Company Registration in India!!!

A company is any body that engages in business. A company can be arranged in many ways, such as a partnership, sole proprietorship or a corporation. It depends on which type of company you are dealing with, that may be owned by one person or group of people.  

A registered / incorporated company in India is a company which is formed and registered under the Companies Act, 1956, including companies which are earlier registered under any of the previous company is called as the registered / incorporated company. Registrar of companies provides an identifying number and which is printed on the certificate of incorporation(ROC). This company indentification  number is unique in nature.

Advantages of registering a company in India

Establishing Business Bank Accounts:- 

To start a business bank account, you need to properly register your business with the state. And it is very important for separating your personal activity with business activity. It is more professional to give a business account details to your client than giving personal account details.

Getting Loans:- 

When you are applying for a small business loan you need to prove that you are actually a business. The lenders and investors are asking for business registration along with other documents. If you are applying for a credit card as business, creditors may also ask for business registration documents.    

Reputation with Customers:- 

Registering your business has helped to get a reputation for your company in front of your clients and especially other people whom you are not working with.   

Supplier Arrangements:- 

A registered business also helps you to receive supplier discounts that you wouldn't normally receive as an unregistered operation. 

Hiring Employees:- 

A registered company can hire full time employees and pay them according to state law. You will receive a state identification number after registering your business with state that allows you to route state taxes on the employee's behalf.  

Getting on Record:- 

Another major benefit with registering your business is safeguarding your business name. No one else can register the business with the same name Ministry of corporate Affairs ( MCA ) has ensured, every business can search the name of their business and if they find similar name, then we can choose a different name. 

Legal Liability Protection:- 

Another benefit is getting legal liability protection. If you are incorporating it is very easy to get business insurance, or attract investors, since they will know you are not personally responsible for the company’s well-being and you will not be personally responsible for certain accidents and other liabilities. 

Continuity:-

Continuity is another benefit that is registration provides a business continues even if you die or become ill. Registered company is an entity with its own rights thus another can provide ownership or control or your business can be sold.

Types of Company Registrations:-

Private limited Company 

LLP Company

One person company 

Partnership Firm

Sole proprietorship 

Private limited registration:- 

Prerequisites 

1. Have paid-up capital of INR 1,00,000

2. Need minimum of 2 directors/board members and two shareholders

3. Maximum of 50 members allowed in Pvt. Ltd

4. Cannot publicly sell shares. A Pvt. Ltd company can only invite people to buy shares by issuing a prospectus 

Step 1: - Acquire Director Identification Number. It is a unique identification number for an existing directory. According to recent amendments to the Companies Act 1956 the DIN is mandatory. Need 3 to 5 working days for this process.

Supporting documents required (soft-copies):

1. Proof of identity

2. Proof of residence

3. Photograph

4. PAN Card

Register on MCA website for login ID and password (create an account)

I. File E-Form DIN-1

1. Download E-Form DIN-1

2. Fill the form

3. Attach necessary documents

4. Sign using digital signature

5. “Check Form”

6. Upload E-Form

7. Pay fees

8. Note Service Request Number.

9. Check acknowledgement

10 Intimate approved DIN to your company

11. Download DIN- 2 Form 

Step 2- Acquire Digital signature certificate 

Step 3- This is the final and major step that is applying for a company to be registered which contain incorporating company name, Registering the office address or notice of situation of office and notice for appointment of company directors, manager and secretary. And also about the take and pay for their qualification shares.

LLP Registration:-  

A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities and it depends on the jurisdiction. Therefore, it shows elements of partnerships and corporations. In lap one partner is not liable for other partner’s misconduct.  

Prerequisites

Minimum of two partners and two designated partners with DPIN (Designated Partner Identification Number) just like DIN are required. 

No limit for maximum number of partners. 

It is not compulsory to make partnership deed or LLP agreement, but it may help in any dispute occurred.

Step1- Apply for DPIN for designated partners. 

Step2- Obtain digital signature 

Step 3- Apply for LLP name. First apply for company name in form 1A. 

Step 4 – Register LLP

Step 5 – Apply for PAN and TAN

One person company registration: -

One person company is a new concept introduced by The Companies Act, 2013 [No.18 of 2013]. 

Pre-requisites:- 

Only one share holder

The share holder can nominate any other person who can be share holder in case of death or incapacity of original share holder

Must have minimum of one director and maximum of 15 directors

Step 1- Obtain digital signature

Step2- Get DIN 

Step 3- Select suitable Company Name, and make an application to the Ministry of Corporate Office for availability of name.

