5 things you must know about income tax return for FY2019-20 FAQs on ITR Filing

Keeping in view the challenges faced by individual taxpayers in meeting the statutory and regulatory compliances owing to the current pandemic, the government has recently extended income tax return (ITR) filing deadline for FY2019-20 by a month till December 31. The due date of furnishing ITRs for taxpayers whose accounts need to be audited has also been extended till January 31, 2021.

If you haven’t filed your ITR yet, then you can relax a bit as the government has given you some more time to file your return. However, if you are still wondering how to file your ITR or if you have some queries related to tax return, you can refer to these FAQs on ITR filing, which will help resolve some of your queries.

1. What are the modes for filing of return of income?

Return of income can be filed in paper mode or e-filing mode. If the return of income is filed through electronic mode, then the assessee has the following three options:

(a) E-filing using a Digital Signature (DSC);
(b) E-filing without a Digital Signature; or
(c) E-filing under Electronic Verification Code (EVC).

If the return of income is filed using a DSC or under EVC, then there is no requirement of sending the signed copy, ITR-V (i.e., acknowledgement of return filed electronically) to Bangalore CPC. However, if the return is filed without using DSC or without EVC, the assessee shall send the signed copy of ITR V on the following address within 120 days of uploading the return either by ordinary post or by speed post only:

Income Tax Department – CPC, Post Bag No.-1, Electronic City Post Office, Bangalore -560100, Karnataka

2. When is it mandatory to file the return of income for an individual or HUF?

Income exceeding the threshold limit

If the income of an individual or HUF (resident or non-resident), before claiming the following deductions or exemptions, exceeds the maximum exemption limit, then him/it must file the return of income:

(a) Exemption under Section 10(38)6;
(b) Deduction under Section 10A,10B,10BA;
(c) Exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB7; and
(d) Deduction under Section 80C to 80U.

Assets outside India

An individual, being a resident and ordinary resident in India, shall file his return of Income, even if his income does not exceed the maximum exemption limit, if he:

(a) Holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India;
(b) Has signing authority in any account located outside India; and
(c) Is a beneficiary of any asset (including any financial interest in any entity) located outside India.

Seventh Proviso to Section 139(1)

Filing of return of income is mandatory irrespective of the amount of gross total income if an assessee’s case is covered by the seventh proviso to Section 139(1). This provision requires every person, who is otherwise not required to file the return due to the reason that his income does not exceed the maximum exemption limit, to file the return of income if during the previous year he has:

(a) deposited more than Rs 1 crore in one or more current account maintained with a bank or a co-operative bank;
(b) incurred more than Rs 2 lakh for himself or any other person for travel to a foreign country; or
(c) incurred more than Rs 1 lakh towards payment of electricity bill.

3. Whether individuals are required to mention details of assets and liabilities in ITR-1 (Sahaj)?

Individuals/HUFs are required to furnish details of assets and liabilities at year-end only when their taxable income exceeds Rs 50 lakh. The Schedule AL, wherein the details of assets and liabilities are to be furnished, is available only in ITR-2 and ITR-3. Thus, the individual or a HUF who has to report the details of assets and liabilities has to opt for filing of return in ITR-2 or ITR-3.

4. My income is Rs 60 lakh. What details about assets and liabilities do I need to mention in income-tax return?

Schedule AL requires individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs 50 lakh. If a taxpayer is required to provide information in this Schedule, he shall provide the details of cost of immovable property, jewellery, vehicles, shares, bank and cash balance, etc., at the year-end. Further, the taxpayer is also required to disclose the address of the immovable property and description of movable assets.

“If a taxpayer has acquired assets by way of gift, Will or any other mode specified under section 49(1) of the Income-tax Act, 1961, the asset shall be reported at the cost at which the previous owner has acquired it as increased by the cost of improvement incurred by such previous owner or by the taxpayer, as the case may be. If the cost of acquisition of the previous owner can’t be determined, the value may be estimated at the circle rate or market value of assets, as the case may be,” says CA Naveen Wadhwa, DGM, Taxmann.com.

5. Who are required to file return of income electronically?

For the Assessment Year 2020-21, every taxpayer has to file Income-tax return electronically except a super senior citizen (whose age is 80 years or above during the previous year 2019-20) who furnishes the return either in ITR-1 or ITR-4.

