Effects of COVID-19 on Patents – Twice The Number of Abandonments

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As companies hunker down for the effects of the COVID-19 virus, they are abandoning their IP protection at TWICE the normal rate.

And it is likely to go up much further. AND this has never happened before.

BlueIron’s study looked at recent USPTO abandonments to see what, if any, effects were from COVID-19. The results were enlightening.

Patent Abandonment Rate has DOUBLED in the Last Month

For both Small Entities (under 500 employees) and Large Entities, the normal rate of abandonment is about 12.5% and 7.5% (respectively). In March 2020, the abandonment rate has nearly doubled to 23% and 12%. (For example, small entities received 5747 office actions in September, and 1326 were abandoned – a 23% fall off rate.) The data from April 2020 is expected to be even higher.

Patent protection is a very long term play – the assets last 20 years. In some respects, patents reflect the company’s optimism and commitment to the future. Why would a company get a patent? Because they plan on being in business to use that asset during its 20 year life span.

Companies abandon patent applications for many reasons. Sometimes, the examiner finds prior art that kills the patent dead in its tracks, but most often it is a cost issue. Companies will continue fighting with the examiner and investing money into their patent because they see value, even if they have to amend their claims.

The patent value equation changed dramatically in the last couple months.

Companies are twice as likely to tell their patent counsel to abandon their patent applications lately, compared to historical averages.

For most companies, in my opinion, this reflects possibly two factors: the need to conserve cash and, more worrisome, possibly more pessimism about the future. A third option is that entrepreneurs are happy to have an excuse to cut a pointless expense.

Cash Conservation

Abandoning a patent application certainly conserves cash in the short run. The US average cost to pay an attorney to file a response to an examiner’s rejection is $4000. The raw data are available here from AIPLA (membership required). In a typical cadence, each patent application will require two to three responses filed per year, so keeping a patent application alive saves $8-12K/year in direct cash outlays.

I do not believe this is cash conservation. This is something different – and much more dangerous.

This reaction did not happen in 2008, during our last stock market crash and reset. Throughout all of that period, abandonments went up and down, but hovered at 12% for small entities and 6-7% for large. This is the same rate for most of 2019.

Then something changed – and it changed in a way we have never seen before.

I believe this change is a severe pessimism on all fronts.

Pessimism About The Future

Patents are inherently forward-looking. They are bets that a company’s technologies will be valuable in the future, and, for all practical purposes, patents are call options on technology.

Patents are inherently optimistic. The investment reflects the inventor’s belief that they will be successful in bringing their product to market, and competitors will pop up. Patents are the Big Stick that will protect the entrepreneur’s investment in their business.

Abandoning patents can signal that business owners are not as optimistic as they once were about their ideas. This signal could indicate that even the entrepreneur does not believe in their own ideas, and might be a leading indicator that the entrepreneur will pivot or even close down the enterprise.

Dry Powder

Previous economic downcycles have dumped lots of IP on the open market. In fact, the “industrialization” of IP occurred right after the dot-com era. Intellectual Ventures was formed out of the dust of the dot-com bubble. The term “patent trolls” was born from people trying to generate value from IP left over from the failed startups of that time.

If patents were valuable before the Corona virus, they will be even more valuable after. With companies abandoning their IP, this means that those that keep their IP alive will have an even better competitive advantage when the inevitable recovery happens. Quite simply, they will have IP protection when their competitors do not.

What does this mean for USPTO applicants? It means better, faster examination for those who keep their applications pending.

What does it mean for patent attorneys? The gravy train of patent prosecution is likely to dry up, and it will take years for the pipeline to be refilled with new applications. I don’t think there will be many tears shed for the fate of the patent attorneys.

About the graph:

The graph shows the abandon rate for small entities (less than 500 employees) and large entities. Universities, non-profits, and independent inventors are removed from this dataset.

USPTO rejections allow 6 months to respond. The labels reflect the last date available for response. In other words, the data labeled March 2020 reflect final and non-final rejections issued by the USPTO during September 2019. Note that March 2020 contains data for the first three weeks of March only.

The patent abandonment data are a lagging indicator. We do not see the effects of a decision to abandon a patent application until after the six month window to respond has ended. By all indicators, the data for April 2020 will be much worse than March 2020.