Step4- Prepare Memorandum of Association and Articles of Association. 

Step5- Payment of Requisite fee to the Ministry of Corporate Affairs and also Stamp Duty. 

Step6- Scrutiny of documents at Registrar of Companies [ROC].

Step7- Get certificate from ROC 

Partnership Firm registration: - 

Pre-requisites: - 

Two persons are required as partners. 

Partners share their duties and responsibilities

More capital can brought into the business 

Step 1- Select suitable Company Name

Step 2- Create Partnership Agreement or Deed

Step3- Apply for PAN Card on the name of Partnership Firm.

Step4- Opening of Current Bank Account on the basis of PAN Card and Registered Partnership Deed. 

Sole proprietorship registration: - 

Pre-requisites: -  

  

Single owner for the business. 

Easy to start and easy to close 

Complete control resides on single owner 

Step1- Draft documents required for sole Proprietorship Registration.

Step2- Apply for the Service Tax or VAT.

Step3- Get Service tax or a VAT Registration Certificate.

Step4- Apply for a current bank account in any bank with complete documentation.

Registered company will be treated as a legal entity. It has a separate identity and existence of its own. In the case of unregistered company, the shareholders are liable for the transactions they do in the company's name. They are not separated from the company. In fact an unregistered company is non-existent, insignificant in the eyes of law.

For online legal consultancies from the best corporate lawyer to get clarity on registering your company visit the biggest online legal solution www.licit.ooo or can download the app https://goo.gl/L8GeYk  

Silicon India 2017 list ranked Licit among “10 best Startups in Legal and Advisory”

We are proud to announce that SiliconIndia Magazine has ranked Licit among India’s 10 best Startups in Legal and Advisory of 2017 in a list announced this week.

The list of Best Startups in Legal and Advisory is made by a distinct panel of judges including CEOs, CIOs, CXOs, analysts and startup editorial board.

“Our inclusion on this list is a wonderful recognition of team Licit which over the years has set a strong foothold as a full fledged online legal platform that has got 500+ clients and 94 percent success rate”.

 “Licit has assured to deliver solutions that will help businesses to be updated and secured in the legal field. Licit aims to make the right blend of law with technology for establishing a system profound with innovative process, ensuring proper justice and verification. With the motive of helping business in understanding their risks they also focus on their growth by creating and handling their contracts, policies, and documents on basis of proper research along with an array of services,” Says Startupeditorial board.

SiliconIndia is the largest community of Indian professionals featuring technology, Business, entrepreneur news.

We truly appreciate all the initiatives that the Silicon India will be taking to support startups. Connect with the expert Legal consultants of Licit. For online legal consultation from the best lawyer visit www.licit.ooo or download the Licit app https://goo.gl/L8GeYk

Linking Aadhar card with PAN card is mandatory!!!

As the government decided to go ahead with linking Aadhar cardwith a permanent account number (PAN) the public has been confused about lot of rumours surrounding. A biometric identification system is an essential feature of the current society, and the scheme of PAN had become conjecture as it could be falsified, while Aadhar is a secure and vigorous system by which the identity of an individual cannot be faked.

A unique 10 character code is assigned to all tax paying entities in India referred as PAN Card. A PAN card is issued by the Income Tax Department and the card links all transactions that attract tax under a single source, making it appropriate for the government to keep track of all transactions. A PAN card is obligatory for filing Income Tax returns in the country, and all individuals and entities that pay taxes, including foreigners are expected to have one. Apart from its primary use, a PAN card can be used as proof of identity and age.

The Aadhar card is a unique identification card. It is assigned to every Indian citizen and it furnished by the Unique IdentificationAuthority of India. It’s a 12 digit number that will be used as a proof of identity and proof of address. Aadhar is an enterprise by the government to have a single identification document for the whole citizen in the country. The card holds individual’s biometric and demographic information so it serves as a personal identification card.

                          

Procedure for LinkingPAN Card and Aadhar Card:-

To link the Pan Card with the Aadhar Card, the taxpayers have to first register on the Income tax e-Filing portal for linking the Aadhar card and PAN card. After registering, follow the below steps:-

•  Using log-in ID, password and date of birth user can login to the E-Filing portal of the Income Tax Department.
• After logging into the site a window will appear encouraging you to link your PAN card with Aadhar card.
• Details such as name, gender and date of birth will already be disclosed as per the details submitted at the time of registration to the E-Filing portal.
•  Verify the details mentioned with the Aadhar card.
• After verifying details with other card you can enter the Aadhar number and click on the “link now” button
• A pop up message will appear regarding your successful linking of PAN and Aadhar card.

