Title: Important Update: Biometric-Based Aadhaar Authentication for GST Registration

Date: August 24, 2024

Dear Taxpayers,

The GST registration process is evolving to ensure a more secure and streamlined experience for businesses across India. If you're an applicant from Dadra and Nagar Haveli and Daman and Diu, or Chandigarh, there's an important update you need to know about: biometric-based Aadhaar authentication and document verification are now mandatory as part of your GST registration.

Why This Change?

The introduction of biometric authentication is a game-changer in the fight against fraud and identity theft in the GST system. By verifying your identity through Aadhaar-based biometrics, the GST Network (GSTN) ensures that only legitimate businesses get registered, adding an extra layer of security and trust to the process.

What You Need to Do

Here’s a step-by-step guide to navigating the new requirements:

1. Submit Your Application:

   • Once you submit your GST registration application in Form GST REG-01, keep an eye on your inbox. You’ll receive an email with essential links.

2. Choose Your Authentication Method:

   • The email will include a link for OTP-based Aadhaar Authentication and another link to book an appointment at a GST Seva Kendra (GSK) for biometric verification.

   • You must complete one of these steps to move forward.

3. Booking an Appointment for Biometric Verification:

   • If you opt for biometric verification, use the link provided in the email to schedule your visit to a designated GSK.

   • During your visit, you’ll need to bring:

     • A copy of your appointment confirmation email.

     • Jurisdiction details as mentioned in the email.

     • Your original Aadhaar Card and PAN Card.

     • Any other original documents you uploaded during your application.

4. Verification at GSK:

   • The biometric-based Aadhaar authentication and document verification will be conducted during your visit. Ensure you arrive on time and with all required documents to avoid any delays.

What to Expect at the GST Seva Kendra (GSK)

Your visit to the GSK will be guided by the latest protocols, ensuring a smooth and efficient verification process. The GSK staff will assist you through each step, making sure your biometric data and documents are accurately verified.

Stay Ahead with Compliance

The GSTN has designed this process to be as seamless as possible, but it’s crucial that you follow the guidelines carefully. By staying informed and prepared, you can avoid unnecessary delays and complete your GST registration without a hitch.

Final Thoughts

The shift to biometric-based Aadhaar authentication is a significant move towards greater security and efficiency in GST registrations. This process not only helps protect against fraud but also ensures that businesses across India can operate with greater confidence in their GST compliance.

Team,

ASRN Tax & Accounting Services

Maximizing Compliance: Understanding the New RCM Liability/ITC Statement on the GST Portal

Date: August 23rd, 2024

To enhance transparency and accuracy in reporting Reverse Charge Mechanism (RCM) transactions, the GST Portal has introduced a new statement called the RCM Liability/ITC Statement. This feature is designed to help taxpayers correctly report RCM liabilities and corresponding Input Tax Credit (ITC) claims. This blog post will walk you through the key aspects of this new feature and how to make the most of it.

What is the RCM Liability/ITC Statement?

The RCM Liability/ITC Statement captures the RCM liabilities shown in Table 3.1(d) of GSTR-3B and the corresponding ITC claimed in Table 4A(2) and 4A(3) of GSTR-3B for a return period. This statement is mandatory from the tax period August 2024 onwards for monthly filers, and from the quarter July-September 2024 for quarterly filers.

Accessing the RCM Liability/ITC Statement

To access the statement, simply navigate to:

Services > Ledger > RCM Liability/ITC Statement > RCM Liability/ITC Statement

Reporting the Opening Balance in the RCM ITC Statement

The RCM ITC opening balance can be reported by following these steps:

1. Login > Report RCM ITC Opening Balance or Services > Ledger > RCM Liability/ITC Statement > Report RCM ITC Opening Balance

2. For Taxpayers Who Paid Excess RCM Liabilities:

   • If you have already paid excess RCM liabilities in Table 3.1(d) of GSTR-3B but did not avail of the corresponding ITC in Table 4A(2) or 4A(3) of GSTR-3B, you will need to report the excess amount as a positive value in the RCM ITC opening balance.