The raw data were compiled from AcclaimIP.

About the Author :

Russ Krajec is an accomplished author, inventor, and engineer. Russ is the author of “Investing In Patents” and the forth-coming book “Startup IP Strategy,” as well as countless blogs and articles. He is a registered patent attorney, having drafted nearly 1000 patent applications since passing the patent bar exam in 2000. Russ is a Certified Patent Valuation Analyst.

He is the CEO of BlueIron, which finances patents for startup companies. BlueIron finances pre-revenue startup companies with $50-100K investments to build out their patent portfolios.  For post-revenue companies, can do loans of $2-5M, using only your patents as collateral.

Russ holds a BS and MS in Mechanical Engineering from Rensselaer Polytechnic Institute and a JD from Denver University.

If you wish to speak to him for short call or analysis of your Patent related query, you can schedule an online meeting by clicking here. Alternatively, you can send an email on russ.krajec@blueironip.com with copy to Info@risikollp.com.

CORONA VIRUS VS DUTCH CONTRACTS

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Now that the world and The Netherlands are suffering under the Corona virus and the counter measures, problems occur with obligations originating from contracts.
When these obligations are not fulfilled (not entirely or only partly or too late), the creditor can ask the debtor to perform and or sue for damages.

If a debtor cannot perform because of the impact of the Corona virus measures, an appeal to force majeure will be invoked.

If an agreement contains a Force Majeure clause (Dutch: “overmacht”), the question is whether the Corona virus fits the definition of force majeure therein. Also, it can be that the parties on entering into the agreement referred to standard terms which usually contain a force majeure clause. 

Article 6:75 of the Dutch Civil Code defines force majeure. To successfully invoke force majeure, the shortcoming in the fulfillment is not due to the debtor’s fault or at his risk. Although Dutch law does not stipulate as a condition that performance has become impossible, an appeal to force majeure will only be permitted in exceptional cases in the event performance is still possible and or the impossibility was foreseeable at the time of contract conclusion.

The specific clauses and standard terms describing in which situation force majeure can occur, need to be taken into account too.

However, article 6:2 of the Dutch Civil Code provides that the creditor and the debtor should behave towards each other in conformity with the demands of ”reasonableness and fairness”(Dutch: “redelijkheid en billijkheid”). A rule in force between them by law, custom or legal act shall not apply, to the extent that it would be unacceptable under the circumstances based on standards of reasonableness and fairness as determined by the courts. 

Reasonableness and fairness standards were defined by the Dutch Supreme Court (HR 13 maart 1981, NJ 1981/635): “The question as to how the relationship of the parties is regulated in a written contract and whether this contract leaves a gap that needs to be filled, cannot be answered on the basis of a purely linguistic interpretation of the provisions of that contract. After all, the answer to that question is based on the meaning which parties could reasonably grant to these provisions in the given circumstances and what they could reasonably expect from each other in this respect. It may also be important to which social circles the parties belong and what legal knowledge can be expected from such parties.” (translated). This rule also applies to oral contracts.

Article 6: 258 of the Dutch Civil Code provides that at the request of one of the parties, the Court may even amend the consequences of an agreement, dissolve it in whole or in part, on the basis of unforeseen circumstances of such a nature that the other party cannot expect unaltered maintenance of the contract in accordance with standards of reasonableness and fairness. The amendment or dissolution can even be given retroactive effect. 

With these tools it may be possible to combat ugly consequences of the Corona virus measures for parties who chose Dutch law in their contracts, or to whom Dutch law is applicable. Since the Dutch Courts were only open for urgent measures until 7 March 2020, case law with regard to the Corona virus measures is not available yet.

The above tools should however be invoked out of Court first, preferably in a lawyers’s letter, before starting legal proceedings.

If you are worried about Dutch law or other contract(s) and need to send out a legal letter, please contact our Dutch Partner Office :

Mr. Arnold Hoegen Dijkhof 
Email – ac@hd-dutchlawyers.com
Tel – +31 20 462 40 70
Website – www.hd-dutchlawyers.com


Stay healthy!

With kind regards, yours sincerely, 

Mr. Arnold C. Hoegen Dijkhof, LL.M., Advocaat (Author)

Government of India looking for items related to COVID-19 from MSME sector

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MSME Department, Government of India is looking for MSME manufacturers or suppliers of items in the enclosed list related to use against COVID-19. 

