Taxation reliefs due to Coronavirus (COVID-19) up to 30th June.

Click here to read official notification regarding extension of due date of GST & INCOME TAX due to COVID-19 
Due to the present lock down situation to prevent Novel Coronavirus (COVID-19), Ministry of Finance give some taxation reliefs and extends the due dates of filing Income Tax and GST returns up to 30th June.

Let's read:

INCOME TAX

• Last date of Income Tax Return filing for FY 2018-19 is extended up to 30th June 2020.
• Aadhaar-PAN linking due date extended up to June 30, 2020.
• Vivad se Viswas Scheme - no additional 10% amount if payment made by June 30, 2020
• Due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority where the time limit is expiring between 20th March and 30th June, 2020 shall be extended to 30th June, 2020.
• Any compliance by the taxpayer including investment in tax saving instruments or investment for roll over benefits of capital gains under Income Tax Act, Wealth tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy Law, Vivad Se Viswas Law where the time limit is expiring between March 20 to March 29th 2020 shall be extended to 30th June 2020.
• For delayed payment of Advance tax, Self assessment tax, regular tax, TDS, TCS, equalization levy, CTT, STT made between 20th March 2020 and 30th June 2020 reduced interest rate @ 9% instead of 12% / 18% per annum (i.e. 0.75% per month instead of 1 / 1.5% per month) will be charges for this period. No late fee/penalty shall be charged for delay relation for this period.

Click here to read official notification regarding due date extension of Income Tax

GST / INDIRECT TAX

• If annual turnover is less than 5 Cr, last date of filing GSTR 3B for March, April and May 2020 is extended up to 30th June 2020. No Interest, penalty and Late fee to be charged.
• If annual turnover is above 5 Cr, 9% per annum reduced interest rate will apply (current interest rate is 18% per annum) from 15 days after due date of filing GSTR 3B for March, April and May 2020. No Late fee and Penalty to be charged if return filed on or befor 30th June 2020.
• Last date for opting Composition scheme is extended till June 30, 2020.
• Last date for making payments and filing returns for JAN-MAR quarter for Composition taxpayers is extended up to June 30, 2020.
• Date of filing GST Annual Returns for FY 2018-19 is extended from 31st March 2020 to 30th June 2020.
• Payment date under Sabka Viswas Scheme is extended to 30th June 2020.
• Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST laws where time limit is expiring between 20th March 2020 to 29th June 2020 shall be extended to 30th June 2020.

 Click here to read official notification regarding due date extension of GST and Customs

CUSTOMS

• 24x7 Customs clearance till 30th June 2020.
•  Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing applications, reports, any other documents, time limit for any compliance under Customs Act and other allied laws where time limit is expiring between 20th March 2020 to 29th June 2020 shall be extended to 30th June 2020.

Difference among Equity Share, Preference Share and Debenture

	Equity Share	Preference Share	Debenture
Meaning	Company owned capital by selling shares.	Company owned capital by selling shares.	A debt instrument used by company to borrow money at a fixed rate of interest.
Status	Owners. (limited by shares)	Owners. (limited by shares)	Creditors.
Mode of Return	Shareholders are given dividends.	Shareholders are given dividends.	Debenture holders are given interest.
Payment of Return	The dividend is paid to the shareholders out of the profit earned by the company after the payment of all liabilities	The dividend is paid to the shareholders out of the profit earned by the company before the payment to the equity shareholders.	Interest can be paid to the debenture holders whether the company has earned profit or not.
Security for Payment	No	Only redeemable preference shareholder can claim money after a fixed period of time.	Yes
Voting rights	Equity shareholders have voting rights	Preference shareholders have no voting right on matters not directly affecting their right	Debenture holders have no voting rights in company’s general meeting.
Conversion	Equity shares can never be converted	Preference shares can be converted into equity shares.	Convertible debentures can be converted into equity shares on maturity.
Trust deed	No trust deed is executed	No trust deed is executed	When the debentures are issued to public, trust deed must be executed.
Repayment of capital	In the event of winding up of the company, equity shares are repaid at the end	In the event of winding up of company, preference shares are repaid before equity shares.	Debentures got priority over share and they are repaid before shares.

