Nandhakumar & Sundaran - N&S BlogNandhakumar & Sundaran - N&S Bloghttps://www.nscas.in/blogsSat, 11 Jul 2026 05:40:07 +0530http://zoho.com/sites/<![CDATA[Govt Notifies 8.33% Employer Contribution to Pension Fund]]>https://www.nscas.in/blogs/post/govt-notifies-12-pf-contribution-rate-under-social-security-code1



The Central Government has notified 8.33% of wages as the rate of contribution payable every month by the employer to the Pension Fund established under the Code on Social Security, 2020.

The notification has been issued in exercise of powers conferred under Section 16(1)(b)(i) of the Code and is effective from the commencement of the Employees’ Pension Scheme, 2026, i.e., June 29, 2026.

1. Employer Contribution Rate Fixed at 8.33%

The Government has prescribed that employers shall contribute 8.33% of the wages payable to employees every month to the Pension Fund.
This contribution will form part of the pension framework established under the Code on Social Security, 2020.

2. Contribution to Pension Fund

The notified contribution is payable to the Pension Fund established under the Code.
The Pension Fund is intended to support pension and related benefits payable to eligible employees under the Employees’ Pension Scheme, 2026.

3. Legal Basis of Notification

The notification has been issued under Section 16(1)(b)(i) of the Code on Social Security, 2020.
This provision empowers the Central Government to notify the rate of contribution payable by employers towards the Pension Fund.

4. Effective Date

The notified contribution rate is effective from the commencement of the Employees’ Pension Scheme, 2026.
Accordingly, the 8.33% employer contribution rate applies from June 29, 2026.

5. Applicability to Employers

Employers covered under the pension provisions of the Code on Social Security, 2020, will be required to make monthly contributions at the prescribed rate.
The contribution must be calculated with reference to the wages payable to eligible employees.

6. Objective of the Notification

The notification seeks to:
Prescribe the employer contribution rate for the Pension Fund;
Operationalise the Employees’ Pension Scheme, 2026;
Ensure regular monthly funding of pension benefits;
Provide clarity to employers regarding pension contribution obligations; and
Support implementation of the pension framework under the Code on Social Security, 2020.

7. Key Takeaway

The Central Government has notified 8.33% of wages as the monthly contribution payable by employers to the Pension Fund under the Code on Social Security, 2020. The rate applies from June 29, 2026, being the date of commencement of the Employees’ Pension Scheme, 2026.
]]>Wed, 08 Jul 2026 10:44:39 +0530<![CDATA[Govt Notifies 12% PF Contribution Rate Under Social Security Code]]>https://www.nscas.in/blogs/post/govt-notifies-12-pf-contribution-rate-under-social-security-code


The Central Government has notified the contribution rate payable by employers and employees to the Provident Fund Scheme under the Code on Social Security, 2020. As per the notification, the contribution rate has been fixed at 12% for establishments covered under the Code, subject to specified exceptions.

The notification is deemed to have come into force on November 21, 2025.

1. Contribution Rate Fixed at 12%

The Central Government has prescribed that both employers and employees shall contribute at the rate of 12% to the Provident Fund Scheme.
This rate will apply to establishments covered under the Code on Social Security, 2020, except those specifically excluded or covered under a different rate.

2. Applicability to Covered Establishments

The notified contribution rate applies to establishments that fall within the scope of the Provident Fund provisions under the Code on Social Security, 2020.
Such establishments will be required to comply with the prescribed contribution obligations under the Scheme and the applicable provisions of the Code.

3. Exceptions for Specified Establishments

The notification provides exceptions for certain specified establishments.
These include establishments for which a resolution plan or repayment plan has been approved by the Adjudicating Authority established under the Insolvency and Bankruptcy Code, 2016.

4. Exclusion for Certain Specified Industries

The exception also applies to establishments operating in certain specified industries.
Such establishments may be governed by separate contribution provisions or rates, as prescribed under the applicable framework.

5. Deemed Effective Date

The notification is deemed to have come into force on November 21, 2025.
Accordingly, the notified contribution rate will be applicable from the said date, subject to the conditions and exceptions specified in the notification.

6. Objective of the Notification

The notification seeks to:
Prescribe the applicable provident fund contribution rate under the Code on Social Security, 2020;
Provide clarity to employers and employees regarding contribution obligations;
Ensure continuity of provident fund contributions under the new social security framework;
Identify specified establishments eligible for exception; and
Support implementation of the Provident Fund Scheme under the Code.

7. Key Takeaway

The Central Government has notified a 12% contribution rate payable by both employers and employees to the Provident Fund Scheme under the Code on Social Security, 2020. The rate applies to covered establishments, except for specified establishments, such as those with an approved resolution or repayment plan under the IBC, and establishments operating in certain specified industries. The notification is deemed to have come into force on November 21, 2025.
Get Started Now
]]>Wed, 08 Jul 2026 10:40:32 +0530<![CDATA[TDS Challan: Nature of Payment Code and others under Income Tax Act 2025]]>https://www.nscas.in/blogs/post/tds-challan-nature-of-payment-code-and-others-under-income-tax-act-2025

The Income-tax e-filing portal prescribes Nature of Payment (NOP) codes ranging from 1001 to 1095 for TDS payments under Challan 281.

