income tax return 0

Income Tax Return (ITR)

Income Tax Return (ITR)

ITR refers to Income Tax Return which is prescribed form for declaring Income to Income tax department. Every assessee covered under the definition of person under Income tax shall furnish the Income-tax return. There are 7 ITR forms. Based on the type of assessee the due date varies, based on Income and other aspects the ITR form varies.

Due dates for Income Tax Return

For Individual/ HUF/ Cooperative societies who are not liable to tax audit – 31st July of Assessment year.
For Companies and others who are liable for tax audit – 30th September of Assessment year.

Types of ITR forms

  1. ITR 1 – For Individuals being a Resident (other than Not Ordinarily Resident) having Total Income up to Rs.50 lakhs, having Income from Salaries, One House Property, Other Sources (Interest, etc.), and Agricultural Income up to Rs.5 thousand(Not for an individual who is either Director in a company or has invested in Unlisted Equity Shares)
  2. ITR 2 – For Individuals and HUFs not having income from profits and gains of business or profession.
  3. ITR 3 – For individuals and HUFs having income from profits and gains of business or profession.
  4. ITR 4 – For Individuals, HUFs and Firms (other than LLP) being a Resident having Total Income up to Rs.50 lakhs and having income from Business and Profession which is computed under sections 44AD, 44ADA or 44AE (Not for an individual who is either Director in a company or has invested in Unlisted Equity Shares)
  5. ITR 5 – For persons other than:-
    • Individual,
    • HUF,
    • Company and
    • Person filing Form ITR-7
  6. ITR 6 – For Companies other than companies claiming exemption under section 11
  7. ITR 7 – For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D).

Return under section 139(4A) is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.

Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount which is not chargeable to income-tax.

Return under section 139(4C) is required to be filed by every

  1. Scientific research association ;
  2. News agency ;
  3. Association or institution referred to in section 10(23A);
  4. Institution referred to in section 10(23B);
  5. Fund or institution or university or other educational institution or any hospital or other medical institution.
    Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section.

Return under section 139(4E) must be filed by every business trust which is not required to furnish return of income or loss under any other provisions of this section.

Return under section 139(4F) must be filed by any investment fund referred to in section 115UB. It is not required to furnish the return of income or loss under any other provisions of this section.

These utilities were available in Javascript and in excel form. The user can prefill the data using prefilled XML which can be downloaded from user login in income tax filing website. Once the data is filled then the user needs to validate and check for the errors before filing the return. ITR 1 and ITR 4 can be prepared and submitted online.

Hindu Undivided Family HUF

Hindu Undivided Family (HUF)

Hindu Undivided Family (HUF)

Definition:

HUF stands for Hindu Undivided Family, governed under Hindu law board and could be formed by a married couple or by members of a joint family. HUF could be formed by two members, at least one among whom should be a male member of the family. Senior-most male member of the family would become ‘Karta’. Although it is governed by the Hindu law board, it can be formed by Jains, Sikhs, and Buddhists as well. Individuals of other religions except the above stated are not allowed to be a part of HUF.

1. Karta:

Karta is the oldest male family member. In the event of the death of the Karta, his eldest son becomes the next karta, who will be followed by the next son in line if the eldest son does not want to be the karta. If there are no sons, the unmarried daughter can become the karta in the unfortunate event of the death of her father. If the karta passes away, the assessing income tax officer should be intimated of his death and the appointment of the new karta.

2. Coparceners:

All the male members are called coparceners. This includes the sons, grandsons and great-grandsons of the karta, who holds the joint family property. These coparceners acquire an interest in the family property, by virtue of their birth. A coparcener has the right to demand that the family property gets divided, so that they can receive their share in the property, or in whatever assets the HUF holds.

Basic criteria for an HUF:

There are some essential conditions that must be fulfilled to qualify as an HUF. These are outlined below:

  1. Only one member or co-parcener cannot form an HUF;
  2. The joint family continues even in the hands of females after the death of the sole male member;
  3. An HUF need not consist of two male members. One male member is enough. For example, a father and his unmarried daughters may form and HUF.

Incorporation of HUF:

  1. HUF can be incorporated by executing a deed which is written formal document on stamp paper stating the names of Karta and Co-parceners, using that HUF can apply for PAN and can open separate bank account on the name of HUF.
  2. HUF corpus can be created with money received as gifts from relatives or with assets received under a will or inheritance, as it enjoys tax exemption.
  3. Usually, the name of karta is the name of the HUF.

