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Relaxed deadlines for return filing

  • Form GSTR 3B to continue till March 2018, with payment of tax by 20th of the succeeding month
  • For filing GSTR 1 taxpayers would be divided into two categories :  

  • Taxpayers with annual aggregate turnover upto Rs. 1.5 crore need to file GSTR-1 on quarterly basis as per the following schedule :

    Period

    Dates

    Jul-Sep

    31st Dec 2017

    Oct-Dec

    15th Feb 2018

    Jan-Mar

    30th April 2018

     

  •  Taxpayers with annual aggregate turnover more than Rs. 1.5 crore need to file GSTR-1 on monthly basis as per following schedule :

    Period

    Dates

    Jul- Oct

    31st Dec 2017

    Nov

    10th Jan 2018

    Dec

    10th Feb 2018

    Jan

    10th Mar 2018

    Feb

    10th Apr 2018

    Mar

    10th May 2018


     

  • The time period for filing GSTR-2 and GSTR-3 for the months of July, 2017 to March 2018 would be worked out by a Committee of Officers. However, filing of GSTR-1 will continue for the entire period without requiring filing of GSTR-2 & GSTR-3 for the previous month / period.

Reduced fines on late filing

  • Fine for late returns has been slashed by 90% to a mere Rs. 20 per day from Rs. 200 per day for a taxpayer with nil liability.

  • Late fine for not submitting the GSTR-3B within due dates for the months of July, August and September 2017 has been waived off

  • All the late fee collected on late filing of FORM GSTR 3B will be re-credited to their electronic cash ledger under "Tax"

  • From October 2017 onwards the amount of late fee on nil returns will be Rs.20 per day

Changes in rate Structure

  • 178 Items shifted

     from 28% slab to lower slabs leaving apart sin goods and cess applicable goods.

  • Restaurants to have no more input tax credit and the rate of tax is changed to 5%.But Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day (even for a single room) will attract GST of 18% with full ITC 
  • Outdoor catering - 18% with ITC.

Changes in composition scheme

  • Manufacturers and traders would now operate at a standard rate of 1%

  • Threshold for the composition scheme has been increased to Rs. 1.5 crores from the current limit of Rs. 1 crore

  • Those supplying goods and services (services not exceeding Rs 5 lakhs in total) are eligible for compositions scheme

  • Composition Returns, GSTR-4  due date extended to 24th December

Relief for service providers

All service providers having inter-state supply or supply through e-commerce operator are exempt from GST registration with turnover up to Rs 20 lakhs.

Other reliefs granted

  • Export of services to Nepal and Bhutan are exempt from GST and have now been allowed to claim a refund of input tax credit paid if any

  • TRAN-1 can be filed and revised till 31st December 2017. Revision to be done only once.

  • Manual filing for Advance Ruling application to be introduced


 



 


 

Are you a director in a company?!! Know your duties and liabilities

The term "director" has been defined under Companies Act, 2013 Act to mean a director appointed to the board of a company. The Act provides for different categories of directors, including, whole time directors, managing directors, independent directors, nominee directors, and alternate directors and women directors.


Directors' Duties 

 The Act had stipulated the following duties under section 166:

  • A director of a company shall act in accordance with the articles of a company.
  • A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, and the community and for the protection of environment.
  • A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.
  • A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.
  • A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain of the company.
  • A director of a company shall not assign his office and any assignment so made shall be void.

 Directors' Responsibilities

  • The company had filed annual returns & financial statements with ROC (Registrar of companies) in time and manner as specified in the act/rules.
  • The compliance of companies act provisions relating to Public offer, Buy back of securities etc
  •  Proper books of accounts has been maintained by the company and financial statements had been prepared in compliance with the notified accounting standards
  • The Dividend declared is paid in time (within 30 days).
  • Proper filing of resolutions and agreements with ROC in time and manner as specified.
  • DIN(Director Identification Number) of all directors is intimated to ROC
  • Furnish all information, explanation or produce any document to registrar as asked for
  • All directions issued by registrar are properly complied
  • That there is no wrongful withholding of properties of companies
  • Proper disclosures had been made with respect to all contracts or arrangements entered into by the company with other entities, where the officers have interest
  •  No wrongful trading of company securities or price sensitive internal information is not passed on.