 

These codes are system-driven classifications available on the income-tax portal and are not explicitly prescribed under the Act or Rules. Therefore, the portal dropdown should be treated as the authoritative source for selection.

 

Detailed List of Nature of Payment Codes

Code

Nature of Payment

New Section

Old Section

1001

Payment to Government employees other than Union Government employees

392

192

1002

Payment of employees other than Government employees

392

192

1004

Payment of accumulated balance due to an employee

392(7)

192A

1005

Commission or brokerage – insurance

393(1) – Sl. No. 1(i)

194D

1006

Commission or brokerage – others

393(1) – Sl. No. 1(ii)

194H

1008

Rent on machinery etc. – specified person

393(1) – Sl. No. 2(ii)

194I

1009

Rent other than machinery etc. – specified person

393(1) – Sl. No. 2(ii)

194I

1011

Payment on any consideration under section 67(14)

393(1) – Sl. No. 3(ii)

194IC

1012

Payment of Compensation on Acquisition of Certain Immovable Property

393(1) – Sl. No. 3(iii)

194LA

1013

Income payable in respect of units of specified Mutual Fund

393(1) – Sl. No. 4(i)

194K

1014

Interest from units of business trust

393(1) – Sl. No. 4(ii)

194LBA

1015

Dividend from units of business trust

393(1) – Sl. No. 4(ii)

194LBA

1016

Renting income from units of business trust

393(1) – Sl. No. 4(ii)

194LBA

1017

Income from investment fund (Sec 224)

393(1) – Sl. No. 4(iii)

194LBB

1018

Income from securitisation trust

393(1) – Sl. No. 4(iv)

194LBC

1019

Interest on securities

393(1) – Sl. No. 5(i)

193

1020

Interest (senior citizen)

393(1) – Sl. No. 5(ii)

194A

1021

Interest (others)

393(1) – Sl. No. 5(ii)

194A

1022

Other interest

393(1) – Sl. No. 5(iii)

194A

1023

Payment to contractor (Individual/HUF)

393(1) – Sl. No. 6(i)

194C

1024

Payment to contractor (others)

393(1) – Sl. No. 6(i)

194C

1026

Fees for technical services / royalty / call centre

393(1) – Sl. No. 6(ii)

194JA

1027

Professional services

393(1) – Sl. No. 6(ii)

194JB

1028

Director remuneration

393(1) – Sl. No. 6(iii)

194JB

1029

Dividend income

393(1) – Sl. No. 7

194

1030

Sum received under life insurance policy

393(1) – Sl. No. 8(i)

194DA

1031

Purchase of goods

393(1) – Sl. No. 8(ii)

194Q

1032

Payment to specified senior citizen

393(1) – Sl. No. 8(iii)

194P

1033

Benefit or perquisite arising from business or profession

393(1) – Sl. No. 8(iv)

194R

1035

E-commerce operator payments

393(1) – Sl. No. 8(v)

194O

1037

Transfer of virtual digital asset

393(1) – Sl. No. 8(vii)

194S

1058

Winnings (lottery, etc.)

393(3) – Sl. No. 1

194B

1060

Winnings from online games

393(3) – Sl. No. 2

194BA

1062

Winnings from horse race

393(3) – Sl. No. 3

194BB

1063

Lottery ticket commission etc.

393(3) – Sl. No. 4

194B

1064

Cash withdrawal (co-op society)

393(3) – Sl. No. 5

194N

1065

Cash withdrawal (others)

393(3) – Sl. No. 5

194N

1066

Amount under section 80CCA(2)(a)

393(3) – Sl. No. 6

194EE

1067

Partner remuneration

393(3) – Sl. No. 7

194T

1068

Sale of alcoholic liquor

394(1) – Sl. No. 1

206C(1)(i)

1069

Sale of tendu leaves

394(1) – Sl. No. 2

206C(1)(ii)

1070

Sale of timber (forest lease)

394(1) – Sl. No. 3

206C(1)(iii)

1071

Sale of timber (other than lease)

394(1) – Sl. No. 3

206C(1)(iii)

1072

Sale of other forest produce

394(1) – Sl. No. 3

206C(1)(iii)

1073

Sale of scrap

394(1) – Sl. No. 4

206C(1)(vi)

1074

Sale of minerals

394(1) – Sl. No. 5

206C(1)(vii)

1075

Sale of motor vehicle >10 lakh

394(1) – Sl. No. 6(a)

206C(1F)

1076

Sale of wrist watch >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1077

Sale of art piece >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1078

Sale of collectibles >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1079

Sale of yacht/boat/helicopter >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1080

Sale of pair of sunglasses >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1081

