In Hurry..

A photographer for a national magazine was assigned to take pictures of a great forest fire. He was advised that a small plane would be waiting to fly him over the fire.

The photographer arrived at the airstrip just an hour before sundown. Sure enough, a small Cessna airplane was waiting.

He jumped in with his equipment and shouted, "Let's go!" The tense man sitting in the pilot's seat swung the plane into the wind and soon they were in the air, though flying erratically.

"Fly over the north side of the fire," said the photographer, "and make several low-level passes."

"Why?" asked the nervous pilot.

"Because I'm going to take pictures!" yelled the photographer. "I'm a photographer, and photographers take pictures."

The pilot replied, "You mean you're not the flight instructor?"

Understanding Indian Stamp Act 1899

Introduction:

There are some Acts which are difficult to understand and follow correctly. In my view The Indian Stamp Act, 1899 and Registration Act and Transfer of property Act, are those Acts which are inter related and application of these acts is required almost every day. Be it an affidavit, agreement or execution of sale deed, receipt, family settlement, invariably one has to refer to and comply with the provisions the above Acts. In this article, attempt is made to highlight the provisions Stamp Act in a brief manner.

Scheme of Act:

The Indian Stamp Act, 1899 is a Central legislation and deals with all aspects of stamps and stamp duties. It applies to whole of India except the State of Jammu & Kashmir. The Act through Schedule-1 lays down the rate of stamp duty payable on different instruments.

The instruments given in the Schedule-1 can be classified into two categories. First category of instruments consisting of bills of exchange, promissory notes, stamp duty for transfer of shares, debentures, bills of lading, proxies, letters of credit and receipts.

Second category of instruments consist of instruments such as agreements, affidavits, articles of association of a company, partnership deed, lease deed, mortgage, power of attorney, security bond etc..

Vide entry 91 of List 1 central government is empowered to levy stamp duty in respect of first category of instruments and rates prescribed by Central Government will prevail over the rates prescribed by the state Government

Vide Entry 44 of List III and Entry 63 of List II, the State Governments have power to enact and levy stamp duty and prescribe the rates for all other instruments not referred above.

In the case of Second category of instruments, the rates prescribed by individual States will prevail in those States. However for these instruments, the rates prescribed in Scheudle-1 will be applicable only for union territories. If there is any conflict between State law and Union law, the Union law prevails as per Article 254 of Constitution.

It is clear from the scheme of legislation that fields for levy of stamp duty are central and state are demarcated so as to ensure that revenues collected through stamp duty are shared as per provisions of the Act.

Instruments are chargeable with stamp duty:

As per Section 2(14) of the Act, Instrument includes every document by which any right or liability is, or purported to be created, transferred, limited, extended, extinguished or recorded. Section 3 says every instrument mentioned in Schedule I to Indian Stamp Act is chargeable to duty as prescribed in the schedule. Thus, if an instrument is not listed in the schedule, no stamp duty is payable.

The list includes all usual instruments like affidavit, agreement, lease, memorandum and articles of company, bill of exchange, bond, mortgage, conveyance, receipt, debenture, share, insurance policy, partnership deed, proxy, shares etc. Instruments chargeable with duty but executed out of India, have to be stamped within 3 months after they have been received in India.

Stamp Duty in case of several documents in one instrument:

Some times several instruments are executed for one transaction. In case of sale, mortgage or settlement several instruments are executed for one transaction, only nominal value is collected on other instruments other than the principal instrument. If one instrument relates to several distinct matters, stamp duty payable is aggregate amount of stamp duties payable on separate instruments. If one instrument covering only one matter can come under more than one description given in Schedule to Stamp Act, in such case, highest rate specified among the different heads will prevail.

Exemptions from stamp duty:

Instruments executed by, on behalf Government need not bear any stamps. Similarly if the Schedule exempts any particular instrument subject to certain conditions those are also exempt or concessional duty is payable. Section 9 of the Indian Stamp Act gives power to State Govt to remit the stamp duty in certain cases, by issuing a notification to that effect. If the state government is following Schedule I of the Indian stamp Act, this exemption will be applicable. For e.g. By exercising power u/s 9(a) of the Indian Stamp Act 1899, State Government of Orissa has issued a notification to provide exemption from stamp duty in the case of orders sanctioned by the Hon’ble High courts u/s 394 of the Companies Act 1956. But this exemption is subject to fulfilment of conditions specified there in.

