Professional Updates

Draft format of a statement of account STK-8 Statement of Accounts  in form STK-8 is required to be prepared by a company when it goes for closure. This statement of accounts should be signed by at least two directors (or MD/Secretary & Director if there is MD/secretary appointed) of the company and required to be certified by a Practicing Chartered Accountant. Form STK-8 (a statement of accounts) containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application for closure in form STK-2. As per rule 4(3) The application in Form STK 2 shall be accompanied by along with STK-8 – indemnity bond duly notarized by every director in Form STK 3; An affidavit in Form STK 4 by every director of the company; a copy of the special resolution duly certified by each of the directors of the company or consent of seventy-five per cent of the members of the company in terms of paid up share capital as on the date of application; a statement

Partial relaxation for electronic filing of form 10F CBDT wide notification no 03/2022 dated 16th July 2022 had notified filing of form 10F [Information to be provided under sub-section (5) of section 90 or sub-section (5) of section 90A of the Income-tax Act, 1961] electronically on income tax portal. Which required PAN based login. Mandatory electronic filling of 10F created hurdle for non-resident payees and resident payers, as in certain cases, a non-resident payee is not required to obtain PAN under the Act. As mandatory obtaining PAN in India created unnecessary burden on NRIs. On consideration of the practical challenge being faced by non-resident (NR) taxpayers not having PAN in making compliance as per the notification 03/2022, and with a view to mitigate genuine hardship to such taxpayers, it has been decided by the CBDT that  Non-resident taxpayers who are not having PAN and  not required to have PAN as per relevant provisions of the Income-tax Act,1961,  are exempted fr

Tamil Nadu labour welfare fund contribution rate 2023 Tamil Nadu Labour Welfare and Skill Development department issued order no 161 dated 02/12/2022 to revise rate of contribution to labour welfare fund. Vide order no 161 rule 11A of The Tamil Nadu Labour Welfare Fund Rules, 1973 amended and rate of contribution revised as follows: Every employee shall contribute a sum of Rs 20/- per year Employer shall contribute a sum of Rs. 40 per year per employee Government shall contribute Rs. 20 per year per employee Attached herewith notification No. SRO A-26(b)/2022 for ease reference: Click here

ESIC compliances for newly incorporated companies Ministry of corporate affairs (MCA) earlier this year launched Spice+ service for incorporation of companies through integrated web form which provides 10 services like registration under ESIC, PF, GSTN, Profession tax etc. I.e. Companies registered through spice+ form are compulsorily registered under these acts as well irrespective of strength of employees. Earlier Ministry of Labour & Employment had issued press release to the effect that new companies will have to comply with the provisions of EPF & MP Act, 1952, and ESI Act, 1948 when they cross the threshold limit of employment under the respective Acts. ( PIB dated 06 MAR 2020, No: 1605558). In simple words registration is compulsory for new companies under various labour laws but compliances are applicable only upon crossing of applicable threshold limits under respective acts. However, ESIC letter No. P-11/14/19/Misc/02/2022-Rev.II dated 21/11/2022  instructed that, new

CBDT has extended due date for filing various forms for the FY 2021-22 Noting the hardships of taxpayers & IT glitches Income Tax department extends the due date for filing of various reports of audit for assessment year 2022-23 (FY2021-22) to October 7th 2022. Earlier the deadline was 30th September 2022. Ref: CBDT Circular No. 19/2022 in F.No.225/49/2022/ITA-II dated 30.09.2022 issued.

Trust audit submission due date extended for the FY 2021-22 Charity Commissioner of Maharashtra has extended due date for submitting trust accounts online for the FY 2021-22. Extended due date vide Circular No 596 dated 30/09/2022 is 15th October 2022. Trust Audit The trustee shall get the accounts audited within six months of the date of balancing the accounts (generally 31st March) under section 33 (1) of the Maharashtra Public Trusts Act 1950. Take benefit of such extension and ensure timely compliance. Several thousand trusts and societies have been de-registered by  the charity commissioner on account of failure to submit annual audited accounts. Trust Audit is an important compliance to keep your trust active with Charity Commissioner. Here is the circular no 596 of extension of due date for online submission of trust accounts for the FY 2021-22

