Category: Most Asked Questions

Reverse Charge Under GST: Payment of GST is generally made by the supplier or the seller of the goods or services. But in Reverse Charge, GST payment is made by the person who is the purchaser of goods or services. It means the person who is liable to pay the tax gets reversed. It is referred Reverse Charge Mechanism (RCM). E-commerce, like the services made by Amazon, or Uber, is the best illustration of Reverse Charge.

Cases Where Reverse Charge Mechanism Is Applicable

Reverse Charge is applicable in two cases:

Reverse Charge applies to the supply of certain goods or services as specified by CBEC [section 9(3)]: When a person who is unregistered sells goods or supplies services to a person registered under GST, in that case, Reverse Charge is applicable. It means that the receiver has to pay GST to the Government directly. The registered dealer needs to self-invoice his/her purchases. For the buyer to make interstate purchases, he needs to pay IGST. It is also applicable to dealers registered under the Composition Scheme of GST [section 9(4)].

Requirements for Registration: A person who supplies goods and services only on which payment of GST is made on a Reverse Charge basis, then registration of such person is not required even if the specified limits of turnover are exceeded. For example, a farmer who is engaged with the cultivation of cashew nuts and sells it to a trader is liable for the payment of GST based on the Reverse Charge Mechanism. The farmer is not liable to register under GST if he is not involved with trading any other taxable goods.

Purchase Of Specific Product Or Services

Reverse Charge is charged explicitly for some services and products. The receiver is liable to pay the reverse Charge even when the seller is registered under GST, subject to conditions specified for such specific products and services.

The person who is liable for the tax paid under Reverse Charge Mechanism has to register first regardless of the threshold limit.

The seller of such products or services covered under this condition has to mention that GST payment is based on Reverse charges on their tax invoices.

Example: A trader registered under GST takes services of Goods Transport Agency (GTA) for ₹15,000. This service falls under the reverse charge list. As a result, the trader has to pay tax @ 18% on ₹15,000 based on Reverse Charge Mechanism. However, there will be no increase in net tax liability as the amount of GST paid is allowed in the same month as an Input tax credit.

At the end of the article, a list of such services and products is provided.

Purchase Of Any Goods/Services From Unregistered Personstrong

When an unregistered person sells any goods or services to a person registered under GST, then the payment of GST has to be made by the registered person on a Reverse Charge basis. When the registered person purchases goods from other states, he has to pay IGST.

There is an exemption of ₹5,000 per day provided by the Government. It means that if a purchase of less than ₹5,000 is made in a day from a person who is not registered under GST, then the person is not liable to pay tax under Reverse Charge. The limit of ₹5,000 is applicable as a total from all suppliers and not from a single supplier. The person registered under GST has to self-invoice the purchases made.

GST Rate

The tax rate already specified on such goods or services is to be used as a tax rate. When Reverse Charge is applicable, GST compensation cess is to be applied. If the purchase of such goods and services falls under exempted or zero percent tax slab, then no tax will be payable under Reverse Charge.

Dealers under Composition Scheme are liable for the payment of Reverse charges at standard tax rates (5%, 12%, 18%, and 28%). The dealer will not be able to pay at composition rates (1% or 5%).

Payment Of Input Tax Credit Of GST Under Reverse Charge Mechanism

An input tax credit means that while paying output tax, a person can reduce the tax that is already paid on inputs. It includes the amount paid as IGST on imports and the amount paid under Reverse Charge. It is to be noted that credit allowed to such business is under normal circumstances. For example, dealers under the composition scheme won’t be able to take input tax credit under normal circumstances. Therefore they are prohibited from taking input tax credit on the amount of GST paid under Reverse Charge.

The amount of GST to be paid under Reverse Charge should be in cash only. It cannot be paid from the available input tax credit. The amount of reserve charge is the amount of GST that is to be paid in that period.

GST is levied on the advance amount that is paid on a Reverse Charge basis. The person is liable to pay tax under a reverse charge basis for advance payment. (Mentioned provision is currently postponed)

Reverse Charge Accounting Entries

Entries To Be Made While Purchasing Such Goods Or Services:

Particulars	Debit (Dr) / Credit (Cr)
Purchase A/c	Dr
Input SGST A/c	Dr
Input CGST A/c	Dr
To Creditor A/c		Cr
To Output SGST Reverse Charge Mechanism A/c		Cr
To Output CGST Reverse Charge Mechanism A/c		Cr

Specific accounts will get debited on the purchase of any asset or any expenses made. Output SGST Reverse Charge Mechanism A/c is used instead of normal Output SGST A/c to distinguish both taxes. It is because taxes charged under Reverse Charge Mechanism cannot be adjusted in opposition to input taxes, and it is to be paid in cash only.

Entries To Be Made While Making Payment Of GST

Particulars	Debit (Dr) / Credit (Cr)
Output SGST Reverse Charge Mechanism A/c	Dr
Output CGST Reverse Charge Mechanism A/c	Dr
To Cash/Bank A/c		Cr

Self-Invoicing Under Reverse Charge Mechanism

A person registered under GST is liable for the payment of tax under reverse Charge to purchase products or services on which amount of tax falls under reverse charge mechanism and purchase of products or services from a person who is not registered under GST. In such cases, the person has to issue an invoice for the products or service received by him/her. The registered person, while making payment to the supplier for such supplies, has to issue a payment voucher.