Types of Stamps:

Stamps are of two types namely adhesive stamps and printed/embossed stamps. Again adhesive stamps are printed with words “Notarial” or Share. The former are used for notarial acts and the latter are used for transfer shares/debentures. Embossed stamps are non-judicial stamps which are used for executing documents. However for court proceedings, court fee stamps are used as per the provisions of court fee Act and not under Stamp Act.

Manner of payment of stamp duty:

Stamp duty is paid either by purchasing and affixing adhesive stamps or by remitting money for franking on the instruments. Adhesive stamps are used for execution of promissory notes, bill of exchange, and transfer of shares or debentures. Adhesive stamps are printed with words “Notaries” or Share. The former are used for notarial acts and the latter are used for transfer shares/debentures. Non judicial stamps are printed with Government emblem and are used for execution of agreements. Central government only has the authority to print the stamp papers and supplies to various states. Stamps of various denominations are sold in treasuries and also authorized stamp vendors who usually charge premium some times in case of scarcity. Adhesive stamps are to be cancelled so that the same can not be used again. Cancellation can be done by writing his name /initial or by drawing lines across the stamps. If cancellation is not done that instrument will be deemed to be unstamped

Liability to pay duty:

In the absence of any agreement to the contrary, in respect of promissory notes, bonds, debentures, mortgage deeds, transfer of shares, by the person drawing or making or executing the instrument.

Effect of under stamped/unstamped documents:

As per the Evidence act, any instrument presented as evidence must be charged with requisite stamps. If an instrument is not stamped or under paid, it will not be accepted as evidence in a court of law. Collector or any officer before whom it is presented can impound such under stamped/unstamped instruments and levy fine. The person executing the documents can present the document to the collector within one year from the date of execution for adjudication and pay the deficit stamp duty and make the document all right.

Conclusion:

Unless proper stamp duty is paid, documents executed may expose the Executants to huge penalty and also face the risk of court not accepting it as evidence. It is therefore important to check the relevant article in Schedule-1 or 1A of the states to ensure that proper stamp duty is paid at time of execution of instrument.

Employee can claim deduction even of employer's contribution to NPS

The New Pension Scheme (NPS) was introduced by the Union Government in 2003. According to the new scheme, employees appointed on or after January 1, 1994 will contribute 10 per cent of their Pay and Dearness Allowance to the Pension Fund Regulatory and Development Authority under the Ministry of Finance. An equal amount will be contributed by the Centre. The scheme is mandatory for Government employees, but optional for other citizens of India. NPS merely declared that tax benefits would be applicable as per the Income Tax Act 1961 as amended from time to time. 

Limits on Deduction

Section 80CCE provides that the aggregate amount of deduction under Section 80CCC and 80CCD shall not exceed Rs 1 lakh. The Finance Act, 2011 provides that contribution made by the Central Government or any other employer to NPS shall be excluded while computing the limit of Rs 1,00,000. The contribution by the employee to the NPS will be subject to the limit of Rs 1,00,000.

At the same time, deduction in respect of contributions by the Central Government or any other employer to NPS available under Section 80CCD (2) will not be subject to the limit specified in Section 80CCE. This provides a leeway for employees to seek a restructuring of the pay. Employers may be willing to include the contribution to the NPS in the pay package and claim 10 per cent of the salary as deduction. Depending on the pay scales, such restructuring may offer a benefit to both the employer and the employee.

The Employees Provident Fund Organisation has within its fold 4.72 crore subscribers. They get interest income of 9.5 per cent on PF deposits for 2010-11. There is also a move to increase the rate of interest .

The New Section 36(1)

The Finance Act, 2011 has inserted a new Section 36 (1)(iva) with effect from assessment year 2012-13 to provide that an assessee will get a deduction in respect of contribution towards a pension scheme referred in Section 80CCD of the Act on account of an employee up to 10 per cent of the salary of the employee in the previous year. For this purpose, ‘salary' includes DA, if the terms of ‘employment' so provide, but excludes all other allowances and perquisites.

Currently, contribution made by an employer towards a recognised provident fund, an approved superannuation fund or an approved gratuity fund is allowable as a deduction from business income under Section 36, subject to certain limits.

However contribution made by an employer to the NPS is not allowed as a deduction. The newly inserted clause provides that any sum paid by the assessee as an employer by way of contribution towards the pension scheme on account of an employee to the extent it does not exceed 10 per cent of the salary of the employee in the previous year, shall be allowed as deduction in computing the income under the head ‘Profits and gains of business or profession'.