How to Improve CIBIL Score for Loan

If you go to any bank to take loan, bank will seek several documents such as KYC documents (Aadhaar and PAN), last 3 years financial statements (i.e. I.T. file) etc. After satisfying with these documents bank will check your CIBIL score. If your CIBIL score is poor, bank will not give you loan, even after satisfied with your other documents.

What is CIBIL ?
CIBIL [Credit Information Bureau (India) Limited] is a company that maintains the records of all the credit related activities of companies as well as individuals including credit cards and loans.

What is CIBIL score ?
A credit score is a three digit number between 300-900. Generally 750 or above is considered as a good CIBIL score.

Score	Remarks	Chances of loan availability
300-550	Poor	Difficult to get any kind of loan wheather secured or unsecured.
551-650	Average	May be able to get a secured loan but would not be in a position to negotiate a better rate of interest.
651-750	Good	Opens up options for unsecured loans along with high ticket secured loan but still may not be able to negotiate better deals on loans.
751-900	Excellent	Great chance of getting approved for a loan at competitive rates of interest.

CIBIL Score Factors
Following factors can affect your CIBIL score, such as

• Credit repayment history: Any default on loan and credit card bill can make negative impact in your credit score. Pay EMI and Credit card bill on time to get better credit score.
• Credit Utilization Limit: High credit utilization limit over time can give negative impact on credit score.
• Multiple loan application: Multiple loan application means multiple  CIBIL score and credit report inquiry by such bank or lending institution. Too many of such inquiries will made bad impact on your credit score. Also if you apply for loans with more than one financial institution in a same period, you will be treated as a credit hungry person and your credit score become low.
• High percentage of unsecured loans: High percentage of unsecured personal loan or credit card expense can make negative impact on credit score.
• Giving guarantee for loan: If you act as a guarantor of another person's loan, it will affect your credit score. But if that person defaults or delays payment then it will have anegative impact on your credit score.
• Loan servicing term: If you are repaying loan amount timely, it will have a positive impact on your credit score.
• Delayed or wrong credit reporting: The delayed or wrong reporting by bank or credit card company may reflect faulty information on your credit report and reduce CIBIL score. So, it is necessary to check credit report every six months to rectify errors, if any.

How to improve CIBIL score?

• Pay outstanding dues: Try to clear off all the outstanding dues because unpaid outstanding can reduce your credit score.
• Update credit report: Sometimes bank or credit card companies delayed to update credit information. So check your credit report and if any you found any error, tell your bank or credit card company to update credit report. Take an account statement and closure certificate in case of closing the account.
• Raise Dispute: If you have valid points to disagree with credit report, you may appeal at CIBIL website (www.cibil.com) to correct the error.
• 30% rule of credit utilization: Never use your credit card to buy each and everything and never exceed more than 30% of credit utilization. 
• Avoid making too many inquiries: Do not check the CIBIL score so often, it can decrease you credit score. Three and more inquiries in a month can make bad impact on your score.

Meaning & Types of Loans and loan related terms with some useful tips on Business Loan approval

What is loan ?

As you know that loan means lending of money from one individual, organization or entity to another individual, organization or entity. A loan is a debt, provided by an entity to another entity at an interest.

In a loan, the Borrower initially receives or borrows an amount of money, called the Principal, from the Lender. The borrower repays the principal amount to the lender with / without interest within a specified time.

Types of loans

Secured loan
Unsecured loan
Demand
Subsidized
Concessional

Generally most of the people takes Secured or Unsecured loans from bank or other entity.

Secured loan

A Secured loan is a loan granted against any asset. Mortgage loan is a very common type of secured loan.

Following are some examples of secured loans,

Home loan
Car loan (Car loan may be direct, where a bank gives loan directly to the consumer or indirect, where a car dealership acts as an intermediary between bank or financial institution or consumer)

Unsecured loan

Unsecured loans are monetary loans that are not secured against borrower's assets. Some common unsecured loans are,

Business Loan
Personal loan
Credit card loan
Bank overdraft
Corporate bonds
Education loan
LIC loan

Types of Common Securities for Loan

	Pledge	Hypothecation	Mortgage
Type of Security	Movable	Movable	Immovable
Possession of Security	Remains with lender (Pledgee)	Remains with borrower	Usually remains with borrower
Example of loans	Gold loan, Advance against NSCs, Advance against goods	Car/Vehicle loans, Advance against stock and debtors	Housing loans

If the Borrower defaults, then the Lender has a right to sell the Security and adjust it towards the due (i.e. Principle and Interest)

Requirements to grant Loan

Different banks or institutes have different rules for loan approval, in fact necessary documents also varies with type of loan and banks. But some documents are common such as,

KYC documents such as Aadhaar card, PAN card etc
Passport size photographs
Salary slips & Form 16 in case of Salaried person
IT acknowledgement, Profit & Loss A/c, Balance sheet in case of Businessman.
Good CIBIL Score (approx 750+)
In case of Term loan, Projected Balance Sheets are required for terms within which loan will be repaid.