There isn’t any precise format mentioned for self-invoicing. The structure that the registered person uses for invoicing can be used with specific changes to the heading.

Tax Payment Under Reverse Charge Mechanism On The Basis Of Supply Time:

The specified time to deposit GST with the Government is 20 days from the month-end in which services were dispensed. Therefore it is essential to ascertain the supply time to levy taxes based on Reverse charges under GST.

Payment Date

For the purpose of calculation of Date of Supply, the Date of Payment shall be earlier among the following:-

• The date on which the entry of payment is made on the recipient’s books, or
• The date on which the amount is debited from his bank account

In Case Of Goods Time Of Supply

Under Reverse Charge, the supply time would be the earliest among the following:

• The date of payment, or
• The date of receipt of goods, or
• The immediate date after 30 days from the date of issue by the supplier.

If the time of supply cannot be determined under (a), (b) or (c) above, then in the recipient’s books of account, the date of entry shall be the time of supply.

In Case Of Services Time Of Supply

Under Reverse Charge, the supply time would be the earliest among the following:

• The payment date, or
• The immediate date after 60 days from the date of issue of invoice by the supplier

If the time of supply cannot be determined under (a) or (b) above, then the date of entry in the recipient’s books of accounts shall be the time of supply.

GST Payable Under Reverse Charge for The Following List Of Goods

Sl. No	Tariff item, sub-heading, heading or Chapter	Description of supply of Goods	Supplier of goods	Recipient of supply
1.	2401	Tobacco leaves	Agriculturist	Any person registered under GST
2.	1404 90 10	Leaves for Bidi wrapping (tendu)	Agriculturist	Any person registered under GST
3.	0801	Cashew nuts, not peeled or shelled	Agriculturist	Any person registered under GST
4.	5004 to 5006	Silk yarn	Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn	Any person registered under GST
5.	–	Supply of lottery	Any local authority, State Government or Union Territory	A selling agent or lottery distributor. Explanation.- For the purposes of this entry, selling agent or lottery distributor has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the provisions of subsection 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

GST Payable Under Reverse Charge for the following List of Services

Sl. No.	Service	Provider of service	Rate of Service tax  payable by the service provider	Rate of service tax payable by any person other than the service provider	Recipient of Service
1.	Taxable services agreed  to be provided or provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory other than the non-assessee online recipient (OIDAR)	Any person located in a non-taxable territory	Nil	100%	Any person from the taxable territory other than the non-assessee recipient of any business
2.	Services agreed to be provided or provided by a goods transport agency (GTA) to transport goods by road.	Goods Transport Agency (GTA)	Nil	100%	(a) Any factory governed by or registered under ‘The Factories Act, 1948’; (b)Any society registered under the ‘Societies Registration Act, 1860’ or under any other law for the time being in effect to any Indian part; (c) Any Co-Operative society established under or by any law (d)any person who is registered under the following Act: SGST/UTGST/CGST; (e) Any  corporate body established, under or by law; (f) Any partnership firm, including the association of persons whether registered or not under any law; (g) Person taxable naturally
3.	Services agreed to be provided or provided by an individual advocate or firm of advocates through legal services, directly or indirectly.	An individual advocate or firm of advocates	Nil	100%	Any Business institution.
4.	Services agreed to be provided or provided by an arbitral tribunal	An arbitral tribunal	Nil	100%	Any Business institution.
5.	Sponsorship services	Any person	Nil	100%	Any person
6.	Services agreed to be provided or provided by Government or local authority excluding (1) renting of fixed property, (2)Specified are as follows- (i)Services by the Department of Posts in the form of speed post, express parcel post, life insurance, and agency services provided to a person other than Government; (ii)Services concerning an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers	Government or local authority	Nil	100%	Any business entity.
7.	Services agreed to be provided or provided by an insurance agent to any person carrying on insurance business.	An insurance agent	Nil	100%	Any person carrying on insurance business.
8.	Services agreed to be provided or provided by a company director or corporate body to the said company or the corporate body;	A company director or a corporate body	Nil	100%	A company or a body corporate.
9.	Services in the form of goods transportation by a vessel from a place outside India up to the Indian customs clearance station	A person from a non-taxable territory to a person located in non-taxable territory	Nil	100%	Importer as defined under clause (26) of section 2 of the Customs Act, 1962.
10.	Services provided or agreed to be provided by a recovery agent to a financial institution, or a banking company, or a non-banking financial company	A recovery agent	Nil	100%	A financial institution, or banking company, or a non-banking financial company.
11.	Transfer or permitting the enjoyment or use of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 concerning  dramatic, original literary, musical or artistic works	Author or music composer, photographer, artist, etc	Nil	100%	Publisher, Music company, Producer
12.	Radio taxi or Passenger Transport Services provided through electronic commerce operator.	A taxi driver or Rent a cab operator	Nil	100% by Electronic Commerce Operator	Any person

Save Yourself From Clubbing Provisions for The Gifts Made In Cash: There are certain taxpayers who have substantial taxable income and are shifting some portion of their income to other persons to reduce tax liability. This is done by either shifting assets or a part of revenue. In order to handle such situations, the clubbing provisions were introduced by IT Department to make the correct persons liable to pay taxes. It means that if an individual does not pay taxes, such clubbing provisions will be applied, and the tax amount will be recovered from the individual who is the owner or who is carrying such an asset.