3. For Taxpayers Who Claimed Excess RCM ITC:

   • If you have claimed excess RCM ITC in Table 4A(2) or 4A(3) of GSTR-3B but did not declare the corresponding liability in Table 3.1(d), you must report the excess claimed ITC as a negative value in the RCM ITC opening balance.

4. Reclaiming RCM ITC:

   • If you need to reclaim RCM ITC that was reversed in earlier tax periods, you can reclaim it in Table 4A(5) of GSTR-3B, provided it’s eligible. Note that this ITC should not be reclaimed through Table 4A(2) and 4A(3) of GSTR-3B.

Reconciliation of Opening Balance for Different Tax Periods

• Monthly Filers: Report the opening balance considering RCM ITC till the July 2024 return period.

• Quarterly Filers: Report the opening balance up to Q1 of FY 2024-25, considering RCM ITC till the April-June 2024 return period.

Important Deadlines and Amendments

• Deadline to Declare Opening Balance: The opening balance can be declared until October 31st, 2024.

• Amendments in Opening Balance: Taxpayers have until November 30th, 2024 to rectify any errors made while declaring the opening balance. You are allowed up to three opportunities to make these amendments.

Please note that this amendment facility will be discontinued after November 30th, 2024.

Team 

ASRN Tax & Accounting Services

In a landmark operation, the Indian Income Tax Department executed the largest income tax raid in the country’s history, uncovering a staggering ₹352 crore in undisclosed income. This extensive 10-day operation targeted multiple premises across the country and resulted in the seizure of vast amounts of cash, gold, and other valuable assets. 

The operation was meticulously planned and executed, reflecting the department's commitment to combating tax evasion and promoting financial transparency. The team involved in this significant raid has been honored for their exemplary work.

This operation is part of a broader initiative by the government to crack down on illegal wealth accumulation and ensure that all income is properly reported and taxed. The success of this raid serves as a stern reminder to those attempting to evade taxes that the authorities are vigilant and well-equipped to detect and penalize non-compliance.

Data Source 

https://www.news18.com/business/rs-352-crore-took-10-days-to-count-team-honoured-for-indias-biggest-income-tax-raid-till-date-9025022.html

Team

Asrn Tax & Accounting Services 

Potential GST Relief on Life Insurance Premiums: What You Need to Know

Introduction

The Goods and Services Tax (GST) Council in India may soon provide relief on life insurance premiums, which are currently taxed at a rate of up to 18%. This move aims to make life insurance more affordable for the general public by reducing the tax burden. Here’s what this potential change means for policyholders and the insurance industry.

Background on GST and Insurance

Life insurance policies are currently subject to an 18% GST rate, which applies to most services in India. In the past, there have been several attempts to lower this rate. Proposals were put forward in multiple GST Council meetings to reduce the GST rate on insurance services, including life and health insurance, from 18% to 5%. However, these proposals were consistently rejected. The Fitment Committee, a body responsible for evaluating tax rate changes, argued that any reduction could lead to significant revenue losses for the government and distort the tax structure. As a result, no changes have been made to the GST rate on life insurance premiums so far.

Current Developments and Proposals

Recently, the Fitment Committee has shown favor toward reducing the GST on life insurance premiums. This shift indicates a possible reconsideration of earlier rejections, although concerns about revenue loss and tax structure distortion remain. Alongside life insurance, there are ongoing discussions about providing similar relief for health insurance premiums, which have also faced high GST rates.

Implications for Policyholders

If the GST rate on life insurance premiums is reduced, policyholders could see a significant decrease in their overall insurance costs. Lower premiums may encourage more people to purchase life insurance, promoting financial security and wider insurance penetration across the country. For existing policyholders, a lower GST rate could mean reduced renewal costs and more affordable premium payments over time.