Independent auditors report for the FY 2021-22 Everyone is talking about amendments in schedule III & CARO however most of those are not highlighting changes in Independent Auditors Report . Though changes are small but can result into significant risk of negligence. First I would like to request every one kindly read entire independent audit report for every auditee. At least read what you are signing and what would be the implications. I have seen audit reports for the FY 2021-22 which are not referring to the The Companies (Accounting Standards) Rules, 2021. MCA already prescribed accounting standards w.e.f. 01/04/2021. But as usual due to "Ctrl C+ Ctrl V" same is not reflecting in the independent auditors report and reference to old rule of 2006 is given. Also some of us not inserting new para under rule  Rule 11 of the Companies (Audit and Auditors) Rules, 2014. Kindly refer attached report of Small Company for ease reference only (please note this is just a draft

Revision in the definition of small company  The ministry of corporate affairs (MCA) has amended definition of "small company" wide notification no G.S.R. 700(E). dated 15th September 2022.  The revised paid-up capital and turnover thresholds for small companies that will be applicable w.e.f. 15th September 2022. Now onwards, companies having paid capital upto Rs 4 Cr & turnover upto Rs 40 Cr will be considered as Small Companies. Earlier limit was Rs 2Cr & 20Cr respectively. Small companies enjoy certain exemptions such as  -small companies not required to prepare cash flow statements, -small companies can prepare annual report in abridged form -only 2 board meetings needs to conduct in a calendar year  -various E-forms can be signed by the directors only -reduced penalties under the Company Act 2013 -Auditors not require to report on internal control over financial reporting etc.

ESIC Contribution due date extended for the month of August 2022 ESIC Department vide letter No. P-11/12/Misc./1/2019(M)-Rev.II dated 15/09/2022 has extended due date for payment of ESIC contribution for the month of August-2022 up to 15/09/2022 due to the problems being faced by the Employers in depositing ESI contribution for the contribution period August 2022, the Director General in exercise of powers vested under Regulation 100 has relaxed the provision as entered in Regulations 26 & 31 of the Employees' State Insurance (General) Regulations, 1950. As per the letter, employers are allowed to deposit contribution for the month of August 2022 up to 22/09/2022 instead of 15/09/2022 Read here the letter No. P-11/12/Misc./1/2019(M)-Rev.II dated 15/09/2022 extending due date for ESI Contribution for the month of August-2022.

All about Director KYC i.e. DIN KYC All directors and designated partners holding DIN (Director Identification Number) as on 31/03/2022 and the status of such DIN is ‘Approved’, needs to file form DIR-3 KYC to update KYC details on MCA portal. E-Form DIR-3 KYC is to be filed by a din holder for filing KYC details for the first time or by the DIN holder who has already filed KYC once in e-form DIR-3 KYC but wants to update KYC details. Web service DIR-3-KYC-WEB is to be used by the DIN holder who has submitted DIR-3 KYC e-form in the previous financial year and no update is required in his details like name, address, contact info etc. Fees:  There is no government fees for filing DIN KYC within due time. However late filing of above forms attracts fees of Rs. 5000/- (Penalty) Due date for filing DIN kyc for the year ended March 31, 2022 is 30th September 2022. Due date for filing DIN kyc is extended up to 15/10/2022 v ide General Circular 09/2022 . Personal mobile number and

Management Representation Letter on Statutory Audit The Management Representation Letter is required to be furnished before the Financial Statements are signed. The auditor should obtain representations from management, wherever considered appropriate. The auditor should obtain evidence that management acknowledges its responsibility for the appropriate preparation and presentation of financial information and that management has approved the financial information. A sample format of management representation letter (for a company under the Companies Act, 2013) is given below which is required to be tailored for each circumstance . Written representations are an important source of audit evidence as per "SA 580 WRITTEN REPRESENTATIONS". Although written representations provide necessary audit evidence, they do not provide sufficient appropriate audit evidence on their own about any of the matters with which they deal. Representations by management cannot be a substitute fo