What Is Clubbing?

Clubbing is the inclusion of another person’s income into the assessee’s total income for the computation of taxes.

There are some instances under the Income Tax Act where another person’s income is required to be included in another person’s income. This is known as ‘Clubbing of Income’.

For example, suppose a husband transfers a part of his income to his wife’s name to reduce his personal tax burden. In such cases, clubbing provision will be applied, and such transferred income shall be added back into the husband’s payment for computing taxable income.

The main reason for introducing clubbing provision is to curb the unfair practice of tax evasions. However, if all the mentioned conditions are satisfied, then clubbing shall be done irrespective of the intention of not evading taxes.

Several Clubbing Provisions

According to Section 64 of the Income Tax Act, 1961, it provides the provisions of clubbing. As per Section 64, while computing the total income of any individual, inclusion of all such incomes as arises indirectly or directly –

• Section 64(1)(ii)– To the wife of such an individual by way of salary, fees, commission, or any other form of remuneration, whether in cash or in-kind, from a concern in which such individual has a substantial interest. However, clubbing provision shall not be applicable concerning any income arising to the spouse where the spouse possesses technical or professional qualifications. The income earned is solely attributable to the application of his or her experience and technical or professional knowledge.
• Section 64(1) (IV)– When assets are transferred to the spouse of such individual directly or indirectly otherwise than for adequate consideration or in connection with an agreement to live apart. However, when an individual transfer any house property to his or her minor child/spouse otherwise than for adequate consideration, the transferor, in that case, is deemed to be the owner of the house property so transferred as per Section 27(I) and the total income shall be taxable in the hands of the transferor under Section 27(I) not covered under Section 64(1) (IV).
• Section 64(1) (VI)– When assets are transferred to the son’s wife, of such individual, directly or indirectly on or after June 1, 1973, to the son’s wife by such individual otherwise than for adequate consideration.
• Section 64(1) (VII)– When assets are transferred to any person or association of persons indirectly or directly otherwise than for adequate consideration to the association of persons or person by such individual, to the extent to which the income from such assets is for the deferred or immediate benefit of his or her spouse.
• Section 64(1) (VIII)– When assets are transferred to any person or association of persons directly or indirectly on or after June 1, 1973, otherwise than for adequate consideration, to the association of persons or person by such individual, to the extent to which the income from such assets is for the deferred or immediate benefit of his son’s wife.
• Section 64(1) (A)– To the individual’s minor child, or not being a minor child but suffering from any disability as specified in Section 80U. However, provisions of clubbing shall not apply in respect of such income as accrues or arise to the minor child on account of any:
  • Manual work done by him; or
  • Activity that involves the application of his skill, specialized knowledge or talent and experience.
• Section 64(2) – In the case of an individual being a member of an undivided Hindu family, any property having been the separate property of the individual has, at any time after December 31, 1969, been converted by the individual person into property through the act of impressing such discrete property with the character of property belonging to the family or including it into the common stock of the family or been transferred by the individual, directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transferred being in the future referred to as the converted property), then, notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, for computation of the total income of the individual under this Act for any assessment year starting on or after April 1, 1971,
  • The individual shall be considered to have transferred the converted property, through the family, to the members of the family for being held by them jointly;
  • The income derived from such converted property or any part thereof shall be considered to arise to the individual and not to the family;
  • where such converted property has been the subject matter of a partition (whether total or partial) amongst the members of the family, the income derived from such converted property as is received by the spouse on a division shall be deemed to arise to the wife from assets transferred indirectly by the individual to the wife and the provisions of sub-section (1) shall be applied accordingly.

But provided that the income referred to in clause (b) or clause (c), if included in the individual’s total revenue, shall be excluded from the family’s total income or, as the case may be, the spouse of the individual.

Note: – Property includes any interest in the property, the proceeds of the sale, movable or immovable, and any money or investment for the time being representing the proceeds of sale thereof and where the property is converted into any other property by any method, such other property. Also, for the purpose of Section 64, the income also includes loss.

How To Save Yourself From Clubbing Provisions or The Gifts Made In Cash?

There are various ways to save yourself from the above provisions of clubbing and can do proper tax planning for saving taxes. Adequate consideration shall be given while transferring assets.

The provisions of clubbing shall be applied only if the assets were transferred without giving adequate consideration. If an individual transfers any assets with adequate consideration, such transaction shall not come under the preview or provisions of clubbing.

Example: A husband made a cash gift of ₹500,000 to his spouse via cheque. A fixed deposit is made by the spouse with the said amount in her saving bank account at an 8% interest rate. The interest thus earned on this fixed deposit shall be taxable in the hands of the husband as per Section 64(1) (IV).