Challenges Ahead

Despite the positive outlook, the potential reduction of GST on life insurance premiums is not without challenges. The government's main concern is the possible revenue loss that could result from such a reduction. There is also the risk of creating a cascading effect of input taxes, leading to a distorted tax structure. The final decision will likely balance the need to make insurance more affordable against the government’s revenue requirements.

Conclusion

While the possibility of GST relief on life insurance premiums is a welcome prospect for policyholders, the decision remains pending with the GST Council. Stakeholders and the public eagerly await further developments, hoping for a more favorable outcome that will ease the financial burden of securing life insurance.

Team 

ASRN Tax & Accounting Services

The Goods and Services Tax (GST) regime, implemented in India from July 1, 2017, has significantly reformed the country's indirect taxation system. The Central Goods and Services Tax (CGST) Act, 2017, is a key component of this framework. One of the provisions that taxpayers often seek clarity on is Section 128A, which deals with the waiver of interest or penalty under the CGST Act, 2017. In this blog post, we will explore Section 128A in detail, its significance, and the circumstances under which it is applicable. 

What is Section 128A of the CGST Act, 2017?

Section 128A of the CGST Act, 2017, empowers the Central Government to waive the whole or part of any interest, late fee, or penalty payable by any taxpayer under the Act. This waiver can be made by issuing a notification, subject to such conditions and limitations as specified in the notification. The primary aim of Section 128A is to provide relief to taxpayers in situations where strict compliance with the law may result in undue hardship or where genuine mistakes have occurred.

Key Provisions of Section 128A

1. Authority to Grant Waiver:
   The Central Government has the sole authority to grant a waiver of interest, late fees, or penalties under the CGST Act, 2017. This authority is exercised by issuing notifications in the Official Gazette.

2. Scope of Waiver:
   The waiver under Section 128A can apply to:

   • Interest on delayed payment of tax.

   • Late fees for delayed filing of returns.

   • Penalties imposed for non-compliance with various provisions of the CGST Act.

3. Conditions and Limitations:
   The waiver is not automatic; it is subject to certain conditions and limitations as may be prescribed in the notification issued by the Central Government. These conditions can include the period for which the waiver is applicable, specific categories of taxpayers who may benefit, and any other requirements necessary to avail of the waiver.

4. Applicability:
   Section 128A applies to all taxpayers registered under the CGST Act, including individuals, companies, partnerships, and other entities. It is also applicable to those who have committed a genuine mistake or error while complying with the GST laws.

Significance of Section 128A

1. Relief for Taxpayers:
   The waiver provision under Section 128A is crucial in providing relief to taxpayers who might face severe financial strain due to interest, late fees, or penalties imposed for delayed compliance. This is particularly beneficial for small and medium enterprises (SMEs) and startups that may lack the resources or expertise to fully comply with all GST requirements.

2. Encouraging Voluntary Compliance:
   By offering the possibility of waivers, the government encourages voluntary compliance with the GST laws. Taxpayers are more likely to correct errors and adhere to regulations if they know that genuine mistakes will not attract severe penalties.

3. Flexibility in Administration:
   The provision allows the government to respond flexibly to various situations, such as natural disasters, economic downturns, or other circumstances where strict compliance would be unreasonable. In such cases, the government can provide temporary relief through notifications under Section 128A.

Recent Notifications and Examples

Several notifications have been issued by the Central Government in the past to grant waivers under Section 128A. Here are a few notable examples:

1. Waiver for Delayed Filing During COVID-19:
   During the COVID-19 pandemic, the government issued multiple notifications granting a waiver of late fees for delayed filing of GST returns. This was done to ease the burden on businesses facing unprecedented challenges due to lockdowns and economic disruptions.

2. Interest Waiver for Certain Periods:
   In some instances, the government has issued notifications waiving interest for late payment of tax for specific periods. For example, interest rates were reduced for taxpayers who filed their returns late for certain months during the pandemic period.

3. Specific Waivers for SMEs and Startups:
   Recognizing the unique challenges faced by SMEs and startups, the government has occasionally provided targeted waivers of penalties and late fees to help these businesses remain compliant without facing undue financial hardship.

