Archives February 2025

Excited to know How, isn’t it? Let’s discuss it here. 

In budget 2020, New Tax slab had been introduced in which Taxpayer need to deny the various deductions such as HRA, Loss from House Property, Tuition fees (Children), Life Insurance, NSC deposit, PPF, etc

Lower Tax Rate has been applied for the New Regime. But due to denial of various amazing deductions, taxpayers still prefer to be taxed under the Old Tax Regime. In order to shift the interest of taxpayers towards New regime, Tax Rate has been drastically reduced.

New Tax Slab with effect from 01.04.2025

Income Tax Slabs	Tax Rate
Upto Rs. 4,00,000	Nil
From Rs 4,00,001 to Rs. 8,00,000	5%
From Rs 8,00,001 to Rs. 12,00,000	10%
From Rs 12,00,001 to Rs. 16,00,000	15%
From Rs 16,00,001 to Rs. 20,00,000	20%
From Rs. 20,00,001 to Rs. 24,00,000	25%
More than Rs, 24,00,000	30%

Standard Deduction 

Standard Deduction for Salaried Person allowed as deduction is Rs. 75,000/- without any documentary proof. This deduction is available without any expense or investment.  This amount is from FY 2024-2025 for only under the New Tax Regime . For the Old Tax Regime, Rs. 50,000/- is the standard deduction.

Claim under Section 87A – Brief

An Individual whose net income after deduction is not more than Rs. 7,00,000/- can claim this deduction for FY 2024-25. In Budget 2025, the Relief has been increased for those whose Income is upto Rs. 12,00,000/-
So, The taxpayers who opt for New regime and having salary income upto Rs. 12,75,000/- will have nil tax liability. 

Marginal Relief is also available under New Tax Relief. Know here, How?

If the income of an individual exceeds Rs 12,00,000 and tax payable on such income is exceeding the income amount over and above Rs 12,00,000, then the tax will be limited to the extent of such income exceeding Rs. 12,00,000.

For Example, An individual resident in india, total income is Rs 12,50,000/- The tax Liability is calculated as below:

The step to calculate the relief here:

Step 1 Calculate excess above Rs 12 lacs which means (Rs 12.50 lacs – 12 Lacs) which is Rs. 50,000.

Step 2  Tax on Total Income Rs. 12,50,000 is Rs 67,500/-

Step 3 Since Step 1 is less than Step 2, the Marginal relief would be Rs. 67,500 – Rs. 50,000 = 17,500/-

Now, after allowing the relief of Rs. 17,500, Tax Payable will be Rs. 50,000 + cess @ 4% = 52,000/- for the taxpayer whose income is Rs 12,50,000/-

Deductions not allowed for Taxpayers opting for New Regime

• HRA
• Section 80C such as LIC Premium, Tuition fees, PPF, NSC, FD for 5 years, ELSS, etc.
• Loss from Self Occupied House property of Rs 2 lacs
• Professional Tax u/s 16(iii)
• Section 80D, Section 80TTA, Section 80TTB, etc.

How to Opt for New Tax Regime
The New Tax Regime is the default tax regime from FY 2023-24 and those who want to be liable for tax under the old tax regime need to opt out by filing Form 10IEA.

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About Author – Deepa Kaintura

I am a lawyer by profession. I am a legal consultant in TaxAcumen providing services to corporates about GST, Income Tax, ROC Compliances, etc. My love for finance and law encouraged me to write and share the knowledge with the readers here.  

The companies registered under the Companies Act, 2013, have a separate legal entity. The operations are managed by the Board of Directors, and not the owners, subject to the provisions of said Act. Along with the powers of management, directors have been assigned with some duties and responsibilities, provided in the said Act.

Section 166 of the Act, deals with the duties of the directors, towards the company. Here, duties specified under the law are as mentioned below :

1. Act according to Articles of Association

Every director of the company shall act, according to the terms decided under Article of Association. The powers given in the Articles cannot exceed, unless the provisions permitted.

2. Act in the interest of the company

All the directors shall act in good faith in order to promote the objects of the company, for the benefits of its members, as a whole, and in the best interests of the company, employees, the shareholders, the community, and for the protection of the environment.

3. Don’t make secret profits

A director shall not achieve, or attempt to achieve any undue gain or advantage, either to himself or to his relatives, partners, or his associates, and if found guilty, he shall be liable to pay an amount equal to that gain.

