January-2016

Payroll and Compliance The Monthly Chronicle - January 2016 Provident Fund Department removes the grace period for remittance

The process involved in PF calculation and remittance have gone online since last year. In light of this development, the Provident Fund department has removed the 5-days grace period allowed for remittance of the PF dues. From 1st February, 2016, all employers must make PF payment within 15th days from the close of every month.

Provident Fund department simplifies withdrawal policy

In a move to do away with an employer’s attestation on PF withdrawal forms, the EPFO department has introduced a revised set of simplified forms (one page that requires minimum details) and procedures to facilitate smooth and hassle free EPF withdrawals. Individuals can submit their PF withdrawal forms directly to the respective jurisdictional EPF office—without their employer’s attestation. This scheme is available for all individuals who meet the following conditions:

  1. KYC details (including bank account number) have been verified by their employer by using a digital signature
  2. Universal Account Number (UAN) is linked with their Aadhar number
Salient features of Bonus Act Amendment

The Payment of Bonus (Amendment) Bill, 2015 received the President’s assent on 31st December, 2015. The Payment of Bonus (Amendment) Act, 2015 amends the Payment of Bonus Act, 1965 as follows:

  1. Increases the eligible salary limit under clause (13) of Section 2 from Rs. 10,000 per month to Rs. 21,000 per month
  2. Increases the calculation ceiling under Section 12 from Rs. 3,500 per month to Rs. 7,000 per month or the minimum wage for the scheduled employment (as fixed by the respective Government), whichever is higher.

The changes have been effective from 1st April, 2014.

Mandatory digital signature for PF and ESIC members

The EPFO department has mandated that all establishments must have an authorized digital signature from 31st December, 2015. The following conditions are applicable:

  1. If the establishment is registering for the Provident Fund Code for the first time, then it is mandatory for them to submit a digitally signed application.
  2. If the establishment has already registered for the Provident Fund Code, then any future document submissions must be made only after having been signed digitally.

Also, the Employee State Insurance Corporation (ESIC) department is planning to mandate digital signatures for all establishments from 1st January, 2016. It has requested all its members to apply for digital signatures.

New e-TDS/TCS file validation utility released

NSDL released a new e-TDS/TCS file validation utility of versions 2.145 and 4.9 for FY 2007-08 to FY 2009-10 and FY 2010-11 onwards respectively. This utility is applicable from 19th December, 2015.

The key feature that is applicable for 24Q is the Addition of challan (i.e. C9 correction) in correction statements. As directed by the Income Tax Department (ITD), the addition of challan option (C9 correction) has been made available for Central (deductor category ‘A’) and State governments (deductor category ‘S’), applicable only for statements up to FY 2012-13.

Facts every business should know

Statutory expenses, (like PF, ESIC, PT, etc.) if paid after the due date but before the date of filing IT returns along with all the interest and penalty, will not be disallowed in the financial statement. (F.No.279/Misc./140/2015-ITJ)

  Consequences of late payment of TDS

*If the TDS payment is made after the due date but before the due date of filing IT returns, then the expense will be allowed.   Holiday list for 2016

The government has released an all new holiday list for 2016 for Andhra Pradesh, Delhi, Goa, Haryana, Himachal Pradesh, Maharashtra, Telangana, West Bengal, Kerala, Karnataka, Tamil Nadu, Uttar Pradesh, Gujarat, and Jammu & Kashmir. For more details, contact ADP.

New PAN-quoting rules

The IT (22nd Amendment) rules, 2015 (introduced by the CBDT) mandates the quoting of the PAN number in the transactions that are listed in the revised rule 114 B. Quoting of the PAN number has been seen as necessary for curbing the black money market. To bring parity between compliance burden and information checks new PAN quoting rules have been provided. These changes are applicable from 1st January, 2016.

Transactions listed under rule 114B of the IT (22nd Amendment) Rules, 2015 are as follows:

New PAN quoting rules S . No Nature of transaction Existing rules Revised rules 1 Immovable property Sales/purchases valued at Rs.5 lakhs or more
  • Sales/purchases exceeding Rs.10 lakh
  • Properties valued by the Stamp Valuation authority at amounts exceeding Rs.10 lakh will also need PAN
2 Motor vehicle (other than two wheeler) All sales/purchases All sales/purchases 3 Time deposit Time deposit Exceeding Rs.50,000/- with a banking company
  • Deposits with co-op banks, Post offices, Nidhi, NBFC companies will also need PAN
4 Deposit with Post Office Savings Bank Exceeding Rs.50,000/- Discontinued 5 Sale or purchase of securities Contract for sales/purchases of values exceeding Rs.1 lakh