Penalty & Imprisonment

A director of a company held negligent or responsible for any of the above specified defaults will be punishable by payment of fine or penalty and even imprisonment in certain cases.The fine or penalty will be ranging up to Rs.25 lakhs and/or the imprisonment period ranges from 1 to 3 years depending upon the nature and seriousness of the default.

Therefore becoming a company director has become a very serious business and should not be undertaken lightly or unadvisedly. So if you are invited to become a company director or are already a director, it is very important that you understand your duties and responsibilities and the potential consequences of their breach prescribed under the Companies Act, 2013.

For further information, Contact Us

 

One Person Company

One Person Company (OPC) is a corporate framework, which incorporates the features of both sole proprietorship and a company. It has only one person as a constituent who will perform in the capacity of a director as well as a shareholder. Thus, OPC will have all the benefits of a private limited company i.e. they will have access to credits, bank loans, limited liability, legal protection for business, access to market etc., all in the name of a separate legal entity.All the provisions applicable to a private company are applicable to an OPC also, unless otherwise expressly excluded.

Advantages of OPC

  • One Person Company is the only form of corporate entity that can be incorporated and run by a single promoter with limited liability safeguard in India.
  • Businesses currently run under the proprietorship model could get converted into OPCs without any difficulty.
  • An OPC has 'perpetual succession' until it is legally put to an end. Being a distinct legal person, the existence of an OPC is unaffected by the demise of the member or other changes in ownership.
  • Like a Private company, One Person Company can raise funds through venture capital, financial institutions etc.
  • An OPC will have to face only limited compliance burden in comparison to private limited companies.
  • OPC needs to conduct at least one Board of directors meeting in each half of a calendar year and the gap between two meetings is not less than 90 days. Further, an OPC is not required to hold an AGM.

Other salient features

  • The words 'One Person Company' must be mentioned with the name of the company in brackets wherever it appears.
  • Only a natural person who is an Indian citizen and resident in India shall be
  • eligible to incorporate a One Person Company;
  • Shall be a nominee for the sole member of a One Person Company.
  • A person shall not be eligible to become a member of more than one OPC or become a nominee in more than one such company.
  • The minimum and maximum number of members in an OPC can be only one
  • The minimum and maximum number of directors in an OPC can be one (1) and fifteen (15) respectively.In order to increase the number of directors beyond 15 directors, a special resolution must be passed by the OPC to that effect
  • Financial Statement of an OPC has to be approved by the Board and needs to be signed by only one director for submission to the auditor. Also, an OPC need not prepare Cash Flow Statement as part of its financial statement. The copy of such financial statement along with other documents etc. must be filed with the ROC within 180 days from the closure of the financial year.
  • Such Company cannot be incorporated or converted into a company under section 8 of the Act.
  • Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.

Stages of Incorporation

  • Obtain Digital Signature Certificate [DSC] for the prospective director.
  • Attain Director Identification Number [DIN] for the prospective director.
  • Select suitable Company Name, and produce an application to the Ministry of Corporate Affairs for approval of company name.
  • Draft Memorandum of Association and Articles of Association [MOA & AOA].
  • Sign and file various documents and forms including MOA & AOA with the Registrar of Companies electronically.
  • Payment of Requisite fee to Ministry of Corporate Affairs including Stamp Duty.
  • Scrutiny of documents at Registrar of Companies [ROC].
  • Receipt of Certificate of Incorporation from ROC.

 Capital & Turnover threshold limits for compulsory conversion

  • Where the paid up share capital of an OPC exceeds Rs. 50 lacs or its average annual turnover of immediately preceding three consecutive financial years exceeds Rs. 2 crores;
  • Such OPC shall be required to convert itself, into either a private company or public company in accordance with the provisions of section 18 of the Act within 6 month of the date as mentioned above.
  • The OPC shall alter its memorandum and articles by passing a resolution to give effect to the conversion and to make necessary changes incidental thereto;
  • The OPC shall within period of sixty days from the date of applicability of above provisions, give a notice to the Registrar in Form No. INC-5 informing that it has ceased to be an OPC and that it is now required to convert itself into a private company.

