Statutory Compliance

What is Statutory Compliance?

India has a complex web of laws applicable across various sectors. Statutory means ‘laws and regulations’ and compliance means ‘adhere to’. There are several rules and regulations in the country such as Income Tax, Service Tax, Companies Act 2013, Partnership Act and Value Added Tax (VAT) among many others. It is better to have a broad understanding of various important regulations in the country.

Rules and Regulations:

Below is the list of some important rules and regulations applicable in the country

  • Companies Act
  • Income Tax Act
  • Service Tax
  • PF and ESIC
  • Companies Act:

    The table below shows the list of incorporation related forms

    Purpose

    Form (public and private cos)

    Incorporation of company

    INC-7

    Reservation of name

    INC-1

    Nominee consent form

    INC-1 (OPC)

    Appointments of Directors

    DIR-12

    DIN Application

    DIR-3

    Notice - director resignation

    DIR-11

    Notice- Auditor registration

    ADT-3

    Statutory Report

    22

    Nominee consent form

    INC-3

    Change in Member

    INC-4

    Filing profit and loss account

    23ACA

  • Income Tax Act:

    The following table shows tax rates for individuals and HUF

    General/NRI

    Senior citizen

    Super senior citizen

    Rate

    Rs.2.5 to Rs.5 lakh

    Rs.3 to Rs.5 lakh

    -

    10%

    Rs.5 lakh to Rs.10 lakh

    Rs.5 lakh to Rs.10 lakh

    Rs.5 lakh to Rs.10 lakh

    20%

    Above Rs.10 lakh

    Above Rs.10 lakh

    Above Rs.10 lakh

    30%

    The following table shows tax rates for co-operative societies

    Rate

    Amount

    10%

    Up to Rs.10,000

    20%

    Rs.10,001 to Rs.20,000

    30%

    Over Rs.20,000

    The following table shows the rates for other assesses

    MAT Rate

    Rate

    Assesses

    18.5 %

    40%

    Foreign companies

    18.5 %

    30%

    Domestic companies

    -

    30%

    Firms/LLP

    E-filing of Returns:

    An individual who claims tax deduction under section 90A, 90 or 91 of the IT Act

    HUF and individual with assets located outside India

    Individual or HUF - income exceeds Rs.5 lakh in the previous year

    E-filing with Digital Signatures:

    Companies

    HUF/Firm under section 44AD/44AE/44AB

    Capital Gains:

    The following table shows the current capital gain rates

    Organisation

    Tax Rates (short-term)

    Domestic company

    30%

    Firms (LLP)

    30%

    Foreign companies

    40%

    Sale of an equity share

    15%

    The following table shows exemption related to capital gains

    Sold assets

    Section

    Exemption

    Long term asset

    Section 54F

    New asset X capital gain/net sale

    Residential House

    Section 54

    Capital gain or amount invested in new asset (whichever is less)

    Long term capital asset

    Section 54EC

    Investment must not be above

    Rs.50 lakhs

    Deductions:

    The following table shows deductions under various sections

    Section

    Particulars

    Amount

    Section 80CCC

    Pension Fund

    Rs.1.5 lakh

    Section 80C

    PPF

    ULIP

    NSC

    ELSS

    MF

    Rs.1.5 lakh

    Section 80D

    Mediclaim

    Rs.25,000 (general) and

    Rs.30,000 (senior citizen)

    Section 80EE

    Interest on housing loan

    Up to Rs.1 lakh

    Section 80E

    Interest on higher education loan

    -

    Section 80TTA

    Interest on savings account deposits

    Rs.10,000

    Section 80G

    Donation

    50% and 100% of donation

  • Service Tax:

    The following table shows service tax rates

    Basic exemption limit

    Registration Application

    Registration Certificate

    Rs.10 lakh (small service provider)

    ST-1

    c

    Service tax is paid using challan GAR-7.

  • PF and ESIC:

    The following table shows PF and ESIC rates

     

    Employee Contribution

    Employer Contribution

    ESIC

    1.75% of wages

    4.75% of wages

    PF

    12% of basic + dearness allowance + food concession

    12% of basic + dearness allowance + food concession +

    retaining allowance (maximum of Rs.15,000 per month)

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