The extension of due date to file form CSR-2

The Ministry of Corporate Affairs (MCA) introduced the Companies (Accounts) Amendment Rules, 2022, effective from February 11, 2022. A notable change brought about by this amendment is the introduction of Form CSR-2.

This is a new reporting requirement for companies covered under Section 135 of the Companies Act, 2013, which mandates compliance with Corporate Social Responsibility (CSR) provisions.

 

Key Points:

1. Reporting Obligation: Companies covered under Section 135(1) must submit Form CSR-2 as an addendum to Form AOC-4.

2. Filing Deadline for FY 2020-21: Form CSR-2 must be filed separately on or before March 31, 2022, after submitting Form AOC-4 for the preceding financial year.

3. Filing Requirement for Subsequent Years: From FY 2021-22 onwards, Form CSR-2 should be submitted as an addendum to Form AOC-4 by the applicable due date.

However, for the FY 2022-23 Form CSR-2 shall be filed separately on or before 31^st March, 2024 after filing form AOC-4.  This is as per the Companies (Accounts) Second Amendment Rules, 2023 dated 31^st May, 2023.

 

 

 

 

 

 

Understanding the Liberalised Remittance Scheme (LRS) for Indian Residents

The Liberalised Remittance Scheme (LRS) introduced by the Reserve Bank of India (RBI) has made it easier for Indian residents to remit funds abroad for various purposes. This scheme allows individuals to send up to USD250,000 per financial year outside of India for permissible current and capital account transactions.

In this blog post, we will have an understanding of the LRS, including its eligibility criteria, permissible transactions, and important considerations.

 

Eligibility for the LRS

The LRS is available to Indian residents as defined by the Foreign Exchange Management Act (FEMA).

However, it is important to note that corporations, partnership firms, Hindu Undivided Family (HUF), trusts, and NRIs are not eligible to utilize the LRS.

 

Permissible Current Account Transactions

The LRS allows Indian residents to undertake various current account transactions, including:

1. Private visits (excluding Nepal & Bhutan): Remitting funds for personal travel abroad.

2. Gift or donation to NRIs: Sending gifts or donations, including rupee gifts, to close relatives who are NRIs.

3. Emigration: Remitting funds for the purpose of emigrating to another country.

4. Overseas business trips: Sending funds for business-related travel abroad.

5. Medical treatment abroad: Remittances for medical treatment and related expenses outside India.

6. Pursuing studies abroad: Sending funds for educational expenses incurred by individuals studying overseas.

7. Going outside India for employment: Remittances for individuals moving abroad for employment purposes.

8. Maintenance of close relatives abroad: Sending funds for the support and maintenance of close relatives residing outside India.

 

Permissible Capital Account Transactions

Under the LRS, Indian residents can engage in certain capital account transactions, which include:

 

1. Opening a foreign currency account abroad: Individuals can open and maintain foreign currency accounts with banks located outside India.

2. Purchase of foreign property: Remittances for acquiring properties located outside India.

3. Investments in overseas shares, securities, mutual funds, etc.: Investing in foreign stocks, securities, mutual funds, and similar financial instruments.

4. Extending INR loans to NRIs who are relatives: Providing loans in Indian Rupees (INR) to NRIs who are considered relatives.

Limits and Permissions

 

The LRS has a limit of USD250,000 per financial year for remittances. However, higher amounts may be remitted for emigration, medical treatment, and overseas education if required, subject to certain conditions. Any remittances exceeding the USD250,000 limit for other purposes require prior permission from the RBI.

 

Key Considerations

1. Currency Choice: Remittances under the LRS can be made in any freely convertible foreign currency.

2. Remittance Frequency: There is no restriction on the number or frequency of transactions in a financial year. However, the cumulative amount of all transactions should not exceed the current LRS limit.

3. Minors and LRS: Minors are eligible to utilize the LRS, but their natural guardian may need to sign Form A2.

4. PAN Card Requirement: Providing your Permanent Account Number (PAN) is mandatory for all LRS transactions.

 

The Liberalised Remittance Scheme (LRS) is a beneficial scheme for Indian residents to remit funds abroad for various purposes. By understanding the eligibility criteria, permissible transactions, limits, and key considerations associated with the LRS, individuals can make informed decisions and effectively utilize this scheme.

Stay updated with the latest regulations and guidelines issued by the RBI regarding the LRS to ensure compliance and smooth remittances. Consider consulting your professional to make an informed decision.

Government Advisory Prohibits Shopkeepers to Request Mobile Numbers to Generate Bills.

The Ministry of Consumer Affairs in India has advised retailers to refrain from compelling customers to provide their personal contact details for generating a bill.

This advisory aims to protect consumer privacy and address concerns raised by customers who have experienced refusal of services due to not sharing the contact numbers.