Importance of Linking PAN Card with Aadhar Card:-

Aadhar card and PAN card are unique identification cards and both are required as proof of identity that are necessary for registration and verification purposes.

The government has advised all citizens to link their PAN cards with their other cards.

This is being done for the following purposes:-

Prevent Tax Evasion:-

The government can keep track of the taxable transactions of a particular individual whose address and identity will be proved by his Aadhar card by linking the Aadhar and PAN cards. This will efficiently mean that the whole taxable transaction or activity will be recorded by the government. As a result of this, the government has a complete record of all financial transactions forming tax evasion a thing of the past.

Multiple PAN Cards:-

Linking PAN and Aadhar card reduces applying for multiple PAN cards by an individual in an effort to defraud the government and avoid paying taxes. By this method one’s PAN card can be used for some type of financial transaction and pay taxes applicable for those. Another one used certain other accounts and transactions that the person wishes to conceal from the Income Taxdepartment, thereby avoiding paying tax on them.

The government will be able to link the identity of a person through his/her Aadhar card, by linking the PAN and Aadhar card and later have details of all financial transactions made through the linked PAN card. The government will be able to find if multiple PAN cards linked with a same name and can take corrective action.  

Ease in Filing of Income Tax Returns:-

Every person can file their E-Returns or their online Income Tax returns perfectly and quickly after linking PAN and Aadhar card. After linking the PAN and Aadhar, entities will no longer have to submit their Income Tax acknowledgement to the IT department, thus saving taxpayers a lot of trouble.

The government has made it obligatory to link the PAN to the Aadhar before 1st of July 2017. Linking of PAN to Aadhar is required for e-filing the Income Tax Return (ITR).

To get more clarifications on the matter or for any legal assistance, connect with the expert consultants of Licit. For online legal consultation from the best lawyer visit the biggest online legal solution www.licit.ooo or download the app https://goo.gl/L8GeYk

Your Lawyer is fleecing you? Wait no more! You have got options in this Digital world.

In a country where thousands of people are fighting with the legal system, we need Lawyers who can understand the common man’s problem and stand as a bridge between them and the legal system. Lawyers must be the representative of the society and they must maintain their responsibilities in every possible way. The public responsibilities of advocates in developing countries are much more than developed countries. A developing economy requires good lawyers in every segment for its successful takeoff too.

Bar Council of India claimed that almost one third of the total lawyers in India are not genuine. The number of practicing lawyers is about to come down to 55-60% after the completion of the BCI verification process. Choosing the wrong attorney can end up costing you a lot of time and money.

Genuine Lawyers can offer legal remedies at the right time and point you in the right direction. To help the users to find right lawyers and to stop fleecing ordinary man, online lawyers portals will be the right solution on this digital world and the Indian market oversee a drastic growth for Online legal services in 2017.

The past year has been a battleground for online legal services. Finding a lawyer online was way easier than searching for the Lawyer manually. Many online platforms, including LICIT – Go Legal app or www.licit.ooo website, offer an easier and trusted way to connect with local lawyers based on your location and the type of legal cases you have. Also there are options to Chat and Video conferencing with the Lawyer in a single clickaway. This really helps the common man to save his time and money.

“Our vision is to use technology to reach out to everyone who are living in rural to urban areas, startups to big corporates and provide the best possible legal solution in a more cost-effective and affordable manner” says Santhosh Shamanna, founder of one of the biggest online legal solution providers in India, licit.ooo.

Licit- Go Legal helps you to find verified list of lawyers in India who are specialized in various legal areas & offers almost every services that is usually required in day to day life. Licit’s virtual office technologies have done the hard part for you by carefully selecting Lawyers across the country to be a part of their network. Lawyers can take advantage of this online exposure with LICIT services that double their conversions, and proven lead targeting tools.

Licit- Go Legal is the most commonly used site to search lawyers and is very simple and easy to use. Over 58 percent of clients find it way better than other online portals and commented that it is the first time they got complete satisfaction on their legal problems. 90% of users said Thumbs up to Licit’s structure and they said they will keep coming for any other legal help.