Please contact us to know more..>>> Contact Us

GST: Small taxpayers can opt for composition scheme before July 21

Small businesses with turnover of up to Rs.75 Lakh are eligible to avail the composition scheme under the goods and services tax regime. Any person who has been granted registration on a provisional basis and has turnover not exceeding Rs.75 Lakh, and who wishes to opt for the composition levy, is required to electronically file intimation at the GST portal on or before 21 July 2017. Under composition scheme, traders, manufacturers and restaurants can pay tax at 1%, 2% and 5%, respectively in the new indirect tax regime. Businesses opting for composition scheme will see a lesser compliance burden as they will have to file returns only once in a quarter as against monthly returns to be filed by other businesses.

Conditions / Consequences

  • In the case of the following States, the limit of aggregate turnover for composition scheme is Rs. 50 lakhs:-  Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh.
  • Following persons are not allowed to opt for the composition scheme:
  1.  A casual taxable person or a non-resident taxable person;
  2. Suppliers whose aggregate turnover in the preceding financial year crossed Rs. 75 lakhs;
  3. Supplier who has purchased any goods or services from unregistered supplier unless he has paid GST on such goods or services on reverse charge basis;
  4. Supplier of services, other than restaurant service;
  5. Persons supplying goods which are not taxable under GST law;
  6. Persons making any inter-State outward supplies of goods;
  7. Suppliers making any supply of goods through an electronic commerce Operator who is required to collect tax at source.
  8. A manufacturer of following goods:

-        Ice cream and other edible ice, whether or not containing cocoa

-        Pan Masala

-        Tobacco and manufactured tobacco substitutes

  • Aggregate turnover will be computed on the basis of turnover on an all India basis and will include value of all taxable supplies; exempt supplies and exports made by all persons with same PAN, but would exclude inward supplies under reverse charge as well as central, State/Union Territory and Integrated taxes and cess.
  • A taxable person opting to pay tax under the composition scheme is out of the credit chain. He cannot take credit on his input supplies. When he switch over from composition scheme to normal scheme, eligible credit on the date of transition would be allowed
  • As the composition dealer cannot collect tax paid by him on outward supplies from his customers, the registered person making purchases from a taxable person paying tax under the composition scheme cannot avail credit.

Compliances

  • ·A person opting for composition levy will have to pay tax and electronically file quarterly returns in Form GSTR-4 before 18th of the month succeeding the quarter during which the supplies were made
  • The option to pay tax under composition scheme lapses from the day on which his aggregate turnover during the financial year exceeds the specified limit (Rs. 75 lakhs /Rs. 50 lakhs). He is required to file intimation for withdrawal from the scheme in FORM GST CMP-04 within seven days from the day on which the threshold limit has been crossed.
  • A person paying tax under the composition scheme can issue a bill of supply in lieu of tax invoice.
  • If a person opting to pay tax under the composition scheme receives inputs/input services from an unregistered person, tax will have to be paid on such supplies by the composition taxpayer under reverse charge mechanism.
  • Such person is required to furnish the details of stock, including the inward supply of goods received from unregistered persons, held by him on the day preceding the date from which he opts to pay tax under the composition scheme, electronically, in FORM GST CMP-03 within a period of sixty days from the date on which the option for composition levy is exercised or within such further period as may be extended by the Commissioner in this behalf.
  • A person making application for fresh registration under GST can opt for composition levy at the time of making application. Such persons can give the option to pay tax under the composition scheme in Part B of FORM GST REG-01. This will be considered as intimation to pay tax under the composition scheme.
  • In case a person has registration in multiple states, the option to pay tax under composition scheme will have to be exercised for all states.
  • Such persons shall mention the words "composition taxable person, not eligible to collect tax on supplies" at the top of the bill of supply issued by him; and he shall mention the words "composition taxable person" on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.
  • The registered person will not be able to carry forward the excess ITC of VAT to GST if he opts for composition scheme.