Contract for sales/purchases of a value exceeding Rs.1 lakh

6 Opening an account (other than time deposit) with a banking company. All new accounts
  • Basic savings bank deposit accounts excluded (no PAN numbers required for opening these accounts)
  • Co-operative banks also to comply
7 Installation of telephone/ cellphone connections All instances Discontinued 8 Hotel/restaurant bill(s) Exceeding Rs.25,000/- at any one time (by any mode of payment) Cash payment exceeding Rs. 50,000/- 9 Life insurance premium Payment Rs. 50,000/- or more in a year as premium to an insurer Payment exceeding Rs. 50,000/- in a year 10 Purchases or sales of goods or services (including bullion and jewelry) No requirement Sales/purchases of any goods or services exceeding Rs.2 lakhs per transaction 11 Foreign travel Cash payment in connection with foreign travel of an amount exceeding Rs.25,000/- at any one time (including fare, payment to travel agent, purchase of forex) Cash payment in connection with foreign travel or purchase of foreign currency of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent) 12 Cash purchase of bank drafts/ pay orders/ banker’s checks Amount aggregating to Rs.50,000/- or more during any one day Amounts exceeding Rs. 50,000/- on any one day 13 Cash deposit with banking company Cash aggregating to Rs.50,000/- or more during any one day Cash deposit exceeding Rs.50,000/- in a day 14 Credit card Application to banking company/any other company/institution for credit card No change. Co-operative banks also to comply. 15 Mutual fund Payment of Rs.50,000/- or more for purchase Payment exceeding Rs.50,000/- for purchase 16 Shares of company Payment of Rs.50,000/- or more to a company for acquiring its shares
  • Opening a demat account
  • Sales/purchases of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction
17 Debentures/ bonds Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds Payment exceeding Rs.50,000/- 18 RBI bonds Payment of Rs.50,000/-or more to RBI for acquiring its bonds Payment exceeding Rs.50,000/- 19 Cash cards/ prepaid instruments issued under Payment & Settlement Act No requirement Cash payment aggregating to more than Rs.50,000 in a year #page-wrap {margin: 50px;}p {margin: 20px 0; }/* Generic Styling, for Desktops/Laptops */table { background-color:#fafafa;width: 100%; border-collapse: collapse; }/* Zebra striping */tr:nth-of-type(odd) { background: #eee; }th { background: #646464; color: white; font-weight: bold; }td{ font-size:16px; font-family: 'Roboto', sans-serif !important;}td, th { padding: 6px; border: 1px solid #ccc; text-align: left; } Compliance Calendar for the month of January 2016 Due Date Nature of transaction Existing rules Mode Professional Tax - States - Remittances 10th January 16 Andhra Pradesh & Madhya Pradesh State wise regulations By Challan 15th January 16 Gujarat Gujarat PT regulations By Challan 20th January 16 Karnataka Karnataka PT regulations By Challan & Online 21st January 16 West Bengal West Bengal PT regulations By Challan 29th January 16 Assam & Orissa State wise regulations By Challan 29th January 16 Maharashtra Maharashtra PT regulations Online PF Central 15th January 16 Remittance of Contribution EPF & MP Act 1952 Online 25th January 16 Provident fund return online EPF & MP Act 1952 Online ESI Central 21st January 16 Remittance of Contribution (Main code and Sub Codes) ESIC Act 1948 Online TDS 7th January 16 TDS Payment Income Tax Act Online 15th January 16 TDS Return Income Tax Act Online Labour Welfare Fund Remittances 15th January 16 Gujarat State wise regulations By Challan 15th January 16 New Delhi State wise regulations By Challan 15th January 16 Karnataka State wise regulations By Challan 15th January 16 Maharashtra State wise regulations By Challan 20th January 16 Kerala State wise regulations By Challan 15th January 16 West Bengal State wise regulations By Challan 29th January 16 Assam & Orissa State wise regulations By Challan 29th January 16 Chattisgarh State wise regulations By Challan 29th January 16 Tamilnadu State wise regulations By Challan 29th January 16 Haryana State wise regulations By Challan 29th January 16 Goa State wise regulations By Challan 29th January 16 Madhya Pradesh State wise regulations By Challan 29th January 16 Andhra Pradesh &Telangana State wise regulations By Challan * Since 30th and 31st is holiday, 29th Jan would be the due date for respective cases. Sources: Government Notifications, Circulars, Press releases. Share us on           var switchTo5x=true;stLight.options({publisher: "a774d07d-a09d-4a2f-a103-57088fe922e2", doNotHash: false, doNotCopy: false, hashAddressBar: false, tracking: false});

Disclaimer

The information provided herein is general and not intended as legal, regulatory, tax or accounting advice and you should obtain your own independent advice regarding the matters dealt with herein. ADP assumes no liability or responsibility for any errors or omissions in the content of this document or publication and for your use of any information provided. The information contained in this document is provided “as is” without warranty of any kind, either express or implied, including without warranties of merchantability or fitness for a particular purpose, and non-infringement. All materials contained in this are protected by copyright laws, and may not be reproduced, republished, distributed, transmitted, displayed, broadcast or otherwise exploited in any manner without the express prior written permission of ADP. ADP’s names and logos and all related trademarks and other intellectual property are the property of ADP and cannot be used without its express prior written permission.

Copyright ©2015 ADP, LLC ALL RIGHTS RESERVEDThe Newsletter is not for commercial or solicitation purposes