Example: A husband made a cash gift of ₹500,000 to his spouse via cheque. A total investment of ₹10 00,000 (out of which ₹500,000 was transferred as a cash gift) is made by the spouse and incurred a loss of ₹200,000 in that year. The propionate loss of ₹100,000 shall be clubbed with the husband.

Note: – As per Explanation 3 of Section 64, for the purposes of Section64 (1) (IV) and Section64 (1) (VI), where an individual directly or indirectly makes the transfer of assets to his spouse or son’s wife are invested by the transferee—

• in any business, such expenditure being not in the nature of the contribution of capital as a partner in a firm or, as the case may be, for being admitted to the benefits of partnership in a firm, that part of the income arising out of business to the transferee in any preceding year, which bears the same proportion to the payment of the transferee from the company as the value of the assets aforesaid as on the first day of the preceding year bears to the total expenditure by the transferee as on the said day in the business
• in the nature of the offering of capital as a partner in a firm, that part of the interest receivable by the transferee from the firm in any preceding year, which bears the same proportion to the interest receivable by the transferee from the firm as the value of financing aforesaid as on the first day of the preceding year bears to the total investment by way of capital contribution as a partner in the firm as on the said day shall be included in the total income of the individual in that previous year.

Example: A husband purchased jewellery worth ₹10 00,000 from his wife for consideration of ₹12 00,000. Such proceeds are used by the wife for making a fixed deposit into the bank account at an interest rate of 8% per year. In such case, only ₹16,000 (proportionate interest on the excess payment of ₹200,000) shall be clubbed in the hands of the husband. The remaining interest earned shall be considered as the wife’s income as it is received on the transfer of an asset with adequate consideration and shall not be considered under the provisions of clubbing.

In other words, if the spouse transfers an asset such as jewellery, precious stone, bullion, archaeological collections, paintings, drawings, sculptures, debentures, share, etc., on the fair market value, then the provision of clubbing shall not be applicable. The fair market value of such assets shall be calculated in the similar manner as followed for computation of capital gain.

Transfer Assets In Other Relation

The provisions of clubbing shall be applicable only if the transfer is made to: –

• Spouse
• Minor Child (Daughter or son)
• Son’s wife
• HUF

So, suppose the asset transfer is made to other relations such as parents, son or daughter (above 18 years of age) or grandchildren etc. In that case, it will not fall under the provisions of clubbing even if the transfer of such asset is without consideration.

Note:– Income can only be clubbed when there is conclusive proof for the deferred or immediate benefit of their spouse or son’s wife for the transfer of such assets.

Example: Suppose a father made a cash gift of ₹10 00,000 to his major son via cheque. A fixed deposit is made by his son with the said amount in his savings bank account at an 8% rate of interest. The interest earned on this fixed deposit shall not be clubbed in the father’s hands, and such income shall be taxable in the son’s hands. At the time of accrued income and transfer of assets, the relationship of spouse or son’s wife shall exist.

The provisions of clubbing shall be applicable when the relationship of husband and wife or son’s wife shall exist at the time of accrual of income and the transfer of assets. So, when the relationship doesn’t exist at the time of transfer of accrual income or assets, then such income shall not be clubbed in the hands of the individuals.

Example: Suppose a fiancé (engaged partner) made a cash gift of ₹10 00,000 to his engaged life partner via cheque and made a fixed deposit with the said amount in her saving bank account at an interest rate of 8%. Interest thus earned on such fixed deposit shall not be clubbed as the relationship of husband and wife does not exist while the transfer of such assets took place.

Other Points

• Any amount of income generated on the loan funds received from the spouse shall not be clubbed and shall be taxable only in the hands of the partner to whom such amount of income has been accrued. The only prudence is to repay the loan along with the nominal rate of interest. It is advisable to maintain proper documentary evidence for the loan and the repayments.
• Income generated on the indirect or direct transfer of asset to spouse or son’s wife shall fall under clubbing provisions. However, if any successive income is earned on the direct income generated from such asset transfer, it shall not be clubbed.

Example: Suppose the husband transferred ₹300,000 to his wife’s account and made a fixed deposit at an interest rate of 8% in her name, then the interest of ₹24,000 earned shall be clubbed in the husband’s income. However, any income earned by investing this amount of ₹24,000 shall not be clubbed in the husband’s hands.

Example: Suppose the husband transferred ₹100,000 to his wife’s account, and she deposited such a sum of money in her PPF account. The amount of interest earned from PPF shall be clubbed in the hands of her husband but shall not be taxable as it is exempted u/s 10.

• Where the individual person transfers cash to his/her spouse or minor child and the transferee acquires a house property out of such money; then the transferor shall not be treated as deemed owner of the house property. Such transactions will, however, attract the provisions of clubbing.

Relevant Case Laws

• Commissioner of Income Tax versus Smt. Pelleti Sridevamma (Supreme Court): When the cash gift is made to a minor son has been converted into a house property, and such house property is sold after a long period of time, then the capital gain earned on such transfer of house property shall also be clubbed in the hands of the parents.
• Commissioner of Income Tax versus Nawab Hussain Jah: If the cash gift made to the wife is invested in shares and after that, the shares are sold and the sales proceeding earned is converted into house property, then the income from such house property shall also be clubbed in the hands of the husband.