4. Due care and skill

Every director needs to ensure that the due care, skills and diligence is in exercise, while taking the decisions for the company. Also, independent judgement should be exercised.

5. Confidentiality

The directors are the core management personnel of the company. They come to know various sensitive, confidential information, while exercising their duties. This information can damage the company, in case of disclosure. Hence, there is a need to maintain confidentiality for the sensitive information of the company.

6. Attend meetings

As required by law, directors need to attend the meeting conducted for the operations of the company. He must provide valuable ideas, inputs for the smooth functioning and betterment of the company, whenever required.

7. Conflict of Interest

Directors must know that the company interests are more important than his personal interests. He should not be involved in such a situation, in which he may have any direct or indirect interest that conflicts, or possibly may conflict, to the interest of the company.

8. Assignment of his office

Director can not assign his office to any person. Such assignment, if done, shall be void. Directors must fulfil his/her duties towards the Company, otherwise he/she will be liable to be punished according to the provisions of law.

Also read the Article on Appointment of Director 

Appointment of Directors – Provisions and Procedure for Private Limited

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I am a lawyer by profession. I am a legal consultant in TaxAcumen providing services to corporates about GST, Income Tax, ROC Compliances, etc. My love for finance and law encouraged me to write and share the knowledge with the readers here.  

A company registered under Company Act, 2013 with MCA needs to ensure proper compliances as per the relevant said law. A company is a legal entity which needs a board of directors to operate its functions. A board of directors implies a group of individuals who are entrusted with the management of the company.

At the time of incorporation, a Private Limited is required to appointment a minimum of two directors. In case of no appointment made, all the subscribers to memorandum will be considered as first directors. After Incorporation, in case there is a need to appoint a director, the proper procedure needs to be followed.

Prerequisite for the appointment of a director 

1. A person proposed to be appointed as director, must have a Director Identification Number (known as DIN) and a valid DSC to sign the MCA Forms;

2. The person proposed to be appointed as Director must submit the form DIR 2 to give the consent for appointment and declare that he is not disqualified to be appointed as director in the company;

The eligibility to become a director in the company is as follows:

1. The proposed person must be above 21 of age;
2. The individual must be of sound mind;
3. An undischarged bankrupt or adjudged insolvent should not be appointed;
4. A person sentenced and convicted by court for more than six months is not eligible to become a director.

Documents required for appointment:

1. A copy of valid PAN copy 
2. A copy of Identity proof, such as Aadhaar, Voter Id, Passport, etc.
3. Passport Size Photo
4. Digital Signature Certificate (DSC)

During Incorporation process, the person to be appointed must have obtained DSC for sign the Form to subscribe and mention PAN for the process. A DIN will be allotted directly and no diferent form is required to sign or to apply.

And in case of Appointment after the incorporation, the procedure is required to be followed, which is as follows:

1. Firstly,check the AOA of the company to ensure that the appointment must be within the limit of Articles. If required, alter the Articles of Association for the same.

2. The proposed person must obtain a valid DSC.

3. The person proposed, if they don’t have a valid DIN, must apply the same with the Form DIR 3. Also refer the article on Allotment of DIN here https://taxacumen.in/?p=349

4. The proposed person must intimate the Company about his/her active DIN for further process.

5. Also, Submit the consent to act as a director and declare that there is no disqualification to him/her to appointment in DIR 2. No person can be appointed as director unless he/she submits the consent to act as director.

6. The proposed person must intimate the company about his/her interest in other entities. 

7. The appointment of directors takes place in a General Meeting by the shareholders. In case an appointment is being made in between the AGMs, the company can call an Extra General Meeting(EGM) for the purpose. Also, the additional director can be appointed by the directors in the Board Meeting only, if empowered in the AOA. The additional director can be appointed till the next AGM to be held.

8. The company must provide an appointment letter to the person appointed.

9. The company must file the FORM DIR 12 with ROC within 30 days from the event.

The article here is based on the provisions and procedure provided under the Company Act, 2013 in general language. 

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About Author – Deepa Kaintura

I am a lawyer by profession. I am a legal consultant in TaxAcumen providing services to corporates about GST, Income Tax, ROC Compliances, etc. My love for finance and law encouraged me to write and share the knowledge with the readers here.  

Under the company Act, 2013, Section 153 to 159 are in relation to the allotment of Director Identification Number (commonly known as DIN) to Director and conditions to be satisfied for the same and penalty for Non-compliance.