Sale of handbag/purse >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1082

Sale of shoes >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1083

Sale of sportswear/equipment >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1084

Sale of home theatre system >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1085

Sale of horse for racing >10 lakh

394(1) – Sl. No. 6(b)

206C(1F)

1086

LRS – education/medical

394(1) – Sl. No. 7

206C(1G)

1087

LRS – others

394(1) – Sl. No. 7

206C(1G)

1088

Overseas tour package ≤10 lakh

394(1) – Sl. No. 8

206C(1G)

1089

Overseas tour package >10 lakh

394(1) – Sl. No. 8

206C(1G)

1090

Parking lot usage

394(1) – Sl. No. 9

206C(1C)

1091

Toll plaza usage

394(1) – Sl. No. 9

206C(1C)

1092

Mining/quarry usage

394(1) – Sl. No. 9

206C(1C)


In the evolving framework of TDS compliance, correct selection of Nature of Payment codes, Major Head, Minor Head, and residential status is essential to ensure seamless credit, accurate reporting, and avoidance of future litigation. As the system becomes increasingly portal-driven, professionals must align their compliance practices with the functional design of the e-filing system rather than relying solely on statutory interpretation.

]]>Thu, 07 May 2026 16:19:23 +0530<![CDATA[Income Tax Act 2025 - Tax Year 2026-27 onwards]]>https://www.nscas.in/blogs/post/income-tax-act-2025-tax-year-2026-27-onwards

Clause

Old Section

Nature of Payment / Income

Threshold (per TY, unless stated)

TDS Rate (%)

392(1)(a)

192

Salary

Taxable salary

As per slab

392(6)

192A

Accumulated PF balance

> ₹50,000

10

393(1) Sl.1(i)

194D

Insurance commission (non-corporate)

Aggregate > ₹20,000

2

393(1) Sl.1(i)

194D

Insurance commission (company)

Aggregate > ₹20,000

10

393(1) Sl.1(ii)

194H

Commission or brokerage

Aggregate > ₹20,000

2

393(1) Sl.2(i)

194-IB

Rent by individual/HUF (not liable to audit)

Monthly rent > ₹50,000

2

393(1) Sl.2(ii)(a)

194-I

Rent (plant & machinery)

Monthly rent > ₹50,000 (≈ ₹6,00,000 p.a.)

2

393(1) Sl.2(ii)(b)

194-I

Rent (land, building, furniture, fittings)

Monthly rent > ₹50,000 (≈ ₹6,00,000 p.a.)

10

393(1) Sl.3(i)

194-IA

Transfer of immovable property (not agricultural land)

Consideration ≥ ₹50,00,000

1

393(1) Sl.3(ii)

194-IC

Monetary consideration under JDA

Any amount

10

393(1) Sl.3(iii)

194LA

Compensation on acquisition of immovable property

Aggregate > ₹5,00,000

10

393(1) Sl.4(i)

194K

Income in respect of units

Aggregate > ₹10,000

10

393(1) Sl.4(ii)

194LBA

Distribution by business trust (interest/rent, etc.)

Any distributed income

10

393(1) Sl.4(iii)

194LBB

Income from investment fund (non-exempt)

Any income

10

393(1) Sl.4(iv)

194LBC

Income from securitisation trust

Any income

10

393(1) Sl.5(i)

193

Interest on securities

> ₹10,000

10

393(1) Sl.5(ii)

194A

Interest (Bank/PO) - Senior citizen

> ₹1,00,000

10

393(1) Sl.5(ii)

194A

Interest (Bank/PO) - Others

> ₹50,000

10

393(1) Sl.5(iii)

194A

Interest (other than Bank/PO)

> ₹10,000

10

393(1) Sl.6(i)

194C

Contractor/sub-contractor (individual/HUF)

Single > ₹30,000 or aggregate > ₹1,00,000

1

393(1) Sl.6(i)

194C

Contractor/sub-contractor (others)

Single > ₹30,000 or aggregate > ₹1,00,000

2

393(1) Sl.6(ii)

194M

Specified payments by individual/HUF (not liable 194C/H/J)

Aggregate > ₹50,00,000

2

393(1) Sl.6(iii)

194J

Technical services/specified royalty

Aggregate > ₹50,000

2

393(1) Sl.6(iii)

194J

Other professional fees/royalty

Aggregate > ₹50,000

10

393(1) Sl.6(iii)

194J

Director fees/remuneration

Any amount

10

393(1) Sl.7

194

Dividend

Any amount

10

393(1) Sl.8(i)

194DA

Life insurance payout (taxable component)

Aggregate ≥ ₹1,00,000

2

393(1) Sl.8(ii)

194Q

Purchase of goods

Aggregate purchases > ₹50,00,000

0.1

393(1) Sl.8(iii)

194P

Resident senior citizen (≥75 yrs, specified bank)

Taxable income

As per slab

393(1) Sl.8(iv)

