VPRP & Co LLP, Chartered Accountants

VPRP & Co LLP, Chartered Accountants We are a full service firm of Chartered Accountants providing professional consulting services in India to clients across the world.

To know more, visit our website - www.vprpca.com

17/08/2026

India and complicated tax laws…

You declared the income. You paid the tax. You filed on time. You just missed one schedule.

Under Section 43 of the Black Money Act, that is Rs. 10 lakh penalty. Per year of default. And it applies whether or not any tax was owed.

The Mumbai Tribunal upheld exactly this in Shobha Harish Thawani, where the taxpayer had declared income from her foreign assets but not reported the assets in Schedule FA for three assessment years. In Vinil Venugopal v. DDIT, Rs. 10 lakh per year was upheld even though the funds were remitted entirely through LRS.

From 16 August 2026, there is a route out. The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026. Chapter IV, Sections 130 to 144 of the Finance Act 2026, read with the FAST-DS Rules 2026.

CATEGORY 2, the Rs. 1 lakh route. Applies where the asset outside India was already offered to tax, or was acquired while you were a non-resident, but was not declared in the relevant Schedule. Ceiling: aggregate asset value up to Rs. 5 crore. Payable: Rs. 1 lakh, flat.

CATEGORY 1, for foreign income or assets never offered to tax. Ceiling Rs. 1 crore. Payable at 30% tax plus an equal amount, so 60% of value. Against 12
0% plus prosecution under the Black Money Act.

Check your last few returns if you are: A returning NRI who became resident and ordinarily resident Holding RSUs, ESOPs or ESPP from a foreign parent Sitting on an old or dormant overseas account A signatory on an account held abroad.

Two things before you act.

The immunity covers the Black Money Act and the Income-tax Act. It does not cover FEMA.

And where your foreign movable assets total under Rs. 20 lakh, the relaxation to Section 43 effective 1 October 2024 may already put you outside penalty. Establish that before paying anything.
Valuation date 31 March 2026. Scheme Closes 31 December 2026.

Stay tuned for more on this series and keep following CA Vijaykumar Puri | Tax, Finance & Business Advisor to get the next part.

13/08/2026

CAs are going to hate me for this, but do NOT blindly register a Private Limited Company.

It is one of the most common pieces of advice given to new entrepreneurs. But a Private Limited Company is not automatically the best structure for every business.

Here’s a simple way to think about it.

1. Sole Proprietorship

If you are starting small, operating alone and have no immediate plans to bring in investors, a proprietorship can be the simplest option.

There is no separate incorporation process like a company. But there is also no separate legal personality—the business and you are essentially the same person legally.

2. LLP

If two or more people are running a business together and want limited liability with a flexible structure, an LLP can work well, especially for professional and closely held businesses.

But LLPs are not built around the same equity investment model as companies. If you plan to repeatedly raise equity capital, it may not be the natural choice.

3. Private Limited Company

A Private Limited Company makes more sense if you want to raise equity funding, bring in investors, issue shares or ESOPs, build a scalable startup, or have multiple shareholders.

The trade-off? More compliance, governance and administrative requirements.

So don't ask:

“Should I start a Private Limited Company?”

Ask:

“What am I trying to build over the next 5–10 years?”

Your structure should match your business model, ownership plans, funding needs and long-term goals.

Changing the structure later is possible, but it can involve tax, regulatory, contractual and commercial consequences.

So don't choose an entity because your friend, CA, lawyer or mentor said everyone needs a Pvt Ltd.

Choose the structure that fits the business you are actually building.

Save this before incorporating your business.
[Private Limited Company, LLP vs Private Limited Company, proprietorship vs LLP, startup company registration, business structure in India, company incorporation, startup compliance, LLP registration, founder tax planning, business structuring India]

09/08/2026

₹1.5 lakh penalty... for missing a deadline that the law itself seems to confuse you about.

If you're a founder, ask yourself this:

If the Companies Act gives you *6 months*, would you ever imagine that another provision effectively expects you to complete an important part of the process within 2 months?

Most people wouldn't.

And that's exactly why so many businesses end up facing penalties—not because they intended to break the law, but because they relied on reading *one provision instead of the law as a whole.*

This is what makes corporate compliance so challenging. The real risk isn't always the provision you're reading. It's the one you *didn't know was connected to it.*

What's even more surprising is that this isn't just a theoretical issue. Authorities have imposed significant penalties even for relatively short delays. That's a costly lesson for any entrepreneur.

