Author: Sanjeev Archak

The budget for the year 2020-2021 has created a lot of ripples of curiosity among the people due to its unusual features. In this budget, the Finance Minister has proposed the removal of about 70 different tax exemptions. This has made the tax calculation a much simpler and easier activity for many individuals. If you think your income is within the taxable regime, you need to keep in mind a few of the important things before you opt for a genuine income tax calculator 2020. 

Choosing the Regime

The biggest thing that a person needs to do is to choose the right tax calculation regime. As per the recent budget regime, there is a relaxation in the tax rates but with the condition of a lesser number of deductions. In this case, the best option is to make use of the income tax calculator ay 2020 21 to check through the right regime. You can calculate the payable taxes individually as per both the regimes and can check which one is more profitable for you. 

The Deductions

As per the new regime for 2020-21, there are 70 deductions that have been removed. Hence it becomes quite important for you to understand the deductions that will be made. The maximum amount of deduction that an employee can make is 10% of his or her salary. If you are choosing the new regime, the deductions will be made as per the 80CCD (2) of the Income Tax Act 1961. People who have chosen the old regime may have several deductions but have to pay a higher tax rate comparatively. 

How is This Calculated?

In order to come up with the right payable tax, you need to calculate the net taxable income for the financial year. 

Step – 1: The very first step in this calculation is to first accumulate the income of the financial year. This accumulation has to be the total taxable income for that financial year. 

Step – 2: Now, you need to know the deductions that you can claim for that particular financial year. Here, you need to check through the list of deductions removed if you are calculating the payable tax amount as per the regime of 2020-2021. 

Step – 3: When the deductions are made from the total income, you get the total taxable amount. 

Step – 4: On this, you need to apply the tax rate based on the slab you belong to so that you can calculate the amount that you need to pay as tax. 

Even though the method has been simplified after removing different exemptions, there are a number of people who might find it difficult to find out the exact amount that has to be paid as tax. They might either opt for a professional and pay a hefty commission or use the tax calculator AY 2020 21. 

Choosing the Right Tax Calculator

If you are unable to make the calculation manually and wish to seek the help of the income tax calculator 2020, you should make sure to choose the right one. Go through the reviews of different calculators well and check the details that the calculator is asking for. Make sure that the calculator includes these eminent steps:

• Option to the financial year, gender, and age 
• Providing the taxable salary and the deductions
• Providing other details such as interest income and others
• Providing other investment options such as under section 80D, 80C, and others if you wish to calculate as per the old slab
• Ability to compare results calculated as per the old slab as well as the new slab 

These eminent steps in the calculator will help you in getting the right one.

Conclusion

Integra Books can offer you an easier way of calculating. Contact us to know the methods even further. You can conveniently calculate your tax for the financial year 2020 – 2021 by clicking here.

Goods and Services Tax, commonly known as GST, has been applicable to all businesses operating in India since July 2017. This ambitious and targeted tax regime has been a major asset in subsuming a plethora of indirect taxes that were applicable to goods and services before its implementation.

However, a major problem statement GST has presented businesses with is the calculation of late payments, and the interest rates applicable to it. GST has two strata of operation, namely Central Goods and Service Tax (CGST) and States Goods and Service Tax (SGST). Under GST, the government has implemented certain procedures that determine the late fee and interests applicable to businesses failing to meet the payment timelines. Let’s take a closer look into the functioning of GST to understand how to calculate late fee and interest in GST.

Provisions of the GST Regulations

Under Section 50 of the CGST Act, the government of India has the right to collect defined interest rates on the tax dues of businesses. These tax dues consist of the taxes payable excluding interests and penalties, on certain goods and services. The government only imposes the interest for GST after the due taxes are paid by individuals/businesses, as the official GST portal doesn’t allow them to file for returns before paying their taxes.

This rate of interest is defined at 18%, which carries from the period from the date when the taxes are due until the date that taxes are paid. The GST department issues a notice, after which this interest has to be paid to file for returns every financial year. The late payments are cleared in the form of “challan”, which are issued on the official GST portal. A copy of this challan has to be sent to the jurisdictional tax officer. This challan is named Form DRC03.

How to Calculate Late Fee and Interest for GST Returns?

There are two ways to calculate the late fee and interest in GST to file for returns. The differences between them are subtle, but they are important to understand to get a grasp of interest and late fee calculator.

1. Calculator Specifically for Late Fee 

 Late fees are charged under the GST laws in case of delays in filing for returns in GST by businesses or individuals. The late fees applicable right now on SGST and CGST is Rs 25 per day. You can calculate the late fees seamlessly on Integra Books’ interest and late fee calculator GST automatically. 