Deduction of Interest from Savings Account Section 80TTA: Section 80TTA under the Income Tax Act, 1961 is introduced to an individual or an undivided Hindu family to provide deduction in respect of interest received on deposits (not being time deposits) in a savings account held with certain institutions.

Who is Eligible for Deduction Under Section 80TTA?

Deduction under section 80TTA applies to resident individual taxpayers and HUF only. Also, if the individual is a senior citizen, the deduction is allowed under Section 80TTB and not 80TTA from FY 2018-19.

Saving accounts with any of the following establishments will qualify under section 80TTA –

1. Bank or banking company;
2. Co-operative banks and other co-operative banking societies.
3.  Post office savings account.

However, this benefit is not available to a firm, an association of persons, LLP, a body of individuals, or a company assessee.

Amount for Deduction

The maximum amount possible for the deduction, along with the interests that are not eligible for the deduction, are discussed below.

1. The deduction applicable is for interest received on eligible saving accounts or Rs. 10,000 (maximum amount), whichever is lower. The limit of Rs. 10,000 is held collectively for interest from all the saving accounts held by an individual.
2. If the interest earned exceeds Rs. 10,000, then the balance amount will be taxable as before, i.e., considered income from other sources and taxed as per applicable slab rate.
3. The interest earned on a saving bank interest is exempted from TDS as per section 194A of the Income Tax Act. So, no TDS is deducted on interest from a savings account, whatever the amount of interest may be.
4. This deduction is not available for the interest received on fixed deposits (FDs) or time deposits, or term deposits (A term deposit is a deposit received by the bank for a fixed period and can be withdrawn only after the predefined fixed period is over).

How to Apply for Deduction under Section 80TTA?

Form ITR – 1

You need to fill your income from all other sources that include interests from saving accounts in point no. 4. The interest from the savings account is to be filled in Point no. 5(q).

Form ITR -2, 2A, 3, 4, 4S

You need to fill your income from all other sources, including interest from saving accounts in point no. 1(b) in sheet “OS”.

The interest from savings accounts is to be filled in point no. “o” of sheet VIA.

Note: The utility automatically calculates the amount allowed as a deduction if the amount exceeds Rs. 10,000 in both cases.

South Indian Bank Personal Loan: Personal loans can be seen as a form of installment credit. It is extremely helpful for those people whose financial condition is really poor and is in requirement of instant monetary support. The South Indian Bank Personal Loan comes to one’s rescue when one is short of money.

South Indian Bank Personal Loan interest rates are competitive with the market and are really good. It is very easy to access a personal loan under this bank since one can apply for South Indian Bank Personal Loan online as well.

Curious to check other banks’ offered Personal loan features, eligibility, interest rates, tax benefits, and a repayment plan. Go with our one-stop Personal Loan Page & swipe out your doubts within no time.

South Indian Bank

South Indian Bank Personal Loan Overview

The South Indian Bank is very secure and dynamic whose main objective is customer convenience. Their vision is to become the most preferred bank when it comes to corporate governance, customer service, and stakeholder value.

The bank provides various financial services to its customers, such as, recurring deposits, savings deposits, PPF accounts, home loans, personal loans, lockers, mobile banking RTGS, NEFT, etc.

About the South Indian Bank

The South Indian Bank is a private sector bank with its foundation in India. It was founded on 29^th January, 1929 and has its headquarters in Thrissur, Kerala. This bank was the first private sector bank in Kerala that received the license from RBI under Section 22 of the Act of Banking Regulation, 1949. The bank currently has a whopping 924 branches all over India.

How to Apply for a Personal Loan in the South Indian Bank?

Online Method

One can apply for South Indian Bank Personal Loan by following these easy steps detailed below.

Step 1: Visit the bank’s website and find the personal loan option. Select the option of South Indian Bank Personal Loan present under it and click on apply.

Step 2: A new screen will open that will contain a form. The form needs to be filled with essential details like name, address, and other personal information.

Step 3: After putting in the personal details, click on apply for loan. A new window opens where other essential information like account numbers and the documents needed for loan approval are required. Fill those in and then double-check the information. Lastly, click on submit to submit your loan application.

Offline Method

For the offline method, the applicant needs to visit the bank branch. There they need to fill out the form with all the essential required details and submit it along with all the required documents.

South Indian Bank Personal Loan Eligibility Criteria

• The age of the individual needs to be between 21 to 58 years.
• The applicant needs to be a permanent employee of State or Central Govt., Public Sector Undertakings, Corporations, Private Sector Companies, or reputed establishments.
• The applicant needs to be salaried or self-employed.
• The applicant has to be employed for a minimum period of three years to be eligible for the loan.

South Indian Bank Personal Loan Documents Required

• The signed and filled up personal loan application form with the necessary details. One must also make sure that the details the applicant has filled in are accurate.
• Passport size photographs need to be submitted to the bank branch along with the signed loan application. Mostly the bank requires more than one copy of the current photograph.
• Proof of identity of the applicant is required. Viable proofs of identity include Passport, Voter ID card, Driving license, PAN card, Aadhar Card, Government department ID card.
• The applicant has to provide proof of their income.