**Personal assets and funds are not transferred to the HUF account, as income generated from it shall later be clubbed under personal income under Section 64 (2).

Taxability of HUF:

In order to compute the income of an HUF, one has to first ascertain its income under the different heads of income (ignoring incomes exempted under sections 10 to 13A of the Act). The following points should be keep in mind while computing income:

Ancestral Property:

Ancestral property may be defined as the property which a man inherits from any of his three immediate male ancestors, i.e. his father, grandfather and great grandfather. Therefore, property inherited from any other relation is not treated as ancestral property. Income from ancestral property held by following families is taxable as income of HUF:

  1. A family of widow mother and sons (may be minor or major) ;
  2. Family of husband and wife, having no child ;
  3. Family of two widows of deceased brothers ;
  4. Family of two or more brothers ;
  5. Family of uncle and nephew ;
  6. Family of mother, son and son’s wife ;
  7. Family of a male and his late brother’s wife

Tax slabs of HUF are same as that of an individual, with an exemption limit of 2.5 lakhs and qualifies for all the tax benefits under Section 80 C, 80D, 80G and so on. It also enjoys exemptions under Section 54 and 54F with respect to capital gains. If any remuneration is paid by the HUF to the karta or any other member for services rendered by him, remuneration is deductible from income of HUF if such payment is genuine and not excessive and paid under a valid and bona-fide agreement.

Formats:

FORMAT OF HUF CREATION DEEDS

FORMAT-I

DECLARATION

I, ____________________________ son Of ___________________________________ Residing at ____________________________________________ aged ___Adult do hereby declare-

1. That I am Karta of ____________________________________________

1. That I received on behalf of the H U F gift of Rs. ___________ by way of CASH/CHEAUE from my FATHER ________________________________(name of relative of karta of HUF) on dt. _______________ this formed the corpus of the HUF.

1. That the HUF at present is consisting of the followings members-

I) Shri _____________________, Adult, Residing at _________________
II) Smt. _____________________, Adult, Residing at _________________
III) Kumari _________________-Minor, Residing at ___________________

1. That the above statements are true to the best of my knowledge & belief. Declare this on _________________

WITNESS: Signature

1. ————————————–
————————————
2. ————————————– (_____________________)
—————————————————————————————————-

HUF with only Female Members:

A Hindu widow being the sole surviving member, cannot constitute a HUF. Gangamma Vs. Agl. ITO (1991) 188 ITR 1 (Ker.). After the Amendment in the Hindu Succession Act, in 2005, a Hindu Widow and her unmarried daughter can constitute a HUF, even when the widow had not adopted a son since, daughter is also a coparcener.

indexation

Indexation

Indexation

In simple terms indexation refers to technique to adjust income payments by means of a price index, in order to maintain the purchasing power of the public after inflation. To overcome the problem of inflation the concept of indexation was introduced.
For tax purposes indexation is the term used for arriving at the current actual cost. The purchasing power of money decreases with an increase in inflation which results in an increase in prices of goods. Indexed cost allows the assessee to claim a higher deduction in respect of the cost of the asset by taking inflated cost while calculating capital gains.
The overall cost of acquisition is adjusted per the prevailing Cost Inflation Index for the year and the year in which acquisition took place.

Calculation of Indexed Cost:

Firstly, calculate the cost of acquisition of the capital assets. Then,

 

Cost Inflation Index of the year in which

Indexed Cost of acquisition = Cost of acquisition  x   asset is transferred_________________

Cost Inflation Index of the year in

which asset is first held by assessee or

CII of 2001-02, whichever is later

Note: Cost inflation index is the index for the inflation rate in the country. Central Board of Direct Taxes (CBDT) issues this index every year.
Indexation can be done on the cost of improvement also in the same manner as the cost of acquisition. Any expense incurred on account of improvement before 01/04/2001 is to be completely ignored and only expense incurred after 01/04/2001 is to be considered for indexation as the cost of improvement before 01/04/2001 is already considered in fair market value.

 

Cost inflated index of the year in

Indexed Cost of Improvement = Cost of Improvement  x  which expense incurred_______

Cost Inflation Index of the year in

which asset is first held by assessee

or CII of 2001-02, whichever is later

Indexation benefit is available only for transfer of long term capital asset. Depreciable Assets are always deemed as short-term capital assets. Thus, no indexation benefits shall be available on such assets and where a non-resident acquires shares or debentures of an Indian company in foreign currency, the scheme of indexation does not apply.
No indexation benefit is available for slump sale.

