The Union Budget for the financial year 2024-25, presented by Finance Minister Nirmala Sitharaman on July 23, 2024, outlines the government’s priorities and spending plans. This budget, significant as the first of the newly elected government, focuses on several key areas to drive India’s growth and development.

The budget emphasises nine priority areas:

• Productivity and resilience in Agriculture
• Employment & Skilling
• Inclusive Human Resource Development and Social Justice
• Manufacturing & Services
• Urban Development
• Energy Security
• Infrastructure
• Innovation, Research & Development and
• Next Generation Reforms

Direct Tax Reforms

   Simplifying and Rationalizing of Capital Gains Taxation

• The proposed changes aim to significantly simplify capital gains taxation.
• Short-term gains on specified financial assets will now be taxed at 20% (earlier it was 15% under 111A), while all other financial and non-financial assets will continue to follow the current tax rates.
• Finance Minister Nirmala Sitharaman revealed changes to the Long-Term Capital Gains tax on real estate, giving taxpayers the choice to either use the previous system or benefit from reduced rates without indexation. The new rate is 12.5%, a decrease from the previous 20%. Additionally, to benefit the lower and middle-income groups, the exemption limit for capital gains on certain financial assets will be increased to ₹1.25 lakh (Earlier it was 1 Lakh per year) per year.
• Financial assets listed for more than a year will be considered long-term. Unlisted financial assets and all non-financial assets must be held for at least two years (earlier it was 3 years) to qualify as long-term.
• Unlisted bonds, debentures, debt mutual funds, and market-linked debentures will be taxed on capital gains at applicable rates, regardless of the holding period.

Individual Income Tax

• Enhanced the limit of Standard Deduction: – Concerning Individual Income Tax Rates for those opting for the new tax regime, the standard deduction for salaried employees will be increased from ₹50,000 to ₹75,000. Additionally, the deduction on family pension for pensioners will be raised from ₹15,000 to ₹25,000.

Revised Tax Restructure under the New Tax Regime

Changes in TDS Rates

It is proposed to reduce TDS rates from 5 per cent to 2 per cent in certain sections and eliminate section 194F, which currently has a TDS rate of 20 per cent, as detailed below.

TDS on Payment to Partners

It is proposed that payments made by a firm to its partner, including salary, remuneration, commission, bonus, and interest, will be subject to TDS at a rate of 10% for aggregate amounts exceeding ₹20,000 in a financial year.

Corporate Taxes on Foreign Companies

In the 2024 Budget, Finance Minister Nirmala Sitharaman has proposed reducing the corporate tax rate on foreign companies from 40% to 35%.

Enhanced Deduction for Employer Contributions to Pension Schemes

Section 80CCD offers a deduction for the employer’s contribution to the pension scheme up to 10%. The Budget 2024 has raised this deduction limit to 14% of the employee’s salary (Basic+DA) from the previous year.

                              Indirect Tax Reforms

Reductions and Exemptions in Customs Duties for Essential Goods

Other GST Reforms and Amendments

• Un-denatured Neutral Alcohol used in manufacturing alcoholic liquor for human consumption will be excluded from the scope of GST. (Amendments to Sec 9 of the CGST Act, Sec 5 of the IGST Act, and Sec 7 of the UTGST Act).

• Section 74A addresses tax not paid, underpaid, erroneously refunded, or input tax credit wrongly availed or utilized starting from the Financial Year 2024-25. Under this new section, if any tax is unpaid, underpaid, erroneously refunded, or if the input tax credit is wrongly availed or utilised, the proper officer will serve a notice to the responsible person, requiring them to explain why they should not pay the due amount with interest and penalty. However, no notice will be issued if the amount in question for a financial year is below Rs. 1,000. The notice must be issued within 42 months from the due date of the annual return or the date of the erroneous refund.

• The same limitation period applies for issuing demand notices and orders for demands from the financial year 2024-25 onwards. The time limit for taxpayers to benefit from reduced penalties under this section, by paying the tax demanded along with interest, is extended from 30 days to 60 days.