If they are salaried then their salary certificate, along with the latest salary slip is the proof.

If the applicant is self-employed, then their Income Tax Returns of 2 previous financial years is the proof.

• Proof of Address is required and that includes Bank account statement, Latest electricity bill, Latest mobile/telephone bill, Latest credit card statement, Existing house lease agreement
• A bank statement or a copy of the Passbook is required. The passbook or statement must have an account of the entries of the last six months.

Reasons for Rejection of the Loan

• Poor Credit Score: A credit Score defines the borrower’s credibility to repay the loan, and thus a low credit score will lead to cancellation of the loan proposal.
• Large size of existing debt: A borrower’s loan application can be rejected by the bank if the borrower already has a big existing debt.

South Indian Bank Personal Loan Features

Maximum loan amount: The South Indian Bank provides a maximum of Rs. 10 Lakhs for Personal Loans. The amount is quite huge and the borrower can avail the entire amount when they are in crisis.

Multiple loan repayment options: In the South Indian Bank Personal Loan scheme, the borrower gets the opportunity of repaying the loan amount in multiple ways. The bank provides many repayment options, like mortgaging something of equivalent value, etc.

Fixed Time Period: The bank has a specified time period for when the borrower has to repay the loan amount. The maximum time given to the borrower to pay off the loan amount is 48 months.

Fast & easy processing of personal loan applications and quick loan approval: The South Indian Bank Personal Loan has one of the fastest and simplest processing times for personal loans. Their loan approval system is also very quick and hence customers do not have to wait for long time periods.

The bank does not insist upon a guarantor: The approval of the personal loan does not need another person as guarantor to be present and to be held accountable if the borrower fails to pay for the money.

Attractive & competitive interest rates: The South Indian Bank has an interest rate of 10.25% to 14.15% on their personal loans. The rates are extremely competitive in the market and are quite attractive to the customers as well.

South Indian Bank Personal Loan Types

The South Indian Bank offers different options under their Loan. These options are available to satisfy the needs of salaried individuals, self-employed individuals, and even group borrowers. Currently, the South Indian Bank is offering two types of Personal Loans, that are:

The South Indian Bank Personal Loan for individuals 

Under this loan, the salaried and self-employed individuals get access to instant loan amounts at a reasonable interest rate. Even NRIs can access this loan. For applying for the loan, one can do the needful online with extremely minimal documentation. The requirement for any collateral security is also nil.

South Indian Bank Personal Loan for Group

This loan offers financial help to a group of people collectively and fulfills their different personal needs. The individual requirements may include educational expenses, debt repayment, travel expenses, etc. There is no requirement of collateral security for securing the loan, and the documentation is also very minimal.

Specialties of the South Indian Bank

• The South Indian Bank has received the Best MSME Bank award among all the other private sector banks.
• They are the first private sector bank that has opened an NRI branch and has also started an Industrial Finance Branch.
• Among all the other banks in Kerala, the South Indian Bank is the first bank that executed a core banking system.
• They have branches all over India and are counted as one of the most proactive banks in India.

Takeaway from the Article

The South Indian Bank is a safe and secure bank that provides personal loans at a good interest rate. Their personal loan features are extremely exciting and they even have an online method for the application of loans. The bank’s team is extremely tech-savvy and they make sure to provide the best customer care services as well.

How To Claim Deduction On Interest On Home Loan?

• Claim for a deduction on interest on home loan under section 24C and 80EEA can be made by individuals by submitting necessary details to his employer in Form 12BB with supporting documents such as Ownership details and a provisional home loan certificate. Once you submit documents related to interest on a home loan to your employer, it will be adjusted on your TDS (Tax Deducted at Source) deductions accordingly.
• If the individual is self-employed or a freelancer, submission of such documents is not required. However, such documents are needed to estimate the Advance Tax liability for each quarter and claim it while filing the Income Tax Return (ITR).
• The employee can also avail under section 80C tax deduction on the principal amount by submitting necessary documents to the employer in Form 12BB. There are other deductions that can also be claimed by providing documents such as Life Insurance Premium, PPF, Mediclaim etc.
• The tax-saving documents that are considered for deduction by the employer will be shown in Form 16.
• If an Individual, while filing ITR, shows Interest on a Home loan as income from House Property, it’s not required to submit those documents to the Income Tax Department.

While one chooses not to submit the documents to the employer, they can claim deduction on the Interest on Home Loan and Principal amount when filing ITR. But such a process takes time, and therefore a person should declare the details of house property to the employer so that it can be adjusted with TDS.

For tax exemption claims on the home loan, one is required to furnish the PAN number of the financial institution or bank from where the loan was acquired. The home loan certificate has now been modified by the loan providers, which quotes their PAN Number. Some of the popular banks that provide home loans along with their PAN numbers are provided. Below mentioned is a complete list of banks, along with their PAN numbers.

• State Bank Of India – AAACS8577K
• ICICI Bank – AAACI1195H
• HDFC – AAACH0997E

Reason Behind Submitting The Tax Saving Documents To The Employer

The basic concept of personal income tax is ‘pay as you earn’. There is also a compulsory deduction of tax at source (TDS) from the salary paid to each employee by the employer. From the Income Tax Act, 1961, section 192 has made it mandatory for the employer to deduct taxes at source (TDS) while making salaries.