194R

Benefit/perquisite from business/profession

Aggregate > ₹20,000

10

393(1) Sl.8(v)

194-O

E-commerce payments to resident participant

Any amount; no TDS if resident individual/HUF ≤ ₹5,00,000

0.1

393(1) Sl.8(vi)

194S

Transfer of virtual digital asset

As per section (₹10,000/₹50,000 for specified persons)

1

393(10) Sl.1

194B

Lottery, puzzle, card game, betting winnings

> ₹10,000 per transaction

30

393(10) Sl.2

194BA

Winnings from online games

Net winnings

30

393(10) Sl.3

194BB

Winnings from horse races

> ₹10,000 per transaction

30

393(10) Sl.4

194G

Lottery ticket commission

> ₹20,000

2

393(10) Sl.5

194N

Cash withdrawal (normal case)

Aggregate > ₹1 crore (₹3 crore co-op societies)

2

393(10) Sl.5

194N

Cash withdrawal (non-filers, 3 preceding FYs)

Aggregate > ₹20 lakh: 2%; > ₹1 crore: 5%

2 / 5

393(10) Sl.6

194EE

NSS/annuity deposits

Aggregate ≥ ₹2,500

10

393(10) Sl.7

194T

Remuneration/salary/interest to partner of firm (NEW)

Aggregate to a partner > ₹20,000

10

]]>Thu, 02 Apr 2026 15:21:16 +0530<![CDATA[MCA Raises Small Company Thresholds: Amendment to Definition Under Companies Act, 2013]]>https://www.nscas.in/blogs/post/mca-raises-small-company-thresholds-amendment-to-definition-under-companies-act-2013

The Ministry of Corporate Affairs (MCA), through Notification G.S.R. 880(E) dated 1 December 2025, has amended the Companies (Specification of Definition Details) Rules, 2014. The amendment revises the financial thresholds for classifying a company as a “small company” under Section 2(85) of the Companies Act, 2013, effective 1 December 2025.

Under the updated Rule 2(1)(t), a company will qualify as a small company if both of the following conditions are met:

Paid-up share capital does not exceed ₹10 crore; and

Turnover does not exceed ₹100 crore.

The notification explicitly states that both criteria must be satisfied simultaneously for classification as a small company.

This amendment significantly broadens the scope of the small company framework, allowing more entities to benefit from relaxed compliance requirements, simplified filings, and reduced regulatory burden as envisaged under the Act.

---------------

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi, the 1st December, 2025

G.S.R. 880(E).— In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Specification of definition details) Rules, 2014, namely:-

1. Short title and commencement.- (1) These rules may be called the Companies (Specification of Definition details) Amendment Rules, 2025.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Companies (Specification of definition details) Rules, 2014, in rule 2, in sub-rule (1), for clause (t), the following clause shall be substituted, namely:-

“(t) For the purposes of sub-clause (i) and sub-clause (ii) of clause (85) of section 2 of the Act, paid up capital and turnover of the small company shall not exceed rupees ten crores and rupees one hundred crores respectively.”.

[F. No. Policy-01/5/2022-CL-V-MCA]

BAIAMURUGAN.D, Jt. Secy.

Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (1), vide number G.S.R. 238(E), dated the 31st March, 2014 and was last amended, vide number 700(E), dated the 15th September, 2022.

Get Started Now
]]>Wed, 03 Dec 2025 16:09:57 +0530<![CDATA[RBI Extends Pre and Post-Shipment Export Credit Period to 450 Days]]>https://www.nscas.in/blogs/post/rbi-extends-pre-and-post-shipment-export-credit-period-to-450-days
RBI Extends Pre and Post-Shipment Export Credit Period to 450 Days


Ref.: Circular no. RBI/2025-26/96 DOR.STR.REC.60/21.04.048/2025-26; Dated: 14.11.2025

Background
The Reserve Bank of India (RBI) has issued the Trade Relief Measures Directions, 2025, introducing a set of regulatory relaxations to support exporters and borrowers affected by prevailing trade and economic disruptions.

These measures aim to ease liquidity constraints, facilitate credit continuity, and stabilise trade financing flows during challenging market conditions.

Key Measures Announced

Moratorium on Payment of Instalments
All Regulated Entities (REs) have been permitted to grant a moratorium on the payment of instalments falling due from eligible borrowers.

This relief measure is intended to provide temporary financial flexibility to borrowers engaged in export and trade-related activities.

Extended Credit Period for Export Finance
The credit period for both pre-shipment and post-shipment export credit—disbursed up to March 31, 2026—has been extended from one year to 450 days.

This extension offers exporters additional time to realise export proceeds and manage working capital effectively amidst global trade uncertainties.

Asset Classification Norms
The classification of assets under these directions will be as per the norms applicable to the respective regulated entities.

This ensures consistency in prudential treatment across banks, NBFCs, and other financial institutions while recognising the temporary nature of the relief.

General Provisioning Requirement
Regulated entities are required to create a general provision of not less than 5% of the total outstanding in respect of borrower accounts availing these relief measures.