Please refer to the below list of Medical Supplies (39 Items) and Auxiliary Supplies (61 Items) and send details of products you manufacture or supply or know any entity doing it, along with contact details to:

MSME- Development Institute, Ministry of MSME, Govt. of India
Kurla Andheri Road, Sakinaka,
Mumbai-400072
Tel.: +91-22-28576090/3091/7166
Fax.: +91-22-28578092
email : dcdi-mumbai@dcmsme.gov.in

Items List

  • A. MEDICAL SUPPLIES (39 ITEMS).
  • Ventilators
  • Alcohol based hand-rub
  • Face shield (eye, nose & mouth protection)
  • N95 Masks
  • Latex single use gloves (clinical)
  • Reusable vinyl / rubber gloves (cleaning)
  • Eye protection (visor / goggles)
  • Protective Gowns / Aprons
  • Disposable thermometers
  • UV tube light for sterilization
  • Medical masks (surgical / procedure)
  • Detergent / Disinfectant
  • Single use towels
  • Biohazard bags
  • Wheel Chair
  • Glucometer with strips
  • Medicine
  • IV Fluid – DNS
  • IV Fluid – Dextrose
  • Hard-frozen Gel Packs
  • Sample Collection Kit
  • Thermocool box / Ice-box
  • Stretcher
  • Thermal scanners
  • Batteries for thermal scanners
  • BP apparatus
  • IV Sets
  • IV Cannula
  • IV Stand
  • Ambulance
  • First aid
  • Medical Waste Incinerator
  • ICU Beds
  • Cardiac monitors
  • Syringe pumps
  • Portable x ray machines
  • Endotracheal tube
  • Suction tube
  • Oxygen cylinders

  • B. AUXILLARY SUPPLIES (62 ITEMS)
  • Soap
  • Rubb Hall Tents
  • Chairs/Benches
  • Tables/Desks
  • Printer
  • Computer
  • Extension Boards
  • Matches
  • Candles
  • ID for Patients
  • ID for volunteers
  • Flyer – information booklet
  • White board + markers
  • Rooms for Volunteers
  • Garbage bags, bins
  • Drinking Water+ Dispenser (4)
  • Cleaning items (Brooms)
  • Cleaning items (Mop)
  • Fire extinguisher
  • E Toilet
  • Genset / Back up
  • Whistle
  • Tool set – basic
  • Registration details – sticker/printer
  • Mattresses
  • Foldable Cots / Beds
  • Bed sheets
  • Pillows
  • Pillow Covers
  • Towels
  • Rubber Sheets
  • Blankets
  • Emergency Lamp
  • Food
  • Food Waste
  • Other Waste
  • Laundry (Detergents)
  • Refrigerator – smallest
  • Electrician / Plumber
  • Entertainment for inmates
  • Internet access
  • Tokens with number
  • Mosquito Repellent
  • Sanitary Pads
  • Diapers – kids
  • Steel Plates
  • Steel Glasses
  • Spoons
  • Jugs
  • Stove – Big
  • Large vessels
  • Buckets
  • Mugs
  • Tissue paper
  • Smaller bins
  • Paper
  • Pen
  • Stapler
  • Stapler Pins
  • Box file
  • Official Seal

Nation – Call for Proposal – Fighting COVID – 19

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Technology Development Board (website – http://tdb.gov.in/) a statutory body of Department of Science and Technology, Government of India, invites proposals applications from Indian companies and enterprises to address protection and home-based respiratory intervention for COVID – 19 patients. 

The proposal may include technologically innovative solution towards:

-Low cost masks which can capture virus from air and absorb respiratory droplets

-Cost effective Thermal Scanning

-Large area sanitization and sterilization (including electrostatic spray and Ultra Violet treatment for various available surfaces like glass, ceramic, wood, textile etc)

-Bioinformatics and Surveillance

-Rapid and Accurate Diagnosis kit (paper based and other point of care devices)

-AI and IOT based solution for contact-less entry

-Oxygenators and ventilators (Low cost and portable) Or

-any other related technology

The Board provides financial assistance by means of soft loans (up to 50% of project cost @ 5% simple interest per annum), Equity participation (up to a maximum of 25% of the project cost) or grant in exceptional cases, for the purpose of:- i) Encouraging the commercial application of indigenously developed technology; and ii) For adapting imported technology to wider domestic application. The proposal may indicate the desired mode of funding.