From the beginning of the financial year, the employer asks the employees to declare tax-saving documents. Since the beginning of the financial year, i.e., from April 1, the employer starts computing taxes on employees’ salaries based on the declared proposed investment and deducts taxes.

But from the month of January, the employer asks employees to furnish documentary evidence of actual investments made during the year. Once the actual investment documents are submitted, the accounts department starts computing the taxes based on the documents of the actual investments made.

Individuals can invest in different tax-saving investments whose values can be different from the values of investments declared earlier, but the deduction from taxable income will be made based on the actual documents submitted and not on the proposed investment declaration made earlier.

This enables the employees to finalize any tax adjustments within the balance months of the current financial year. The taxes will be adjusted on the last three months of the financial year if there has been a deduction of taxes in excess or less, accordingly. It is not required to send the documents at the time of filing taxes to the office of the Income Tax Department. The employer will receive those documents from employees and deduct taxes accordingly.

Individuals are requested to refrain from waiting till March to save taxes as there can be a considerable burden of taxation in the last month of the financial year and less take-home pay.

Benefits Of Income Tax On Home Loan

Tax Benefits on Home Loan for Financial Year 2019-20 is given:

Benefits On Tax	On Interest Payment	On Principal Payment
Self-Occupied- First home	A maximum of ₹2 lakhs on actual home loan interest if construction is completed within 5 years from the conclusion of the financial year when the loan is taken. Tax exemption of ₹30,000 is allowed if the construction is not complete within 5 years. An additional deduction of ₹1.50 lakhs is allowed on interest paid on a home loan if there is a purchase of affordable houses up to ₹45 lakhs till the end of the financial year. The benefit is made available till 31st March 2021	A maximum of ₹1.5 lakhs is eligible for deduction of tax on the actual principal repaid
Vacant/Rented property (deemed to be let-out property)	1.     ₹2 lakhs 2.     Amount of interest actually paid by the taxpayer for all the properties. The exemption will be provided on lower of any of the two, 1. Or 2.	The maximum allowed deduction under section 80C is ₹1.5 lakh only if the owner of the property is residing in a different city for the purpose of work.
Additional Property or Second Home	₹2 lakhs Amount of interest actually paid by the taxpayer for all the properties. The exemption will be provided on lower of any of the two, 1. Or 2.	Nil
Property under construction	A claim of a maximum of ₹2 lakh can be made after the completion or handing over of the property. They paid interest can be equally claimed in five financial years.	Nil

Documents Required To Claim Income Tax Benefits On A Home Loan

A list of documents is provided that needs to be submitted to claim the benefits of Income Tax on Home loan in Form 12BB. Some employers have their own websites or employee portal where they can upload the following information.

• Copy of Possession Certificate.
• Copy of Sale Deed if a copy of Possession letter is not available.
• Copy of Lease Deed if the property is let out.
• Provisional Certificate of Interest from Financial Institution/Banks where should be explicitly mentioned the principal amount, the interest break-up, name and address of the lender. PAN number and the date of loan sanction should be mentioned in the Certificate.
• Self-Declaration of the proportion of ownership should be furnished for Joint Home Loan.
• Form 12C

Provisional Home Loan Interest Certificate

It is required to submit the interest certificate from the financial institution or bank, which mentions specifically the principal amount and the interest on a home loan for a financial year. The amount that is paid by the individual at the start of the financial year (April) up to the time when the Certificate will be generated is known as Actual repayment.

The amount that an individual expects to pay from the day the Certificate is generated up to March 31, the end of the financial year, is known as Expected Repayment.

Provisional Certificates of home loans are provided by most banks through net banking. For example, suppose an individual has taken a home loan from Union Bank, he/she can download/view the Interest Certificate (Provisional) of the home loan account(s) by the given below steps. It can also be downloaded/printed in PDF format and can also be viewed online.

• Log in to Internet Banking website with valid credentials
• Go to Enquiries Tab
• Click on the ‘Home Loan Interest. Certificate (Provisional)’ link under ‘Enquiries’ tab. Then select the required account for which you need a Home Loan Interest Certificate.

PAN Number Of The Lender For Home Loan:

PAN number of the respective financial institution/bank from where the loan is taken is to be provided for claiming tax exemptions on the home loan. The payment certificate of interest is modified to show the PAN number. A list of financial institutions or banks along with their PAN numbers is provided. To verify the PAN number, one can visit the Income Tax website.

