Business Incorporation India for Start-Ups and Small Businesses

This article covers the incorporation process for businesses in India, including the basics of the process, how to start the business and what paperwork you need to have.

What is a Business Incorporation in India?

Business incorporation is the formal process of incorporating a company or enterprise in India. It is an essential step in starting and operating a business in India. It allows you to legally identify yourself as the company owner, protect your assets, and carry out business activities under official legal authority.

The Benefits of Doing Business Incorporation in India Include:

-Setting up a legal entity to protect your assets and carry out business activities under official legal authority.

-Eligibility for various government incentives and tax breaks, reduced customs duties, and exemption from specific licensing requirements.

-Availability of quality legal assistance from registered lawyers and registered companies reduced administrative costs associated with operating a business in India, such as filing annual reports, making payments to government agencies, and complying with labour laws. Protect your data, including bank account information and health records.

As a startup company in India, you will need to operate under the supervision of an Indian corporate entity. Indian legislation provides that any business registration in india with less than 100 employees can be formed as an LLP, which means you can be controlled by just one person who is the managing partner. 

When Should I Incorporate My Business?

There is no one-size-fits-all answer to this question, as the timing and procedure for incorporating your business will vary depending on the specifics of your situation. However, some factors you may want to consider include: 

Your Business Size: If your business is small (fewer than ten employees), you can incorporate yourself without any special requirements. On the other hand, if your business has ten or more employees, you’ll likely need to file for a corporate charter. 

Business Purpose: If your business is mainly intended to generate income from outside of India, you may wish to incorporate as a Private Limited Company (PLC). On the other hand, if your primary goal is to operate within India and take advantage of its favourable tax laws and regulatory environment, incorporation as a Public Limited Company (PLC) may be better. 

Operating Agreement: An essential requirement for many businesses is an operating agreement specifying the terms under which the company will operate. This document can be helpful in avoiding potential disputes between shareholders and shareholders-transferring the role of the company’s manager to a third party. -Legal forms: The legal form of your company can impact its liability and tax status. For instance, while you can incorporate as a public limited company in India, you may want to consider incorporating under another legal entity, such as a private limited company or Limited Liability partnership.

Elements of an Incorporation Document

India is the world’s fastest-growing economy, with a projected growth rate of 7.5 per cent in 2017 and 8.0 per cent in 2018. The country has over 1.3 billion people and is expected to reach 1.7 billion by 2027. The economy is driven by services, including the rapidly growing information technology (IT) sector, which employs over 60 per cent of India’s workforce.

Setting up a business in India can be complex and time-consuming. However, it can also be rewarding if done correctly. This article provides an overview of the steps involved in setting up a business in India and tips on how to ensure a successful incorporation process.

To set up a business in India, you will need to apply for incorporation with the relevant authority, complete an incorporation document, and obtain all necessary permits and licenses from the appropriate authorities.

What are the Advantages of Incorporating As A Startup In India?

There are many advantages to incorporating a startup in India. Incorporating as a startup in India offers many key benefits such as: 

  1. Low Incorporation Cost– In comparison to many other countries, the incorporation process in India is relatively inexpensive. This is due to the country’s low corporate filing fees and that corporations are not taxed at a very high rate. Most companies that incorporate in India pay only around Rs 10,000 in filing fees. 
  2. Flexible Incorporation Options– Many different incorporation options are available to startups in India, including private limited, public limited, LLP, Partnership Firm, Proprietorship, an exempt company forms. This means that startups can choose the form of incorporation that best suits their business model and needs. 
  3. Quick And Easy Corporate Formation– The corporate formalities involved in incorporating a startup in India are often quick and easy to complete. This is due to the country’s fast-track procedures and the availability of a range of assistance providers, such as law firms, accountants, and lawyers. 
  4. Limited Taxation –Unlike many countries where startups are taxed at the corporate level, it is mainly the taxed owner in India. This means that the startup company pays taxes only on its profit within a particular time. This could be up to three years or less if it so wished.
  5. Ease and Quick Transfer Of Equity –The startup’s primary capital source is usually its founders or early investors. However, when these cannot provide funding, an alternative source of capital may be needed quickly. This is where the issue of transferability comes in. In most startups, equity is not transferrable. Therefore a sole proprietorship or partnership may be required to obtain funding. This will limit the number of investors and the amount they can invest. For example, an investor may not want to invest more than 10% of their total assets into a project.
  6. Entrepreneurship Education –India has a slow and complex bureaucracy that makes starting a business difficult. However, suppose entrepreneurs understand better the nuances and requirements of starting a new business. In that case, they will be able to find solutions to these problems. The government’s efforts to create policy, build infrastructure, and educate people on the basics of entrepreneurship have led to a more educated population and, therefore, more Startup businesses.

– India has a slow and complex bureaucracy that makes starting a business difficult. However, suppose entrepreneurs understand better the nuances and requirements of starting a new business. In that case, they will be able to find solutions to these problems.

Process For Filing Business Registration

Business incorporation in India is a complex and time-consuming process that requires careful planning. To ensure a smooth and successful incorporation process, follow these steps: 

  1. Research the best time to file your business registration. Regulations change frequently, so it’s essential to consult with an experienced attorney or tax advisor. 
  2. Create a comprehensive business plan. This will include detailed information on your company’s mission, goals, and objectives. 
  3. Prepare all required documents. This includes your business registration application form, certificate of incorporation, articles of association, and other relevant documents. 
  4. Submit all required paperwork to the appropriate authorities. This may include filing an application with the state/national board of commerce and industry , paying applicable taxes, and hiring a tax consultancy firm or accountant to help with the incorporation process.