If you want to get loan from a Bank, then may go to the Branch Manager of the Bank before gathering all the document, at least a first interaction will be done. Also you will get some information about important document and other requisites. A good relationship with bank will help you to get loan more easily from bank.



Business Loan

You may take Business loan by two ways generally, Cash Credit Loan or Term Loan

Important documents for Business Loan:
KYC documents such as Aadhaar card, PAN card (in case of Partnership firm, Partnership deed, KYC documents of partners or in case of Company, MOA, AOA is also required)
Trade License
Current account
Last 3 year Financial statement such as Balance sheet and Profit & Loss A/c ( If you want to take Loan more than 10 Lakhs, then Audited balance sheet is preferable) & I.T. Acknowledgement.
Good CIBIL Score (Approx 750+)

If you want to get business loan from bank more easily, don't file nil I.T. return, at least pay some income tax

Cash Credit Loan
Cash Credit loan is also known as working capital loan.

Working capital = Current assets - Current liabilities

Cash credit loan is a short term loan given by bank on the hypothecation of stock.

Cash credit A/c is different from Overdraft A/c. You may withdraw money from OD A/c and may use it in personal purpose. But Cash credit loan is given only for business purpose, you cannot withdraw money to use it in personal purpose. Cash credit a/c is different from current a/c. you need to open cash credit a/c separately to take cash credit loan.

For example,

Suppose you have a business and you have Raw materials, Building, Inventories. It means you have stock in your business and need 2-3 months to sell the stock. But you haven't enough Cash in your hand to pay the salaries to the staffs or other expenses of business. Then the bank may give you cash credit loan on the hypothecation of stock. The CC limit is not fixed, it increases or decreases with your working capital.


Term Loan
If you want to purchase any Plant or Machinery, you need to submit quotation of that plant or machinery to the bank.

If you want to construct your business place or if you are doing small business and want to make large your business, you need to submit estimated expenses by an approved valuer to the bank.

Projected Balance Sheets are required for terms within which loan will be repaid.

You need to repay your Term loan amount by monthly EMI within 5-7 years.

Bank Overdraft A/c V. Cash Credit A/c

Sometimes people thinks Overdraft and Cash Credit are same. But this is not true.

Let it explain with an example,

Overdraft A/c
Suppose you have a current account in bank and have 100,000/- closing balance. Suppose for last 2-3 years you maintains average quarter balance Rs. 100,000/- in that account also you maintains good relationship with bank. Then bank may give you Rs. 40,000/- (suppose) overdraft facility. It means, if you need Rs.130,000/- but you haven't enough balance in bank, you may withdraw Rs. 130,000/- from the bank as the bank given you overdraft limit of Rs. (100,000/- + 40,000/- = 140,000/-). The limit of overdraft facility depends on bank and the OD limit is generally fixed until you apply to the bank for increase OD limit.

Cash Credit Loan
Cash credit a/c is different from Overdraft a/c. Let it explain with a Comparison chart.

Cash Credit A/c	Overdraft A/c
Generally given on security of stock, debtors etc.	Generally given on security of a fixed asset
Maximum amount is calculated as a percentage of sale and stock along with financial statements. For example, A bank allowed cash credit upto 80% of stock plus 20% of sales.	Maximum amount allowed is calculated mainly on basis of financial statements and security.
It should be used for the purpose of business.	Can be used for any purpose
Financial statements like Balance Sheet, P & L account , GST reports is required be submitted to bank generally annually or quarterly.	Financial statements are generally not required to be resubmitted after approval.
Insurance of stock is normally required.	Insurance of the property is generally required.
A new account has to be opened to take cash credit facility.	Overdraft is generally started by banks in existing current accounts.
Interest rate is lower than overdraft account.	Interest rate is higher than cash credit account.