How to Avail Waiver Under Section 128A?

To avail of a waiver under Section 128A, taxpayers must carefully review the relevant notification issued by the government. The process generally involves:

1. Understanding the Notification:
   Taxpayers should read the notification carefully to understand the specific conditions, limitations, and eligibility criteria for the waiver.

2. Filing an Application (if required):
   In some cases, the waiver may be automatically applied, while in others, taxpayers may need to file an application or a request with the GST authorities.

3. Maintaining Proper Documentation:
   Taxpayers should maintain all relevant documents, such as copies of returns, payment records, and any correspondence with GST authorities, to substantiate their claim for a waiver.

4. Timely Action:
   Since waivers are often time-bound, it is crucial to take timely action to ensure that the waiver is availed within the stipulated period.

Common Scenarios Where Waiver Can Be Granted

1. Natural Disasters or Emergencies:
   Waivers are often granted in cases of natural disasters like floods, earthquakes, or other emergencies that disrupt business operations and compliance.

2. Technical Glitches on GST Portal:
   If a taxpayer is unable to file returns or make payments due to technical issues on the GST portal, the government may issue a waiver for the late fee or interest.

3. Economic Hardships:
   During periods of economic hardship or downturns, the government may grant waivers to help businesses survive and maintain compliance.

4. Genuine Errors or Mistakes:
   Taxpayers who have made genuine mistakes while filing returns or making payments may be eligible for a waiver, especially if they come forward voluntarily to rectify the error.

Conclusion

Section 128A of the CGST Act, 2017, provides a critical relief mechanism for taxpayers by allowing the waiver of interest, late fees, or penalties under certain conditions. It demonstrates the government's commitment to ensuring fair treatment of taxpayers, encouraging voluntary compliance, and maintaining flexibility in the administration of GST laws. Taxpayers should stay informed about the latest notifications issued under this section to take advantage of the waivers available and ensure smooth compliance with GST regulations.

Team 

ASRN Tax & Accounting Services

India’s economic landscape has shown promising resilience and growth in the first quarter of the 2024–2025 fiscal year (April to June 2024). As one of the world's fastest-growing economies, India’s Gross Domestic Product (GDP) performance is a key indicator of its overall economic health and potential. This quarter has demonstrated significant economic recovery, spurred by robust consumer demand, government policies, and strong performances in key sectors.

**1. Overview of GDP Growth from April to June 2024**  

According to the Ministry of Statistics and Programme Implementation (MoSPI), India's GDP grew by an impressive 7.8% in the April to June quarter of 2024. This growth rate is a marked increase compared to the same period last year, which saw a growth of 6.1%. The recent numbers indicate a strong rebound from global economic uncertainties and domestic challenges such as inflationary pressures and geopolitical tensions.

**2. Key Drivers of Growth**  

Several factors contributed to this encouraging growth trajectory:

- **Robust Consumer Demand**: With the easing of inflationary pressures, there has been a significant boost in consumer confidence and spending. Retail sales saw a substantial increase, with sectors such as automobiles, electronics, and consumer durables reporting strong growth.

- **Government Initiatives and Reforms**: Proactive government measures, such as increased public expenditure on infrastructure projects, production-linked incentives (PLI) for manufacturing, and reforms in taxation, have created a conducive environment for economic activities. The focus on "Atmanirbhar Bharat" (self-reliant India) has driven growth in manufacturing and exports.

- **Agriculture and Allied Sectors**: The agriculture sector, a crucial part of the Indian economy, grew by 4% in this quarter. Favorable monsoon conditions, improved crop yields, and government support programs for farmers have bolstered this growth.

- **Service Sector Resurgence**: The service sector, which accounts for over 50% of India’s GDP, expanded by 9.2% in Q1. Segments like IT services, financial services, and hospitality have performed exceptionally well, driven by digital adoption, global demand for Indian IT services, and a revival in travel and tourism.