• Section 11A is inserted to empower the government to regularize non-levy or short levy of central tax due to prevalent trade practices.

• Section 13(3) is amended to set the time of supply as the date of invoice when the invoice is issued by the recipient of the supply.

• Sub-section (5) is added to Section 16, effective retroactively from July 1, 2017, to allow ITC claims on invoices or debit notes for FY 2017-18, 2018-19, 2019-20, and 2020-21 in the GSTR-3B filed up to November 30, 2021. Additionally, sub-section (6) is inserted in Section 16, also effective retroactively from July 1, 2017, to permit ITC claims on invoices and debit notes in GSTR-3B filed for the period from the GST registration cancellation date or the effective date, as applicable, until the date of the revocation order for GST registration cancellation, provided it is filed within thirty days of the revocation order date. However, the time limit for ITC claims for such documents must not have expired under Section 16(4) as of the date of the cancellation order. If the tax is paid or the ITC is reversed, no refund will be accepted.

• A new provision is added under the blocked credits in Section 17(5), disallowing ITC on taxes paid under Section 74 for demands up to FY 2023-24, and removing references to Sections 129 and 130 of the CGST Act.

• A new proviso in sub-section (2) of section 30 of the CGST Act is inserted, adding conditions and restrictions for the revocation of GST registration cancellation, which will be prescribed in the CGST Rules later.

• Section 31(3)(f) is amended to provide a time limit for issuing invoices by the recipient for RCM supplies, including suppliers registered solely for TDS under GST.

• GSTR-7 for TDS under GST must be filed whether or not TDS is deducted during a month under Section 39(3).

• Section 54(15) specifies that GST refunds of unutilized ITC or IGST will not be allowed for zero-rated supplies of goods subject to export duty.

• A summoned person can authorize another person to appear on their behalf in compliance with GST summons issued by the GST officer under the new Section 70(1A).

• New Sections 73(12) and 74(12) restrict the applicability of demand and recovery provisions for determining tax demands for FY up to 2023-24.

• Under the new Section 74A, the penalty will be reassessed in a notice if it is established that the case no longer involves fraud, willful misstatement, or suppression of facts.

• Under Section 107 of the CGST Act, the maximum pre-deposit required for filing appeals before the appellate authority is reduced from Rs. 25 crores to Rs. 20 crores. Likewise, Section 20 of the IGST Act is amended to lower the pre-deposit amount from Rs. 50 crores to Rs. 40 crores.

• The government may specify the types of cases to be heard by the Principal Bench of the Appellate Tribunal through an amendment to Section 109.

• Effective August 1, 2024, taxpayers will have until the later of either the date of the order’s communication or a date specified by the government based on Council recommendations to file an appeal with the Appellate Tribunal. This change also applies to commissioners and GST officers filing applications before the Appellate Tribunal. Applications may be submitted within three months after the standard appeal period expires. The pre-deposit requirement for appeals is reduced from 20% to 10% of the disputed amount, and the maximum pre-deposit amount is lowered from Rs. 50 crore to Rs. 20 crore.

• The penalty under Section 122(1B) is amended to apply only to cases involving e-commerce operators subject to TCS under GST, effective retrospectively from 1st October 2023.

• Conditional waiver of interest and penalty is provided through Section 128A for demand notices under Section 73 for all FY from 2017-18 to 2019-20, except for erroneous refunds and where interest/penalty is already paid for the said years.

• The appellate authority replaces the anti-profiteering authority from a date to be notified for accepting applications for cases of anti-profiteering under Section 171.

New items through Paras 8 and 9 are inserted under Schedule III to declare the following as neither supply of goods nor supply of services:

• The activity of apportioning co-insurance premiums by the lead insurer to the co-insurer for the insurance services jointly supplied by the lead insurer and the co-insurer to the insured in coinsurance agreements, provided the lead insurer pays the tax liability on the entire premium paid by the insured.

