1. The composition scheme is applicable to manufacturers or traders whose taxable business turnover is up to Rs 1.5 crore (Rs 75 lakh in case of Specified States). A service provider can also opt for the scheme if his taxable turnover is up to Rs 50 lakh. This limit is to be checked in the Previous Year to determine the eligibility of applicability of the composition scheme.

Not Applicable to-

  • Businesses with inter-state supplies
  • Manufacturers of ice cream, pan masala, aerated water and tobacco, and
  • E-commerce Operators

The due date to opt for this the composition scheme for FY 2020-21 is extended till 30th June 2020.

2. It is important for any taxpayer to see that all its inward supplies has been reported in GSTR 1 by his vendor so as to enable him to avail the input tax credit. If any inward supplies have not been uploaded in GSTR 1 by the vendor then input tax credit to be availed will be limited to 10% of eligible input tax credit available.

3. At the start of the new financial year 2020-21 (w.e.f. 01/04/2020), a new invoice series, unique for the financial year is to be started by the GST taxpayers. Similar provision is there in rule 49 of the CGST  Rule 2017, in respect of the issue of a bill of supply by registered taxpayers availing composition scheme or supplying exempted goods or services or both(the tax invoice issued by a registered person should have a consecutive serial number, not exceeding sixteen characters – hyphen or dash and slash symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year).

4. As per the IGST Act, the export of goods and services can be conducted through two ways:

  • Submit Letter of Undertaking (LUT) and then export without payment of GST.
  • Pay IGST at the time of export and claim refund of IGST.

LUT has to be submitted only once during the year and this option is only available to those exporters who had not been prosecuted and the amount of tax evaded has not exceeded Rs. 2.5 lakh. LUT or bond shall be submitted in Form GST RFD-11.

5.     Following are the deduction a taxpayer can take of his/her regular expenses/investments-

  • Any donation done for PM CARES Fund (notified now), PM National Relief Fund or CM Relief Fund is eligible for 100% deduction under Section 80G.
  • You must have paid Life Insurance Premium for self, spouse, children and if the policy is taken after 1/4/2012 then the deduction would be lower of premium paid or 10% of policy value (15% in case of specified disability).
  • Amount deposited in public Provident Fund, Tuition fees paid for education of maximum 2 children, Fixed Deposit in Bank or Post office for 5 years or more, pension fund of LIC such as UTI/MF or other insurance company.
  • In case you are making repayment of loan taken for purchase or reconstruction of House, then the deduction will be available only after completion of construction and also in addition to the deduction that is being claimed under house property.
  • You must have deposited some amount for a girl child in the Sukanya Samridhi scheme and the good news is that it is also eligible for deduction under section 80C.
  • One of the most important deductions for individuals is the contribution to pension scheme of the central government was an additional deduction of Rs. 50,000 is available over and above the following limit.
  • If there is any expense of medical insurance premium, central government health scheme, preventive health check-up and medical treatment of self, spouse, parents and dependent children then maximum deduction allowed is Rs. 50,000.
  • Deduction is available for 8 years in case of higher studies education loan.
  • If you have made any donation, then the deduction would be available on the same condition to it is not in cash above Rs. 2000 (donation can not be made to political party or electoral trust in cash).
  • If you are getting interest in saving bank account then you can claim deduction of such interest income subject to maximum Rs. 10,000 (Rs. 50,000 in case of senior citizen).
  • If you have purchased any house property or constructing the same for which loan has been sanctioned during F.Y. 2019-2020 the deduction of interest on such loan will be available up to Rs. 1,50,000 provided the stamp duty value of such house property is upto Rs. 45,00,000.
  • The new deduction is available in respect of the purchase of electric vehicle. Therefore, if you take the loan for purchasing electric vehicle between FY 2019-2020 to FY 2022-2023 then you will be eligible for a deduction of interest on such loan subject to maximum of Rs. 1,50,000.
  • All these deductions will be limited to the GTA i.e. Gross Total Income

6. The List of some of the major deductions and allowances, available to the salaried persons, using which one can reduce their income tax liability-

  • Exemption of House Rent Allowance
  • Standard Deduction @ Rs. 50,000 flat deduction
  • Leave Travel Allowance (LTA) which can be availed only twice in a block of 4 year and is only limited to domestic travels and the mode of transport should be through Air, Railway or Public transport. It can be carried forward in the next block, if unused.
  • Mobile reimbursement is limited to the lower of the actual amount paid or amount provided in the Salary package.
  • Books and periodicals are limited to lower of the actual amount paid or amount provided in the Salary package.
  • Food coupons are taxable as Perquisites in hands of Employee but however, such coupons are tax-exempt up to Rs. 50 per meal.
  • Income tax exemption on relocation allowance such as Car transportation cost, registration charges, packaging charges, etc will be exempt from tax in case employee shifts to another place.
  • Cab Facility transport provided by the employer would not be taxed as perquisite in hands of employee as it would be an expense for the employer.
  • Health club facility provided by the employer, if provided uniformly to all employees, would not be taxable as perquisite.
  • Gifts or vouchers provided by the employer are exempt up to Rs. 5000 per year.

7. Return Filling Due Date

Category AY 2020-21
Individual/HUF/AOP/BOI 31st July 2020
Business Require Tax Audit 31st October 2020
Business Require TP Report 30th November 2020

8. Advance Tax Due Date

Due Date Advance Tax Payable
On or Before 15th June 15% of Advance Tax
On or Before 15th September 45% of Advance Tax
On or Before 15th December 75% of Advance Tax
On or Before 15th March 100% of Advance Tax

Disclaimer

This write up is intended to insight on significant circular under Companies Act, 2013. It is not intended to be a professional advice; therefore, Our Firm accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the contents of this write up.

We are hopeful that this write up would be of some help w.r.t. your professional working and endeavors under Companies Act, 2013. Kindly share your opinion and if anyone have query then pls mail at sjvandassociates@outlook.com or

Author Bio

Qualification: CA in Practice
Company: S J V & Associates
Location: LUCKNOW, Uttar Pradesh, IN
Member Since: 30 Mar 2020 | Total Posts: 3

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