**3. Sector-Wise Performance**  

- **Manufacturing**: Manufacturing grew at 7.2%, aided by higher production in sectors such as electronics, pharmaceuticals, and automobiles. The PLI schemes and Make in India initiatives have encouraged domestic production and reduced dependency on imports.

- **Construction**: The construction sector saw a growth of 8.5%, primarily driven by government spending on infrastructure projects like highways, railways, and urban development. This sector's growth has a multiplier effect, providing employment opportunities and stimulating allied industries.

- **Financial Services and Real Estate**: This segment experienced a robust growth rate of 10%, bolstered by a stable banking sector, higher credit disbursement, and a growing real estate market.

**4. Challenges and Concerns**  

Despite the positive growth numbers, certain challenges remain:

- **Inflation**: While inflation has eased, it continues to be a concern, particularly with global crude oil prices and food inflation still volatile. Policymakers need to balance growth with inflation management to ensure sustainable economic progress.

- **Global Economic Uncertainty**: The global economic environment remains unpredictable due to geopolitical tensions, tightening monetary policies by major economies, and potential supply chain disruptions. These factors could impact India’s export performance and foreign investments.

- **Employment Generation**: While sectors like construction and manufacturing have shown growth, the overall employment generation needs to be more inclusive and robust to absorb the growing labor force.

**5. Future Outlook**  

The April to June 2024 GDP numbers provide a positive outlook for the Indian economy, reflecting resilience and adaptability in the face of global and domestic challenges. However, maintaining this growth momentum will require sustained efforts in policy reform, infrastructure development, and boosting domestic consumption.  

**Conclusion**  India's GDP growth in the first quarter of the fiscal year 2024–2025 is a testament to the country's economic strength and strategic policies. While the growth outlook remains optimistic, policymakers, industry stakeholders, and citizens must continue to work towards a balanced, inclusive, and sustainable conomic path.

Team

ASRN Tax & Accounting Services 

Discover How the New IMS Feature on the GST Portal Simplifies Invoice Matching and ITC Claims Starting October 1st, 2024 

Starting October 1st, 2024, the GST portal will introduce a new feature called the Invoice Management System (IMS). This system is designed to help taxpayers efficiently manage invoice corrections and amendments with their suppliers. By streamlining the process of matching records and invoices, IMS will ensure that taxpayers can accurately claim Input Tax Credit (ITC). In this blog post, we’ll take you through the key features of IMS, its benefits, and a step-by-step guide on how to use it.

What is the Invoice Management System (IMS)?

The Invoice Management System (IMS) is an advanced communication tool built into the GST portal. Its primary goal is to help taxpayers and suppliers address discrepancies in invoices quickly and efficiently. By providing a platform where taxpayers can match their records with those issued by suppliers, IMS simplifies the process of availing the correct ITC. Additionally, it allows taxpayers to accept, reject, or keep invoices pending, providing greater flexibility in managing their accounts.

Key Features of the Invoice Management System (IMS)

1. Seamless Communication:

   • IMS introduces a direct communication channel between taxpayers and their suppliers, enabling quick resolution of invoice discrepancies.

   • Taxpayers can raise queries, request amendments, or confirm the accuracy of invoices through the portal.

2. Invoice Matching:

   • The system automatically matches the invoices in the taxpayer’s records with those uploaded by suppliers.

   • This helps in identifying any mismatches or errors, reducing the chances of incorrect ITC claims.

3. Decision-Making Options:

   • Taxpayers have the flexibility to take action on each invoice:

     • Accept: Confirm that the invoice details match your records.

     • Reject: Deny the invoice if it doesn’t align with your records, prompting the supplier to make corrections.

     • Keep Pending: Delay the decision if you need more time to verify the invoice details.

4. Efficient Record-Keeping:

   • The system maintains a log of all actions taken on each invoice, helping taxpayers keep a detailed record for future reference.

Step-by-Step Guide to Using the Invoice Management System (IMS)

Step 1: Access the IMS on the GST Portal

• Log in to your GST account on the official GST portal.

• Navigate to the “Invoice Management System” section, which will be available from October 1st, 2024.