Calculation of Fair market value:

1. Average price of similar properties in the same area
2. Based on the circle rates
3. Based on the Real estate Indices
4. Valuation from registered valuers.
Indexation table as per Income tax act, 1961:
Central Government specifies the cost inflation index by notifying in the official gazette.
Cost Inflation Index = 75% of the average rise in the Consumer Price Index* (urban) for the immediately preceding year.
*Consumer Price Index compares the current price of a basket of goods and services (which represent the economy) with the price of the same basket of goods and services in the previous year to calculate the increase in prices.

Financial Year Cost Inflation Index (CII)
2019-20 289
2018-19 280
2017-18 272
2016-17 264
2015-16 254
2014-15 240
2013-14 220
2012-13 200
2011-12 184
2010-11 167
2009-10 148
2008-09 137
2007-08 129
2006-07 122
2005-06 117
2004-05 113
2003-04 109
2002-03 105
2001-02 100
Any time before 1st April 2001 100

This above-stated indices will come into force with effect from the 1st day of April 2019 and will accordingly apply to the Assessment Year 2019-20 and subsequent years.
As the cost of indexation starts from 2001-02 than for the assets purchased before 01/04/2001 the fair market value of the assets as on 01/04/2001 shall be taken into account. The taxpayer shall be given the option to either take the fair market value as on 01/04/2001 as cost of acquisition or actual price as the cost of acquisition
For CII Calculator Visit: https://www.incometaxindia.gov.in/Pages/utilities/Cost-Inflation-Index.aspx
COST INFLATION INDEX (CII) APPLICABLE FOR FINANCIAL YEAR 2016-17 AND PRECEDING YEARS

Financial Year Cost Inflation Index (CII)
2016-17 1125
2015-16 1081
2014-15 1024
2013-14 939
2012-13 852
2011-12 785
2010-11 711
2009-10 632
2008-09 582
2007-08 551
2006-07 519
2005-06 497
2004-05 480
2003-04 463
2002-03 447
2001-02 426
2000-01 406
1999-00 389
1998-99 351
1997-98 331
1996-97 305
1995-96 281
1994-95 259
1993-94 244
1992-93 223
1991-92 199
1990-91 182
1989-90 172
1988-89 161
1987-88 150
1986-87 140
1985-86 133
1984-85 125
1983-84 116
1982-83 109
1981-82 100
Anytime before 1st April 1981 100

As the cost of indexation starts from 1981-82 than for the assets purchased before 01/04/1981 the fair market value of the assets as on 01/04/1981 shall be taken into account. The taxpayer shall be given the option to either take the fair market value as on 01/04/1981 as cost of acquisition or actual price as the cost of acquisition

Company Name Availability Search

Company Name Availability Search

Company Name Availability Search

Company Name Availability Search under Companies Act, 2013

As per provisions contained in Section 20 of the Companies Act, 2013, no company is to be registered with undesirable name. A proposed name is considered to be undesirable if it is identical with or too nearly resembling with:

  1. Name of a company in existence. The name must not be undesirable in opinion of Central Government neither be offensive as provided under section 4(2) of the Companies Act 2013.
  2. The proposed name(s) is/are not in violation of the provisions of Emblems and Names (Prevention of Improper Use) Act, 1950 as amended from time to time;
  3. The proposed name is not offensive to any section of people, e.g., proposed name does not contain profanity or words or phrases that are generally considered a slur against an ethnic group, religion, gender or heredity;
  4. And gone through all the prescribed guidelines, given in these Rules, understood the meaning thereof and the proposed name(s) is/are in conformity thereof;
  5. Such promoter who undertakes to be fully responsible for the consequences, in case the name is subsequently found to be in contravention of the prescribed guidelines.
  6. A registered trademark or a trademark is subject of an application for registration, of any other person under the Trade Marks Act, 1999.

The proposed name should be in accordance with the objects of the company. The company should suffix the type of the company like Private limited or Public limited or OPC mandatorily even during the name availability search.