This prudential step balances financial flexibility for borrowers with sound risk management practices for lenders.

Significance
The Trade Relief Measures Directions, 2025, are expected to:
Support exporters and trade-oriented borrowers facing delays in payment realisation,
Strengthen liquidity across the trade finance ecosystem, and
Maintain credit discipline and financial stability while providing regulatory flexibility.
Get Started Now
]]>Wed, 19 Nov 2025 15:32:44 +0530<![CDATA[RBI Extends the Time Period for Realisation of Full Export from 9 to 15 Months]]>https://www.nscas.in/blogs/post/rbi-extends-the-time-period-for-realisation-of-full-export-from-9-to-15-months

RBI extends export realisation period

Ref.:Notification No. F.No. FEMA 23(R)/(7)/2025-RB; Dated: 13.11.2025

Background
The Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2025, amending provisions under Regulations 9 and 15 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.

The amendments aim to provide greater flexibility to exporters in realising export proceeds and in managing advance payments received against export orders.

Key Amendment 1 – Extended Period for Realisation and Repatriation of Export Proceeds

Earlier Provision
Under Regulation 9, the export value of goods, software, or services was required to be realised and repatriated to India within 9 months from the date of export.

Revised Provision
The RBI has now extended this period to 15 months, offering exporters additional time for recovery of payments from overseas buyers.

Applicability
The revised 15-month period also applies to exports made by:

Units in Special Economic Zones (SEZs),
  • Status Holder Exporters,
  • Export Oriented Units (EOUs), and
  • Units located in Electronics Hardware Technology Parks (EHTPs), 
  • Software Technology Parks (STPs), and 
  • Bio-Technology Parks (BTPs).

This harmonisation ensures uniformity across all export categories and promotes ease of doing business in international trade.

Key Amendment 2 – Extended Time for Shipment Against Advance Payments

Earlier Provision
Under Regulation 15, when an exporter received an advance payment (with or without interest) from a buyer or third party abroad, the exporter was required to ship the goods within one year from the date of receipt of such advance.

Revised Provision
The amended regulation now allows exporters up to three years from the date of receipt of advance payment to complete shipment of goods, provided the advance has been declared in the export documentation.

This change provides exporters with greater operational flexibility, especially in cases involving large, complex, or long-term export contracts.

Significance
These amendments are expected to:
  1. Facilitate easier cash flow management for exporters,
  2. Provide longer timelines for realisation and fulfilment of export obligations,
  3. Improve India’s export competitiveness, and
  4. Align export compliance requirements with global trade practices.
Get Started Now
]]>Wed, 19 Nov 2025 15:27:11 +0530<![CDATA[Unlocking Growth and Resilience: The Strategic Value of Internal Audit for SMEs]]>https://www.nscas.in/blogs/post/unlocking-growth-and-resilience-the-strategic-value-of-internal-audit-for-smes

Introduction

 

Internal audit is an independent and objective assurance function that enhances value and strengthens organizational performance. For small and medium enterprises (SMEs), it is not merely a compliance requirement—it is a strategic enabler that helps manage risks, streamline operations, and support sustainable growth.


Strengthening Internal Controls

 

Internal audits help SMEs design, establish, and continuously monitor strong internal controls. By reviewing core processes such as accounting, procurement, and inventory management, auditors identify control gaps and recommend corrective measures. Effective internal controls reduce the likelihood of fraud, errors, and inefficiencies, thereby enhancing operational resilience.

 

Safeguarding Assets

 

Through regular reviews, internal audits ensure that financial and physical assets are properly safeguarded. Early detection of issues such as inventory discrepancies, unauthorized payments, and resource misuse enables timely corrective action and promotes accountability across the organization.

 

Improving Operational Efficiency

 

Internal audits assess workflows to uncover operational bottlenecks, redundant activities, and gaps in process effectiveness. SMEs can optimize, automate, or redesign processes based on audit insights, leading to faster turnaround times, better productivity, and improved resource allocation.

 

Ensuring Regulatory Compliance

 

SMEs must adhere to numerous regulatory requirements, including GST, income tax, labor laws, and industry-specific regulations. Internal audits review compliance status on a periodic basis, helping organizations avoid penalties, legal exposure, and reputational damage.

 

Enhancing Risk Management

 

Internal audits provide a structured approach to identifying and evaluating financial, operational, cyber, and compliance-related risks. Beyond highlighting vulnerabilities, auditors recommend practical mitigation strategies, enabling SMEs to build a robust and proactive risk management framework.

 

Supporting Data-Driven Decision Making

 

Audit findings offer management objective, data-backed insights into financial performance, process efficiency, and risk exposure. These insights empower SME leadership to make informed decisions that drive growth and improve operational effectiveness.

 

Facilitating Fraud Prevention

 

By evaluating processes and controls, internal audits help detect early warning signs of fraud such as duplicate payments, unauthorized fund access, and irregular transactions. Regular audits strengthen fraud prevention mechanisms and support timely investigation and resolution of suspicious activities.

