Statutory Compliance
Some of the rules and regulations which it is mandatory to be compliant to, or which need statutory compliance, are the Income Tax Act, Companies Act, PF and ESIC, and Service Tax. There are different forms, taxes, and assessees for these.
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% |
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) |
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 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 |
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 aboveRs.50 lakhs |
Deductions:
The following table shows deductions under various sections
Section | Particulars | Amount |
Section 80CCC | Pension Fund | Rs.1.5 lakh |
Section 80C | PPFULIPNSCELSSMF | Rs.1.5 lakh |
Mediclaim | Rs.25,000 (general) andRs.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 |
Donation | 50% and 100% of donation |
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