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Income Tax return filing – 31st July 2017

It is mandatory for all individuals to file Income Tax Return (ITR) where his total income exceeds the maximum amount that is not chargeable to  Tax ie, if it exceeds Rs.2,50,000 in the FY 2016-17. This limit is Rs 3,00,000 for senior citizens ( who are more than 60 years old but less than 80 years old) and Rs 5,00,000 for super senior citizens (who are more than 80 years old). In the case of partnership firms, return needs to be filed even if there is no taxable income. Due date of filing income tax return for the FY 2016-17(AY 2017-18) is 31st July 2017 for individuals and firms who are not subject to audit under section 44AB of the IT Act.

Different forms for return of income are prescribed for filing IT returns for different status and nature of income.

Types of taxable income

  •  Salaries  and perquisites
  • Income from house property (Ex: Rental income)
  • Income from  Business or Profession
  • Capital gain on sale of assets/shares
  • Income from other sources (Ex: Interest earned on bank deposits)

Deductions available

  • Life insurance premium paid
  • Contribution to PPF or EPF
  • Children's tuition fee
  • Medical insurance premium paid
  • Subscription to Mutual Funds. (ELSS)
  • Contribution to Pension Funds including pension scheme of Central Government. (NPS)
  • Investment in listed equity shares. (for first time investors)
  • 5 year post office time deposit
  • Subscription to notified securities/notified deposits scheme
  • Medical expenses of handicapped dependent relative.
  • Interest paid on loan taken for higher education.
  • Interest and principal repayment on loan taken for residential house property
  • Salaried individuals who live in a rented house/apartment can claim house rent allowance or HRA
  • Donations to approved charitable trusts/institutions, scientific research and rural development etc
  • Contributions to political parties.
  • Special benefits  available for  government employees

Benefits of filing your tax returns in time

  • Copy of ITR is required at the time of loan application
  • Eligibility to carry forward capital losses (short-term or long-term), which can help to plan and reduce tax liability in the subsequent years
  • Visa processing –ITR of last 3 years is a mandatory requirement prescribed under the visa application requirements of many countries
  • Life insurance companies, ask for ITR receipts for high life covers
  • Government tender- ITR of last five years are required to be submitted while applying for a government tender
  • Self-employed - ITR receipts acts as a proof of income source. Filing of tax on time, always adds to the credibility of the assessee
  • Credit for the tax deducted from you can be claimed through timely filing of ITR which results either in tax refund or reduces the tax liability by the amount already deducted.
  • ITR can be a sufficient proof for source of income , when a major expense is incurred over assets, events etc

To download in  PDF format, Click here  >>>IT Return 31st July 2017 .pdf

A Step Plan for GST implementation

A Step plan for GST implementation

Government is introducing Goods and Services Tax (GST),with effect from 01stJuly 2017. GST is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition throughout India to replace taxes levied by the central and state governments.

Please ensure that the changes in new tax regime are properly understood and appropriate measures are taken for hassle free transition. Please determine the taxability of various transactions undertaken by you including purchases, sales, supply, credit notes, returns etc. to ensure correct payment of taxes and compliance under GST regime.

Pre – Implementation action points  for smooth GST transition

Migration

  • If you are an existing tax payer, get your GST enrolment in time by making use of the provisional ID & Password that you have obtained from your concerned indirect tax authority.
  • Apply for migration in all states if you have centralised registration under Service Tax.

 Closing Stock

  • Complete the closing stock working as on 31.03.2017/30.06.2017 on or before the GST implementation date. Please make sure that no old stock ageing more than one year lies in the stock on GST implementation date.
  • A dealer or manufacturer who has input tax credit under State Vat or Entry Tax in his return on 30-6-2017 can carry forward his input tax credit as SGST Credit.A manufacturer who is having cenvat credit balance in his return on 30-6-2017 can carry forward his cenvat credit as CGST credit. Classify stock tax rate wise, purchased locally to get ITC (Input Tax Credit) into SGST. Also classify stock purchased on invoices bearing duty payment & non duty payments to get ITC transferred to CGST.
  • Make a separate file of those items which are shown in your unsold stock as on 30.6.2017 e.g. Purchase Bills/ Bill of Entry/ Excise Paying Documents etc.