• Services provided by the insurer to the reinsurer, where the ceding commission or reinsurance commission is deducted from the reinsurance premium paid by the insurer to the reinsurer.
• Section 146 specifies that no refund shall be issued for tax paid or input tax credit reversed if these amounts would not have been paid or reversed had clause 114 been in effect at all relevant times.

Important note: All amendments to direct and indirect taxes will take effect once they are notified by the CBDT or CBIC, respectively.

Speech by Mrs. Nirmala Sitharaman of Budget 2024-25 (Download PDF): https://www.indiabudget.gov.in/doc/budget_speech.pdf

(Important Due Dates for FY 2024-25)

Monitoring due dates within a financial year is essential for budgeting, financial reporting, tax planning, and meeting contractual obligations. It enables organisations to allocate resources effectively, comply with regulatory requirements, and evaluate performance. Timely tracking also fosters investor confidence by demonstrating financial discipline and transparency. Failure to meet deadlines can lead to penalties and legal repercussions, highlighting the critical importance of diligence in managing financial obligations within the designated timeframe.

April 2024

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In today’s globalized business landscape, organizations often rely on a network of vendors and suppliers to meet their operational needs. While outsourcing tasks to vendors can streamline processes and reduce costs, it also brings about a significant responsibility – ensuring vendor compliance with various laws and regulations. In this blog, we will delve into the crucial aspects of vendor compliance, focusing on vendor selection procedures, vendor data records maintenance, vendor registration with labor offices, and vendor compliance audits with respect to laws like the Contract Labor Regulation and Abolition Act (CLRA).

1. Vendor Selection Procedures

Choosing the right vendors is the cornerstone of effective vendor compliance management. The vendor selection process should be thorough and systematic. Here are some key steps to consider:

– Needs Assessment: Start by identifying your organization’s specific needs and requirements. What services or products are you outsourcing? What are the critical quality, cost, and timeline considerations?

– Vendor Evaluation Criteria: Develop a set of criteria for evaluating potential vendors. This might include factors such as financial stability, past performance, industry reputation, compliance history, and capacity to meet your needs.

– Request for Proposals (RFP): Create an RFP that outlines your requirements and expectations. Share this document with potential vendors to solicit their proposals.

– Due Diligence: Conduct thorough due diligence on vendors, including background checks, reference checks, and financial analysis. Look into their compliance with labor laws, tax regulations, and other relevant legislation.

– Vendor Agreements: Draft clear and comprehensive vendor agreements that outline all terms, including compliance requirements, service-level agreements, and dispute-resolution mechanisms.

2. Vendor Data Records Maintenance

Maintaining accurate and up-to-date vendor data records is essential for vendor compliance. These records should include:

– Vendor Information: Maintain a database of vendor contact details, tax identification numbers, and legal entity information.

– Contracts and Agreements: Keep copies of all vendor agreements, including any updates or amendments.

– Insurance and Certifications: Verify that vendors have the necessary insurance coverage and certifications to operate legally in their industry.

– Compliance Documentation: Maintain records of vendor compliance with labor laws, safety regulations, and any other relevant legal requirements.

– Payment Records: Keep records of all payments made to vendors, including invoices and receipts.

Regularly reviewing and updating these records ensures that you have a clear picture of your vendors’ compliance status at all times.

3. Vendor Registration with Labor Office

In many regions, including India, the registration of vendors with labor offices is a mandatory requirement under labor laws like the Contract Labor Regulation and Abolition Act (CLRA). This registration process typically involves the following steps:

– Application Submission: Vendors must submit an application for registration to the local labor office, providing details about their business, workforce, and operations.

– Inspection and Verification: Labor officials may conduct inspections to verify the information provided in the application. This includes checking for compliance with labor laws, health and safety standards, and wage regulations.

– Issuance of Registration Certificate: Upon successful verification, the labor office issues a registration certificate to the vendor. This certificate serves as proof of compliance with labor laws and regulations.