 

Reducing Operational Costs

 

Internal audits identify inefficiencies, unnecessary expenditures, and opportunities for cost optimization. Implementing audit recommendations can reduce wastage, improve procurement efficiency, and strengthen financial discipline—ultimately improving profitability.

 

Building Stakeholder Confidence

 

A structured internal audit function signals strong governance and transparency. This enhances trust among investors, lenders, customers, and business partners, enabling SMEs to gain better access to finance, strengthen relationships, and pursue new business opportunities.

 

Supporting Growth and Strategic Planning

 

Internal audits provide independent assessments of expansion plans, new projects, and investment proposals. By evaluating feasibility, controls, and associated risks, audits help SMEs pursue growth initiatives with clarity, confidence, and better-informed strategies.

 

Enhancing Corporate Governance

 

Internal audit reinforces a culture of accountability, ethical conduct, and policy adherence. It clarifies responsibilities across the organization and ensures that both management and staff operate in alignment with governance principles and regulatory requirements.

 

Ensuring Adaptability to Regulatory Changes

 

Regulatory landscapes evolve frequently. Internal audits help SMEs stay current with new legal and compliance requirements, enabling timely adjustments to processes and controls. This adaptability reduces compliance risks and ensures long-term sustainability.

 

Aiding in Technology Integration

As SMEs adopt digital tools and automation, internal audits evaluate IT systems for data integrity, cybersecurity, and process reliability. Audit insights help SMEs implement technology effectively, protect digital assets, and improve overall operational efficiency.

 

Conclusion

 

For SMEs, internal audit is a strategic asset that strengthens governance, enhances efficiency, minimizes risk, and supports sustainable growth. Far from being a routine function, internal audit acts as a foundation for business continuity and long-term success. By integrating internal audit into their management framework, SMEs can build stronger, more resilient organizations capable of thriving in today’s competitive and rapidly changing environment.


]]>Mon, 17 Nov 2025 11:26:57 +0530<![CDATA[The Strategic Importance of Procure-to-Pay (P2P) Process Audits for SMEs]]>https://www.nscas.in/blogs/post/The-Strategic-Importance-of-Procure-to-Pay-Process-Audits-for-SMEs

In today’s dynamic business environment, small and medium enterprises (SMEs) face the dual challenge of sustaining growth while maintaining financial discipline. Among the various operational areas influencing profitability and governance, the Procure-to-Pay (P2P) cycle—spanning from procurement requisition to supplier payment—holds strategic significance. Conducting periodic audits of this process is not merely a compliance requirement; it is a proactive governance measure that fortifies internal controls, drives cost efficiency, and enables sustainable growth.

Understanding the Procure-to-Pay Framework
The P2P process integrates key business functions including procurement, finance, and operations. It typically involves vendor qualification, purchase order issuance, goods or service receipt, invoice verification, and payment authorization. Each stage carries inherent risks that can affect financial accuracy, working capital, and vendor relationships. For SMEs, where oversight and resources may be limited, a structured P2P audit helps identify such vulnerabilities and implement robust control measures.

Why P2P Audits Matter for SMEs

Strengthening Financial Controls
A P2P audit validates that every purchase transaction is properly authorized, documented, and compliant with corporate policies. This prevents unauthorized procurement, duplicate payments, and omissions in liability recognition—thereby fostering strong financial discipline.

Identifying Process Gaps and Control Weaknesses
Many SMEs grapple with insufficient segregation of duties and informal control practices. Systematic audits uncover deficiencies such as missing approvals, policy deviations, or documentation lapses, enabling timely corrective action before they escalate into financial or reputational risks.

Ensuring Regulatory and Policy Compliance
Evolving regulations governing taxation, vendor verification, and accounting disclosures require consistent compliance. A P2P audit ensures adherence to statutory norms, accurate tax reporting, and proper record maintenance, reducing exposure to penalties and noncompliance issues.

Enhancing Vendor Relations
Accurate and transparent payment practices strengthen partnerships with suppliers. P2P audits help ensure timely dispute-free settlements, reinforcing vendor trust and improving collaboration across the supply chain.

Driving Operational Efficiency and Cost Optimization
Audit observations often point to redundant approval layers, manual bottlenecks, or inefficient invoice processing workflows. Acting on these insights can streamline operations, shorten cycle times, and lower administrative overheads.

Supporting Reliable Data and Decision-Making
Accurate procurement data is essential for informed business decisions. By validating data integrity, P2P audits facilitate effective budgeting, demand forecasting, and vendor negotiation.

Key Focus Areas in a P2P Audit
  • An effective P2P audit framework should examine:
  • Vendor onboarding and due diligence procedures
  • Authorization and approval protocols for purchase orders
  • Three-way matching between purchase orders, goods receipts, and invoices
  • Payment authorization workflows and timing controls
  • Accuracy in accounting entries and expense recognition
  • Compliance with internal policies and segregation of duties

Such structured reviews help identify irregularities and establish a culture of continuous process improvement.

