Earlier this financial year, a lot of controversies stirred around company directors’ salary, whether a GST should be collected or not. Putting an end to that, the Finance Ministry has released a circular saying that Goods and Services Tax (GST) will not be levied on the salaries of the directors who are employees of the company.

The issue was examined for two categories. The first one referred to the independent directors and the others referred to the whole-time directors like Managing Directors treated as the employees of the company.

Important Points Of The Circular

The circular was released by the Central Board of Indirect Taxes and Customs (CBIC), the policy making body for indirect taxes under the Finance Ministry. It stated, “The part of director's remuneration that are declared as ‘salaries’ in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of Schedule III of the CGST Act, 2017.”

However, there are other factors that can be subjected to GST. Below are the conditions under which the directors’ remuneration will be taxable:

·     The remuneration that is not declared as ‘salary’ in the company’s accounts and is subjected to TDS under Section 194J of the IT act as fee for professional and technical services.

·     The remuneration paid to independent directors or those directors who are not the employees of the company on reverse charge basis. These lie clearly outside the scope of Schedule III of the CGST and are taxable.

As per the media reports, at least 18 per cent GST will be charged on the payments. Also, it is the responsibility of the company to collect the GST and give it to the government.

The Controversy

The controversy around company directors’ began earlier in this financial year when Advance Ruling Authorities held different views on the levy of GST on remuneration paid to Directors of a company.

In the case of M/s Clay Craft Indian Private Limited, ARA Rajasthan held that company directors cannot be treated as the employees of the company and their remuneration should be taxable. This was later troubled when ARA, Karnataka stated the contrasting statement. It said that all the remuneration paid to the directors cannot be said to be leviable under GST.

These contradictions caused a lot of stir in the industry and everyone was keenly waiting for a judgement by the higher authorities. The new circular has now given relief to all taxpayers by interestingly intertwining the Income Tax Act and the GST provisions and ending the controversy.

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After the announcement of nation-wide lockdown, the government also allowed the extension of deposits such as Public Provident Fund (PPF) and Sukanya Samriddhi Account (SSA) holders.

When the extension of three months was announced, the deadline was March 31, 2020. But later, it was pushed till June 30, 2020, for the complete the tax-saving exercise for FY2019-20. And now with the date coming closer, people are a bit confused about what to do.

Here are five things you must know about PPF extension for FY20:

1.      Even though you have passed the last final date i.e., 31^st March 2020, you will not be charged with any penalty or revival fee if you make the PPF deposit till June 30. This is also applicable to other small savings schemes.

2.     The default fee will be charged only if your account has remained inoperative before FY20.

3.    Not just deposit, you can also extend their accounts, if they have matured on 31^st March 2020.

4.    Due to some changes in the rules in the last fiscal year, PPF account holders can now make deposits in the multiples of Rs. 50 any number of times in a financial year, with a maximum of a combined deposit of Rs. 1.5 lakh a year. 

5.    Now for the withdrawn limit and loan, the balance in PPF and SSY on March 31 will be taken into account instead of June 30.

Other Financial Deadlines

It was not just PFF and SSA holders who got the extension. The government has also extended the last date for various payments and extensions in the past two months.

Here are some of the money-related tasks you must complete along with your PPF deposit before June 30, 2020:

●      Tax Saving Investments For FY20

For tax-saving investments, the government extended the last date to June 30, 2020, from March 31, 2020. So, if you have any investments eligible under section 80C, expenditure on health insurance premium eligible for deduction under section 80D, etc., start making it soon.

●      Linking of PAN with Aadhaar

Earlier, the last date for linking your PAN card to Aadhaar was March 31, 2020. But due to the coronavirus lockdown, the Indian government decided to shift the date to June 30, 2020.

Now, if you do not link your PAN with Aadhaar before this deadline, it will become invalid. You will not be able to conduct financial transactions using your PAN.

●      Income Tax Returns

Just like others, the government also extended the deadline for filing belated and revised ITRs for FY 2018-19 to June 30, 2020. If you miss it, you will have to pay a penalty for the same.

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After a lot of beta testing, Finance Minister Nirmala Sitharaman has finally launched the service of instant allotment of online PAN card. The KYC will be done online, and the only thing applicants will need to apply is the Aadhaar card and a mobile number registered with the same Aadhaar card. To get the e-KYC done, the applicants will have to go the website of the Income Tax Department.

How to get PAN card online?

The Income Tax department itself described the process of applying PAN online. In the official statement, it said that the application process is very easy. “The applicant may go to the e-filing website of the Income Tax Department to provide her/his valid Aadhaar no & submit the OTP generated on the Aadhaar registered mobile no.”

Here is the step by step procedure of applying for PAN

1. Go to the official website of the Income Tax department.

2. The form will ask to register your first name, middle name, email id & mobile number linked to Aadhaar card.

3. An OTP will be sent to the number you have provided in the form.

4. Once you submit the OTP, the website will generate you a 15-digit acknowledgment number.

5. You can check your application status by submitting your Aadhaar number.

6. If the IT department doesn't find any problem in your application, it will release your e-PAN card.

7. The e-PAN will be sent to the email attached to your Aadhaar card.

Finance Minister Nirmala Sitharaman did announce this instant PAN service in the Union Budget of 2020. In the official statement, the Ministry of Finance said that the e-PAN facility would be available for every applicant who has minimum two things- Aadhaar card and a mobile number registered to the same Aadhaar card. The allotted PAN card will be digital.

Notably, the Income Tax Department used to charge processing fees from applicants, but the e-PAN card will be provided to the applicants free of cost.

Before officially announcing the start of instant PAN card services, the Income Tax Department had started a ‘Beta version’ of the same facility from Feb 12, 2020. Since then, more than 6 lakh instant PAN cards have been released by the Income Tax Department.

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