Amendment in Rule 8 of Companies (Incorporation) Rules, 2014:

“8. Names which resemble too nearly with the name of an existing company.
(1) A name applied for shall be deemed to resemble too nearly with the name of an existing company, if, and only if, after comparing the name applied for with the name of an existing company by disregarding the matters set out in sub-rule (2), the names are same.
(2)The following matters are to be disregarded:

  1. The words like Private, Pvt, Pvt., (P), OPC Pvt. Ltd., IFSC Limited, IFSC Pvt. Limited, Producer Limited, Limited, Unlimited, Ltd, Ltd., LLP, Limited Liability Partnership, company, and company, & co, & co., co., co, corporation, corp, corpn, corp, group;
  2. Whether a word is in the plural or singular number in one or both names;
    • Green Technology Ltd. is same as Greens Technology Ltd. And Greens Technologies Ltd.
    • Pratap Technology Ltd. is the same as Prataps Technology Ltd. And Prataps Technologies Ltd.
  3. Type and case of letters, spacing between letters, punctuation marks and special characters used in one or both names;
    Illustrations

    • ABC Ltd. is same as A.B.C. Ltd. and A BC Ltd.
    • TeamWork Ltd. is same as Team@Work Ltd. and Team-Work Ltd.
  4. Use of different tenses in the names;
    Illustration

    • Ascend Solutions Ltd. is same as Ascended Solutions Ltd. And Ascending Solutions Ltd.
  5. Using different phonetic spellings including use of misspelled words of an expression;
    Illustrations

    • Chemtech Ltd. is the same as Chemtec Ltd., Chemtek Ltd., Cemtech Ltd., Cemtek Ltd., Kemtech Ltd., and Kemtek Ltd.
    • Bee Kay Ltd is the same as BK Ltd, Be Kay Ltd., B Kay Ltd., Bee K Ltd., B.K. Ltd., and Beee Kay Ltd.
  6. Whether one or both names includes a hostname such as ‘www’ or a domain extension such as ‘net’, ‘org’, ‘dot’ or ‘com’
  7. The addition of commonly used prefixes, including salutations, before an existing name such as New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, Hari, Mr., Mrs., Ms., Dr., Prof. or any other such commonly used prefixes;
    Illustrations

    • Vijay Corporation Ltd is the same as Shree Vijay Corporation Ltd, Modern Vijay Corporation Ltd, and Dr. Vijay Corporation Ltd.
    • Manjushree Industries limited is not the same as Manju Industries limited.
    • Vijay Corporation Ltd is not the same as Deep Vijay Corporation Limited.
  8. The order of words in the names;
    Illustrations

    • Ravi Builders and Contractors Ltd. is same as Ravi Contractors and Builders Ltd.
    • Ravi Builders and Contractors Limited is not the same as Ravi Shankar Builders and Contractors limited
  9. The use of the definite or indefinite article in the names;
    Illustration

    • Congenial Tours Ltd. is the same as A Congenial Tours Ltd. and The Congenial Tours Ltd.
  10. A slight variation in the spelling of the two names including a grammatical variation thereof;
    Illustration

    • Color Technologies Ltd. is same as Colour Technologies Ltd as there is a slight variation in the spelling.
  11. Complete translation or transliteration, and not part thereof, of an existing name, in Hindi or in English
    Illustrations

    • National Electricity Corporation Ltd. is same as Rashtriya Vidyut Nigam Ltd.
    • Hike Construction Ltd. is not the same as Hike Nirman Ltd.
  12. Addition of the name of a place to an existing name, which did not contain the name of any place;
    Illustrations

    • If Salvage Technologies Ltd. is an existing name, it is same as Salvage Technologies Delhi Ltd and Salvage Delhi Technologies Ltd.
    • Retro Pharmaceuticals Ranchi Ltd. is not the same as Retro Pharmaceuticals Chennai Ltd.
  13. Addition or deletion of words like global, international or any other word which symbolizes the geographical reach of the company, in an existing name;
    Illustration

    • If Hardnut Finance Ltd is an existing name, it is the same as Hardnut Finance Pan-India Ltd or Hardnut Finance International Ltd.
    • If Glory Construction International Ltd. is an existing name, it is the same as Glory Construction Ltd. but not the same as Glory Construction Global Ltd.
  14. Addition or deletion of numerals in an existing name;
    Illustration

    • If Thunder Services Ltd is an existing name, it is same as Thunder11 Services Ltd.
    • If Style Garments11 Ltd. is an existing name, it is the same as Style Garments Ltd.

Provided that clauses (f) to (h) and clauses (k) to (n) shall not be disregarded while comparing the names if a no objection by way of a Board resolution has been provided by an existing company.