Implementing P2P Audit Practices in SMEs
Launching a P2P audit need not be resource-intensive. SMEs can begin with periodic internal audits supported by simple digital tools that automate invoice and purchase tracking. Engaging professional auditors or consultants can further help design a scalable audit framework aligned with the organization’s size, complexity, and governance maturity.

Conclusion
A well-executed Procure-to-Pay audit is a cornerstone of sound financial governance. For SMEs, it serves both preventive and value-enhancing purposes—ensuring compliance, transparency, and efficiency. Beyond safeguarding resources, a disciplined P2P audit framework enhances stakeholder confidence and supports long-term business sustainability.
Get Started Now
]]>Mon, 10 Nov 2025 16:20:54 +0530<![CDATA[TDS Rate Chart FY 2025-26]]>https://www.nscas.in/blogs/post/tds-rate-chart-fy-2025-26

Nature of Payment Made To Residents

Threshold(Rs.)

Company / Firm /Co-operative Society /Local Authority

Individual / HUF

If No / Invalid PAN

Section - Description

IT Rate (%)

IT Rate (%)

IT Rate (%)

192A - Payment of accumulated balance due to an employee. (applicable from 01.06.2015)

50,000

-

10

30

193 - Interest on securities

10,000

10

10

20

194 - Dividends

10,000

10

10

20

194A - Interest other than interest on securities - in any Others Case

10,000

10

10

20

194A -Banks / Co-operative society engaged in business of banking / Post Office

50,000

10

10

20

194A - Senior citizen

1,00,000

-

10

20

194B - Winning from Lotteries or crossword puzzle, etc.

10,000

30

30

30

194B proviso - Winnings from lotteries and crossword puzzles, etc. where consideration is made in kind or cash is not sufficient to meet the tax liability and tax has been paid before such winnings are released (Applicable From 01-July-2022)

10,000

30

30

30

194BA - Winnings from online games (Applicable From 01-April-2023)

-

30

30

30

Sub-section (2) of section 194BA - Net Winnings from online games where the net winnings are made in kind or cash is not sufficient to meet the tax liability and tax has been paid before such net winnings are released
(Applicable From 01-April-2023)

-

30

30

30

194BB - Winnings from Horse Race

10,000

30

30

30

194C - Payment to Contractors

1,00,000

2

1

20

194IC- Payment under Specified agreement

-

10

10

20

194D - Insurance Commission

20,000

10

2

20

194DA - Payment in respect of life insurance policy (applicable from 01.10.2014)

1,00,000

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

20

194E - Payment to Non-Resident Sportsmen or Sports Association

-

20

20

20

194EE - Payments out of deposits under NSS

2,500

10

10

20

194F - Repurchase Units by MFs

-

20 (upto 30th Sep 2024)

20 (upto 30th Sep 2024)

20

194G - Commission - Lottery

20,000

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

20

194H - Commission / Brokerage

20,000

5 (upto 30th Sep 2024
2 (1st Oct 2024 onwards)

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

20

194I - Rent
194I(b)-Land and Building/Furniture/Fittings

50,000 (Per month)

10

10

20

194I(a) - Plant/Machinery/Equipment

50 000 (Per month)

2

2

20

194IA - Transfer of certain immovable property other than agriculture land (w.e.f. 1-6-2013)

50,00,000

1

1

20

194J - Fees for Professional/Technical Services

194J(a) - Fees for Technical Services

50,000

2

2

20

194J(b) - Fees for Professional services or royalty etc.

50,000

10

10

20

194K - Payment of Dividend by Mutual Funds (Applicable From 01-Apr-2020)

10,000

10

10

20

194LA - Immovable Property

5,00,000

10

10

20

194LB - Income by way of interest from infrastructure debt fund (non-resident)

-

5

5

20

194LBA - Certain income from units of a business trust to Residents

194LBA (a) - Certain Income in the form of interest from units of a business trust to a residential unit holder

-

10

10

20

194LBA (b) - Certain Income in the form of dividend from units of a business trust to a resident unit holder

-

10

10

20

194LBA - Certain income from units of a business trust to Non Resident :-

194LBA(1) - Payment of the nature referred to in Section 10(23FC)(a)

-

5

5

20

194LBA (2) - Payment of the nature referred to in Section 10(23FC)(b)

-

10

10

20

194LBA (3) - Payment of the nature referred to in section 10(23FCA) by business trust to unit holders

-

35% - For Non Residents Company

30% - For Non Residents other than companies

30

30/35

194LBB - Income in respect of units of investment fund.

-

10% - For Residents

35% - For Non Residents Company

30% - For Non Residents other than companies

10% - For Residents

30% - For Non Resident

20/30/35

Sec 194LBC - Income in respect of investment in securitisation trust.