SUBMIT YOUR PROPOSAL HERE: http://www.e-techcom.tdb.gov.in/

CASE STUDY – PHARMACEUTICAL, NUTRACEUTICAL, HEALTHCARE & LIFE SCIENCE INDUSTRY

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In a world of competition and rapidly evolving environment, Pharmaceutical , Nutraceuticals & Healthcare companies must find ways to enhance shareholder value, increase efficiency, improve internal controls, contain costs and manage risk.

The rapid changes in the industry demands for unique approach to risk management to successfully achieve “Corporate Governance as well as Corporate Performance.”

Based on our industry experienced professionals and a tailored risk assessment. Our Risk Advisory Services & Strategic Advisory often play a key role in risk management process of a company. We believe that it is important that we understand the objectives of our clients and then help them create value for the company. We do this by helping clients understand the key drivers of value chain and then providing Strategic & financial customised advisory services.

PHARMA & RiSiKoOur Understanding of key issues

Pharma Sector is regulated on account of its social & economic significance. The government plays a major role by way of licensing laws, patent laws,  price regulations & plant approvals. Opening up of the new emerging market, change in economy and the advent of foreign players has changed the dynamics of this segment. Some of the key issues and challenges faced by the sector as enumerated below: Surviving Competition faced by Domestic bulk drugs industry due to cheap imports.

Managing working capital to improve cash flow, particularly relevant in times of “liquidity concerns”.

Price wars between regional and local Pharma companies are driving down prices, exerting pressure on margins.

Lowering costs through a continuing review of the cost base and development of lean manufacturing techniques.

– Working within the global framework to gain advantage from lower cost production and generate sales from these powerful markets.

Developing a strategy that enables continued growth within a defined strategic plan and a clear understanding of exit options.

Continuing to develop Intellectual Property to maintain a competitive advantage based on our knowledge economy and to protect created IP.

Optimising the tax position through appropriate use of tax planning arrangements and incentives such as R&D tax credits.

Managing pensions and benefits to enhance the employment proposition at the most appropriate cost.

Developing the governance procedures that are right for the business, its risks and locations.

Developing the Internal Control & Anti Fraud Control to monitor the performance of Overseas Companies & Distribution Channels

Managing balance between “Corporate Governance & Corporate Performance” Integration of Culture , Ethics & Controls in Takeover or acquisition transactions

Our involvement in manufacturing & Pharma stems from a first class client base that enables us to keep a regular contact with the issues in the industry. We then build on this platform by meeting other manufacturing companies and discussing their issues and working with key players in the industry. Our sectoral experience accompanied by international risk advisory practices, enables us to work around solutions that add value to the clients.

We use this knowledge to support our core services and consider new and innovative ways we can help our clients achieve their objectives.We strongly believe that all that we do should be designed to add value to our clients.

PHARMA & RiSiKoOur Strategic Solution to Industry

RiSiKo Consulting LLP is a business consulting and advisory firm, specializing in risk management, turnaround strategies and scaling-up family managed businesses. The company caters to clients across industries and business environments within India, Dubai and USA.

Our team of professionals offer experience & deep industry expertise in areas of Strategic & Risk Advisory Services. We offers following Customized Advisory solutions to Pharmaceutical, Healthcare & Life Science industry: –

HOW WE CAN HELP YOU ?
If you would like further information about this publication or our wide range of services please visit our website or contact RiSiKo office to speak to Pharma Industry Expert: Phone : +91-22-22816486 , Email : enquiry@risikollp.com  or info@risikollp.com

DUTCH TAX BLACKLIST UPDATED

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DUTCH BLACKLIST UPDATED

As of 1 January 2019 , The Netherlands has a list of countries with a “too low tax rate” (“the blacklist”). Apart from this Dutch list there is the EU-blacklist. The Dutch and the EU blacklists are used with three anti-tax evasion measures.