The various options for filing of a return have been enumerated below.

Source: Professional Updates

Finance ministry clarifies on income tax returns filing deadline extention for corportates

The finance ministry has notified the extended due date for filing income tax returns (ITR) for the 2019-20 fiscal.

While the deadline for filing ITR by individual taxpayers has been extended by a month till December 31, the due date for those taxpayers whose accounts need to be audited has been extended to January 31, 2021.

Nangia Andersen LLP Partner Sandeep Jhunjhunwala said although the government had announced the extension of ITR and audit report filing due dates last week, but there was an ambiguity if such extension is available for corporates to whom tax audit and transfer pricing reporting was not applicable, for instance, foreign companies having no associated enterprise in India and yet earning income from Indian sources.

“Today’s notification has cleared the air by extending the due dates for such entities as well.

“Consequently, all Indian and foreign companies who are not liable to obtain a tax audit or do not maintain transfer pricing documents can now file ITR by January 31, 2021, whereas individuals not liable to tax audit will have to file their tax returns by December 31, 2020,” Jhunjhunwala said.

The government had earlier in May extended various due dates for filing ITRs for the 2019-20 fiscal from July 31 to November 30, to give compliance relief to taxpayers due to the COVID-19 pandemic.

Source: Professional Updates

How much income tax private sectors employees can save

The Income Tax Department has extended the income tax exemption available under the LTC cash voucher scheme to employees of state governments, state-owned enterprises and private sector. The government had on October 12 allowed payment of cash allowance equivalent to LTC fare to Central Government employees subject to fulfilment of certain conditions. The payment of cash allowance is subject to maximum of ₹36,000 per person as Deemed LTC round trip fare subject to fulfilment of prescribed conditions.

Here are 5 things to know about the income tax exemption on LTC cash voucher scheme:

1) This clarification provides the exemption for private sector employees who are eligible to claim the leave travel allowance, says Aarti Raote, Partner, Deloitte. Unfortunately, employees who have opted for the simplified tax regime will not be able to take the benefit of the exemption, she says, adding that “this is a welcome step by the government given the festive season is just round the corner.”

2) To avail this tax benefit, the employee is required to spend three times the eligible amount on the purchase of goods/services which carry a GST rate of not less than 12% from GST registered vendors/service providers through digital mode.

An employee who spends less than three times of the deemed LTC fare under the cash voucher scheme shall not be entitled to receive full amount of deemed LTC fare and the related income-tax exemption and the amount of both shall be reduced proportionately.

Explaining further the CBDT said if the deemed LTC Fare is ₹80,000 ( ₹20,000 x 4), then the amount to be spent under the scheme is ₹2,40,000. Thus, if an employee spends ₹2,40,000 or above on specified expenditure, he shall be entitled for full deemed LTC fare and the related income-tax exemption. However, if the employee spends ₹1,80,000 only, then he shall be entitled for 75 per cent (i.e. Rs. 60,000) of deemed LTC fare and the related income-tax exemption. In case the employee already received ₹80,000 from employer in advance, he has to refund ₹20,000 to the employer as he could spend only 75 per cent of the required amount

3) The maximum deemed LTC fare per person is Rs. 36,000, which would entail a maximum deduction of Rs. 144,000 for a person with a family of four, says Sraswathi Kasturirangan, Partner, Deloitte. This could translate to a tax benefit around Rs. 61,556 at the maximum marginal rate of 42.744%, she adds.

4) “The expenditure could be incurred during the period from the 12th of October, 2020 to 31st of March, 2021. Suitable vouchers indicating the GST number and the amount of GST paid is required to be submitted. Where a lower amount of expenditure is incurred, the exemption shall be available in a proportionate manner,” says Sraswathi Kasturirangan.

“Employees could consider the expenditure on purchase of white goods such as refrigerators, washing machines, mobiles, two wheelers/ four wheelers other than electric vehicles for this purpose since the GST rate for these would meet the above criteria. Further the GST rates for most services would fall under this category,” she adds.

5) The employees have to exercise an option for the deemed LTC fare in lieu of the applicable LTC in the Block year 2018-21.