Step 2: Review Your Invoices

• In the IMS section, you’ll see a list of invoices issued by your suppliers.

• The system will automatically match these invoices with your records.

Step 3: Take Action on Invoices

• Accept: If the invoice details are correct, click on the “Accept” button. The system will record this action, and the invoice will be marked as accepted.

• Reject: If the invoice details are incorrect, click on the “Reject” button. You will be prompted to provide a reason for rejection, which will be communicated to the supplier for necessary amendments.

• Keep Pending: If you’re unsure about the invoice details, click on the “Keep Pending” button. This will allow you to revisit the invoice later for further verification.

Step 4: Communicate with Your Supplier

• If you’ve rejected an invoice, the supplier will receive a notification and can make the necessary corrections.

• You can communicate directly with the supplier through the portal to clarify any issues.

Step 5: Track the Status of Invoices

• The IMS will keep a detailed log of all actions taken on each invoice.

• You can monitor the status of each invoice—whether accepted, rejected, or pending—at any time through the portal.

Step 6: Finalize Your ITC Claims

• Once all invoices are verified, and discrepancies are resolved, finalize your ITC claims based on the accepted invoices.

Benefits of the Invoice Management System (IMS)

• Increased Accuracy: The IMS reduces the chances of errors in claiming ITC by ensuring that all invoices are accurately matched and verified.

• Enhanced Efficiency: The streamlined communication process between taxpayers and suppliers speeds up the resolution of invoice discrepancies.

• Better Record-Keeping: With a detailed log of all actions, taxpayers can easily track the status of invoices and maintain accurate records for future reference.

• Flexibility: The ability to accept, reject, or keep invoices pending gives taxpayers greater control over their accounts.

Conclusion

The introduction of the Invoice Management System (IMS) on the GST portal marks a significant advancement in the management of invoices and ITC claims. By providing a user-friendly platform for resolving invoice discrepancies, IMS will help taxpayers ensure compliance and maximize their ITC benefits.

Make sure to familiarize yourself with this new feature and take full advantage of its capabilities starting from October 1st, 2024. For a more detailed understanding of how IMS works, please click here to read the complete advisory on IMS.

Thanks 

ASRN Tax & Accounting Services

The 54th GST Council Meeting took place on September 9, 2024, chaired by Union Finance Minister Nirmala Sitharaman. This meeting addressed several important issues, including tax rate changes, simplified return filing, and measures to prevent tax evasion. Here’s a detailed look at the key decisions made during the meeting:

1. GST Rate Rationalization

In a bid to simplify the GST structure and offer relief to both consumers and industries, the Council approved significant changes in GST rates for various goods and services:

• Electric Vehicles (EVs): GST reduced from 18% to 5%, aligning with the government’s push for clean energy.

• Healthcare Services: Rates on gyms, fitness centers, and wellness programs reduced from 18% to 12%.

• Packaged Foods: Ready-to-eat meals and snacks now have a lower GST rate of 5% (down from 12%).

• Small Home Appliances: Rates on items like mixers and toasters dropped from 18% to 12%.

• Tourism Sector: Hotels with tariffs below ₹10,000 will now have an 8% GST rate, reduced from 12%.

These adjustments aim to boost consumer demand, support industry growth, and keep inflation in check.

2. New Simplified Return Filing System

A major highlight of the meeting was the introduction of a simplified return filing system set to roll out on October 1, 2024. Key features include:

• Single-Page Return Filing: Businesses can now declare sales and input tax credit claims in a simplified format.

• Auto-Population of Data: GSTR-1 data will automatically populate into GSTR-3B, reducing manual entry errors.

• Pre-Filled Returns for MSMEs: Small businesses with turnover up to ₹5 crore will benefit from pre-filled returns based on past filings.

These changes are expected to reduce the compliance burden, particularly for Micro, Small, and Medium Enterprises (MSMEs).

3. Strengthened Anti-Evasion Measures

In response to rising GST fraud, the Council has introduced measures to enhance compliance:

• E-Invoicing: Mandatory for businesses with an annual turnover of ₹50 lakh or more.