 

Reasons for the Issuance of the Advisory

Ø Unfair Practice:

Retailers demanding personal contact details before generating a bill is considered an unfair trade practice. It goes against the Consumer Protection Act and restricts customer choices and rights without valid justification.

 

Ø Privacy Concerns:

The collection of personal contact details raises privacy concerns. Customers have the right to protect their information and decide how it is used. Mandating disclosure infringes upon their privacy rights. The advisory emphasizes the need for retailers to respect consumer privacy.

 

Ø Empowering Consumers:

The advisory empowers consumers by allowing them to refuse providing personal contact details for generating a bill. By eliminating the mandatory disclosure requirement, consumers can freely protect their privacy, promoting transparency and strengthening consumer confidence.

 

                             The advisory by the Ministry of Consumer Affairs to retailers is a significant step to safeguard consumer privacy in India. It is crucial for consumers to be aware of their rights and make informed choices to protect their privacy in business transactions.

Bootstrapping vs. Crowdfunding: Analysis of Start-up Funding Options

When it comes to funding a start-up, entrepreneurs have a range of options to explore. Two popular approaches are bootstrapping and crowdfunding.

Both methods offer distinct advantages and disadvantages, making them worth considering depending on the specific needs and circumstances of a start-up.

In this blog post, we will delve into the key aspects of bootstrapping and crowdfunding, providing a comparative analysis of their benefits and disadvantages.

 

Bootstrapping:

Bootstrapping refers to the practice of self-funding a start-up or relying on personal savings, friends, and family for financial support. It involves using minimal external funding sources while focusing on revenue generation and controlling costs. Here are the key benefits and disadvantages of bootstrapping:

 

Benefits of Bootstrapping:

1. Ownership and Control: By bootstrapping, entrepreneurs retain full ownership and control over their start-up. They are not accountable to external investors or obligated to meet certain expectations, giving them the freedom to make decisions according to their vision.

 

2. Resourcefulness and Financial Discipline: Bootstrapping forces entrepreneurs to be resourceful, creative, and frugal in managing their limited resources. This can foster financial discipline and encourage finding innovative solutions with fewer financial dependencies.

 

3. Proof of Concept: By relying on organic growth and revenue generation, bootstrapping provides a solid proof of concept. It demonstrates that the start-up can survive and thrive without significant external funding, which can be attractive to investors in the future.

 

 

Crowdfunding:

Crowdfunding involves raising capital by soliciting small investments from a large number of individuals through online platforms. It allows entrepreneurs to pitch their ideas, products, or services to potential backers, who contribute varying amounts of money. Let's explore the benefits and disadvantages of crowdfunding:

 

Benefits of Crowdfunding:

1. Access to Capital and Market Validation: Crowdfunding provides a platform to access capital from a diverse group of individuals who believe in the start-up's potential. It can validate market demand and generate early customer interest, offering a proof of concept.

 

2. Marketing and Exposure: Running a crowdfunding campaign can generate significant media attention and publicity. This exposure can attract potential customers, strategic partners, and even traditional investors who may have previously overlooked the start-up.

 

3. Feedback and Engagement: Crowdfunding platforms enable direct interaction with backers, allowing entrepreneurs to gather feedback, build a community around their product or service, and gain valuable insights for product development and improvement.

 

Choosing between bootstrapping and crowdfunding depends on the start-up's financial situation, growth goals, and how much control the entrepreneur wants to keep. Sometimes, using a combination of both methods can work well. It's important for entrepreneurs to carefully consider the pros and cons of each approach and decide which funding strategy is best for their start-up.

Exploring Sovereign Gold Bonds

 

Buying physical gold in the form of jewellery can come with additional expenses such as making charges. To overcome these challenges and enjoy the benefits of gold investments in the long run, investing in Sovereign Gold Bonds (SGBs) can be an excellent alternative.

In this blog, we will explore the basic features, benefits, and essential facts about Sovereign Gold Bonds.

  

What are Sovereign Gold Bonds?

Sovereign Gold Bonds were introduced by the Government of India in 2015 as part of the Gold Monetisation Scheme.

These bonds are issued by the Reserve Bank of India (RBI) on behalf of the government. They are denominated in multiples of grams, with 1 gram being the minimum unit.

Investors receive an annual interest rate of 2.50%, paid semi-annually.

 

What are the key Features and Benefits of Sovereign Gold Bonds:

1. Flexibility: SGBs can be held in either paper form or demat form, providing convenience to investors.

 

2. Multiple Weight Denominations: Investors have the option to buy gold bonds in various weight denominations, with a minimum weight of 1 gram.

 

3. Choice of Investment Amount: SGBs offer flexibility in choosing the amount you wish to invest, allowing you to tailor your investment according to your financial goals.

 

4. Interest Earnings: The bonds provide an opportunity to earn interest on your investment semi-annually, enhancing the overall returns.