– Renewals and Updates: Vendors must renew their registration periodically and inform the labor office of any changes in their operations or workforce.

4. Vendor Compliance Audit with Respect to Laws like CLRA

Regular vendor compliance audits are essential to ensure that vendors adhere to labor laws like the CLRA. These audits involve a systematic review of vendor operations and compliance records. Here’s how to conduct an effective vendor compliance audit:

– Planning and Scope Definition: Define the scope of the audit, including the specific laws and regulations to be assessed. Develop an audit plan that outlines the audit’s objectives, methodology, and timeline.

– Document Review: Examine vendor records, contracts, agreements, payroll records, and compliance documentation to assess compliance with labor laws.

– On-Site Inspections: Conduct on-site inspections of vendor facilities to verify compliance with safety, health, and working condition standards.

– Interviews and Discussions: Interview vendor representatives and workers to gain insights into their understanding of labor laws and their working conditions.

– Report and Remediation: Prepare a detailed audit report highlighting compliance strengths and weaknesses. Work with vendors to address any non-compliance issues and establish corrective action plans.

– Follow-up and Monitoring: Regularly monitor vendor compliance, conduct follow-up audits as needed, and ensure that corrective actions are implemented.

Vendor compliance is a multifaceted process that requires careful vendor selection, diligent record-keeping, and proactive adherence to labor laws and regulations. By following robust vendor selection procedures, maintaining accurate vendor data records, ensuring vendor registration with labor offices, and conducting regular compliance audits, organizations can mitigate risks, enhance vendor relationships, and uphold their legal and ethical responsibilities. In today’s competitive business environment, proactive vendor compliance management is not just a choice; it’s a necessity for sustainable and responsible business operations.

In today’s complex and ever-evolving regulatory landscape, compliance management has become a critical aspect of business operations across industries. Companies must navigate a web of rules, laws, and guidelines to ensure they are operating ethically and legally. To streamline this process and empower businesses to meet their compliance goals efficiently, our Compliance Management Tool offers a comprehensive set of features. In this blog post, we will dive into the main attributes of our tool, emphasizing its end-to-end capabilities, ready-to-use checklists, integration with Salesforce, global implementation, custom design, technology, and human touch blend, as well as its scalability, security, and cost-effectiveness.

End-to-End Compliance Management: Our Compliance Management Tool is designed to cover the entire compliance lifecycle. From identifying relevant regulations to implementing and monitoring compliance initiatives, it provides a seamless end-to-end solution. This ensures that no aspect of compliance is overlooked, reducing the risk of non-compliance and associated penalties.

Ready-to-Use Compliance Checklists: To simplify compliance efforts, our tool offers a library of ready-to-use compliance checklists. These checklists are meticulously curated to cover a wide range of industries and geographies, making it easy for businesses to get started quickly. Users can also customize these checklists to align with their specific needs.

Salesforce Platform Integration: We understand that businesses often rely on Salesforce for their customer relationship management (CRM) needs. Our Compliance Management Tool seamlessly integrates with Salesforce, allowing for a unified approach to compliance and customer management. This integration enhances data consistency and accessibility, streamlining compliance efforts.

Global Implementation: Businesses today operate on a global scale, facing a myriad of international regulations. Our tool is equipped to handle global compliance requirements, offering support for various regulatory frameworks across different regions. This ensures that multinational companies can maintain compliance across borders effortlessly.

Custom Designed: We recognize that each organization has unique compliance needs. Our Compliance Management Tool is not a one-size-fits-all solution. Instead, it can be customized to align with the specific compliance requirements of your industry and organization. This tailored approach enhances its effectiveness in meeting your compliance objectives.

Technology & Human Touch Mix: Our tool combines cutting-edge technology with a human touch. While automation streamlines routine compliance tasks and reporting, it also provides a platform for collaboration and communication among compliance teams and stakeholders. This blend ensures that critical decisions and judgments are made with the human expertise required.