      2. Calculation Specifically for Interest on Late Payments or Filing                   for  GSTR 3B

If you have any GST dues, whether late payment or late filing, then an interest rate on them is applicable under the GST laws. These interest rates are applicable to every taxpayer who has made a delayed GST payment at 18% per annum. Interest rates are also applicable if an excess input tax credit is claimed at 24% per annum. These interest rates can be calculated on the interest and late fee calculator GST offered by Integra Books.

Now that you know about calculating the late fee and interest in GST, let’s take a look at some important dates, so you don’t miss out on filing for GST Returns:

• The returns scheme for filing for GST Returns has been postponed to start from 30th September 2020.
• E-invoicing for filing for GST returns has been postponed to start from 1st October 2020. This is only applicable for taxpayers who have an annual turnover of over Rs 100 crores for B2B transactions, or over Rs 500 crores for B2C transactions.

A recent update regarding  GST late fee payment 

Below are important highlights as per a recent update from the government by the Economic Times  on June 12th, 2020:

• No late fee will be charged for taxpayers who do not have any tax liability but were yet to file returns for the period from July 2017 to January 2020  (prior to the COVID-19 period). 
• Taxpayers who have liability but have not yet filed their returns can do so with late fee payment of maximum Rs 500 if returns are submitted by July 1, 2020.
• During COVID-19 period of February, March and April 2020, the interest rate on late return filings by small taxpayers with turnover up to Rs 5 crore, will be reduced to 9% from 18%, if returns of inward supplies are filed till September 30.

Conclusion

Integra Books can help you keep track of all the GST due dates and payments, and maintain accuracy in the calculations of GST payments. Contact us today for any GST related concerns and other financial solutions by clicking here.

In the wake of the COVID-19 pandemic, the Indian Government initiated a multitude of incentives to be dispersed to the qualified Micro, Small, and Medium Enterprises (MSMEs) across the country. Announced by the Finance Minister Smt Nirmala Sitharaman on May 13th, these incentivized relief packages are targeted towards providing much-needed assistance to the businesses in surviving the repercussions that this pandemic has brought along with it.

MSMEs employ a major portion of the country’s working population, especially the economically weaker areas. These relief packages are meant to provide them with a solid ground to avoid bankruptcy, and the competency to still pay the salaries and wages to their employees. This was further assisted by the Ministry of Labour and Employment and Ministry of Home Affairs, who issued an advisory and order respectively to still pay the salaries of the employees during the lockdown.

Let’s take a closer look at what these relief packages are and how they are supposed to help MSMEs.

Loans

Automatic Loans for MSMEs were a major highlight of the relief packages. Under Automatic Loans, the MSMEs will have the following advantages:

• Added relief for businesses in the form of additional working capital of 20% of the finance of outstanding credit. Term Loans will implement a concessional rate of interest for the same. Available to MSMEs with an outstanding credit of up to Rs 25 crores and a turnover capital of up to Rs 100 crores, without having to provide any collateral or guarantees of their own.
• Of the loan balance that any MSME carries, a 20% loan extension would be provided under the same conditions as the last pointer.
• These relief packages will be available to over 45 lakh MSMEs across India, with over 3 lakh crore rupees available for dispersion.

Taxes and Provident Funds

There were some major rollbacks provided by the Finance Ministry for employers and employees alike for 

• The Finance Ministry has reduced the rate of provident funds issued between the employer and the employee from 12% to 10%. 
• The Tax Deduction at Source (TDS) and Tax Collected at Source (TCS) deduction rates have been cut down by 25% on non-salary payments. Only residents will be able to claim this benefit, which has been implemented since 14th May.
• For all businesses, the due date of filing for income tax returns has been officially extended till 30th November 2020. 
• Finance Ministry has also aimed to increase liquidity across all domains in the market. Exact monetary relief announcements may or may not be announced by the Ministry. 

Glass Half Full or Empty?

Digging deeper into the relief packages offered by the Finance Ministry, it becomes clear that the idea is solid, but lost amidst the big numbers. There are over 5 crore MSMEs (registered or unregistered) in India, and the relief packages offer eligibility to only 45 lakh of them, which is a mere 6%. 

According to The Print, the government failed to provide payroll support to MSMEs. Moreover, the government also sanctioned loans instead of directly transferring money to MSMEs, which was the result of the government focusing on liquidity rather than direct transfer. There is a possibility that this might result in MSMEs being unwilling to return the loans taken under this scheme.

Conclusion

Regardless of the fact that the government’s actions for providing relief to MSMEs weren’t swift, it did deliver in coming up with schemes that can majorly assist in preventing an economic downfall due to the pandemic. It is reasonable for MSMEs to be less content with the structure/benefits of the relief packages, but these packages can prove to be a source of vital assistance to help keep their business running amidst the complications caused by the COVID-19 pandemic.