So what are you waiting for ! For any online legal consultation from the top notch lawyers in India, visit the biggest online legal solution www.licit.ooo or Download the app https://goo.gl/L8GeYk today itself.

Confused about rights of your intellectual property??

Intellectual Property Rights:-

Intellectual property rights are the legal rights provided to a person for his creation of the intellect. A monopoly will be assigned to the owner for his or her creation legally. Legal rights are allowed to a person for any invention or discovery, any creative or artistic works, phrases and symbols, literary work or words, designs for a specified period of time etc. By this law, owners have the privilege to use their property without any disturbance and can prevent the misuse of their property. In India, Intellectual Property is ruled under the Copyright Act, 1957; Patents Act,1970; Trade Marks Act, 1999; Designs Act, 2001, etc.

Intellectual property rights include Trademarks, Trade Secrets, Copyrights, Patents, Industrial Designs, Layout Designs of Integrated Circuits and Geographical Indications. The inventor of any invention, or a literary or a mark or creative work consumes money and time for creating the Intellectual Property. So they should also be allowed for certain rights like claiming remedies for the infringement, exclusive use of their invention or etc.

Patent:-

If a person made a new invention in any field, it is important to protect the invention from getting exploited by anybody other than that inventor. It is possible by obtaining a patent for that invention to the inventor. Patent allows exclusive right to the patent holder so that the inventor can utilize his invention and can move legally against anyone who uses his invention without permission.

A patent allows the right to stop others from selling, manufacturing, copying and importing the invention without the patent holder’s permission. The patent also grants licensing the invention to someone else but retaining all the Intellectual Property Rights, selling the invention and all the Intellectual Property (IP) rights, discussing the invention with others in order to set up a business with reference to that invention.

Trademarks:-

Legally registered or established sign will enable to distinguish the goods and services of the trademark holder from competitors. It can be logos, words or a combination of both. A trademark may be registered or unregistered. Registering a trademark provides exclusive legal rights to trademark holders to use the mark to his goods and services. Symbol ® can be used as registered trademark and no other parties can use this symbol other than the trademark holder.

If people use registered trademark without permission of holders, it is an offence and allows the police to take criminal charges against counterfeiters. The registered trademark is the property of trademark holders and they can sell it, or let other people have a license that allows them to use it.

Unregistered trademark holders can also protect their rights by the common law action of passing. But they must be able to prove that the trademark belongs to him.

Copy right:-

Copyright is a legal right that allows the creator of original work for exclusive rights for its use and distribution for a limited period of time. The exclusive rights are not complete, but limited by limitations and exceptions to copyright law, including fair use. Copyright protects the original expression of idea not underlying ideas themselves. Copyright is applicable to certain creative works. If the owner is getting work done or developed through third parties, the owner will get copyright over such work only if the owner has a contract or agreement clearly assigning such rights in the owner’s favor.

Trade Secrets:-

Trade secrets are extremely valuable for the company’s growth and survival. A business must ensure that they adequately protect their business process and know how to keep confidential information from competitors. A trade secret is any confidential business information which provides a competitive edge in business. The unapproved use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret.

Intellectual property Infringement:-

Intellectual property infringement is a breach of intellectual property rights i.e, infringed when a work which is protected by intellectual property right copied or exploited without having proper permission from the person who owns the right.

Patent Infringement:-

A patented product can be used after seeking permission from the owner. The permission will be granted in the form of license. Patent infringement is the act of consuming a patented invention without consent of the patent holder. Persons involved in making, using, selling, distributing, importing or offering any of the above may be held liable for infringement.

Patent Infringement Remedies:-

A court can order the infringer to stop making use of the patented invention by issuing an injunction. A suit for infringement of a patent has to be filled in district court or high court. Only the High Court has the jurisdiction to entertain the matter when a counterclaim for revocation has been filed against the same. But when the patent expires, any party is free to make use of the product.

Trading Infringement:-

Trademark infringement is the unapproved use of the trademark or service mark by a person other than the trademark owner and it's used on competitive product or services.     