Scalable, Secure, & Cost-Effective: Scalability is crucial as businesses grow and compliance needs evolve. Our tool is designed to grow with your organization, accommodating changing requirements seamlessly. It also prioritizes security to safeguard sensitive compliance data. Moreover, it is cost-effective, ensuring that businesses of all sizes can access top-tier compliance management without breaking the bank.

In conclusion, our Compliance Management Tool is a comprehensive solution that empowers businesses to excel in compliance management. With its end-to-end capabilities, ready-to-use checklists, Salesforce integration, global readiness, customizability, technology-human mix, and cost-effectiveness, it stands as a valuable asset for organizations seeking to navigate the complex world of compliance with confidence. Contact us today to learn more about how our tool can transform your compliance efforts and help your business thrive in a compliant and ethical manner.

When should you hire a Managing Consultant? 

The massive number of duties required to run a small or medium-sized firm makes it difficult to operate. It is nearly impossible for business owners to handle everything individually, from accounting to human resources to tax consultation. However, because hiring a managing consultant is so simple, a company doesn’t have to sort everything out on its own.

A business will almost certainly want the services of a managing consultant at some stage. It could be market research, expertise, skills, strategies, or processes that your business lacks. Therefore, hiring a consultant may assist companies in improving performance and making the required changes to attain success.

A managing consultant may help your business with a wide range of challenges in the workplace. They will guide you in establishing a company model, making a marketing plan, or figuring out which marketing tactics to employ and how to apply them. A managing consultant, in general, assists you with strategy, planning, and problem-solving. They may be able to assist you in developing a business skill or expanding your knowledge.

When is the right time to hire a managing consultant?

1. If your team is short on experience or knowledge,

If no one on your team has the required degree of expertise or depth of knowledge for a certain function or project, it is time to hire a managing consultant.

2. When a single employee is responsible for many roles

Consider hiring a consultant to fill at least one of the positions if a single employee is performing several tasks. This way, you get exactly what you need and just for the hours you need it, and you have the correct person doing the job well rather than one employee attempting to do numerous jobs poorly.

3. When they need a second opinion

A managing consultant works with a variety of firms and may have already solved the problem that you are facing. They may provide a unique viewpoint based on what they have seen work (or not) in the past. Furthermore, because of their background, they may frequently bring to the table new and inventive ideas or potential issues that customers would not have seen on their own.

4. If you are looking for specific skills

Another, and certainly the most popular, reason for hiring consultants is to obtain access to particular skill sets that may not be available in-house. When you hire a managing consulting firm, you have access to a collection of specialists with varying abilities. These highly skilled individuals would not only be costly to acquire, but the organization may not have enough work to keep them occupied all year. Companies, on the other hand, can bring in that skill set on demand owing to consultants.

5. When you want to obtain an independent opinion

When a company is working on a difficult problem or a contentious project, it might be difficult to make judgments or take essential measures without being engulfed in emotions or politics. So, they hire a managing consultant to give an independent opinion and to do some of the grunt work.

 6. When they require additional energy 

Companies may have crucial challenges to solve, yet they lack the people to do so. After all, companies must continue to focus on their day-to-day operations, and new initiatives sometimes need reprioritizing to focus on workers’ fundamental job tasks. However, because many of these initiatives are one-offs, recruiting new staff to fill these vacancies does not always make sense. Clients may struggle to get the teams in place to undertake this vital job, be it a cost-cutting program that requires a dedicated team for a year, for example.

Why choose us?

Komplytek is the best managing consulting firm. We provide complete services and flexible solutions that are designed to be insightful and increase efficiency in your business’s crucial spin-off areas. We provide a “One Stop Solution” for finance & accounting, compliance & regulatory, and other operations portfolios.

Our main goal is to transform business implementation services by combining human talent with technology that is forward-thinking, based on core principles, and built for the future. We also provide effective solutions that align with multinational enterprises’ lean structures. This allows them to function more efficiently while we provide financial, compliance, human resource, and payroll management.