5. Convenient Storage: Unlike physical gold, SGBs are issued in certificate or demat form, eliminating the need for storage and security concerns.

 

6. Government Backing: SGBs are backed by the Government of India, ensuring the purity and reliability of the gold investment.

 

7. Premature Withdrawal: Although the bonds mature after eight years, investors have the option to exit after five years, providing some liquidity.

 

Please note that it is important to check for any updates or changes in the scheme's terms and conditions as per the current guidelines issued by the Government of India and the Reserve Bank of India. Always consult with a financial advisor or conduct thorough research before making any investment decisions.

How to Build a Good Credit Score

Your credit score plays a crucial role in your financial life. It affects your ability to secure loans, rent an apartment, get favorable interest rates, and more.

This blog guides you through simple steps to help you establish and maintain a good credit history.

1. Understand the Basics:

Start by familiarizing yourself with the fundamentals of credit scores. Learn how credit scores are calculated, what factors influence them, and how they impact your financial life. This knowledge will empower you to make informed decisions and take the necessary actions to improve your credit score.

 

2. Establish Credit:

If you're new to credit or have a limited credit history, it's essential to start building your credit profile. Begin by opening a basic credit account such as a secured credit card. Use it responsibly by making small purchases and paying off the balance in full and on time each month. This demonstrates your ability to manage credit and establishes a positive credit history.

 

3. Make Timely Payments:

Consistently paying your bills on time is crucial for maintaining a good credit score. Late payments can have a significant negative impact on your creditworthiness. Set up reminders or automatic payments to ensure you never miss a due date. Paying your bills promptly showcases your reliability and financial responsibility to lenders.

 

4. Keep Credit Utilization Low:

Credit utilization refers to the percentage of your available credit that you're currently using. Aim to keep your credit utilization below 30% of your total credit limit. High credit utilization can indicate financial strain and negatively affect your credit score. Regularly review your credit card balances and make efforts to pay them down and keep them low.

 

5. Build a Diverse Credit Mix:

Having a diverse mix of credit accounts can positively impact your credit score. This demonstrates your ability to handle different types of credit responsibly. Consider having a combination of credit cards, installment loans, and other lines of credit. However, be cautious and only take on credit that you can manage comfortably.

 

6. Monitor Your Credit:

Regularly check your credit reports. Review these reports for any errors, fraudulent activities, or discrepancies. Reporting inaccuracies promptly will help ensure the accuracy of your credit history.

 

7. Avoid Opening Multiple Accounts Simultaneously:

While having a diverse credit mix is beneficial, avoid opening multiple new accounts within a short period. This can raise concerns among lenders and temporarily lower your credit score due to new inquiries and a potential lack of credit history for those accounts.

 

 

Building and maintaining a good credit score is a gradual process that requires responsible financial habits and consistent effort. By understanding the factors that influence your credit score and following these simple steps, you'll be well on your way to establishing a solid credit history.

 

Crypto Tax in India - Key Points to Remember

 

Cryptocurrencies have gained significant popularity and traction worldwide in recent years, including in India. 

In India, the government introduced Section 115BBH in the 2022 budget, which imposes a 30% tax (plus surcharge and cess) on profits made from crypto trading. Additionally, a 1% Tax Deductible at Source (TDS) on crypto transactions was implemented. In this blog, we will delve into crypto tax in India and explore their implications for investors and traders.

 

Crypto Tax in India: Key Points to Remember

 

1. Tax Rate and Applicability: Section 115BBH imposes a flat 30% tax on profits made from crypto trading, starting from April 1, 2022. The tax is applicable to private investors, commercial traders, and anyone transferring crypto assets in a fiscal year, subject to certain conditions.

 

2. Nature of Income: Regardless of the nature of income (investment or business), the 30% tax rate remains the same. There is no distinction between short-term and long-term gains.

 

3. Expense Deductions: No expense deductions are allowed for crypto trading. Only the acquisition cost, which is the purchase price, can be deducted.

 

4. Loss Set-off: Crypto losses cannot be subtracted from crypto gains. Loss from any other source of income, such as business income, salary income, or house property income, cannot be set off against crypto income.

 

5. Carry Forward of Losses: There is no provision to carry forward crypto losses to future years to set off against crypto income.

 

Implications for Crypto Investors and Traders

1. Tax Calculation: The tax liability on crypto income is determined at the time of transfer or sale of the crypto asset. Unrealized gains from holding crypto assets are not taxable.

 

2. Limited Deductions: Unlike in stock and derivative trading, the government does not allow deductions for expenses like platform fees, broker fees, or internet charges. This reduces the flexibility for investors to offset their taxable gains.

 

3. Increased Compliance: The introduction of TDS on crypto transactions increases compliance requirements for both buyers and exchanges. Crypto exchanges are responsible for deducting 1% TDS on behalf of buyers and depositing it with the government.