Source: Professional Updates

How to file Income Tax Returns

In this article, we will discuss in detail about the documents needed for filing IT Returns in India.

1.  Select the applicable ITR Form.

Taxpayers have to choose the ITR form applicable to them for the A.Y. 2020-21 considering their heads of income & threshold limit of income. If you select an incorrect form, it may be rejected & may be treated as if no return has been filed. Consequently, penalty provisions may be attracted for late filing unless it is rectified before the end of assessment year.

ITR-1 (SAHAJ) :- For Resident Individual having Income from Salary/Pension, One House Property & from other sources( excluding winning from lottery & from Race Horses) and Agricultural Income upto Rs. 5000. But following cannot use. ITR 1 form :-

  • Total Income exceeding Rs. 50 Lakh.
  • If the Assessee is a Director in a company.
  • Have made any investments in unlisted equity shares of a Company at anytime during the previous year.
  • Has any assets including financial interest in any entity located outside India
  • Have signing authority in any account located outside India.
  • In cases where loss is brought forward in house property from previous years.
  • Having any foreign assets or foreign income.

ITR-2 :-  For Individuals & HUFs not having Income from Profits& gains of Business/Profession.

ITR -3 :- ForIndividuals & HUFs  having Income from Profits&gains of Business/Profession.

ITR-4 (SUGAM) :- For Individuals & HUFs (other than LLPs), being a Resident having total income up to Rs. 50 lakhs and having income from Business/Profession which is computed on presumptive basis  u/s 44AD, 44ADA, 44AE but not for Individual who is either a Director in company, or has invested in unlisted equity shares.

ITR-5 :- For Firms, LLPs, AOPs, BOIs, Artificial Juridical Person(AJP), Estate of deceased, Estate of insolvent, Business trust & Investment Fund.

ITR-6 :- For Companies other than companies claiming exemption u/s 11 of IT Act, 1961 i.e. for charitable purposes.

ITR-7 :- For persons including companies required to furnish return u/s 139(4A) or 139(4B) or 139(4C) or 139(4D). Any Person who derives income from property held under trust or other legal obligations wholly or partly from charitable or religious purposes & partly for voluntary contributions, assessable as representative assessee.

2.  Prepare the statements of accounts i.e. B/S & P/L in the respective format prescribed in the return which is very similar to format under schedule VI of the Companies act, 1956.

3. Compute the income under each source first and than each various head of income and arrive Total Income and ascertain Tax liability / refund as the case may be and get it checked with a tax preparer.

4. Collect the necessary information to fill the return.

List Of Additional Information to be kept ready for Form ITR-1

Name, Address, Pan No, Mobile No, Pin Code of the Assessee.

  1. Area/Locality
  2. Alternate Mobile Number & Email Address.
  3. Aadhaar number / Aadhaar Enrolment ID.
  4. Return U/S 139(1) i.e. if income exceeds taxable limit of Rs. 250000 / 300000/  500000 for Normal Assessee, Senior Citizen super senior citizen as applicable else complies with any one or more of the following condition.
  • Whether occupied one house property or
  • Whether owner/lessee of motor vehicle or
  • Whether incurred expenditure for himself or for any other person for travel to a foreign country.
  • Whether he is a holder of a credit card issued by any institution.
  • Whether he is a member of a club and entrance fee exceeds Rs. 25000 or more.

5. Whether he has incurred any expenditure on consumption of electricity exceeding Rs. 100000 in a year (Form No.2 & others)

6. Whether he has incurred any expenditure on consumption of electricity exceeding Rs. 100000 in a year (Form No.2 & others)

7. Whether he has incurred any expenditure on consumption of electricity exceeding Rs. 100000 in a year (Form No.2 & others)

8. Income from house property whether (Form No.2 & others):-

  • self occupied
  • let out or deemed let out.
  • Corporation tax paid
  • Interest payable on capital borrowed from bank/any institution upto Rs. 200000
  • Arrear rent received during the year less 30%

9. Other Information:-
Details of all bank accounts held in India at any time during the previous year.
IFS code of the bank, name of the bank, account number
Minimum one account should be selected for refund credit
IT details of advance tax and self assessment tax payments
– BSR Code
– Date of deposit
– Serial number of challan
– Tax paid