If there's one takeaway from this reel, let it be this:

*Never assume that a compliance timeline tells the complete story.*

Before incorporating a company or completing any MCA compliance, understand how different provisions interact. A few minutes of professional guidance today can save you lakhs tomorrow.

*Do you think compliance laws should be simplified for entrepreneurs, or is it the responsibility of every business owner to know every connected provision?*

I'd love to know your opinion. Drop your thoughts in the comments. 👇

[Companies Act, INC-20A, Commencement of Business, Company Compliance, Director Penalty, Startup Compliance, CA Vijaykumar Puri]

06/08/2026

Succession planning gone wrong…. This is the KK Modi family. Godfrey Phillips, the listed company that makes and distributes Marlboro in India. Market value around 3,50,00,00,00,000 (yes, keep counting the zeros)
They did succession planning properly, or so they thought.

A private trust, executed in 2014, five years before the father died. The most expensive structure money can buy. It still ended in years of litigation.
Two clauses did the damage.

One said if the trustees didn't agree unanimously within thirty days of his death, the entire trust could be sold and distributed within a year. One son said that trigger had fired. The others said, read it properly, it hasn't. Years later, courts are still deciding what that sentence means.

The second sent every dispute to arbitration in Singapore. Sounds sophisticated. The assets are in India. So Indian courts spent years arguing whether a trust dispute can be arbitrated at all.
But here's the part that matters most, and this one is my world.

They brought in two of the biggest audit firms to produce a mutually acceptable valuation of the businesses inside that trust. Two firms. Still no consensus.

Think about what that tells you. Valuation was never the bottleneck. Agreement was.
If a family hasn't agreed on the principles first, no number will ever be acceptable. Because nobody is really arguing about the number. They're arguing about everything else, using the number.

So a trust is not a plan. It's a document.
And even top lawyers wont tell you this -- Sit the family down while you're alive.

In most Indian families we never discuss money at all, and then we're surprised when it ends up in court.
Send this to your friend who's quietly richer than he lets on and has never once talked about it.

[Succession Planning, Family Business, Business Succession, Family Trust, Estate Planning India, Wealth Transfer, CA Vijaykumar Puri]

05/08/2026

Many directors believe that once they resign from a company’s board, their legal responsibilities automatically end.

Unfortunately, that’s not always true.

Under Section 89 of the GST Act, if GST dues cannot be recovered from a private company, every person who was a director during the relevant period may, in certain circumstances, become personally liable.

What makes this provision even more concerning is that the burden of proof can shift to the director.

Instead of the GST department first proving wrongdoing, the director may have to prove that the non recovery was not due to any gross neglect, misfeasance, or breach of duty on their part.

But there is an important safeguard.

A recent Madras High Court ruling reaffirmed that the GST department cannot directly recover dues from a director.

It must first make genuine efforts to recover the dues from the company.

The director must also be given a proper opportunity of being heard before any recovery action is taken against their personal assets.

One more important point.

This provision applies specifically to private companies.

If you’re serving on the board of a private company, or planning to join one, here are a few practical safeguards:

✅ Ensure board minutes record discussions on GST and tax compliance.

✅ Regularly review the company’s GST position and any outstanding tax liabilities.

✅ Before resigning, understand the company’s GST compliance status and keep a record of any concerns raised by you.

✅ Before accepting a directorship, conduct proper due diligence and check whether the company has any pending GST demands.

You can resign from the board.

You cannot always resign from the consequences.

Save this post so you don’t forget these safeguards, and share it with every director, founder, entrepreneur, and business owner who believes resignation automatically ends liability.

CA Vijaykumar Puri | Tax, Finance & Business Advisor

[GST Liability, Director Liability, Section 89 GST Act, GST Compliance, Company Directors, Business Owners, CA Vijaykumar Puri]

31/07/2026

The supreme court recently examine on rule 86A in the case of Union of India & Ors. Versus M/s K.K. Alloys

Your GST credit ledger can be blocked — but can the department block your FUTURE ITC?
Rule 86A allows the GST department to restrict ITC available in your Electronic Credit Ledger if there are reasons to believe that the credit was fraudulently availed or is ineligible.