• AI-Based Fraud Detection: The GST Network will use advanced data analytics to track suspicious transactions.

• Stricter Penalties: Enhanced penalties for cases involving fake invoices or false ITC claims.

These steps aim to reduce tax evasion and ensure accurate reporting of transactions.

4. Taxation of Online Gaming and Betting

The Council clarified that a uniform 28% GST will apply to the full value of bets placed in online gaming, gambling, and betting activities, covering both skill-based and chance-based games.

5. Extension of GST Amnesty Scheme

To aid businesses affected by the pandemic, the GST Amnesty Scheme has been extended until December 31, 2024, allowing taxpayers to file pending returns with reduced late fees.

6. GSTR-2B Reconciliation for ITC

The Council emphasized the importance of reconciling GSTR-2B and GSTR-3B forms to ensure accurate Input Tax Credit (ITC) claims. An automated mechanism is being developed to reduce mismatches.

7. Release of GST Compensation to States

The Finance Minister assured that pending GST compensation dues will be released to states soon, helping them manage revenue shortfalls.

8. Revisions to Reverse Charge Mechanism (RCM)

The threshold for the Reverse Charge Mechanism has been increased from ₹50 lakh to ₹1.5 crore, offering relief to small businesses by reducing their compliance burden.

Conclusion

The decisions made at the 54th GST Council Meeting reflect the government’s commitment to simplifying the GST system while maintaining fiscal discipline. For businesses, these changes offer opportunities for cost savings and operational efficiencies.

for more information clink on below link

https://pib.gov.in/PressReleasePage.aspx?PRID=2053233

Thanks 

ASRN Tax & Accounting Services

Many individual taxpayers mistakenly believe that advance tax payments are meant only for businesspersons, companies, and corporates. However, this is a costly misconception. If your estimated tax liability exceeds Rs 10,000 after considering Tax Deducted at Source (TDS) or Tax Collected at Source (TCS), you are required to pay advance tax, according to Section 208 of the Income-Tax (I-T) Act, 1961. Salaried individuals are also subject to this rule, and the second installment for the financial year 2024-25 is due on September 15.

Who Needs to Pay Advance Tax?

Any individual whose estimated tax liability surpasses Rs 10,000 in a financial year must pay advance tax. This includes salaried taxpayers with additional income from other sources like interest from deposits, capital gains from the sale of shares, or mutual funds.

However, senior citizens who do not draw any income from business or profession are exempt from paying advance tax.

What is Advance Tax?

Advance tax is the payment of your income tax liability before the end of the financial year. Instead of paying it all at once, you are required to make payments in four installments throughout the year: June 15, September 15, December 15, and March 15.

Salaried individuals typically have taxes deducted from their salaries through TDS. However, employers do not consider other sources of income. As a taxpayer, you need to calculate and pay advance tax on these incomes.

Advance Tax Installments for Financial Year 2024-25: 

1. First Installment (Due: 15th June 2024)
   Pay 15% of the total tax liability.

2. Second Installment (Due: 15th September 2024)
   Pay 45% of the total tax liability, reduced by the amount paid in the first installment.

3. Third Installment (Due: 15th December 2024)
   Pay 75% of the total tax liability, reduced by the amounts paid in the previous installments.

4. Fourth Installment (Due: 15th March 2025)
   Pay 100% of the total tax liability, reduced by the amounts paid in prior installments.

Special Consideration for Self-Employed Individuals

Self-employed professionals and businesspersons opting for the presumptive taxation scheme have a different payment schedule. They are allowed to pay their entire advance tax in the last quarter, by March 15. This exception is made because small businesses might find it challenging to estimate their income and tax liability earlier in the year.

