Monday, January 14, 2019

Right to Provident Fund

PF or EPF is also called the Employee Provident Fund Scheme. It is one where the employees contribute a small portion of their remuneration i.e. 12% of their basic pay every month. A matching amount is contributed by the employer. Such a contribution, together, form a corpus. This is to be used to fund the employee’s retirement.

Here, it would be relevant to mention that EPF organisation has made the allotment of UAN i.e. the Universal Account Number compulsory for all the employees covered under the PF Act. UAN would be linked to the employee’s EPF account. The UAN remains portable throughout the lifetime of an employee and there is no need to apply for EPF transfer at the time of changing jobs.

Employees Provident Fund Law in India is regulated and controlled by the Employees Provident Fund Act of 1952 which is basically a welfare legislation enacted for the protection of the rights of employees. It is applicable to the establishments of the notified classes which employ more than 20 persons at one point of time in the establishment. Once an establishment is covered under the EPF Act, it remains under the purview of the Employees Provident Fund Law in India even after the reduction of the number of employees in the establishment. Almost all types of establishments are covered under Employees Provident Fund Law in India.

EPF contribution is made up of four components - employee's contribution, employer's contribution, interest on employee's contribution, and interest on employer's contribution. Out of these, three components - employer's contribution and interest earned on both the contributions are fully taxable.

"According to rule number 9 of schedule IV and section 111 of the Income Tax Act, the rules of unrecognised provident fund would be applicable in case of withdrawal before the completion of five years. All the four components of EPF will be taxable. The amount of tax liability would have to be recomputed for each of the financial years at the tax rates that were applicable to the withdrawer in those respective years."

"The taxability of your contribution, i.e., employee's contribution will depend on whether you had earlier claimed deduction under section 80C while filing your income tax return (ITR) in the previous years."

Employee's own contribution to EPF is eligible for deduction under section 80C of the Income Tax Act. Most of salaried employees use this as a way to save income tax while doing their tax planning.

"Even if your current income tax liability is zero, you are still liable to pay tax on the withdrawal from EPF. This is because it is the tax liability for the previous financial years when PF contributions by you and your employer were made. It would have been taxable had the PF been an unrecognised one from the start."

For claiming funds, a request has to be raised to The Employees’ Provident Fund Organisation (EPFO). The EPFO is a statutory body under the Ministry of Labour and Employment. Upon requesting for PPF withdrawal, there is a possibility that you may not get to know the status of your requisition. To address this problem the EPFO has launched an online process to know the status of your requisition. To know the status of your claim the following information should be available to you:
a. Universal Account Number (UAN)

b. EPF regional office of your employer

c. company

d. Extension code (if relevant)

Source : https://cleartax.in/s/epf-withdrawal-online

Step 1: Go to theEPFO portal. Click on Our services> For Employees

Step 2: Click on ‘Know Your PF Status’

Get a 45 minutes expert advisory session on Tax

Plans starting from Rs. 999/-

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Step 3: Enter your UAN and enter the captcha image

Step 4: Enter the following details

1. Enter the state of your PF office 2. Select your PF Office from the drop-down menu 3. Enter your establishment code 4. Enter your Provident Fund account number

Step 5: Click on the ‘Submit’ button to check the status of your PF claim.

For the benefit of the claimant, the EPFO also provides for alerts via SMS if a mobile number has been linked to the account. The SMS is sent to the following two instances: 1. On receipt of claim application. 2. On transfer of funds to the claimant’s bank account. There could be income tax implication on your PF withdrawal under ‘certain scenarios.