Section 153 states that

“Every individual who is intended to become a director needs to apply for DIN. Application to be made in the form DIR-3 to the Central Government (CG) along with the prescribed fees (presently fees is 500 for each application)

Procedure to Apply for DIN

The following documents need to be uploaded while applying DIN:

1. Photograph
2. Proof of Identity
3. Proof of residence
4. Verification of Signature specimen (Optional)

The form DIR-03 is to be digitally signed along with the applicant by 

A Chartered Accountant in practice; or

Company Secretary in practice; or

CMA in practice; or 

Managing Director or Director of the company in which applicant intended to be appointed; or

CS of the company in full time employment.

Section 154 states that the CG shall allot DIN within one month from the receipt of the application after due verification.

Conditions to be complied for Director Identification Number

There are also some conditions mentioned in relation to DIN under the above said Act which are as follows:

A Person can have only one DIN;

Every existing Director shall within one month of receiving the DIN, intimate to all the companies wherein he is a director;

Every company shall, within fifteen days of the receipt of DIN from the directors, furnish all the details to the Registrar;

Every company or directors, while furnishing any returns, information or particulars required under the Act, shall mention the DIN in the return, information or particulars relating to the said director.

Change in Particulars of the Directors – DIR-6 Form:

In case of any change in the particulars of the directors, the Form DIR-06 is to be submitted to intimate the changes such as change in address, or any other details.

Penalty/Punishment for Non-compliance

If any individual/ Director of a company, contravenes any provision, shall be punishable with the imprisonment for a term upto six months or with fine upto the limit of Fifty Thousands.

And it is also stated that in case of continuing Non-compliance, punishment can be extended with a further fine upto Five hundered for every day after the first contravention.

Also if any company contravenes the requirement of furnishing DIN of the directors or other officers under section 157, the company shall be punishable with the fine which is not less than Twenty thousands, but may extend upto one lakh rupees, and 

Every officer-in default of the company shall also be punishable with fine which shall not be less than twenty five thousands, but may extend upto one lakh rupees.

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About Author – Deepa Kaintura

I am a lawyer by profession. I am a legal consultant in TaxAcumen providing services to corporates about GST, Income Tax, ROC Compliances, etc. My love for finance and law encouraged me to write and share the knowledge with the readers here.  

MSME stands for Micro, Small and Medium Enterprises in India. The business entities on the basis of their Investment value in Plant and Machinery and Turnover can decide and get to know that, whether it falls into the definition of MSME and get benefited with the schemes which are applicable for MSMEs. 

With effect from the date 01.07.2020, in the gazette of India, the Government notifies the new revised criteria for classification of micro, small and medium enterprises, which is as provided below:

(i) a micro enterprise, where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;

(ii) a small enterprise, where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees;

(iii) a medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

There are plenty of schemes and benefits available for the entities that fall under this criteria. To get the benefit, One needs to get itself registered for the same. Here, we are going to provide you with an overview of the registration process. 

Firstly, to get the MSME registration certificate, you can apply through the Udyam Registration Portal https://udyamregistration.gov.in/UdyamRegistration.aspx

Secondly, Documents and Information required for the Registration are as follows:

• Business Name 
• Type of Business Organization (Proprietorship Firm, Partnership firm, Pvt Ltd, etc.)
• Proof of Business entity (Partnership Deed, Certificate of Incorporation (COI) along with MOA and AOA, etc.) 
• Aadhaar Number of Individual, being the Applicant 
• PAN of Individual, being the Applicant
• Address of Premise to be registered
• Business Activity
• Bank Cheque or Passbook page for Bank Account Details
• Investment Value
• Turnover Value / Financial Statement
• Income Tax Return, if any

Thirdly, the Steps to be followed for Registration

Step 1

Validate the Aadhar Number of the applicant through the OTP and Mobile Number on the Registration Portal.

Step 2

Fill out the Complete Application form with your Business details. Select the business activity of the entity carefully.

Step 3

Click on the Submit Option and enter the OTP received.

Step 4

You will get the UDYAM Registration details and certificate in your mailbox. 

The registration can be done by the applicant itself. There is no Government Fee involved while getting registered for UDYAM. Business Activity and Business Code need to be selected accurately while filling out the form. 

For the professional advice, one can reach to us: 

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About Author – Deepa Kaintura

I am a lawyer by profession. I am a legal consultant in TaxAcumen providing services to corporates about GST, Income Tax, ROC Compliances, etc. Having a practical exposure of GST, Income Tax and ROC Compliances, I love to share my knowledge with our readers about legal compliances.