The first measure is aimed at avoiding companies assign movable assets to a country on this blacklist. This is the so called CFC-measure which applies as of January 2019. Furthermore, the blacklist will be used for the source tax on interest and royalties, applicable as of 1 January 2021. Royalty and interest payments to countries on the blacklist will be subject to a withholding tax of 21,7%. This is to avoid that The Netherlands is being used for transfer activities to countries that levy little or no tax. The threshold is 9%. Moreover, the Dutch Tax Authorities will not enter into Tax rulings concerning transactions with companies that are established in the countries which are on the blacklist. The blacklist is updated annually.

This year Barbados and Turkmenistan were added to the blacklist. It concerns countries without a corporate tax or with a corporate tax rate of less than 9%. Belize, Kuwait, Qatar and Saudi-Arabia have been deleted from the blacklist which has just been published. The blacklisted countries on the list are now:

01. Anguilla,

02. Bahama’s,

03. Bahrein,

04. Barbados,

05. Bermuda,

06. British Virgin Islands,

07. Guernsey,

08. Isle of Man,

09. Jersey,

10. Cayman Islands,

11. Turkmenistan,

12. Turks- and Caicos Islands,

13. Vanuatu and

14. The United Arab Emirates.

Barbados is added to the list because the corporate (profit) tax rate has been lowered to under 9% as of January 1, 2019. Turkmenistan is added because further analysis shows that the generally applicable profit tax rate is not 20% but 8%. For Saudi Arabia, Kuwait, Qatar and Belize, on the other hand, further analysis shows that local taxes correspond to a profit tax with a rate of at least 9%.

The tax avoidance measures will also apply to countries that are on the EU list (see https://www.consilium.europa.eu/en/policies/eu-list-of-non-cooperative-jurisdictions/ ) and are not already on the Dutch blacklist.

The countries on the EU blacklist (as of 14 November 2019) are 

01. American Samoa,

02. Samoa,

03. US Virgin Islands,

04. Fiji,

05. Guam,

06. Oman,

07. Trinidad and Tobago,

08. Vanuatu.

The measures will therefore apply to 21 countries in total.

For more details about the Author – Our Netharlands Network office i.e. Arcanum Management & Company Services B.V. i.e. https://www.arcanum.amsterdam/management-and-company-services

For further details on this article , please get in touch with us on email at Info@risikollp.comenquiry@risikollp.com or call India Helpdesk Tel. +91-22-28816486 or fill up the enquiry page on our website so we can get in touch with you.

MOVING TO HOLLAND IN THE FRAMEWORK OF BREXIT? …….YES!

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More and more companies are established in The Netherlands as a result of Brexit.

Our Netharlands Network office i.e. Arcanum Management & Company Services B.V. is glad to lend a helping hand!

Now, there are in total 140 “brexit companies” says the Netherlands Foreign Investment Agency (“NFIA”). According to the NFIA (source: https://investinholland.com/news/uncertainty-of-brexit-remains-more-companies-choose-the-netherlands/ ):

“Media companies Discovery and Ridley Scott, credit rating agency AMBest and Life Sciences & Health manufacturer Shionogi were amongst the companies choosing the Netherlands because of Brexit. Together, these 140 companies expect to create more than 4,200 direct jobs and 375 million euros in investments in the first three years.”

“The 78 companies that opted for the Netherlands last year because of Brexit are an important part of the 2019 annual results of Invest in Holland. In total of 397 international companies chose to move to or expand in the Netherlands last year. These companies expect to create more than 14,000 direct jobs and invest 4.3 billion euros in the first three years.”

Why choose Holland?

According to the NFIA:

“Ranked No. 4 in the world by Forbes’ “Best Countries for Business”, Holland is truly a world-class business destination. Holland’s strategic location at Europe’s front door provides the perfect springboard into the European market—with access to 95% of Europe’s most lucrative consumer markets within 24 hours of Amsterdam or Rotterdam. Add to that Holland’s supportive corporate tax structure, highly educated, multilingual workforce, and superior logistics and technology infrastructure and it’s no wonder so many multinational businesses—from small and mid-sized to Fortune 500 leaders—have chosen the Netherlands as their gateway to Europe.”

What can Arcanum Management & Company Services do for you?

We are proud to be able to provide the following services at reasonable and predictable fees.