Dealing with vendors/customers

  • Get the accounts statement from your suppliers / creditors for the year ended 31/3/2017 &  reconcile with your books of accounts
  • Rectify mismatch reports of purchases, if persists; and revise your indirect tax Returns accordingly
  •  If goods were supplied under CST Act, details of claims and CST forms (C, F, H, I, E-I/E-II) shall be submitted within 60 days)
  • ·Inform your GSTIN / ARN to all suppliers of Goods & Services and obtain GSTIN of all Suppliers & Buyers.
  • ·Make Chart of HSN CODES & GST Rates on your goods & services to be purchased &sold.

Books of Accounts & ERP

  • Get your Books of accounts finalised for FY 2016-17.
  • Updating your ERP or accounting systems
  • Keeping note of GST compliance requirements and effectively training your accountants for GST accounting and returns formats.
  • Update the invoice formats in ERP with GST requirements.
  • Take help of appropriate Tax engines/ Decision tables if found necessary.

 

Administration/Decision making

  • Assess the requirements for transactional restructuring if any needed to be in compliance with GST. Also analyze the requirements for re-modelling business structures if any
  •  As GST is a destination based tax, strategize your supply management strategies in a manner that minimizes cash flow impact.
  •  Define your sales policies – schemes, discounts and returns and effectively redraft the pricing mechanism
  •  Review and if necessary renew your contracts appropriately.
  •  Impact of abolished and new levies on the recurring finance decisions needs to be analyzed and planned.
  • Special consideration to quantifying the penal provisions for non-compliance

Please contact us if you require any further clarification regarding the above step plan.

For GST Step plan in PDF format, Click here >>> A Step plan for GST implementation.pdf

 

There are several reasons for NRIs to invest in India the major three being (i) to build up a strong financial security when they return to their homeland for good (ii) contribute to creating employment opportunities and (iii) contribute to economic growth of the country. Though NRI now have become a major segment of investors into India and many of them are successful, some of them have faced failures because of various reasons, including being duped by the promoters. In this article, I try to highlight a few points that an investor should look into before they conclude the investment deals.

  1. Know your Industry

Before investing into a venture, it is really important to do a market study of the sector and understand the industry. It is often seen that NRIs are introduced to a concept or a business idea and are taken to a fictitious world of imagination of the promoters, in which everything is perfect with high returns and no provisions for plan B or contingencies are provided. Before investing, it is important to view the initiative in the most realistic way and identify all issues of the particular industry, so that a solution strategy, if deciding to invest, can be worked out.A market study by an independent agency can help the investor in obtaining a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) of the industry into which he is investing.

2.Project Feasibility Report:

Project reports form a crucial part in evaluating any business. Technical, operational and financial aspects must be studied in depth while evaluating any deal.Where the investment is made into a new venture or into a new idea, the investor should take care to review the project report in depth and the same should be analyzed and critically approached by a subject/ technical expert. The promoters should be able to provide a proper financial road map and convince the investor that the cash burn is justified and the revenue targets are achievable. 

3.Valuing the business:

The pace at which technology has grown in the recent years can be understood from the fact that investments are now made on an idea of a person (promoter), and not on a product as it once used to be. Many a times it is difficult to put a proper value for the idea due to its uniqueness and lack of comparable data. Valuing a business helps in understanding the estimated worth of the company as well as the percentage of equity stake an investor can acquire in the company.There are different ways to value a business such as discounted cash flow method, comparable transaction method, multiples method, net assets method, etc. A financial model is built choosing one of these valuation methods which can aid the investor in understanding many financial indicators such as return on investment, break-even point etc. Choosing a method would depend on several factors including the nature and stage of the business, type of industry etc. In many cases valuation using different methods are taken and decision is made on a best judgment. While the above methods are acceptable methods of valuation, it is important for the investor to sit with his team to analyze the assumptions and figures of the financial model to ensure that they are correct and achievable.

4.Due Diligence

Where the investment is made into an existing business, it is advisable to do a due diligence of the business by an independent authority directly reporting to the investor. Due Diligence helps an investor to assess the performance of the entity in the preceding years, details regarding unsettled disputes, unsettled outside & statutory liabilities etc. Due Diligence further helps the investor to compare the information gathered against that provided by the promoters and assess the genuineness of the business.