No doubt, such deduction would have been available under Section 37. The matter, however, is placed beyond doubt by the new Section. It should, however, be noted that deduction would be available only upon actual payment. The term ‘employee' will include all employees including Director-employees. The limit of 10 per cent will apply to each employee individually. The Finance Act has also amended Section 40A (9) for this purpose.

Waiver for PF interest

In this context, the decision of the Income-Tax Department to grant an exemption from tax on the interest income on PF deposits will come as double bonanza for the subscribers.

Deduction for contribution to the NPS in the hands of the employer and the exclusion of such contributions in the hands of the employees in computing the exemption under Section 80C will mean a morale booster for the employer and the employee.

Ishq Na Kario kake..

Liked this para only from the song

Ishq na kariyo kakke
dil ki baat na suniyo kakke
ishq ishq di gali vich khed na kabhi
ishqan de bade shiyape

[ Ishq na kariyo kakke
dil ki baat na suniyo kakke
ishq ishq di gali vich khed na kabhi
ishqan de bade shiyape ]

What Constitutes Statutory Liquidity Ratio SLR

(a) Cash or
(b) Gold valued at a price not exceeding the current market price, or

(c) Investment in the following instruments which will be referred to as "Statutory Liquidity Ratio (SLR) securities":
(i) Dated securities issued up to May 6, 2011;
(ii) Treasury Bills of the Government of India;
(iii) Dated securities of the Government of India issued from time to time under the market borrowing programme and the Market Stabilization Scheme;
(iv) State Development Loans (SDLs) of the State Governments issued from time to time under the market borrowing programme; and
(v) Any other instrument as may be notified by the Reserve Bank of India.

Provided that the securities (including margin) referred to above, if acquired under the Reserve Bank- Liquidity Adjustment Facility (LAF), shall not be treated as an eligible asset for this purpose.
2. Encumbered SLR securities shall not be included for the purpose of computing the percentage specified above.
Provided however that for the purpose of computing the percentage of assets referred to hereinabove, the following shall be included, namely :
(i) securities lodged with another institution for an advance or any other credit arrangement to the extent to which such securities have not been drawn against or availed of; and
(ii) securities offered as collateral to the Reserve Bank of India for availing liquidity assistance from Marginal Standing Facility (MSF) up to one percent of the total net demand and time liabilities in India carved out of the required SLR portfolio of the bank concerned.

3. In computing the amount for the above purpose, the following shall be deemed to be cash maintained in India:
(i) The deposit required under sub-section (2) of Section 11 of the Banking Regulation Act, 1949 to be made with the Reserve Bank by a banking company incorporated outside India;
(ii) Any balances maintained by a scheduled bank with the Reserve Bank in excess of the balance required to be maintained by it under Section 42 of the Reserve Bank of India Act, 1934 (2 of 1934); and
(iii) Net balances in current accounts with other scheduled commercial banks in India.

Mistakes in TDS Returns

Now days, Income Tax department very frequently issuing Notices u/s 201(1) /206C (7).

These notices are mainly for Short Deduction & short Payment of Tax. If we ensure certain things, Notice from Income tax Department can certainly be avoided.

Short Deduction is reported mainly due to following reasons: -

1. While filing e- TDS returns we need to mention the rate of Tax. Here if we take 1% instead of 2% then, even though tax is deducted at 2% it will report in short deduction.

2. If we receive Certificates u/s 197 for lower deduction of tax then, without fail those parties are required to be marked as “A” for lower deduction of tax. If we fail to do so, system will calculate the differential amount & this will be termed as short deduction.

3. If we are using only multiple lines for one single transaction then, too short deduction is reported.

For example: Amount paid or credited to Mr A is Rs. 1000/- .Tax deducted is Rs. 110/-.

But while filing e-TDS return if two lines are used i.e. In first line Amount paid Rs. 1000/- Tax deducted Rs. 100/- .  In second line amount paid Rs. 1000/- & tax deducted Rs. 10/-.

Then, while filing revise TDS returns, the amount paid is required to be spitted to the extent of tax paid.

4. If section is wrongly quoted in challan then too, short deduction is reported.

For example, if Tax is deducted u/s 194C but in challan section is wrongly mentioned as 194A or 194J then system will apply  10% rate & differential amount will be treated as short deduction. Correction of Section in challan can be carried only by Assessing Officer.

5. Deductor has to make payment in different challan for different section. Further challan need to be bifurcated based on deductee type Company & Non company.