8A. Undesirable names.

a. The name shall be considered undesirable, if-

  1. It attracts the provisions of section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950 (12 of 1950);
  2. Subject to section 35 of the Trade Marks Act, 1999 (47 of 1999), if the name includes a trademark registered under the Trade Marks Act, 1999 (47 of 1999) and the rules framed thereunder in the same class of goods or services in which the activity of the company is being carried out or is proposed to be carried out, unless the consent of the owner or applicant for registration, of the trademark, as the case may be, has been obtained and produced by the promoters;
  3. It includes any word or words which are offensive to any section of the people;
  4. The proposed name is identical with or too nearly resembles the name of a limited liability partnership, Provided that the provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling the name of a limited liability partnership;
  5. The proposed name is identical with or too nearly resembles with a name which is for the time being reserved in accordance with rule 9, Provided that the provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling with a reserved name;
  6. The company’s main business is financing, leasing, chit fund, investments, securities or combination thereof, but the proposed name is not indicative of such related financial activities, viz., Chit Fund or Investment or Loan, etc.;
  7. The company’s name is indicative of activities financing, leasing, chit fund, investments, securities or combination thereof, but the company’s main business is not related to such activities;
  8. It resembles closely the popular or abbreviated description of an existing company or limited liability partnership;
  9. The proposed name is identical with or too nearly resembles the name of a company or limited liability partnership incorporated outside India and reserved by such company or limited liability partnership with the Registrar, Provided that if a foreign company is incorporating its subsidiary company in India, then the original name of the holding company as it is maybe allowed with the addition of word India or name of any Indian state or city, if otherwise available;
    Provided further that provisions of rule 8 shall apply mutatis mutandis while determining whether a proposed name is too nearly resembling the name of a company or limited liability partnership incorporated outside India;
  10. Any part of the proposed name includes the words indicative of a separate type of business constitution or legal person or any connotation thereof e.g. cooperative, sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG, etc.;
    Explanation.- For the purposes of this sub-clause, it is hereby clarified that the name including phrase ‘Electoral Trust’ may be allowed for Registration of companies to be formed under section 8 of the Act, in accordance with the Electoral Trusts Scheme, 2013 notified by the Central Board of Direct Taxes (CBDT), Provided that name application is accompanied with an affidavit to the effect that the name to be obtained shall be only for the purpose of registration of companies under Electoral Trust Scheme as notified by the Central Board of Direct Taxes;
  11. The proposed name contains the words ‘British India’;
  12. The proposed name implies association or connection with an embassy or consulate or a foreign government;
  13. The proposed name includes or implies association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or are occupying important positions in Government;
  14. The proposed name is identical to the name of a company dissolved as a result of liquidation proceeding and a period of two years have not elapsed from the date of such dissolution. Provided that if the proposed name is identical with the name of a company which is struck off in pursuance of action under section 248 of the Act or under section 560 of the Companies Act, 1956(1 of 1956) then the same shall not be allowed before the expiry of twenty years from the publication in the Official Gazette being so struck off;
  15. It is identical with or too nearly resembles the name of a limited liability partnership in liquidation or the name of a limited liability partnership which is struck off up to a period of five years;
  16. The proposed name include words such as ‘Insurance’, ‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc., unless a declaration is submitted by the applicant that the requirements mandated by the respective regulator, such as IRDA, RBI, SEBI, MCA, etc. have been complied with by the applicant;
  17. The proposed name includes the word “State”, in case the company is not a government company;
  18. The proposed name is containing only the name of a continent, country, state, city such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited;
  19. Use of descriptive names, where the name merely consists of commonly used words to describe an activity.
    Explanation 1: The term “commonly used words” refers to the use of generic expressions that may be used by any other company to describe its trade.
    Explanation 2: While determining whether a name is descriptive or not, the objects of the proposed company or the order of words appearing in a name shall not be relevant.
    Illustrations