Trademark Infringement Remedies:-

There are two types of remedies are available for unauthorized use of trademarks. These remedies are an action for passing off in the case of an unregistered trademark and an action for infringement in case of a registered trademark. Both are quite different from each other. An infringement action is a statutory remedy and an action for passing off is a common law remedy. The proprietors of the trademark and licensed users can initiate criminal prosecution against the infringers. Criminal remedies available for the offence and suit for the offence can be filed before the magistrate within whose territorial jurisdiction the offence is committed or the Police can register an FIR and prosecute directly. In addition requisition of goods and machinery, the Code of Criminal Procedure, 1973, also provides for the imprisonment starting from six months, which can be extended to three years or a fine of Rs. Fifty thousand to two lakhs or both.

Copyright Infringement:-

Copyright infringement is the use of work protected by copyright law without the permission. It violates one of the copyright owner’s exclusive rights, such as the right to reproduce or perform the copyrighted work or to make derivative works.

Copyright Infringement Remedies:-

A suit for copyright infringement can fill in a District Court or a High Court. The suit has to be filled within whose territorial jurisdiction the cause of action has arisen. Copyright infringement is a non bailable offence and it is punishable with an imprisonment of six months, which can be extended to three years or a fine not less than fifty thousand which can be extended to two lakes.  Civil remedies imply that the injunctions against future violations, civil raids & seizures, delivery up/ discovery of infringing material / documents, damages or accounts of profits. Administrative Remedies available to the copyright, trademark and patent which include bans on the import or export of goods including protection of patents, delivery to the owner and Restrictions against parallel importation of goods and trademarks and copyrights confiscation of infringing material by Excise Authorities.

For online legal consultation regarding Intellectual property issues or to know more about the intellectual property rights and infringement remedies, visit the biggest online legal solution www.licit.ooo or download the app from playstore https://goo.gl/L8GeYk  

Need for Apartment Association & Resident Welfare Organization!!!

Apartment Association:-

An Apartment Owners Association (AOA) is a supremacy that secures the rights of the apartment owners, keeps the facility in the apartment and works for the welfare of the residents of the apartments by conducting events or awareness programs.

Apartment associations in India are established by a voluntary association of the owners of a particular apartment in India.

Apartment association is not to gain or a profit organization, but purely to take the best care of the residents of the apartment and intercept them from suffering any discomfort.

Registering of Apartment Association is not necessary, but it is necessary for getting any legal help easily. If we approach a court for such small issues it might take several months or even years to sort out such disputes as the court will be dealing with many other bigger disputes to take care off. A registered apartment owner’s welfare association will help work as an arbitrator and helps in resolving the dispute without any legal interference.

Aside from central laws like the Apartment Association Act and the Societies Registration Act, there are local legislations in different cities. You would have to form the apartment owners association under the local legislations.

Key points to remember while forming Apartment owners association:-  

• For forming an association minimum of 7 members are required. Out of these 7 members need to be appointed as office bearers and others to make sure that the Association is managed properly. The office bearers are responsible for the rest of the Association and to the members of the Apartment as a whole.
• A memorandum has to be created and the memorandum should contain the objectives and the name of the society, addresses and occupations of each and every member of the Association. This is for clarity in the operation of the organization.
• The bylaws or the rules control the conduct of the affairs of the society will be made. These byelaws are critical in the management of the society. The memorandum and the bylaws have to be printed or typewritten and have to be signed by the members.
• The memorandum and the bylaws will be filed with the registrar of the societies perturbed by a member of the committee of the society. Regular updates to help prevent any questions being raised as to the correctness of the operations of the society.

The memorandum and bye-laws of an apartment association are important to the operation of the Association. Make sure that the association creates these documents with due care and caution.

Ensure that all members of the apartment association are informed of the existence of the association and the maintenance charges payable, if any. Most discourse arises due to the residents are not made aware of the rules and charges. The association meetings and activities should be conducted regularly.

Resident Welfare Organization:-

A Resident Welfare Organization (RWA) is the registered group of residents of a certain locality. RWA is organized to develop the particular locality only. The functioning area of a Resident Welfare Organization (RWA) is very limited, not even a complete state. In most cases a Resident Welfare Organization (RWA) functions only within a small defined residential area

For a new residential area a registered Resident Welfare Organization (RWA) is very important to association with government on behalf of all residents. A productive and well organized Resident Welfare Organization (RWA) is necessary to have a proper garbage disposal, security, utility services and other services.