5.Documentation

A proper Memorandum of Understanding (MoU) should be entered into between the promoters and investors that clearly states the amount of investment, the terms and conditions of investment. The MoU should also list down the various tranches in which the investments will be made and the milestones that the promoters should achieve before each tranche. It would also be advisable to review the MoU by a competent legal authority to ensure that interest of the investor is safeguarded.In addition to the MoU, shareholder agreement, term sheet, byelaws of the company etc all form an important part of documentation 

6.Know your Promoters

Ensure that the promoters of the venture is trust worthy and reliable.  The investor should do a proper back ground check of the promoters. It is the promoters that carries out the day to day business of the entity and their complete involvement in the project is critical to its success.

7.Portfolio Management

It is always wise to diversify the investment rather than investing the entire amount into one idea. Such an approach reduces the risk the investor is exposed to. Risk-averse investors should also consider the options of introducing the fund as debt or preference shares. The method of investing should be selected after understanding the risk and return parameters. 

8.Exit Strategy

It is ideal to have an understanding on the exit strategy as well. Even though it may seem odd to be discussing about exit strategy at the commencement of a business, there should be an alignment of interests between the investors and the founders and planning is required in advance. For example, if the company plans to get listed in stock market, they might prefer to follow some accounting regulations from initial stage.

9.Governance Report

Once an investment is made, monitoring is necessary to ensure that the promoters are on track with the idea development and the cash burn are as budgeted. As the investor is not involved in the day-to-day management of the entity, he will not be able to monitor the performance of the entity. A monthly or quarterly governance report is a solution. The report can either be a summarized dash board with major findings on the performance of the company or a detailed internal audit report. To ensure reliability, the governance report should be prepared by an independent agency.

Recipe for a good CIBIL Score

Recipe for a good CIBIL score

Everybody having money for all their needs happens only in an ideal world. So we all rely on financial credit at different occasions. For Purchasing or constructing a home, financing education, meeting business emergency, financing cultivation & harvesting of agricultural crops or at times it can even be to meet other finance emergency needs. Before sanctioning a loan the institutions will look at our profile and judge our repayment capability analysing various documents and factors like employment details, mortgage value, average bank balance etc and in addition CIBIL credit score & CIR report too.  

CIBIL (Credit Information Bureau (India) Limited )

          TransUnion CIBIL Limited is India's first Credit Information Company. They collect and maintain monthly reports (Credit Information Report- CIR) from banks and financial institutions, detailing individuals' and non individuals'(commercial entities) loan and credit card payment history. These records are submitted by banks and other lenders on a monthly basis. Using this information a Credit Information Report (CIR) and Credit Score is developed, enabling lenders to evaluate and approve loan applications. CIBIL has over 2,400 members–including all leading banks, financial institutions, non-banking financial companies and housing finance companies–and maintain credit records of over 550 million individuals and businesses.

What is CIR and a credit score?

Credit information report(CIR):

CIR is the factual record of your credit payment history compiled from information received from CIBIL members. It contains your basic information; details about all the credit facilities availed, past payment history, amount overdue, current status, etc. It also contains details about enquiries made by a financial institution for your credit report.

Credit score:

· Three digit numeric summary of your credit history.

· Value ranges between 300-900.

· Derived by using details found in on your credit information report(CIR).

· It indicates the probability of default of a borrower based on their credit history.

· Higher the score, more favourably your loan application will be viewed by the financial institution.

· A score of 750 or above is considered as good by banks and financial institutions.

· NA or NH means that either you have no credit history or are new to credit system. It also implies that you haven't had any credit activity in the last few years or you have no credit exposure. This is not a bad indication.  

What impact does it make?