How to Pay Advance Tax

You can pay your advance tax online by visiting the Income Tax Department website. Here's a step-by-step guide to making the payment:

1. Log in using your PAN.

2. Click on 'e-pay tax' from the 'Quick Links' menu.

3. Confirm your PAN, enter the OTP received on your registered number, and proceed.

4. Select the assessment year 2025-26 (for the financial year 2024-25).

5. Choose 'Advance Tax (100)' as the payment type.

6. Fill in the required details and complete the payment.

Penalties for Missing Deadlines

Failure to pay advance tax by the due dates will result in penalties. You will be charged 1% interest per month on any unpaid or underpaid amount. Here's when penalties apply:

• By June 15: If less than 12% of the total advance tax is paid.

• By September 15: If less than 36% is paid.

• By December 15: If less than 75% is paid.

• By March 15: If less than 100% is paid.

If you miss the final deadline on March 15, you can still pay your advance tax until March 31, but you will incur one month's interest under Section 234C.

Waiting until July 31 (the due date for filing ITR) will result in an additional four months’ penal interest under Section 234B. To avoid these penalties, it’s crucial to meet advance tax deadlines.

Conclusion

Advance tax is a critical aspect of income tax compliance. Missing the deadlines can lead to penalties, so it's best to stay aware of your tax liability and make timely payments. Always ensure your other sources of income are included when estimating advance tax, and pay by the due dates to avoid unnecessary interest and penalties.

Team

ASRN Tax & Accounting Services

In a significant development, several private schools across the country have moved to court, challenging the imposition of Goods and Services Tax (GST) on affiliation fees. This legal battle raises concerns about the financial burden on educational institutions and the possible repercussions for students and parents.

### *Understanding the Issue:*

Private schools, especially those affiliated with national boards like CBSE or ICSE, are required to pay affiliation fees to maintain their standing with these boards. Historically, these fees were considered part of the regulatory framework. However, with the introduction of GST, these fees have now been classified under the taxable category, attracting an 18% GST rate.

This move has raised eyebrows within the educational sector, which has long been considered a public service rather than a business. The crux of the argument revolves around whether affiliation fees, which are compulsory for running schools, should be subjected to GST or remain exempt, as education is generally considered a tax-exempt service.

### *Private Schools’ Concerns:*

1. *Increased Financial Burden*: The imposition of GST on affiliation fees adds a significant financial burden on schools. Many argue that this added cost may force schools to increase fees for students, indirectly affecting the parents.

2. *Public Service or Commercial Entity?*: Schools contend that they are non-profit organizations providing a public service. Taxing affiliation fees, they argue, contradicts the spirit of education being a fundamental right and an essential public service.

3. *Double Taxation Worries*: Some institutions claim that the affiliation process, which is essentially a regulatory necessity, should not be subject to additional taxes, as it would amount to double taxation in some cases. They believe that the government should exempt such services, in line with the existing tax exemptions in the education sector.

### *Government’s Stand:*

On the other hand, the government maintains that the affiliation fee is a service rendered by the boards, and all services are taxable under GST unless specifically exempt. From a legal standpoint, the government classifies the affiliation process as a service provided by the educational boards to schools, which falls under the scope of taxable activities.

### *Possible Outcomes of the Court Case:*

1. *GST Exemption*: If the court rules in favor of private schools, it could potentially exempt affiliation fees from GST, providing relief to educational institutions and reducing the financial strain on both schools and parents.

2. *GST Retention*: If the government’s position is upheld, schools may have no choice but to continue paying the GST on affiliation fees, which could lead to increased costs for students or adjustments in school budgets.

### *What This Means for Parents and Students:*

Should schools be forced to absorb these additional costs, they may pass them on to students through higher tuition fees or additional charges. This could make education more expensive, especially for middle-class families already grappling with rising school fees.

### *Conclusion:*

The legal proceedings regarding the GST on affiliation fees could have far-reaching consequences for the education sector. The court’s decision will be crucial in determining whether the affiliation fee will remain under the GST net or be exempted, as many schools hope. This ongoing case is one to watch closely, as it impacts the financial operations of private schools and, potentially, the affordability of education in the country.

Stay tuned for more updates on this developing story as it unfolds.

Team

ASRN Tax & Accounting Services