If deductee is individual & tax is deducted is Rs. 100/- then, in challan dedutee type should be non Company.

In TDS return we are supposed to give deductee code -1 for Company and 2 for Non Co.

In case, if any individual is given deductee code as 1 then, system will apply rate of tax for Company & accordingly short deduction will be calculated.

Short payment of Tax is reported due to following reasons :-

NSDL matches the data given by the deductor in TDS returns with data provided by the bank. If we make any mistake in TDS returns then, system cannot recognize the payment & hence, despite of making tax payment no credit will be given to the Deductor. Following could be the probable reasons for short deduction of Tax.

1. TAN mentioned in Challan is wrong. In that case, only Assessing officer can rectify the TAN.

2. Challan No or Challan tender Date or Amount is wrongly mentioned in e-TDS returns.

3. For Regular Tax payments Major head is to be taken as 200. If major head is taken as 400 then it will amount to tax paid on Assessment. In that case, no credit will be given to the deductor for the amount of tax deposited.  Deductor can approach the Bank & request to change the major head from 400 to 200.

Before filing the return, it is required to extract data in. With the help of various excel function one can easily come to know about the short deduction if any.

What is required to be done after receiving Notice u/s 201(1) / 206C(7) :-

If the amount involved is small and you do not want to contest the same you can pay it online via Challan No 281 on  

https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Please be carefull in selecting Assessment Year. Also type of Tax would be 400 for regular assessment.

If you decide to Contest/revise the return

In the Notice, Department just intimate us single amount of short deduction & short payment.  Considering the huge data in the return, it becomes difficult to find out under what transaction short deduction is reported. On written request to ITO, they provide us party wise details of short deduction. Hence, addressing those problems becomes little easy.

We need to revise the returns after making due corrections in the original e-tds return.

After filing TDS returns, one should check the status of quarterly statements uploaded on NSDL website. Status of challan must be shown as “Booked”. If still it is shown as matching Pending or Amount mismatch then, we should again find out where exactly we went wrong while filing e-TDS returns.

Many times due to change in software or due to ignorance, original FVU file is not available with the deductor. Then, filing revise return becomes impossible job. In such situation NSDL provides the FVU files after due registration of TAN on NSDL web site.

If returns are not revised then, Assessee will be termed as “Assessee in Default”   & then, order u/s 201(1) /201(1A) will be issued along with Notice of Demand by the officer. Then, only remedy available to an assessee is to file Appeal or to go for 154 Application.

But if we carefully file the returns then, surely Notice from Income tax department can be avoided and then TDS job will no more be Tedious.

Perfect Son

A: I have the perfect son.
B: Does he smoke?
A: No, he doesn't.
B: Does he drink whiskey?
A: No, he doesn't.
B: Does he ever come home late?
A: No, he doesn't.
B: I guess you really do have the perfect son. How old is he?
A: He will be six months old next Wednesday

MICR Code

MAGNETIC INK CHARACTER RECOGNITION (MICR)

In MICR technology the information is printed on the instrument with a special type of ink which is made up of magnetic material. On insertion of the instrument in the machine, the printed information is read by the machine. MICR system is beneficial as it minimizes chances of error, clearing of cheques becomes easy and transfer of funds becomes faster in order to facilitate operations.

MICR code consist of 9 digit

First three digit (1-3) denotes city and are same/identical first three digit of your pin code
for example first three digit of Pin code of  New Delhi =110 so first three digit of MICR code of all the bank branches located in New Delhi must be 110.

4-6 digit denotes for Bank
each bank has given a three digit code,4-6 digit is= bank code eg. SBI code is "002"so 4-6 digit of MICR code all the the branches of SBI is "002" irrespective of location in the india.

(7-9)Last three digit denotes branch code,it is in serial wise ,means if delhi has only one branch of SBI and its MICR code will be

To search any image

This website can backtrace any image on internet by displaying which websites are hosting it..

http://www.tineye.com/

Aap...?

Ek ladka ek unknown aunty ki help kar k unhe unke ghar tak lift deta hai.

Raat jada hone k karan aunty unhe kehti hai k beta raat bohot ho gayi hai tum yehi ruk jao aur bittu k room mein so jao.

Ladka bola no thanks aunty mein hall mein so jaunga.

Subah ek beautiful ladki ek cup cofee lekar uske paas aayi to ladke ne use poochha aap kaun....... 

ladki boli mein Bittu aur aap kaun

Ladka bola ........Mein Saala gadha bewkoof ullu ka patha….

