TDs on Purchase of Immovable Property effective from 1st June 2013

Any person purchasing immovable property of Rs. 50 lakh or more is required to deduct tax @1% from the payment to the seller (other than rural agricultural land).

è Step : 1  Deduct TDS

·        Deduct Tax @ 1% from the payment made to the seller

·        Collect the Permanent Account Number (PAN) of the seller & verify the same with the Original Pan Card.

è Step : 2 Online filing of statement at www.tin.nsdl.com

·        It is mandatory to furnish the PAN of seller as well as the purchaser while providing the information regarding the sale transaction in the online form (Form No. 26QB)

·        Please insure that there is no error quoting the PAN or other details in filing online Form 26Q

è Step : 3  Depositing the tax deducted

·        Deposit the tax deducted through e-payment only, either at the time of filling of form 26QB or subsequent to it, e-payment can be made using electronic payment facility at any authorized bank, including self-net banking facility.

·        In case the payment of tax deducted is made subsequent to the filling of Form 26QB, pay using electronic payment facility at any authorized bank within 7 days after online filling of statement at www.tdscpc.gov.in

·        If there is a delay beyond 7 days in payment of tax, the statement filed online would be treated as “Invalid” in that case. Form 26QB, will need to be filed again

è Step : 4 Issue of TDS Certificate

·        Download TDS certificate from TRACES (www.tdscpc.gov.in)

                        RESPONSIBILITY OF THE SELLER OF THE IMMOVABLE PROPERTY

·        Provide PAN to the purchaser for furnishing information regarding TDS to the Income TAX Department.

·        Verify deposit of taxes deduct by the Purchaser in your form 26AS Annual Tax Statement.

v  TAN NOT REQUIRED

            TAN of the deductor is not required for the payment and reporting of the Tax deducted under this section and PAN allocated to the deductor shall be used for payment and reporting of TDS made under this section.

Levy of S.Tax might be removed on Home Deliveries and Takeaways

Some Senior government Officials said that The Finance Ministry may soon clarify that takeaway and home delivery of food will not attract service tax, a move which will be welcomed by the likes of McDonalds, Dominos, Pizza Hut etc.

The Ministry is examining the issue and there is a strong view that takeaways and home deliveries should not attract levy of Service Tax.

Payment of Bonus Act - Law

Applicability: 

The Act is applicable to 

(a)  any factory employing 10 or more persons where any processing is carried out with aid of power 

(b) Other establishments (established for purpose of profit) employing 20 or more persons. 

Once the Act is applicable, it continues to apply even if number of employees fall below 20. The Act is applicable to Government companies and corporations owned by Government which produces goods or renders services in competition with private sector. 

However, the Act is not applicable to Government employees, the employees of Municipal Corporation or Municipality, railway employees, university and employees of educational institutions, public sector insurance employees, employees of RBI and public sector financial institutions, charitable hospitals, social welfare organisations and defense employees. The Act does not apply to any institution established not for purposes of profit.

Establishments to which the Act is applicable - The Act applies to— (a) every factory; and (b) every other establishment in which twenty or more persons are employed on any day during an accounting year.
Employees Eligible for Bonus:

Employees drawing salary or wages upto Rs 3,500 per month are entitled to bonus, if he has worked for at least 30 working days in an accounting year. Even a worker working in seasonal factory is eligible if he has worked for at least 30 working days. Apprentices are not eligible for bonus.

Salary above Rs. 2,500 is not considered for calculation of Bonus. Employee drawing salary/wage exceeding Rs 3,500 is not entitled to any bonus under the Act.

Thus, minimum bonus @ 8.33% will be Rs 2,500 and maximum @ 20% will be Rs 6,000 for the year, when salary of employee exceeds Rs 2,500 but is less than Rs 3,500.

Minimum Bonus:

Every employer shall be bound to pay to every employee in respect of any accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year. Where an employee has not completed fifteen years of age at the beginning of the accounting year, the minimum bonus payable is 8.33% or Rs 60 whichever is higher.

Maximum Bonus:

Where in respect of any accounting year, the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage. In computing the allocable surplus under this section, the amount set on or the amount set off  shall be taken into account.

Salary/Wages for calculation of Bonus:

Where the salary or wage of an employee exceeds Rs 2,500 per month, the bonus payable to such employee shall be calculated as if his salary or wages were Rs 2,500 per month.  In other words, employees drawing salary or wages between Rs 2,500 to Rs 3,500 per month, are entitled to bonus on the basis of Rs 2,500 per moth salary only.