-Incorporation: we incorporate Dutch entities like BV, NV, Foundation, Co-op, Limited partnership.
-Domciliation: we provide a registered office address at Amsterdam.
-Management: we provide experienced directors and take care of the day to day correspondence, board and shareholder meetings, maintenance and custody of all corporate records.
-Administration: we take care of the bookkeeping and annual accounts, registration and filing with the Tax authorities and the Chamber of Commerce, and of the VAT & Corporate Income Tax returns. 

See also https://www.arcanum.amsterdam/management-and-company-services

Make Arcanum your service provider and friend! You will not regret it.

Alternatively, For further details on this, you can also get in touch with us on email at Info@risikollp.comenquiry@risikollp.com or call India Helpdesk Tel. +91-22-28816486 or fill up the enquiry page on our website, so we can get in touch with you.

TDS Rate Chart For Financial year 2019-20 and Financial year 2020-21

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Finance Minister has presented Union Finance Budget on 01st February 2020. Vide the Budget FM has made various changes in TDS provisions and Introduces two New TDS Sections i.e. Section 194K and Section 194O which provides TDS on Mutual Fund Income and TDS on E-Commerce Transactions. There were also changes in few existing sections of TDS which includes amendment in Section 194J by which TDS on Technical Services been reduced to 2%. Post these changes some of our readers has asked us to come up with a TDS Chart applicable for Financial Year 2020-21. Hence, here we come up with TDS rate chart for Assessment Year 2020-21 (Financial Year 2019-20) and Assessment Year   2021-22 (Financial Year 2020-21).

TDS Rate Chart For Assessment year 2020-21 and Assessment year 2021-22:

ParticularsTDS Rates(in %)
(AY 2020-21)
TDS Rates(in %)
 (AY 2021-22)
1. In the case of a person other than a company
1.1 where the person is resident in India-
Section 192: Payment of salaryNormal Slab RateNormal Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee.

(Monetary Limit – Rs 50,000)
1010
Section 193: Interest on securities
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act;1010
b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder;1010
c) any security of the Central or State Government;
[i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018]

(Monetary Limit – Rs 10,000)
1010
d) interest on any other security1010
Section 194A: Income by way of interest other than “Interest on securities”

(Monetary Limit – Rs 40,000)
1010
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort 

(Monetary Limit – Rs 10,000)
3030
Section 194BB: Income by way of winnings from horse races 

(Monetary Limit – Rs 10,000)
3030
Section 194C: Payment to contractor/sub-contractor 

(Monetary Limit – Rs 30,000 per contract or Rs 1,00,000 for aggregate amount during the year)
a) HUF/Individuals11
b) Others22
Section 194D: Insurance commission

(Monetary Limit – Rs 15,000)
55
Section 194DA: Payment in respect of life insurance policy w.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out

(Monetary Limit – Rs 1,00,000)
55
Section 194EE: Payment in respect of deposit under National Savings scheme

(Monetary Limit – Rs 2,500)
1010
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India2020
Section 194G: Commission, etc., on sale of lottery tickets

(Monetary Limit – Rs 15,000)
55
Section 194H: Commission or brokerage

(Monetary Limit – Rs 15,000)
55
Section 194-I: Rent

(Monetary Limit – Rs 2,40,000)
a) Plant & Machinery22
b) Land or building or furniture or fitting1010
Section 194-IA: Payment on transfer of certain immovable property other than agricultural land

(Monetary Limit – Consideration exceeding Rs 50,00,000)
11
Section 194-IB: Payment of rent by individual or HUF not liable to tax audit

(Monetary Limit – Rent for the month or part of the month exceeds Rs 50,000)

Note: This provision is applicable from June 1, 2017
55
Section 194-IC: Payment of monetary consideration under Joint Development Agreements1010
Section 194J: Payment for fees for Technical services, Professional services or royalty etc.

(Monetary Limit –Rs 30,000 p.a)
a)  Fee for technical services102
(w.e.f. 01/04/2020)
b)  Fee in other all cases as per Section 194J

Note: With effect from June 1, 2017 the rate of TDS would be 2% in case of payee engaged in business of operation of call center.
1010
Section 194K: Payment of any income in respect ofa) Units of a Mutual Fund as per Section 10(23D)b) Units from the administratorc) Units from specified company

(This Section is inserted by Finance Act, 2020 which is applicable from 01/04/2020)
N.A.10
Section 194LA: Payment of compensation on acquisition of certain immovable property

(Monetary Limit –Rs 2,50,000 p.a.)