Based on the information received from CIBIL, banks will be able to know whether you are capable of and will actually repay the loan. An unfavourable credit score may result in rejection of your loan application or may actually sanction the loan with lower amount or with higher rate of interest to safeguard the risks. So the credit score on higher knots will give you higher probability of getting a loan sanctioned.For example, imagine you have an education loan from state bank of India and at the same time using an ICICI credit card. Both these institutions will submit details on your account activity to CIBIL on a monthly basis. Now assume you apply for a housing loan with HDFC. As a part of the home loan application processing, HDFC will approach CIBIL to obtain your CIBIL score and CIR. Only timely servicing of education loan and credit card dues will provide you a favourable credit score and prove you are credit worthy. HDFC bank will take this into account before taking a decision on sanctioning the home loan.

What affects the credit score?

There are four major factors that affect your score to fall below the expected level.

1.       Payment history:

Recent/consistent late payments and EMI defaults establishes your trouble to pay existing credit obligations.

2.      High utilization of credit limit:

Increased spending on your credit card will not necessarily affect your score in a negative manner; an increase in the current balance of your credit card indicates an increased repayment burden and may negatively affect your score.

3.      Higher percentage of  credit cards or personal loans(unsecured loans):

Having an unbalance mix in your credit portfolio of secured (such as auto,home loan) and unsecured loan (such as personal loan,credit card) will adversely affect your score.

4.      Opening many new accounts recently:

Back to back availing multiple loans and credit cards will make lenders view your application with most caution, because this behaviour of being credit 'hungry, increases your debt burden, negatively impacting your CIBILscore.

 What enhances your credit score?

You can maintain a good credit history by monitoring your credit report at intervals, paying bills on time, opting for moderate credits, maintaining a healthy combination of credits, and avoiding multiple loans, credit cards and new accounts, monitor your co-signed,guaranteed and joint accounts monthly. Maintaining a good credit history/score is important to avoid being rejected by banks.

Know your credit score

CIBIL allows you to obtain your score and CIR so that you can have a look at your credit rating. In case you want to view your score along with CIR, it will cost you in the following manner:

·CIBIL score and report- Rs.550/-

·Bi-annual subscription -2 score reports @ Rs.800/-

·Quarterly subscription-4 score reports @ Rs.1200/-

 Payment can be made online or through demand draft. You need to fill up the request form and provide identity, address proof, PAN and submit the documents to CIBIL. On receipt of documents and payment, CIBIL will send you across your credit score and CIR.

What does status like 'closed', 'settled' and 'written off' in your credit report mean?

'Closed': If you find a date adjacent to the 'Closed' field in your account section, this means that that loan account has been closed by the lender. In other words, it means you have paid off your loan in full and the bank has reported this account as "Closed" to CIBIL. 

'Written off' or 'settled': In case the report mentions that any of your loan or dues are 'written off' or 'settled', it adversely affects your credit score. Write off indicates that you have not made payment on your outstanding loan/dues for more than 180 days. Whereas, in case you settle the outstanding with an institution for lesser amount than original due, your account appears as settled,reflecting you paid less amount than actually due to them. Since both these statuses can impact your credit score, you need to ensure that there are no write offs and settlement to your loan account.

How to rectify information in CIR?

In case you find that any information in the CIR is inaccurate, you can approach the bureau to rectify the same. You need to identify the error in the report and appropriately report online through your "my CIBIL" account with your query. You further need to contact the concerned institutions against which the error is reflected and inform them about the error. You will be required to provide necessary proofs to substantiate your claim. Once the institution acknowledges the error and rectifies it, CIBIL will update the information based on revised data received from the institution. Since credit score will determine your future borrowings, it is important to ensure that all the loans taken are timely paid up. Further, one needs to restrict oneself from taking loans for mundane purposes and check his spending habits to have control on credit card dues. Financial discipline will go a long way in ensuring a good credit score. A good CIBIL score can play a very pivotal role in one's financial aspects. Few advantages are:

Ability to get credit easily.

Quick approval for mortgages.

Low interest rate credit cards.

More negotiating power.

Get approved for higher limits.

Easy approval for rented/leased houses and apartments.

Low interest rate home loans and car loans.

 

 

 

TDS Rate Chart FY 2017-18

 
   

    

     For TDS Rates Chart in PDF format, Click here >> TDS rate chart.pdf

 

News Flash-Restrictions on cash transactions

 

For news flash in  PDF format click here >> Restriction on cash transactions.pd