    • The names Silk Manufacturers Private Limited and Manufacturers Silk Ltd. are descriptive names as they merely describe an activity which may also be carried out by any other company and the order of the words is not relevant while determining a descriptive name.
    • The names Technical Vista Ltd or Vista Technical are not described as the names do not merely consist of commonly used words and the order of the words is not relevant while determining whether a name is descriptive.
    • The name Drinking Water Plant Ltd. is a descriptive name, even if the object of the company is not related to making drinking water plant as it consists of commonly used words and objects of the proposed company is not relevant while determining whether a name is descriptive.
  20. The proposed name includes the name of any foreign country or any city in a foreign country, the same shall be allowed if the applicant produces any proof of significance of business relations with such foreign country like Memorandum Of Understanding with a company of such country:
    Provided that the name combining the name of a foreign country with the use of India like India Japan or Japan India shall be allowed if, there is a government to government participation or patronage and no company shall be incorporated using the name of an enemy country.
    Explanation.- For the purposes of this clause, enemy country means so declared by the Central Government from time to time.
  21. The proposed name of a section 8 company under the Act does not include the words foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like, etc.
  22. The proposed name of a Nidhi company under the Act does not have the last words “Nidhi Limited” as a part of its name.
  23. The proposed name has been released from the register of companies upon change of name of a company and three years have not elapsed since the date of the change unless a specific direction has been received from the competent authority in the course of compromise, arrangement, and amalgamation.

b. The applicant shall declare in affirmative or negative (to affirm or deny) whether they are using or have been using in the last five years, the name applied for incorporation of company or LLP in any other business constitution like Sole proprietor or Partnership or any other incorporated or unincorporated entity and if, yes details thereof and No Objection Certificate from other partners and associates for use of such name by the proposed Company or LLP, as the case may be, and also a declaration as to whether such other business shall be taken over by the proposed company or LLP or not.

8B. Word or expression can be used only after obtaining previous approval
of the Central Government.

In terms clause (b) to sub-section (3) of section 4, the following words and combinations
thereof shall not be used in the name of a company in English or any of the languages
depicting the same meaning unless the previous approval of the Central Government has
been obtained for the use of any such word or expression-

(a) Board;

 

(b) Commission;

 

(c) Authority;

 

(d) Undertaking;

 

(e) National;

 

(f) Union;

 

(g) Central;

 

(h) Federal;

 

(i) Republic;

 

(j) President;

 

(k) Rashtrapati;

 

(l) Small Scale Industries;

 

(m) Khadi and Village Industries Corporation;

 

(n) Financial, Corporation and the like;

 

(o) Municipal;

(p) Panchayat;

 

(q) Development Authority;

 

(r) Prime Minister or Chief Minister;

 

(s) Minister;

 

(t) Nation;

 

(u) Forest corporation;

 

(v) Development Scheme;

 

(w) Statute or Statutory;

 

(x) Court or Judiciary;

 

(y) Governor;

 

(z) the use of word Scheme with the name of Government(s) , State, India, Bharat or

any government authority or in any manner resembling with the schemes launched by

Central, state or local governments and authorities; and

 

(za) Bureau.

Company Name Availability Search Validity of approved Name:

An approved name is valid for a period of

  1. 20 days from the date of approval (in case name is being reserved for a new company) or
  2. 60 days from the date of approval (in case of change of name of an existing company).
    Process:
  • Before applying name one should check whether there are any companies with the proposed name resemblance.
  • One can apply name using RUN (Reserve Unique Name) service provided by MCA (Ministry of Corporate Affairs) where availability can be checked before applying.
  • Main objects document should be attached while applying for name.
producer company

Producer Company

Producer Company

The concept of Producer company got predominance under Companies act after the bill introduced by the Ministry of Corporate Affairs stating the insertion of Part IXA (section 581A to 581ZT) into Companies Act, 1956.

Section 465 of Companies Act, 2013 states that it shall stand repealed. The provisions of Part IX-A of the Companies Act, 2013 shall be applicable mutatis mutandis to a Producer Company in a manner as if the Companies Act, 1956 has not been repealed until a special Act is enacted for Producer Companies ( 1st Proviso to Section 465(1))

Definition of Producer Company

“Producer Company” means a body corporate having objects or activities specified in section 581B and registered as Producer Company under Companies Act, 2013.
The term Producer means any person engaged in any activity connected with or relatable to any primary produce.