Note: With effect from April 1, 2017, no deduction of tax shall be made on any payment which is exempt from levy of income-tax under Right to Fair Compensation Act, 2013.
1010
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders.1010
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]1010
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA)25% in case of Individual or HUF
30% in case of other resident person
25% in case of Individual or HUF
30% in case of other resident person
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.Tax shall be deducted under section 194M with effect from 1/09/2019 when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh.55
Section 194N: Cash withdrawal in excess of Rs. 1 crore during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office(with effect from 01/09/2019)22
Section 194-O: Applicable for E-Commerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform.

(This Section is inserted by Finance Act, 2020 which is applicable from 01/04/2020)
N.A.1
1.2 where the person is not resident in India*-
Section 192: Payment of SalaryNormal Slab RateNormal Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee.

(Monetary Limit – Rs 50,000)
10.410.40
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort

(Monetary Limit – Rs 10,000)
31.2031.20
Section 194BB: Income by way of winnings from horse races

(Monetary Limit – Rs 10,000)
31.2031.20
Section 194E: Payment to non-resident sportsmen/sports association20.8020.80
Section 194EE: Payment in respect of deposits under National Savings Scheme.

(Monetary Limit – Rs 2,500)
10.410.4
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India20.8020.80
Section 194G: Commission, etc., on sale of lottery tickets

(Monetary Limit – Rs 15,000)
5.205.20
Section 194LB: Payment of interest on infrastructure debt fund5.205.20
Section 194LBA(2): Business trust shall deduct tax while distributing any interest income received or receivable by it from a SPV to its unit holders.5.205.20
Section 194LBA(3): Business trust shall deduct tax while distributing any income received from renting or leasing or letting out any real estate asset owned directly by it to its unit holders.31.2031.20
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)].31.2031.20
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA)31.2031.20
Section 194LC: Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond)

Note: Now TDS at concessional rate of 5% will be applicable for borrowings made after April 1, 2020 but before July 1, 2023.
5.205.20
Section 194LD: Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor

Note: Now TDS at concessional rate of 5% will be applicable for borrowings made after April 1, 2020 but before July 1, 2023.
5.205.20
Section 195: Payment of any other sum to a Non-resident
a) Income in respect of investment made by a Non-resident Indian Citizen20.8020.80
b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen10.4010.40
c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 11210.4010.40
d) Income by way of long-term capital gains as referred to in Section 112A10.4010.40
e) Income by way of short-term capital gains referred to in Section 111A15.6015.60
f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses 10(33), 10(36) and 112A20.8020.80
g) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC)20.8020.80
h) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India10.4010.40
i) Income by way of royalty [not being royalty of the nature referred to point g) above E] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy10.4010.40
j) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy10.4010.40
k) Any other income31.2031.20
Section 196B: Income from units (including long-term capital gain on transfer of such units) to an offshore fund10.4010.40
Section 196C: Income from foreign currency bonds or GDR of an Indian company (including long-term capital gain on transfer of such bonds or GDR)10.4010.40
Section 196D: Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities)20.8020.80
2. In the case of a company-
2.1 where the company is a domestic company-
Section 193: Interest on securities
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act;1010
b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder;1010
c) any security of the Central or State Government;[i.e. 8% Saving (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018]

(Monetary Limit – Rs 10,000)
1010
d) interest on any other security1010
Section 194: Dividend10
(Monetary Limit – Rs 2,500)
10
(Monetary Limit – Rs 5,000)(w.e.f. 01/04/2020)
Section 194A: Income by way of interest other than “Interest on securities”

(Monetary Limit – Rs 40,000)
1010
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort

(Monetary Limit – Rs 10,000)
3030
Section 194BB: Income by way of winnings from horse races

(Monetary Limit – Rs 10,000)
3030
Section 194C: Payment to contractor/sub-contractor

(Monetary Limit – Rs 30,000 per contract or Rs 1,00,000 for aggregate amount during the year)
a) HUF/Individuals11
b) Others22
Section 194D: Insurance commission