Financial statements of a company on the letter head of an auditor Certain instances have been observed where in auditor has used own letter head for printing of balance sheets, profit loss statements of a company. Financials statements of a company should not be printed on letter head of an auditor. Same has also been pointed out by the ICAI in journal published in the August, 1982 issue of ‘the Chartered Accountant’ p. 175.  This practice can lead to several issues: 1. Confusion of Roles: It can create confusion about the role of the auditor. The letterhead implies that the auditor is responsible for the accuracy and completeness of the financial statements, which may not be the case. 2. Lack of Independence: The use of the auditor's letterhead can compromise their independence. An auditor should be impartial and objective, and using their letterhead can suggest a closer relationship with the company than is appropriate. 3. Misrepresentation of the Company: The financial state

Physical verification of the Registered Office of the company MCA vide notification dated 18th August 2022 amended Companies (Incorporation) Rules, 2014 and issued "the Companies (Incorporation) Third Amendment Rules, 2022". Vide this Rule 25B inserted to prescribe physical verification of registered office of the company.  As per the rule, the Registrar, based upon the information or documents made  available on MCA 21, shall visit at the address of the registered office of the company and may cause the physical verification of the said registered office for the purposes of sub-section (9) of section 12 * , in presence of two independent witness of the locality in which the said registered office is situated and may also seek assistance of the local Police for such verification , if required. The Registrar shall carry the documents as filed on MCA 21 in support of the address of the registered office of the company for the purposes of physical verification and to check t

Form 67 can now be furnished on or before the end of the relevant Assessment Year CBDT vide notification no 100/2022 dated 18th August 2022 amends Rule 128 of the Income-tax Rules, 1962, providing major relief to taxpayers in the matter of claiming Foreign Tax Credit (FTC). The Statement in Form No. 67 can now be furnished on or before the end of the relevant Assessment Year . Earlier Form 67 was required to be filed before the due date of filing of return as specified u/s 139(1). This amendment is effective from the 1st day of April, 2022 so that it applies to all the claims of foreign tax credit furnished during the financial year 2022-2023.  Why do assessee need to submit Form 67? Form 67 will be required to submit if assessee want to claim credit of foreign tax paid in a country or specified territory outside India. Assessee will also be required to submit Form 67 in case of carry backward of loss of the current year resulting in refund of foreign tax for which credit has been cla

Latest format of Financial Statements of LLP The ICAI has issued technical guide for preparation and presentation of financial statements of limited liability partnership (LLP). Where in ICAI has prescribed format for preparation of financials of LLP which is in line with the Schedule III format for non-Ind AS following companies. The guide also prescribe for voluntary rounding off.  LLP is a body corporate formed and incorporated under LLP Act and is a legal entity separate from that of its partners. The LLP is a corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid of a company and a partnership. The Technical Guide is relevant for the purpose of preparation of the financial statements of the Limited Liability Partnership in compliance with applicable accounting standards.  I have attached herewi

Format of disclosure under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 1. The disclosure as required by The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 is required to be made in the annual Financial Statements of the entity wherever such Financial Statements are required to be audited under any law.  2. Accordingly you need to attach MSME disclosure to LLP form 08 if you are liable for audit under LLP Act. Attached herewith format of MSME disclosure for ease reference.  3. Similar disclosure also required in the financial statements of the company as per notification no G.S.R. 679(E) dated 04th September 2015. 4.Do not simply attach or insert blank disclosure if you have outstanding dues to MSME. Disclose whatever is applicable in your case as per your records. As if incase your vendor file case against you for outstanding payment and your books not having such disclosure it may lead to levy of penalties. 5.Most of the cases it has been

Maharashtra minimum wages July 2022 to December 2022 Maharashtra government has increased Variable Dearness Allowance (VDA) w.e.f. July 2022, for scheduled employment. Revised minimum wages are applicable w.e.f. 01st July  2022. Maharashtra Minimum wages July 2022 to December 2022 Here is the official notification no 21836 for latest minimum wages payable in the state of Maharashtra. Notification contains total wages (Basic+VDA) for all scheduled employment. I.e. Minimum wages. Maharashtra minimum wages effective from July 2022