Primary Produce means

  1. Produce of farmers, arising from agriculture (including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, revegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers or
  2. Produce of persons engaged in handloom, handicraft and other cottage industries ;
  3. Any product resulting from any of the above activities, including by-products of such products ;
  4. Any product resulting from an ancillary activity that would assist or promote any of the aforesaid activities or anything ancillary thereto ;
  5. Any activity which is intended to increase the production of anything referred to in sub-clauses (i) to (iv) or improve the quality thereof ;

Section 581B. Objects of the Producer Company

The objects of the Producer Company shall relate to all or any of the following matters, namely :

  1. Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution
  2. Processing including preserving, drying, distilling, brewing, venting, canning and packaging of produce of its members
  3. Manufacture, sale or supply of machinery, equipment or consumables mainly to its members.
  4. Providing education on the mutual assistance principles to its members and others.
  5. Rendering technical services, consultancy services, training, research and development, and all other activities for the promotion of the interests of its Members.
  6. Generation, transmission, and distribution of power, revitalization of land and water resources, their use, conservation, and communications relatable to primary produce
  7. Insurance of producers or their primary produce. Promoting techniques of mutuality and mutual assistance.
  8. Welfare measures or facilities for the benefit of Members as may be decided by the Board.
  9. Any other activity, ancillary or incidental to any of the activities referred to in clauses, etc.

Compliances of Producer company

  1. Any ten or more individuals, each of them being a producer or any two or more Producer institutions, or a combination of ten or more individuals and Producer institutions, desirous of forming a Producer Company having its objects specified in section 581B and otherwise complying with the requirements of this Part and the provisions of this Act in respect of registration, may form an incorporated Company as a Producer Company under this Act.
  2. Name of the company shall end with the words “Producer Company Limited”
  3. Restriction on No. of directors.
    • Minimum- 5 Directors Maximum- 15 Directors In case of an inter-State co-operative society incorporated as a Producer Company, such company may have more than 15 directors for a period of 1 year from the date of its incorporation as a Producer Company.
    • Save as provided in section 581N, the Members who sign the memorandum and the articles may designate therein the Board of directors (not less than five) who shall govern the affairs of the Producer Company until the directors are elected in accordance with the provisions of this section.
    • The election of directors shall be conducted within a period of ninety days of the registration of the Producer Company.
  4. Secretary of producer company
    • Every Producer Company having an average annual turnover exceeding five crore rupees in each of three consecutive financial years shall have a whole-time secretary.
    • No individual shall be appointed as a whole-time secretary unless he possesses membership of the Institute of Company Secretaries of India constituted under the Company Secretaries Act, 1980.
    • If a Producer Company fails to comply with the provisions of sub-section (1), the company and every officer of the company who is in default shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues
  5. Save as otherwise provided in sub-sections (1) and (3) of section 58ID, every Member shall have one vote and in the case of equality of votes, the Chairman or the person presiding shall have a casting vote except in the case of election of the Chairman.
  6. Annual General Meeting
    • First AGM shall be conducted within 90 days from the date of incorporation.
    • The Registrar may permit extension of the time for holding Annual General Meeting (not being the first annual general meeting) by a period not exceeding 3 months.
    • The Producer Company shall in each year hold an Annual General Meeting and not more than 15 months shall elapse between the date of one Annual General Meeting to the next.
    • The AGM shall be called by issuing at least 14 days’ notice.
    • The proceedings of every AGM along with Directors’ Report, the audited Balance Sheet and Profit & Loss Account shall be filed with the Registrar within 60 days of AGM.
    • The shareholders shall have exclusive rights to be exercised in the Annual General Meeting such as:
      1. Approval of budget,
      2. Adoption of annual accounts,
      3. Issue of bonus shares,
      4. Approval of patronage bonus,
      5. Declaration of limited return and decision on the distribution of patronage,
      6. Specify the conditions and limits of loans that may be given by the Board to any director; and
      7. Approval of any transaction of the nature as is to be reserved in the articles for approval by the Members.
    • Quorum:- 1/4th of the total number of members.
  7. Audit Compliances
    • Producer Companies shall carry out an internal audit of its accounts, at regular intervals in accordance with its articles of association and such an audit shall be carried on by a Chartered Accountant.
  8. Striking of name
    • The Registrar shall strike the name of the Producer Company if the company fails to commence its business within one year from the date of registration or ceases it transactions after giving a notice to the company. Any Member of the Producer Company is aggrieved against such order
  9. Tax Implications:
    • No tax on agriculture income of Farmer producer companies. But such exemption may vary on the basis of the agriculture activity carried out.
    • The Producer Companies are taxable on par with the Private Limited Companies and Public Limited Companies.
    • The Income Tax Act does not specify any specific tax benefit which essentially provides special tax benefits or exemptions to producer companies by its definition. But subject to the agricultural activity carried out by the producer company, certain tax benefits and exemption can be availed.
  10. As far as GST is concern the rates may vary in accordance with products.