct Taxes. CBIC will withdraw 18% of such cases from tribunals, 22% from high courts and 21% from the Supreme Court.

The CBIC has asked its field formations to clear past cases expeditiously to focus on the GST regime, which is still settling down.

“As newer litigations are coming up under GST, it’s important for the government to clean up the past as early as possible by coming with a onetime settlement for old litigation, wherein penalty and interest (at least partially) is waived,”.

Source :  Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Haven’t filed I-T return yet

Not only citizens with income above basic exemption limit, those with income below it are also advised to file ITR on time

In a relief for salaried tax payers, the government recently extended the date for filing income tax returns (ITR) by one month till August 31. Filing ITR is a must for any responsible citizen earning an income. As per government records, around 68 million income tax returns were filed during FY 2017-18, compared to 54 million filed during FY 2016-17. The number is expected to rise further this year. However, many people in India still don’t file return despite getting remuneration.

It is mandatory to file tax return if your taxable income falls above the basic exemption threshold of Rs 250,000. One should file their tax returns on time as failing to do so will attract penalties. Apart from avoiding punishment, filing returns on time has several other advantages too.

Here’s a look at top 10 advantages of filing ITR on time:

1. Being a responsible citizen: It is mandatory for every individual who earns a specific income and pays income tax on it, to file income tax return before July 31. In addition to this, those who are not eligible to file taxes can still file voluntary returns. When you file returns, you are fulfiling sort of a national duty which brings you into the mainstream as your income gets recorded with the I-T department with applicable tax (if there is any) having been paid. In other words, it’s a sign of being a responsible citizen.

2. Helpful during loan applications: Individuals who are planning to apply for home loans or vehicle loans, filing ITR can prove to be very helpful. Almost all major banks ask for a copy of returns, thus keeping a steady record of filing ITRs may make life easier for you in such a situation. ITR can have further significance as an income proof and an individual might be able to use it to get a loan in line with his/her income.

3. Loss adjustment: Losses incurred by an individual both short-term and long-term, speculative as well as non-speculative, capital or any other type of losses, which are not recorded in the tax return, cannot be carried forward or adjusted against the capital gains made in the subsequent years. So, if you do not file a return then you may not be eligible for any exemption against your tax liability in subsequent years.

4. To claim a refund: There are cases when after TDS deductions or advance tax filings an individual ends up paying more than his/her actual tax liability. In that case, that person can claim a refund from the I-T department through an ITR. So, if a person doesn’t file an ITR he may not get his/her refund.

5. Travelling Overseas: During visa processing, foreign consultants may ask you for your ITR records/receipts of previous years in interviews. The reason is to ensure that the person applying for the visa has an income source in India and does not actually intends to leave the country forever. Many major countries in Europe, US and Canada strictly follow this process and thus filing ITR gains further importance.

6. Buying life insurance: These days, ITR receipts are required when one opts to buy a term policy with sum insured of Rs 5 million or more. Life insurance companies like LIC use ITR documents to verify your annual income.

7. Filing of govt tender: ITR documents also come handy when one need to fill a government tender. Government demands tax return receipts of the previous five years to ensure that the person filing the tender will be able to support the payment obligation.

8. Proof of income and tax payment for the self-employed: Unlike the salaried class, businessmen do not get Form 16. Hence, ITR receipts become an extemely important document for them.

9. Avoid penalties: Filing income tax return is mandatory for individuals whose income falls in the tax bracket. Such individuals might be penalised up to Rs 10,000, besides interest, for not filing ITR on time.

10. An important financial document: Not only while applying for a loan or visa, ITR receipts can be useful in many other ways as it is an important financial document. It is even more detailed than Form 16 as it entails your income and taxation along with revenue from other sources.

Citizens with income below the taxable bracket should also file ITR as most of the above given advantages are also applicable for them.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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