(Monetary Limit – Rs 15,000)
1010
Section 194DA: Payment in respect of life insurance policy w.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out

(Monetary Limit – Rs 1,00,000)
55
Section 194EE: Payment in respect of deposit under National Savings scheme

(Monetary Limit – Rs 2,500)
1010
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India2020
Section 194G: Commission, etc., on sale of lottery tickets

(Monetary Limit – Rs 15,000)
55
Section 194H: Commission or brokerage

(Monetary Limit – Rs 15,000)
55
Section 194-I: Rent

(Monetary Limit – Rs 2,40,000)
a) Plant & Machinery22
b) Land or building or furniture or fitting10

Initiatives for Registration of MSME

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1) MSME SAMADHAAN Portal

Description: MSME Delayed Payment Portal – MSME Samadhaan (https://samadhaan.msme.gov.in) has been launched empowering micro and small entrepreneurs across the country to directly register their cases relating to delayed payments by Central Ministries/Departments/CPSEs/ State Governments. Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 contains provisions to deal with cases of delayed payment to Micro and Small Enterprises (MSEs). As per the provisions, the buyer is liable to pay compound interest with monthly rests to the supplier on the amount at three times of the bank rate notified by Reserve Bank in case he does not make payment to the supplier for the supplies of goods or services within 45 days of the day of acceptance of the goods/service or the deemed day of acceptance.

Who are eligible: Any Micro or Small Enterprise.

2) Udyog Aadhaar Memorandum (UAM)

A one-page simple registration form for online filing of UAM has been introduced which replaces the filing of Entrepreneur’s Memorandum Part I&II. The filing of UAM can be done on https://udyogaadhaar.gov.in.

The salient features of Udyog Aadhaar are: Registration is online and user-friendly ,UAM can be filed on self-declaration basis , No documentation required , No Fee for filing , File more than one Udyog Aadhaar with same Aadhaar Number.

For further details on eligibility and how to apply , please get in touch with us on email at Info@risikollp.comenquiry@risikollp.com or call India MSME Helpdesk Tel. +91-22-28816486 or fill up the enquiry page on our website so we can get in touch with you.

Procurement and Marketing Support to MSMEs

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Procurement and Marketing Support (PMS) Scheme

Description: PMS Scheme has been revamped to enhance the marketability of products and services in the MSME sector. The objective is to promote new market access initiatives, create awareness and educate the MSMEs about various marketing relevant topics and development of marketability.

Nature of Assistance: Assistance available for following scheme components (A) Participation of Individual MSEs in domestic trade fairs/exhibition across the country (B) Organizing/ Participation in trade fairs/exhibitions (Regional/ National/International) by the Ministry/ Office of DC (MSME)/Government organizations (C) Capacity building of MSMEs in modern packaging technique (D) Development of Marketing Haats (E) International/National Workshops/ Seminars (F) Vendor Development Programmes: State Level Vendor Development Programmes (SLVDP) and National Level Vender Development Programme (NLVDP) (G) Awareness Programmes.

Who can apply: Individual Manufacturing/ Service MSE.

How to apply: Eligible MSEs may submit their application online at https://my.msme.gov.in or system in place.

Procurement from Micro and Small Enterprises (MSEs)

Description: The Public Procurement Policy for Micro and Small Enterprises (MSEs) has mandated that every Central Ministry/ Department/PSU shall set an annual goal of minimum 20 per cent of the total annual purchases from the products or services produced or rendered by MSEs. However, the government recently revised the order making it compulsory for all CPSEs to procure 25% from MSEs instead of 20% of their total purchases. Out of the total annual procurement from Micro and Small Enterprises, 3 per cent from within the target shall be earmarked for procurement from Micro and Small Enterprises owned by women. A sub-target of 4% out of annual procurement is earmarked for procurement from MSEs owned by SC/ ST Entrepreneurs. MSME Sambandh portal has been launched to monitor the progress of procurement from MSEs including MSEs owned by SC/ST and women.

Who are eligible: Any Micro or Small Enterprise.

For further details on eligibility and how to apply , please get in touch with us on email at Info@risikollp.comenquiry@risikollp.com or call India MSME Helpdesk Tel. +91-22-28816486 or fill up the enquiry page on our website so we can get in touch with you.