This can happen in cases involving bogus suppliers, invoices without actual goods or services, or other suspicious ITC claims.

But here’s the important distinction:

Rule 86A applies to ITC available in the ledger — not future ITC you are yet to earn.

So, if the department believes you wrongly claimed a much larger amount in the past, it cannot simply create a negative balance and keep blocking every rupee of ITC you earn in the future.

This issue was examined in M/s K.K. Alloys, where the key principle was that Rule 86A operates on credit actually available in the ledger.

Another important point businesses should know:

⏳ Rule 86A(3) provides a one-year limit from the date the restriction was imposed.

So check:
• When was the restriction imposed?
• How much ITC was available then?
• How much was blocked?
• Has one year already passed?

If the department believes ITC was wrongly availed, Section 73/74 provides the appropriate mechanism for demand and recovery, depending on the circumstances.

Don’t blindly accept a GST ITC restriction. Check the amount, date and legal basis.

Comment “86A” and I’ll send you the practical steps to check your GST ledger.

CA Vijaykumar Puri | Tax, Finance & Business Advisor

[GST Rule 86A,GST ITC Blocked,Input Tax Credit,GST Credit Ledger,Blocked ITC, CA Vijaykumar Puri]

29/07/2026

You paid the GST to your supplier. Your supplier never deposited it with the government. The Supreme Court has now decided who takes the loss.

On 24 July 2026, in Bhandari Scrap Traders v. Union of India, the Supreme Court upheld the validity of Section 16(2)(c) of the CGST Act. Input tax credit is available to a buyer only where the tax on that purchase has actually reached the government.

A valid tax invoice is not enough. Paying your supplier in full, GST included, is not enough. Your vendor's GST compliance is now a working capital exposure sitting on your balance sheet.

Here is the part most of the commentary is missing.

The credit is reversed, not destroyed.

Section 41(2) read with Rule 37A works like this:

Your supplier has not filed GSTR-3B by 30 September following the year you took the credit
You reverse the credit by 30 November, or it becomes payable with interest
The day that supplier files the return, you re-avail the same credit, with no time bar

So for most businesses this is a cash flow and timing problem, not permanent tax leakage. It turns permanent only where the supplier never files at all.

Three things worth doing:

Choose suppliers with clean GST records. Reconcile GSTR-2B against your purchase register every month. Matching invoices alone will not surface the gap.
Add a GST compliance warranty to vendor agreements and hold back the tax component until the supplier's return is filed.
Pull your defaulting vendor list in September, not in November when the deadline is already on you.

Worth knowing: while upholding the provision, the Gujarat High Court recorded a pressing need for legislative change and a real-time mechanism to verify supplier payments, and said the government should recover from defaulting suppliers instead of pushing honest buyers into cumbersome remedies. Useful commentary. Not relief.

I have put the compliance calendar, the vendor onboarding checks and three sample contract clauses into a Vendor GST Risk Checklist. If it would be useful to you or your finance team, comment ITC and I will send it across.

[GST input tax credit,GST ITC rules,Supplier GST default,GST supplier compliance,CA Vijaykumar Puri]

26/07/2026

Not every “famous” personal finance book deserves an S tier ranking. 👀📚

There are hundreds of books promising to help you build wealth, manage money and become financially smarter—but here’s the thing:

Some teach you practical finance.

Some teach you investing.
And some are really just mindset books disguised as personal finance books. 😅

So we ranked 5 popular books from C to S. Here’s where they landed 👇

5️⃣ Rich Dad Poor Dad

A decent read, especially for changing the way you think about money. But honestly, it’s more about mindset than personal finance.

4️⃣ The Intelligent Investor

A legendary investing book. It could’ve been S-tier, but it’s heavy, detailed and somewhat dated, which makes it difficult for many readers to finish.

3️⃣ Think and Grow Rich

Motivational? Yes.
Personal finance? Not really.
It’s much more about mindset and ambition than practical money management.

2️⃣ The Richest Man in Babylon

The first few chapters are promising, but overall, it leans more towards motivation and mindset than actionable personal finance.

🥇 1️⃣ The Psychology of Money

And this one takes the crown. 👑
It goes beyond numbers and explains how our behaviour, emotions and decisions affect the way we build, protect and grow wealth over time.