TDS / TCS details:-

 Tan of deductor / collector

 Pan / Aadhar number of the tenant

 Name of deductor / collector / tenant

Gross Payment / receipt which is subject to tax deduction / collection

Year of Tax deduction / collection

Tax Deducted / collected

TDS / TCS credit claimed this year



Fathers name

Pan No:

Capacity in which Signing


Two ways of filing

1. Electronically on E-filing web portal of Income tax Department

-Digitally Signing the verification part or

-Authenticating by way of Electronic Verification Code(EVC) or

-By sending duly signed paper Form ITR –V to CPC within 120 days of filing

2. In paper form at the designated office of Income Tax Department alon with duly signed ITR V

10. Documents :

  • Form 16 (salary certificate) & 16A
  • 26AS
  • Proof of house rent paid
  • Proof of claiming exemption u/s 10 if any(all forms)
  • Receipt for corporation tax paid.

11. To claim deduction under chapter VI A, details &information:-

  • LIC
  • PPF
  • Tuition fees, education fees
  • Mediclaim amount paid
  • payment to National pension scheme
  • House rent paid
  • Donation under section 80G
  • Medical expenses for specified diseases under section 80DDB
  • long term investment in bonds up to rRs.20,000
  • Money spent for a disabled person by a resident under section 80U
  • Interest on loan for higher education for himself or relative under section 80E
  • Interest on loan for residential house up to Rs.150000 under section 80EEA and eligibility information
  • Interest for electric vehicle loan upto Rs.150000 Under Section 80EEB

In case of revised return original return filing acknowledgement slip and date. 

 In case of Return under………………………….Notice- Unique No, / Document Identification Number DIN, date of notice

12. Documents :-

  • LIC receipt
  • PPF passbook
  • Receipt for school fee
  • Receipt paid for NPS
  • Donation receipt and appeal, if any with PAN, Reference number and exception grant number under section 80G of Donee
  • Evidence for medical expenses received form insurance company
  • Loan schedule for repayments on education loan and residential house
  • rent receipt to claim deduction under section 80GG
    In case of other deduction- proof of payment

 Additional information forForm No. 2

  1. Residential status country of residence and TIN number
    Specially in case of non- resident – whether citizen of India or POI holder  Total period of stay in India in the previous year.
  2. In case of filing by representative Assessee-  Name, capacity, Address, PAN number 
  3. If the Assessee is  Director in a company –Name of the company, PAN No: DIN No,  whether listed/ unlisted 
  4. Whether held any share of unlisted Company, if yes – Opening balance, number of shares purchase, number of shares, amount, transfe of shares ………………………………
  5. Salary – Name of the employer

New procedure for registration, approval, etc. of certain entities deferred to 1st October, 2020

In view of the unprecedented humanitarian and economic crisis, the CBDT has decided that the implementation of new procedure for approval/ registration/notification of certain entities shall be deferred to 1st October, 2020. Accordingly, the entities approved/ registered/ notified under section 10(23C), 12AA, 35 and 80G of the Income-tax Act, 1961 (the Act) would be required to file intimation within three months from 1st October, 2020, i.e, by 31st December, 2020. Further, the amended procedure for approval/ registration/ notification of new entities shall also apply from 1st  October, 2020.

The necessary legislative amendments in this regard shall be proposed in due course.

Various representations were received in the finance ministry expressing concerns over the implementation of the new procedure from 1st June, 2020 due to the outbreak of novel corona virus (COVID-19) and consequent lockdown. There have been a number of requests to defer the applicability of the new procedure.


It may be noted that The Finance Act, 2020 rationalized the procedure relating to approval/ registration/ notification of certain entities referred to in sections 10(23C), 12AA, 35 and 80G of the Act, with effect from 1st June, 2020. As per the new procedure, the entities already approved/ registered/ notified under these sections would be required to file intimation within three months, i.e, by 31st August, 2020. Further, the procedure for approval/ registration/ notification of new entities has also been rationalized with effect from 1st June, 2020.

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Source URL :  https://pib.gov.in/PressReleasePage.aspx?PRID=1622387


Why Questioning Forms an Important Part of Internal Audit?

