1. Adjustment of ITC, or Input Tax Credit, means that at the time of paying a tax on the output or sale of your supplies, you can reduce from it the tax that you have already paid while paying the input tax for these supplies or raw materials and pay the balance amount only. This mechanism is called utRead more

    Adjustment of ITC, or Input Tax Credit, means that at the time of paying a tax on the output or sale of your supplies, you can reduce from it the tax that you have already paid while paying the input tax for these supplies or raw materials and pay the balance amount only. This mechanism is called utilization of the ITC or the input tax credit.

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  2. An Input tax is a tax that you would pay or have to pay upon your purchase of materials or services towards the input for the production of such goods or services that you sell as output. Whereas Output tax is a tax that you would be charging to the customers who buy the output of your production orRead more

    An Input tax is a tax that you would pay or have to pay upon your purchase of materials or services towards the input for the production of such goods or services that you sell as output. Whereas Output tax is a tax that you would be charging to the customers who buy the output of your production or sale.

    Input tax is usually paid to the vendors you buy the input materials from, or directly to the Government. Whereas, the Output tax is usually charged to the customers and thus paid to Government.

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  3. Let’s suppose a manufacturer, Mr. A, sells goods to a buyer, Mr. B. Now Mr. B will be eligible to claim the credit, through his invoices. The working mechanism of Input Tax Credit is explained as follows: Mr. A will upload his tax invoices details as issued in GSTR-1. These details uploaded by Mr. ARead more

    Let’s suppose a manufacturer, Mr. A, sells goods to a buyer, Mr. B. Now Mr. B will be eligible to claim the credit, through his invoices.
    The working mechanism of Input Tax Credit is explained as follows:
    Mr. A will upload his tax invoices details as issued in GSTR-1.
    These details uploaded by Mr. A will be automatically reflected in GSTR-2A, and the same details of this purchase will get reflected when Mr. B files his GSTR-2 returns.
    The details of the sale will then be accepted by Mr. B, and therefore, the purchase tax will be credited to Mr. B’s e-credit
    Mr. B can use this to adjust it later for future output tax liability or to receive a refund as well.

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  4. Section 16(1) of the CGST Act, lays out the following condition for availing ITC: (a) Registered Person: She should be a registered person. However, there is an exception to it for a registered person but pays tax under Section 10 of the CGST Act under the composition levy scheme. Such a person cannRead more

    Section 16(1) of the CGST Act, lays out the following condition for availing ITC: (a) Registered Person: She should be a registered person. However, there is an exception to it for a registered person but pays tax under Section 10 of the CGST Act under the composition levy scheme. Such a person cannot claim ITC. (b) Furtherance of business: the goods and services shall be utilised in furtherance of business only; (c) Credit ledger: the amount must be credited to the electronic credit ledger of the entitled person; (d) Utilisation: the ITC shall be utilised in a manner stipulated under Section 49 of the CGST Act; (e) Supporting document: a person claiming ITC should have tax invoice, debit note, bill of entry and receipt of goods and services; (f) Person should have paid to the government and filed a valid return.

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  5. Input Tax Credit (“ITC”) is defined under Section 2(63) of the CGST Act, 2017, which states that ITC means the credit of the input tax. Further, the term input tax is defined under Section 2(62) of the CGST Act, which further defines it as: means the central tax, State tax, integrated tax or Union tRead more

    Input Tax Credit (“ITC”) is defined under Section 2(63) of the CGST Act, 2017, which states that ITC means the credit of the input tax. Further, the term input tax is defined under Section 2(62) of the CGST Act, which further defines it as: means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him, but it excludes composition levy, it further includes. The ITC also includes: (a) the integrated goods and services tax charged on import of goods; (b) the tax payable under the provisions of sub-sections (3) and (4) of section 9; (c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the IGST; (d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective SGST; or (e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act,

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  6. When a registered entity buys goods or avails services for sale, the tax paid on this inward supply is called the Input Tax Credit (“ITC”). ITC is the adjustment of the difference between the GST paid on inward supplies and that paid on the outward supply by a registered entity for goods and serviceRead more

    When a registered entity buys goods or avails services for sale, the tax paid on this inward supply is called the Input Tax Credit (“ITC”). ITC is the adjustment of the difference between the GST paid on inward supplies and that paid on the outward supply by a registered entity for goods and services.
    Example: X, a registered wholesaler in Lucknow, purchases a good worth INR 3000 from Delhi and pays 12 % GST. Further, after margin and additions, X sold the goods to Y, a registered dealer in Kanpur, for 6000 and charged 12 % GST
    (a) GST paid on inward supply 6 % of 1500 as CGST= INR 90 and 6% of 1500 as SGST= INR 90.
    (b) GST collected on outward supply 6% 3000 as CGST = INR 180 and 6 % of 3000 as SGST = INR 180. It is evident that X has ITC of INR 90 each, and now X will pay INR 90 as net GST because INR 90 has already been paid at the time of purchase of goods.

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  7. There is no specific timeline mentioned in the income tax laws which states by when such mistakes must be rectified. However, it can take 30-45 days to reflect the deposit of TDS in the Form 26AS, depending on the efficiency of the company's (employer) accounts department.

    There is no specific timeline mentioned in the income tax laws which states by when such mistakes must be rectified. However, it can take 30-45 days to reflect the deposit of TDS in the Form 26AS, depending on the efficiency of the company’s (employer) accounts department.

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  8. It is mandatory to issue these certificates to Tax Payers. Form 16/ 16A is the certificate of deduction of tax at source and issued on deduction of tax by the employer on behalf of the employees. These certificates provide details of TDS / TCS for various transactions between deductor and deductee.

    It is mandatory to issue these certificates to Tax Payers. Form 16/ 16A is the certificate of deduction of tax at source and issued on deduction of tax by the employer on behalf of the employees. These certificates provide details of TDS / TCS for various transactions between deductor and deductee.

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  9. As per current law, an employee's own contribution to the EPF account is not taxable. However, effective from April 1, 2020, onwards, employer's contribution to the EPF account can become taxable if it exceeds Rs 7.5 lakh in a financial year.

    As per current law, an employee’s own contribution to the EPF account is not taxable. However, effective from April 1, 2020, onwards, employer’s contribution to the EPF account can become taxable if it exceeds Rs 7.5 lakh in a financial year.

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  10. The TDS rate on fixed deposits (FDs) is 10% if the interest amount for the entire financial year exceeds Rs 10,000 for AY 2019-20. In the interim budget 2019, this TDS deduction limit on FD has been increased to Rs. 40,000 annually which is applicable in AY 2020-21. Under existing Income Tax rules,Read more

    The TDS rate on fixed deposits (FDs) is 10% if the interest amount for the entire financial year exceeds Rs 10,000 for AY 2019-20. In the interim budget 2019, this TDS deduction limit on FD has been increased to Rs. 40,000 annually which is applicable in AY 2020-21. Under existing Income Tax rules, the TDS rate on fixed deposit interest is 20% if you do not provide your PAN Card to the bank.For NRO (Non-Resident Ordinary) FDs, the TDS rate is 30%. For NRE (Non Resident External) and FCNR (Foreign Currency Non Resident) FDs, there is no TDS because these FDs are tax-free. The details of TDS deducted by the bank are uploaded in Form 26AS. No TDS is deducted on either Time Deposit (FD) or Recurring Deposit (RD) made with a post office. Senior Citizens (those above 60) can get up to Rs 50,000 per year in FD interest tax-free and no TDS will be deducted for interest received up to Rs 50,000 per annum for them.

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