What are the benefits of registering an Apartment Society? :-

• The registered society can easily initiate the legal proceedings. The Society can sue or be sued in its own name.
• The process of imposing healing measures for defaults and other actions of defaulting or erring members is also well set and will ease the obtaining of interim measures without waiting for formalities to be completed.  
• It is easy for Opening a bank account and other bank operations.
• Tax formalities are also easy with registered apartment society.
• A registered Apartment Society has to audit file and various records mandatory. This will be helpful in maintaining clarity of the affairs of the Society. This will also serve as a back up and can be extremely helpful in handling long pending matters or matters where reference has to be made to the earlier bye-laws or records.

To know more about registration of apartment association or welfare society or For any online legal consultation from the best lawyer, visit the biggest online legal solution www.licit.ooo or can download the app https://goo.gl/L8GeYk

Submit Proof for your HRA exemption Claims: Says IT dept.

 For all who out there claiming tax deduction on Fake HRA, you have a bad news! The Income tax  department has decided to change the rule and make it tough from now on.

The tax sake on HRA is accessible only to a salaried individual who has the HRA component as part of his salary structure and is staying in a rented housing. HRA can be moderately or fully free from taxes. Self-employed professionals cannot claim the deduction. 

The tax reduction on HRA is the amount that is the base under these three options:

1.         Actual HRA that you get;

2.         50 per cent of your basic salary and dearness allowance if you are living in a      metro. It is 40 per cent if you are living in a non-metro city

3.         Actual rent paid by you is 10 per cent of the salary.

Pan card is mandatory if they paid more than 8,333 /- per month. This permits the taxman to examine if your landlord has given the details of the income from house rent in his/her tax return.

For almost every employee, HRA is a common component of their salary. HRA is part of salary but it is not entirely taxable like basic salary. Depends on certain conditions, a part of HRA gets exempted under Section 10 (13A) of the Income-tax Act.

Section 10 (13A) of the Income-tax Act:-

Section 10(13A) of the Income Tax Act provides for indemnity on HRA. The Income Tax Act exempts a part of HRA under section 10(13A) read with 2A, with some specific conditions. In which city the Assesse is living will also define the amount of exemption eligible under section 10(13A). There is also a special exemption HRA clause for Supreme Court and High Court Judges. Section 10(13A) of the Income Tax Act is very prominent distribution among the salaried employees.

Producing Fake receipts for HRA reduction:-

Many of tax payers used to produce fake rent receipt for getting HRA for tax reduction. There may soon be unpleasantness for those who have been producing fake rent receipts to save income tax.

Fake receipts won’t help reducing tax burden. For as long as anyone can fabricate fraud receipts such as fake property rent receipt, often from parents and relatives, has been an easy way to reduce tax burden. This ignorance for tax rule failed to notice by employers as well as taxman. This could be a major offence from now on.

The income tax department has a now a good reason for demanding on proof from the tax payer showing that he is really a genuine tenant, staying in property is question.  A tax payer who receives rent allowance from employer could make a relief of 60% on tax by generating sham rent receipt.

According to a current board of ruling, the assessing officer can now request for letter to the housing co-operative society informing about the tenancy, leave and license agreement, electricity bill, water bill etc. as proof in granting a lower taxable income as enumerated by a salaried employee.  

There are some norms put forward by the income tax appellate tribunal for the assessing officer to contemplate the claim of salaried employees if required question its basis. It imposes more responsibility on salaried employees to follow the rules for getting the tax rebate. If a person submits a fake receipt, then he doesn’t have any required documents. There may not be an actual rent flow from the person who staying in his own home. If he is an actual tenant the rate mentioned in receipt may more than he actually paid. This will not create a problem if the person accepting the rent is outside the tax net. The person claims to pay rent to a relative owning property; But he staying individually in same city. There are assorted occasion where the person may be staying individually but; or, one of member of the family claiming a loan repayment subtraction while another submitting a false rent receipt to evade tax.

In the annual budget of this year, the Finance Minister had suggested that those who are claiming a House Rent Allowance (HRA) of more than Rs 50,000 per month will have to reduce tax at source at the rate of five per cent.

The TDS will have to be deducted on the last month of the year in which rent is paid or last month of tenancy

From Government view this amendment would make sure that there are no revenue loses on account of such rental income. This will also demoralize people who were claiming the HRA deduction fraudulently quoting wrong Permanent Account Number (PAN) of the landlord. Quoting PAN of the landlord was mandatory in case the rent paid during the year was more than one lakh a year.

For online legal consultation from the best lawyer to get clarity on tax redemption and it’s policies, visit the biggest online legal solution site www.licit.ooo or can download the app  https://goo.gl/L8GeYk