There is a lot that goes into the process of an audit. The auditor acquires and analyses a lot of things before giving out a final report. Apart from looking into the accounts, the client interview also plays a valuable role in the process. An auditor in Kolkata interviews some of the top position holders in the company for insights. But this is not received very well. Auditors are often discouraged from asking too many questions. It is believed to ruin the relationship between the client and the auditor. But is this true?

chartered accountant Kolkata

Questioning Leads to Solution

Well, the reality is far from this statement. Questions are fundamental in an internal audit. The more questions the auditor asks you, the better he or she will understand your company. The auditor is an expert in the field, no doubt. But every company works differently, and the auditor will need real and honest inputs from your side to decode discrepancies if any. You shouldn’t challenge the expertise of an auditor if they ask a lot of questions. Every question is important. The thought of an issue being stupid or irrelevant shouldn’t cross your mind. If, in any case, some items make you uncomfortable, be open about how you feel.

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Another tip for you is that when you are answering questions, do not lie. Auditors in Kolkata will know when you lie. They have many tricks rolled up their sleeves to determine whether you are telling the truth. Being dishonest will only put you in trouble. A small mistake will harm your reputation, which is the last thing you want during an audit. Many clients also discover new threads of thought when they are answering questions. Some questions help you in looking at some shortcomings from a different perspective, which makes a massive difference in the long run.

An auditor is strongly familiar to the industry but that strength arises from questioning. As it grants you the option to attain adequate knowledge. So, it is always wise for an auditor to analyse data, interview clients to evaluate the situations and facilitate changes. Questioning makes the process smooth and perfect.



Long Term Goals That Will Boost Your Small-Scale Business

Small businesses are flourishing in the Indian economy today. You might be experiencing growth or activity might be slow, setting the right goals this year might be the extra push your business needs to establish itself. It is essential to set goals like budgeting, auditing services, cutting expenses or hiring an employee so that you can work on them throughout the year. While most of the small business owners skip this step because they think it isn’t significant enough, this will set you apart in this competitive age.

Setting a goal is practical and motivational, reminding yourself to work harder every day. But what are some goals that will be useful to the business?

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Top 6 Goals You Must Accomplish for Your Business

  • Decide where you want to see yourself in the coming year. This requires practicality and calculation of the resources available, keeping the condition of the market in mind. This can act as a basic plan of action.
  • Make a budget. Don’t compromise on this step. Please don’t make a rough estimate; let it include all the details. Make room for taxes, emergency funds, insurances and employee benefits. You will be amazed at the amount you will be able to save once you know you require capital.
  • Get professional help in auditing services. Most small business owners don’t bother about this because the law doesn’t enforce it. This can be a total game-changer. An audit can uncover frauds, act as security to banks and insurance companies, improve efficiency and be helpful while paying taxes.
  • Plan a digital marketing campaign. If you are a local, offline business, take a small step and put yourself on the web. Make a website, be on social media and take advantage of the enormous benefits the digital marketing sphere has to offer. These can be done at a basic price these days.
  • Outsource jobs. Are there aspects of your business that can be handled by automation? For example, chatbots are an excellent way to provide 24*7 customer service. You can also hire an employee to ease the load if your business requires it. This will help you focus on the other essential aspects of your business.

chartered accountant Kolkata

  • Increase margin. One of the most neglected parts of a small business is its margin. Owners often think of ways to expand their businesses and deem it the only way for growth. But, one of the most efficient ways to grow is by improving the margin. Strategize ways to improve your services or switch suppliers to get more margins on the products r services that you offer.

These goals should apply to most businesses, and while others can be done individually, audits should be performed by professionals in the field like S.M. Gupta, who are experts in the field of auditing services and tax. The robust internal structure sets them apart from others. Trusting them will mean never worrying about these services again and focusing on your primary business.

India lacerates Corporate Income Tax by 10%

India lacerates Corporate Income Tax by 10% — It is the brilliant and boldest Move to Stimulate Economy Since1991

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On 20 September 2019, Government of India announced the biggest tax cuts (0.7% of FY20 GDP or INR 1.45 tn in value terms) for corporates and rolled back most tax-related amendments made in the Union Budget 2019. This tax cut in the backdrop of challenges on fiscal deficit front and need for a massive boost for government expenditure speaks volumes about the appetite for bold reforms of Modi 2.0.