💡 The biggest lesson?
Being good with money isn’t only about knowing what to do—it’s also about understanding why you behave the way you do with money.

Now we want to know 👀👇
Do you agree with this ranking—or would you put a different book at #1?

📌 Save this reel for your next reading list.

❤️ Like if you want more finance + book recommendations.

👥 Follow for practical finance tips, money lessons & more.

[Personal finance books, best personal finance books, personal finance book recommendations, books about money, financial literacy books, money management tips, personal finance tips, CA recommended personal finance books, CA Vijayakumar Puri]

24/07/2026

🚨 "You've received a Defective ITR Notice."

If those words made your heart skip a beat, you're not alone.

Your first thought might be:

"Am I in trouble?"

"Will I have to pay a huge penalty?"

"Did I do something illegal?"

Take a deep breath. A defective return notice is not a tax fraud notice, and it certainly doesn't mean you're going to jail. In most cases, it's simply the Income Tax Department informing you that there's an error, omission, or mismatch in your Income Tax Return that needs to be corrected.

The real problem isn't receiving the notice. The real problem is ignoring it.

Whether it's selecting the wrong ITR form, missing income details, incomplete disclosures, or claiming deductions incorrectly, these mistakes are often fixable. The department gives you an opportunity to rectify them within the specified time. Responding promptly can save you from unnecessary complications and ensure your return remains valid.

So, if a defective return notice lands in your inbox:

✔️ Don't panic.

✔️ Read the notice carefully.

✔️ Understand the exact issue.

✔️ Correct the defect within the deadline.

✔️ And if you're confused even after reading it, don't guess—consult a qualified Chartered Accountant.

Think of it this way: If a doctor tells you that your health report needs further attention, you don't ignore it—you take the necessary treatment. A defective ITR notice works the same way. It's a chance to fix the issue before it becomes a bigger problem.

Remember, making a mistake while filing your ITR is common. Ignoring the opportunity to correct it is what can create bigger issues.

💬 Have you or someone you know ever received a defective ITR notice? Share your experience in the comments!

📌 Save this post so you know exactly what to do if you ever receive one.

📤 Share it with your friends, family, or colleagues—this information could save them from unnecessary stress.

Follow for more practical tax tips, ITR guidance, GST updates, and easy-to-understand finance content.

[Defective ITR Notice,Income Tax Notice,Defective Return,ITR Filing,Income Tax Return,ITR Mistakes,Wrong ITR Form,Income Tax Department,Ta

22/07/2026

🚨 "Sir, my turnover was ₹1 crore, but under the presumptive taxation scheme my income is only ₹6 lakh. Since it's below ₹12 lakh, I don't have to pay tax... right?"
This was a real conversation I had with a client.

He had a turnover of ₹1 crore and had actually earned a profit of around ₹25 lakh. But after reading about the presumptive taxation scheme online, he believed he could simply declare 6% of his turnover (₹6 lakh) as his income and legally avoid paying tax.

At first glance, it may sound like a smart tax-saving strategy.
But here's the reality.
A few questions later, I asked him, "Did you buy any major asset recently?"
His answer was yes.
He had purchased a house, made a ₹30 lakh down payment, and financed the remaining amount through a home loan.

Now think about it.
If your declared income is only ₹6 lakh, but you're making a ₹30 lakh down payment on a property, the Income Tax Department is likely to ask a very simple question:

"Where did the money come from?"

Today, financial information is more connected than ever. Property purchases, loans, banking transactions, and many other financial activities are available to the authorities.

Technology and data analytics make it much easier to identify inconsistencies between your declared income and your actual financial behaviour.

This is why the Presumptive Taxation Scheme is not a shortcut to avoid taxes.

It is a compliance benefit designed for eligible small businesses and professionals, allowing them to maintain simplified records instead of detailed books of accounts.

Remember this simple rule:
Your taxable income under the presumptive scheme is generally the prescribed percentage or your actual profit—whichever is higher based on the applicable provisions and your facts. Misusing the scheme can lead to unnecessary scrutiny and future complications.

As a Chartered Accountant, my advice is simple:

✅ Pay your taxes honestly.

✅ Build a strong financial profile.

✅ A clean tax record doesn't just keep you compliant—it also strengthens your credibility when applying for loans, credit facilities, and other financial opportunities.

Tax planning is smart.
Tax evasion

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