Wednesday, January 9, 2019

Knowing a rent and a deed

Since time a lot of us have entered into contracts while living with landlords or as tenants but we fail to address one of the biggest challenge and just set out up right to copy and old deed for a new one .
But then as they say a few saved now leads to a lot spent in litigation . With the demand of legal consultancy firms the requirement of legal advisors has seen a new dawn in this era of advancement .
In order to save those few thousands let's now understand what Is the actual meaning of the basic words before we get into further technicality .
Rent means money that you pay regularly for the use of land, a house or a building.
The entire process is called a lease or in other basic language lease is
a legal agreement that allows you to use a building or land for a fixed period of time in return for rent.
The definitions of both rent and lease may just look to have a small difference as lease being the process for the transaction of receiving rent.
But Legally,
Rent is procedure where the tenant is allowed to use the assets of the landlord for a short period of time usually 11 months as the rent agreement is always less than a year.
The rent deed so signed between a landlord and the tenant can be amended or the rent can be raised at any given point of time by the landlord by giving a written notice to the tenant. The landlord extents the agreement on monthly basis until they mutually agree to cease the relationship.
The landlord has the option to raise the rent or request that the tenant quit the premises without violating the rental agreement. A landlord must give a proper 30-day notice to quit, however, prior to requesting the tenant leaves the property.
The Agreement is monitored under the provisions of the Rent control act of the state .
The abuse of the rent control act is one of the main reasons for the wide spread prevalence of leave and license agreements in India. Leave and license agreements are entered into for a period of 11 months, with an option to renew the agreement at the expiration of the agreement, rent control laws do not apply.
The lease is an agreement where the leassor allows the leasee to use as well as control the assets of the leasee for which the agreement is made for a long period of time.
The terms of a lease are made into only once and can't be altered until the expiry of the period of lease.
A leassor takes to detail the responsibilities of both parties during the lease and it includes all the necessary information to ensure that both parties are protected.

A lease agreement, on the other hand, is advantageous to a leassor by providing the stability of guaranteed, long-term income. It is advantageous to a leasee because it locks in the rental amount and length of lease and cannot be changed even if property or rent values rise.

The agreement is monitored by the either contract act , transfer of property act or local laws.
Once the lessor transfers the property leased to the lessee, the lessee in the absence of contract to the contrary shall possess all the rights and will also be subject to all the liabilities of the lessor as he is the owner of it.

A lease of an immovable property can be determined through 8 modes and it is only by one of these methods that the lease stands determined and the lessor gets back right of possession of the property;

By efflux of time limited thereby;
where the interest of the lessor terminates on happening of an event;
the interest of the lessor terminates on, or his power to dispose of the same extends to the happening of any event;
in case the interest of lessor and lessee becomes vested;
express surrender before the term is over;
implied surrender;
forfeiture;
When the lessee renounces his character

Sunday, January 6, 2019

Rent Agreement

Rent Control Act

A rental agreement is an arrangement between two parties –

landlord

and

tenant,

by which the landlord allows the tenant the right to the use a property owned by the landlord for a specified period of time, in exchange for periodic payment of rentals.

The agreement does not provide ownership rights to the tenant.

However, the landlord may grant permission to the tenant to modify or change the property to suit his needs. The tenant is responsible for the condition of the property during the period of rent.

Property and real estate laws in India impact everyone and the landlord-tenant dispute is one of the most common disputes.

One of the most common features while entering into a property rental transaction in India is the prevalence of the 11 month rental or license agreements. A period of 11 months is preferred by most landlords while entering into property rentals, because there are two types of agreements that deal with property rental in India, lease agreement and leave & license agreement.

Rental agreements that are over 12 months have to abide by strict rent control laws that are mostly favorable to the tenants.

The Rental control laws currently prevent the landlords from overcharging the tenants and protect the tenants from sudden or unfair eviction.

Also, the right to ownership of the property gets transferred from the landlords to the tenants in case of a lease agreements, making it harder for the landlord to vacate a tenant.

Hence, Landlords do not prefer to enter into rental agreements that are over 12 months.

Leave and license agreements on the other hand are also entered into for a period of 11 months, with an option to renew the agreement at the expiration of the agreement.

As a rental agreement that is 11 months long is just a license for the tenant to occupy the premises for a short duration, rent control laws do not apply.
The Rent Control Act offers security of tenure to the tenants and restricts the landlords’ power to evict tenants.

Be careful while you prepare a rent agreement and to avoid hassles ensure that the agreement has been done by a legal person in order to be able to avoid the risks of letting the possession go in order for you to have missed the most important clause under the eyes of law .

Avoid confronting and interfering in the premises of your tenant in order to avoid any sort of hassle .

On eviction of the premises the tenant must avoid any sort of threat or a similar act in that direction or else it can lead to criminality and trespass with the intentions of lurking and house break also there is a possibility of having the intention to be planning a murder or any similar offence.

Stay safe , consult an advocate for your good.

For any Legal Advice feel free to call at +91-9872628189 ; +91-9041300773

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