-

10% - For Residents

35% - For Non Residents Company

30% - For Non Residents other than companies

10

20/30/35

Sec 194LC - Income by way of interest by an Indian specified company to a non-resident / foreign company on foreign currency approved loan /long-term infrastructure bonds from outside India (applicable from July 1, 2012)

-

5 or 4* or 9**
* In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC
** in respect of money borrowed by it from a source outside India by way of issuance of any long-term bond or rupee denominated bond onor after the 1st day of July, 2023, which is listed only on a recognised stockexchange located in an IFSC

5 or 4* or 9**
* In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC
** in respect of money borrowed by it from a source outside India by way of issuance of any long-term bond or rupee denominated bond on or after the 1st day of July, 2023, which is listed only on a recognised stock exchange located in an IFSC

20

194LD - Interest on certain bonds and govt. Securities (from 01-06-2013)

-

5

5

20

194N - Payment of certain amounts in cash.

Withdrawal in Excess of Rs. 1 Cr.

2

2

20

194NC - Payment of certain amounts in cash to co-operative societies not covered by first proviso

Withdrawal in Excess of Rs. 3 Cr. For Co-operative Society

2

2

20

194NF - Payment of certain amounts in cash to non-filers

1. Withdrawl Exceed 20 Lacs but does not exceed 1 Cr.

2. Withdrawl Excess 1 Cr.

2% - Exceed 20 Lacs but does not exceed 1 cr.

5%-Withdrawl in Excess of Rs. 1 cr.

2% - Exceed 20 Lacs but does not exceed 1 cr.

5%-Withdrawl in Excess of Rs. 1 cr.

20

194NFT - Payment of certain amount in cash to non-filers being co-operative societies

1. Withdrawl Exceed 20 Lacs but does not exceed 3 Cr.

2. Withdrawl Excess 3 Cr.

2% - Exceed 20 Lacs but does not exceed 3 cr.

5%-Withdrawl in Excess of Rs. 3 cr.

2% - Exceed 20 Lacs but does not exceed 3 cr.

5%-Withdrawl in Excess of Rs. 3 cr.

20

194O - TDS on e-commerce participants (Applicable From 01-Oct-2020)

500000 (Individual /HUF)

1 (upto 30th Sep 2024)
0.1 (1st Oct 2024 onwards)

1 (upto 30th Sep 2024)
0.1 (1st Oct 2024 onwards)

5

194P - TDS in case of Specified Senior Citizen

-

Not Applicable

Rates in Force

194Q - TDS on Purchase of Goods exceeding Rs. 50 Lakhs (Applicable From 01-July-2021)

In Excess of Rs. 50 Lakhs

0.1

0.1

5

194R - TDS in case any benefit or perquisite (arising from business or the exercise of a profession) is provided (Applicable From 01-July-2022)

20000

10

10

20

First Proviso to sub-section (1) of section 194R- TDS in case any Benefits or perquisites of business or profession where such benefit is provided in kind or where part in cash is not sufficient to meet tax liability and tax required to be deducted is paid before such benefit is released (Applicable From 01-July-2022)

20000

10

10

20

194S - TDS on payment on transfer of Virtual Digital Asset ( Applicable From 01-July-2022)

10000

1

1

20

194T - Payment of salary, remuneration, commission, bonus or interest to a partner of firm

20,000

10

10

20

Proviso to sub-section(1) of section 194S - TDS on Payment for transfer of virtual digital asset where payment is in kind or in exchange of another virtual digital asset and tax required to be deducted is paid before such payment is released (Applicable From 01-July-2022)

10000

1

1

20

Sec 195 - Other Sums

-

Average rates as applicable

-

20/30/40

Sec 196A - Foreign comp unit holder of MF

-

*20 or rate provided in the agreement, whichever is lower
* Not Applicable for company

20 or rate provided in the agreement, whichever is lower

20

Sec 196B - Income from units

-

10 (upto 22nd Jul 2024)
12.5 (23rd Jul 2024 onwards)

10 (upto 22nd Jul 2024)
12.5 (23rd Jul 2024 onwards)

20

Sec 196C - Income from foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend)

-

10 (upto 22nd Jul 2024)
12.5 (23rd Jul 2024 onwards)

10 (upto 22nd Jul 2024)
12.5 (23rd Jul 2024 onwards)

20

Sec 196D - Income of Foreign Institutional Investors/ Specified Fund :-

Sec 196D - Income of foreign institutional investors from securities under sub-section (1)

-

20

20

20

Sec 196DA - Income of specified fund from securities referred to in clause (a) of sub-section (1) of section 115AD (other than interest income referred to in section 194LD)

-

10

10

20

194IB - Payment of rent by certain individuals or Hindu undivided family

50000

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

20

194M - Payment of certain sums by certain individuals or Hindu undivided family

5000000

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

5 (upto 30th Sep 2024)
2 (1st Oct 2024 onwards)

20

Get Started Now
]]>Thu, 09 Oct 2025 17:29:27 +0530