PAN Number Of Banks And Financial Institutions

Financial Institutions/Banks	PAN Number
Axis Bank Limited	AAACU2414K
Allahabad Bank	AACCA8464F
Aadhaar Housing Finance	AAICA4667N
Andhra Bank	AABCA7375C
Bank of Baroda (BoB)	AAACB1534F
Bank of India (BoI)	AAACB0472C
Bank of Maharashtra (BoM)	AACCB0774B
Central Bank of India	AAACC2498P
Canara Bank	AAACC6106G
Corporation Bank	AAACC7245E
Citibank	AAACC0462F
DHFL	AAACD1977A
Deutsche Bank	AAACD1390F
DCB Bank Limited	AAACD1461F
Federal Bank	AABCT0020H
GIC Housing Finance Limited	AAACG2755R
Gruh Finance	AAACG7010K
HDFC	AAACH0997E
HDFC Bank Limited	AAACH2702H
Housing & Urban Development Corporation Ltd.	AAACH0632A
HSBC	AAACT2786P
ICICI Bank Limited	AAACI1195H
Indian Overseas Bank (IOB)	AAACI1223J
Indian Bank	AAACI1607G
Indusland Bank Limited	AAACI1314G
IDBI Bank	AABCI8842G
Kotak Mahindra Bank Limited	AAACK4409J
Karnataka Bank	AABCT5589K
L&T FinCorp Limited	AAACI4598Q
LIC Housing Finance Limited	AAACL1799C
Oriental Bank of Commerce	AAACO0191M
PNB Housing Finance Limited	AAACP3682N
Punjab National Bank (PNB)	AAACP0165G
Punjab & Sind Bank	AAACP1206G
State Bank of India (SBI)	AAACS8577K
State Bank of Hyderabad (SBH)	AADCS4009H
Syndicate Bank	AACCS4699E
Sundaram Finance	AAACS4944A
The South Indian Bank Limited	AABCT0022F
TATA Motors Finance Limited	AACCT4644A
TATA Capital	AADCP9147P
TATA Capital Housing Finance	AADCT0491L
UCO Bank	AAACU3561B
United Bank of India	AAACU5624P
Union Bank of India	AAACU0564G
YES Bank Limited	AAACY2086D

 

Taxability On Buyback Of Shares Of Companies: Buyback of shares means the re-acquisition of its own shares by a company. It also means returning the money of shareholders while obtaining back its shares. In such a case, the shareholders receive the market value of shares, and the company re-absorbs its ownership portion from the public.

The taxes to be charged while buying back shares is also divided based on the listing of the company, which are as follows:

• Buyback by Listed Companies
• Buyback by Unlisted Companies

Table Of Contents

For Buyback Of Shares By Listed Companies

Taxability in the hands of companies: Listed companies are not taxable for the buyback of their own shares.

Taxability in the hands of shareholders: The taxes to be charged at the end of shareholders depend on the buyback of shares. Buyback of shares is classified into two categories which are as follows:-

For Buyback of shares directly from shareholders: The profit in the hands of shareholder while buyback of shares is liable to taxation as follows:

For Long-term capital gain (for holding periods of more than 12 months): Any profits from long-term capital shall be taxable as per Section 112 of the Income Tax Act at any of the following lower rates:

• 20% of capital gain after indexation.
• 10% of capital gain without indexation.

As per Section 112, there won’t be any benefit of exemption for capital gains up to ₹100,000, and the flat tax rate of 10% shall be charged for capital gains exceeding ₹100,000. Such transactions do not come under Securities Transaction Tax (STT).

For Short-term Capital gain (for holding periods less than 12 months): As per Section 48 of the Income Tax Act, profits from short-term capital are taxable at the applicable rate for the shareholder.

An individual falling under the 5% tax slab shall be charged at the rate of 5%. Individuals will be assigned a tax rate at the already applicable rate. Benefits for a flat tax rate of 15% is not available under Section 111A as such transactions are not chargeable to Securities Transaction Tax (STT).

For Buyback of shares via Recognized Stock Exchange: The profit of shareholders shall be liable to taxation in the following ways:

For Long-term capital gain (for holding periods of more than 12 months): Any capital gains that are exceeding ₹100,000 shall be charged under Section 112A at a flat tax rate of 10% as such transactions are chargeable to Securities Transaction Tax (STT).

But such benefits are available only when the acquisition of shares was charged to STT; otherwise, such acquisition shall be taxed in the form of buyback directly from the shareholder.

For Short-term capital gain (for holding periods less than 12 months): Any gains from short-term capital is taxable under Section 111A at a flat rate of 15%. Such transactions are also chargeable to Securities Transaction Tax (STT).

For Buyback Of Shares By Unlisted Companies

Taxability in the hands of companies: As per Section 115QA of the Income Tax Act, buyback of shares by any unlisted companies is liable for taxation at a flat rate of 20% on the ‘distributed income’. Distributed income means any such consideration paid by the unlisted company on the buyback of shares as reduced by the amount which was received by the unlisted company while issuing such shares.

Other Points to consider

• As per Rule 40BB of Income Tax Rules, 1962, the complete procedure of calculating the amount of Distributed Income in various cases.
• Under Section 115QA, the tax charged on the income of shareholders or companies shall not be entitled to any deduction under any provision of the Income Tax Act.
• An additional tax shall be charged over and above the tax charged on the total income of the unlisted company despite no income tax to be charged to the company under the provision of the Income Tax Act.
• The tax charged on distributed income shall be the final tax payment, and no additional credit shall the company claim or any other person in respect of the tax amount paid.

Taxability in Hands of Shareholders

As per Section 10(34A) of the Income Tax Act, any receipts in the shareholder’s hands are exempted for taxes.