The measure is expected to improve corporate savings, attract private investment (both Domestic and Foreign Direct Investment), bolster the competitiveness of India as a manufacturing hub, and support domestic demand as tax benefits are passed on to the end-consumer.

Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1.
and she also said that the government is working on more steps to revive the sagging economy. When asked if the government is considering rationalisation of the personal income tax rate for putting more money in the hands of people, she said, “One among many things that we are thinking of.”

The Gross Domestic Product (GDP) growth slowed down to more than six-year low of 4.5 per cent in the second quarter of the current fiscal from 5 per cent recorded in the first quarter.

The government has taken several measures during August and September to boost the economy, Nirmala Sitharaman said at the HT Leadership Summit in New Delhi.

B. Corporate Income Tax Rates in India

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Government of India now allows corporates to choose between two tax rates highlighted in the table above as Option I and Option II. This step will help everybody transition to lower effective corporate taxation regime without any hiccups and will offer enough flexibility to avail old schemes.

C. Some of the highlights of the recent Direct Tax changes are:

Lower Tax Burden for Corporates: Corporate tax slashed for existing domestic corporates by ~10% (34.94% to 25.17%), inclusive of Surcharge and Cess

Base Corporate Tax rate to be 22% (25.17% including Surcharge and Cess) for existing domestic companies without exemptions/tax holidays

No Minimum Alternate Tax (MAT) applicable on such companies

C.Booster Shot for Make in India:

 Domestic companies incorporated after 1 October 2019 to pay a base rate of 15% (17.16%  including Surcharge and Cess) provided they:

  • Make fresh investments in manufacturing, related activities such as Distribution and R&D
  • Commences operations by 31 March 2023
  • Don’t set-up by splitting up, reconstruction, or by using old Plant & Machinery (Old imported machineries are allowed upto 20% of the total value), or by using old building used in past as a hotel or convention centre
  • No Minimum Alternate Tax (MAT) applicable on such companies

D.Flexibility for Choosing New or Old Rates:

  • Companies enjoying tax holidays/incentives resulting in effective corporate tax rates lower than 25.17% can continue to avail these benefits:
  • These companies can switch to concessional tax regime (i.e. 22% base rate) after the expiry of tax holiday/exemption period. The option once exercised cannot

E.Improvement in Corporate Profitability:

As per data from CMIE, Corporate profitability in India has dipped from its peak of 7.4% of GDP in FY08 to 2.7% of GDP in FY19. The Corporate Tax Rate cut will

  • For BSE 500, the effective tax rate in FY19 was 33.7% and it was 31.3% for Nifty 50. The new effective corporate tax rate at 25.17% will bring relief to domestic
  • Improved corporate profitability will help achieve:
  • Faster break-even for corporate
  • Reduction in prices of products in some industries. E.g. FMCG
  • Fresh capital expenditure, to tap both domestic and export demand

F.Enhancing India’s Competitiveness as a Manufacturing Destination:

India is one of the most attractive markets for investments owing to large domestic market and fast-improving doing business environment. However, Global MNCs’ decisions are often driven by profitability and they are naturally biased to choose countries with lower tax rates and efficient value chains.

  • The new corporate income tax rates in India will be lower than Brazil (34%), Germany (30%), and is like China (25%) and Korea (25%). New companies in India with an effective tax rate of 17.16%% is equivalent to what corporates pay in Singapore (17%).sm gupta 4
  • It is a well-known fact that global value chain has disrupted owing to the trade conflicts. Several countries in South East Asia have leveraged their lower Corporate Income Tax rates to attract foreign companies. With a 17.16% tax rate, India is well-placed to attract these companies with new vigour.
  • “Services firms are expected to be major winners while manufacturing companies in the consumer goods, capital goods and steel sectors will also reap significant benefits as many of them have an effective tax rate of around 30 per cent,” it said.
    When the BJP-led NDA took office, India was ranked 142nd out of 189 countries in the World Bank’s Ease of Doing Business ranking for 2015, which reflected results from the annual survey undertaken during 2014.