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Section 194O of the Income Tax Act

Section 194O of the Income-tax Act, 1961 deals with Tax Deducted at Source (TDS) on payments made to e-commerce participants. It was introduced in the Union Budget 2020 and came into effect on 1st October 2020.

Here's a summary of the key points of Section 194O:

Who is responsible for deducting TDS? 

 E-commerce operators like Amazon, Flipkart, Meesho, etc., are responsible for deducting TDS at the rate of 1% on the gross amount of sales made through their platform by sellers (e-commerce participants).

What transactions are covered? 

The TDS applies to sales of goods, provision of services, or both facilitated through the e-commerce platform. This includes professional and technical services as well.

When is the TDS deducted? 

The TDS is deducted at the time of crediting the seller's account, irrespective of the mode of payment, or at the time of making payment to the seller, whichever is earlier.

Threshold limit: 

There is no threshold limit for e-commerce companies. They are required to deduct TDS on all transactions facilitated through their platform. However, for individual/HUF e-commerce participants, no TDS is deducted if the gross amount of sales during the previous year does not exceed Rs 5 lakh and they have furnished their PAN or Aadhaar.

Purpose of Section 194O: 

This section aims to improve tax compliance by bringing e-commerce participants under the TDS net. Many small sellers operating on e-commerce platforms often miss filing their income tax returns. By collecting TDS at the source, the government ensures that some tax is collected upfront even if the seller doesn't file their returns.

I hope this summary is helpful. If you have any further questions about Section 194O or its implications, feel free to ask!

Gaurav Sharma

8878797882

Infinityservices2018@gmail.com

Infinityservices2018.com

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The income tax challan rectification process

Login to eportal.incometax.gov.in

Go to "Services" and click on "Challan Correction".

Click on "Create challan correction request".

Select the attributes which needs to be corrected. For example: Assessment year, major head, minor head

Select the "Assessment year" or "Challan Identification Number" (CIN)

All the open challans will be displayed on the next screen. You need to select the challan which needs to be corrected.

Enter the correct details (AY, major head or minor head which is correct) and click on continue.

The next screen will show the existing details and updated details. Click on Continue and do the e-verification.

Once e-verification is complete, the challan correction procedure is completed.

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A Goods and Services Tax (GST) audit is a comprehensive review of a taxpayer's financial records, returns, and compliance with the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act) and its corresponding state GST acts. The primary objective of a GST audit is to ensure that taxpayers are accurately reporting their GST liabilities, claiming eligible input tax credits (ITC), and complying with the various provisions of the GST laws.

Here is a detailed overview of the GST audit process in accordance with the CGST Act of 2017:

1. Applicability:

   - GST audits are applicable to certain categories of taxpayers, including those with a specified annual turnover threshold, as prescribed by the government.

   - Taxpayers whose annual turnover exceeds the threshold limit are required to get their accounts audited by a qualified chartered accountant or a cost accountant.

2. Audit Period:

   - The audit covers a specific financial year or multiple financial years, as determined by the tax authorities.

3. Appointment of Auditor:

   - Taxpayers subject to GST audit must appoint a qualified auditor, such as a Chartered Accountant (CA) or Cost Accountant, to conduct the audit.

4. Audit Process:

   - The auditor examines the taxpayer's books of accounts, records, invoices, and other relevant documents to verify the correctness of the reported GST transactions.

   - They assess the accuracy of GST returns filed, including GSTR-1 (outward supplies), GSTR-3B (monthly summary return), and GSTR-2A (auto-populated purchase details).

   - The auditor checks the reconciliation of ITC claimed in GSTR-3B with eligible invoices and relevant provisions.

5. Verification of Compliance:

   - The auditor ensures that the taxpayer has complied with various GST provisions, such as:

     - Timely filing of returns

     - Correct classification of goods and services

     - Proper valuation of supplies

     - Correct calculation of GST liability

     - Timely payment of GST

     - Adherence to reverse charge mechanism (if applicable)

     - Applicability of GST on exempt and non-GST supplies

     - Compliance with anti-profiteering provisions

6. Audit Report:

   - The auditor prepares an audit report, which includes findings, observations, discrepancies, and recommendations.

   - The audit report must be submitted to the taxpayer within the prescribed timeframe.

7. Response and Rectification:

   - After receiving the audit report, the taxpayer has the opportunity to respond to the findings and rectify any discrepancies or errors.

   - If necessary, the taxpayer may need to make additional tax payments or file revised returns to correct any mistakes.

8. Submission to Tax Authorities:

   - The taxpayer submits the audit report along with their response to the tax authorities within the stipulated timeframe.

9. Action by Tax Authorities:

   - The tax authorities review the audit report and the taxpayer's response.

   - If discrepancies are found and the taxpayer's response is unsatisfactory, the authorities may initiate further investigations and take appropriate action, including the imposition of penalties.

10. Conclusion:

    - The GST audit process concludes once the tax authorities have reviewed the audit report and taken any necessary actions.

It's important for businesses to maintain accurate records and comply with GST provisions to avoid penalties and legal consequences. The GST audit process is a crucial mechanism for ensuring tax compliance and preventing tax evasion in the GST regime.

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