CA's held guilty on following counts

Financial statements attain sanctity when they are attested by an auditor. Auditors, in turn should exercise certain precautions before lending their names to the financial statements lest they are held liable for negligence. Certain heads are not capable of being cross-checked and the risk attached to such lines such as travelling, etc., is less than those of others where a cross-check can be made even by an outsider. Upon completion of substantive procedures, the auditor would do well to ponder over certain aspects.

The following are some areas where caution is to be exercised

Capital vs revenue: There are several case laws deciding whether a particular expenditure or income is to be treated as revenue or capital. Error of judgment results in distorting the true and fair view. The auditor should document the reasons for treating a particular expenditure as capital or as revenue.

Write off of bad debts: The auditor should require of the management to explain the circumstances under which the debts are written off as bad. The normal course is that a provision is to be made when there exists a suspicion about recovery of these debts.

The auditor should seek conclusive proof that the entity has exhausted all the recourses open to it before writing it off. S 227(1A) requires the auditor to ensure that all the transactions are properly made and are not prejudicial to the interests of the company or of the shareholders. 

Interest on loans: Interest on loans bears a relation to the loans outstanding. The auditor would do well to seek the confirmation from the lenders before accepting the value of interest as true. When the loans are being serviced, the interest component also should come down correspondingly.

Overdue interest on secured loans is better disclosed alongside the loan rather than as a current liability as in the case of secured debentures. The reason is that the lenders exercise their lien on the security not only for the principal, but for interest also.

Share application Money: The company does not get any right on the share application money until the allotment is made. Law requires these funds to be kept deposited in a separate bank account till the shares are allotted. Therefore, share application money cannot be considered as part of shareholders funds until the shares have been allotted. Such amounts are to be included under the head ‘Current liabilities'. No doubt, such inclusion might distort the current ratio. This can always be explained to the reader by way of a specific note.

Such ratio may be calculated both including and excluding the value of share application money for abundant clarity. An alternative way of carrying such amounts would be by way of unsecured loans in case they are carried longer than one financial statement, though not justifiable.

In case of public issues, the Securities and Exchange Board of India regulates the time frame within which allotment is to be made. Inan unlisted company or the promoters pumping in funds, it would do good to allot the shares and carry them as share capital instead of retaining them as share application money. This would boost the paid-up capital and improve the debt-equity ratio substantially. 

Current liabilities and provisions: Expenditure such as sales tax, salaries, rents, electricity charges, PF and ESI payments, etc for the month ended on the date of balance sheet are made in the subsequent financial period. At the year-end, the statements should contain appropriate entries for all these expenses. The entity would have paid such items by the time audit is completed. It would be a simple matter for the auditor to ensure provisions are made for such items.The auditor should exercise caution on the disclosure of such provisions in the financial statements.

Deferred tax liabilities: Accounting Standard requires that the deferred tax liabilities are disclosed on the financial statements. The auditor should and scrutinise the workings of such deferments. This item is to be cross-checked by the auditor with the tax computations. 

Capital works in progress: The auditor should insist on corroborating evidence for capital works in progress. The value cannot be the same over a period of time unless the work is suspended. It is very rare that no further expenditure is incurred on capital works in progress during the year under review.

Either capital work in progress should continue to be so or be converted into fixed asset. Once it is converted into fixed assets, the auditor should seek a management representation to that effect and consider the applicability of depreciation on such fixed assets. Seeking the services of an expert to value the work in progress would be justified.

Expenditure and income during construction period: Guidance note on expenditure during construction period has been withdrawn after the Accounting Standard on intangible Assets (AS 26) was issued. Whether an item of expenditure should be added to the cost of a specific asset or not needs careful assessment and judgment on the part of the auditor.

Since the entity is at a project stage, the income if any generated (by way of interest on fixed deposits for example) cannot be taken to revenue. 

Pre-paid and outstanding expenditure:

Basic accounting assumption of accrual gives rise to expenditure being treated as pre-paid or as outstanding. Only those expenses which accrue (on a time basis) can be classified as pre-paid or outstanding. But there are certain expenses which arise. These have to be charged off to the revenue statement the moment they are paid. 

Retirement benefits:The entity should disclose in the financial statements, the provisions made for the retirement benefits to employees. Provision for gratuity, pensions, medical benefits, etc should be properly evaluated by an actuary and properly disclosed on the face of the financial statements. If this is not done by the entity, it amounts to non-compliance with the Accounting Standard 15 and calls for a qualification in the audit report.