Reduction of time limit for verification of Income Tax Return (ITR) from within 120 days to 30 days of submitting ITR. CBDT issued notification no 05/2022 dated 29th July 2022 to revise time limit for verification of ITR. Now ITR filed on or after 01/08/2022 need to verify within 30days of submitting online instead of earlier time of 120 days This revised time limit will be applicable for ITRs filed on or after 01/08/2022 Existing time limit of 120 days will be applicable for ITRs filed up to 31st July 2022 ITRs not verified within 30days of submission would be treated as late filed and all consequences of late filing of return under the Act shall follow. W.e.f. 01/08/2022 ITR-V can be sent by speed post only ! Can't say ITR sent by post but not received at cpc :- The date of dispatch of Speed Post of duly verified ITR-V shall be considered for the purpose of determination of the 30 days period. Date of verification of ITR will be the date of filing ITR if verification done post

Format of letterhead as per Companies Act 2013 Nowadays "Compliance" word is buzzing across every sector. Compliances may be mandatory or optional but non-observance of which may be too much punitive either monetary or non-monetary. Here we are talking about non-compliance with the Company law.  Recently registrar of companies issued hefty penalty order against non compliance with easy compliances. Like in one of the case just because of CIN was missing on the letter head of the company penalty of Rs. 22,500/- was levied. Hence, summarizing herewith requirements of the law and draft format of the letterhead for easy reference. Obviously you can change design but don't play with the contents. Easy and small things can save your company and directors from penalty. Download the letterhead sample for a private limited company. Letterhead Rules w.r.t. stationery of a company like letterheads, billheads etc. SECTION 12 (3) Every company shall — (a) paint or affix its name

Utilisation of the amounts available in the electronic credit ledger for payment of tax and other liabilities. CBIC vide Circular No. 172/04/2022-GST dated 06th July 2022 issued clarification on this subject.  Here is the text of the circular: 1.In  terms  of sub –section  (4)  of  section 49 of CGST Act, the amount available in the electronic credit ledger may be used for making any payment towards output tax under the CGST Act or the Integrated Goods   and   Services   Tax   Act,   2017(hereinafter referred to as “IGST Act”),subject  to  the  provisions  relating  to  the order of utilisation of input tax credit as laid  down  in  section  49B  of  the  CGST Act  read  with  rule  88A  of  the  CGST Rules.  2.Sub-rule  (2)  of  rule  86  of  the  CGST Rules   provides for   debiting   of   the electronic  credit  ledger  to  the  extent  of discharge  of  any  liability  in  accordance with  the  provisions  of  section  49  or section 49A or section 49B of the CGST Act. 3.Further, 

GST annual return exemption for the FY 2021-22 CBIC vide notification no 10/2022-Central Tax dated 05th July 2022 exempt filing of GST annual return in form GSTR-9/9A for taxpayers whose annual aggregate turnover (AATO) for the FY 2021-22 is up to 2 Crores .  Who shall file annual return in form GSTR-9 Every registered person, other than : Department of the Central Government or a State Government or a local authority Input Service Distributor A person paying TDS (TDS under GST)  under section 51 Electronic commerce operator required to collect tax at source under section 52 a casual taxable person a non-resident taxable person Composition tax payers paying tax under (Section 10) shall furnish an annual return for every financial year as specified under section 44 electronically in FORM GSTR-9 on or before the thirty-first day of December following the end of such financial year. Person paying tax under section 10 (composition tax payer) shall file Annual return in GSTR-9A. Every elect

Format of declaration from a director under rule 2(1)(C) clause viii  As per rule 2(1)(C) clause viii of of the Companies (Acceptance of Deposits) Rules, 2014 , Any amount received from a person who, at the time of the receipt of the amount, was a director of the company is not a deposit. However, the said director should give a declaration in writing to the effect that that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others.  In simple words director can advance money/give loan to the company from " own funds " and not from funds borrowed by him/her. Declaration under Rule 2(1)(C) clause viii by the director  needs to furnish to the Company at the time of giving the money Here is the draft format of declaration under Rule 2(1)(C) clause viii for easy reference. You can modify the same as per your requirements. DECLARATION [Pursuant to Rule 2(c) (viii) of the Companies (Acceptance of Deposits) Rules, 2014]