Conclusion

If you are looking to incorporate your small business in India, keep a few things in mind. First and foremost, make sure you have a solid business plan and strategy. Second, be aware of the various requirements and regulations for incorporation in India. Finally, find an experienced incorporation lawyer who can help you to know how to register a company in India. You can ensure successful incorporation in India for your small business.

0 Comments

Advantages and Disadvantages of OPC (One Person Company)

Introduction:

What is an OPC? What is advantages and disadvantages of opc? A-One Person Company Compliance. Most people think of them as the same thing, but they are not. An OPC is a company run by one person with no employees. What are the advantages of having such a company? What are the disadvantages? What are the tax implications? Who is the OPC liable to pay taxes to? What are some critical issues for someone thinking about starting an OPC? How do you report and pay your taxes as an OPC if you have employees? And much more.

Advantages of an OPC:

There are several advantages to running your own business as an OPC. First, you have total control over your business and its direction. Second, you can set your hours and work when you want, which can be great if you enjoy working from home. Third, you can make your income, which can be a major advantage over working for someone else. Fourth, you are in charge of your career growth and potential earnings. 

Finally, an OPC is a great way to learn new skills and develop new business ideas. On the other hand, there are some disadvantages to running your own business as an OPC. First, you will have to handle all of the day-to-day tasks independently. Second, you will have less chance to meet and work with clients than working for someone else. Third, you will have to find the funding to start your business. Finally, to earn any income as an OPC, you must spend a significant amount of time learning and developing new skills. Examples of Online Business Opportunities. {Read More: how to legally register a one person company in India}

The following are the advantages of an OPC (One Person Company):

1. Simple to Obtain Funds:

To get money from angel investors, incubators, venture capitalists, and more, OPC is a private company. This makes it easy to get money from these people. Banks and other financial institutions prefer to lend money to businesses with more than one person. As a result, getting money becomes easier.

2. Simple to Use

The OPC is easy to run because it can be set up and kept up by one person. When you make a decision, it’s easy, and making a decision is very quick. You can record it in the minute book and have it signed to make a simple resolution. There will be no disagreements or delays inside the company, so running and managing the business will be easy.

3. Compliances are Lower

Companies Act of 2013 says that the OPC doesn’t have to do certain things. In order to make a cash flow statement, the OPC does not need to do it. The company secretary doesn’t have to sign the books of accounts or the company’s annual report. Only the director needs to do that, and the company secretary doesn’t have to.

Disadvantages of OPC (One Person Company)

There are a few disadvantages to running an OPC business. The biggest disadvantage is that an OPC business has a limited number of employees, which can make it difficult to scale the company. Additionally, because one person runs OPC businesses, they are susceptible to fraud and theft. Finally, OPC businesses typically have lower margins than traditional businesses, making it difficult for them to compete in the marketplace. OPC Businesses. 

An OPC business is similar to a traditional brick-and-mortar store in that it sells goods and services to consumers, but there are some distinct differences between the two types of businesses. An OPC doesn’t rely on its location for sales. Therefore it can be located anywhere (some even operate from home). An OPC business also differs from a traditional brick-and-mortar store in that the owner is responsible for all aspects of running the business, including the physical location. {Read More: What is the Difference Between Accounting and Bookkeeping? }

OPC businesses are not subject to the same licensing requirements as traditional brick-and-mortar stores, so there’s no need for a store to obtain and maintain a license from your local municipality. B2C OPC Businesses. A B2C OPC business provides a service or product over the internet to consumers. These businesses typically include online retailers, such as those who sell household goods or clothing; online retailers typically are subject to the same licensing laws, rules, and regulations as traditional brick-and-mortar stores. B2B OPC Businesses. A B2B OPC business sells its products or services to other businesses. OPCs may also be called: Independent Sales Representatives (ISR). 

The following are the advantages of an OPC (One Person Company):

1. Management and Ownership

In this case, there won’t be a clear line between ownership and management because the only member can also run the company. Only one member has to make and approve a decision to be made. Ownership and control are becoming more and more intertwined, leading to unethical business practices.

2. Business operations are restricted

The OPC can’t do things like invest in corporate securities, but it can’t do other things like that. A rule in the Companies Act 2013 says it can’t be changed into a company for charity.

3. Only suitable for small businesses

OPC (One Person Company) is a good fit for small businesses. Any time, the OPC can only have one member. To get more money, OPC can’t get more members or shareholders. So, more people can’t join as the company grows and expands.

Conclusion:

The advantages and disadvantages of an OPC are as follows:

-Advantages: 

-OPC offers a flexible and easy way to run your business. You can run your business the way you want without worrying about other people or organizations controlling or influencing your business. 

-OPC also allows you to work from home, which can be great if you’re able to do so. 

-OPC is good for people who want to start their own business without involving others. 

-Disadvantages: 

-OPC is not suitable for everyone. If you don’t have the time or money to invest in setting up an OPC, then it may not be the best option for you. 

-Another disadvantage of OPC is that it can be difficult to make money with an OPC. It may take a while for your business to become successful, and there’s a risk that you won’t be able to make much money from it.

Why Taxzona for Your One Person Company Incorporation & Compliance Management:

At Taxzona Consultancy, we provide you with comprehensive, hassle-free Person Company compliance, which our professionals would deal with within a short time frame. Our team takes care of the documentation and aids in providing you with a realistic estimation of person company compliance costs. With a team of highly qualified professionals at your service, there is no way your one-person company compliance can go wrong.

We will stand by you and help you grow and manage your business while taking care of your tax compliances. You can always get in touch with our certified professionals at any point in time for deliberation and assistance concerning compliances throughout your journey with Taxzona. For more questions and queries, feel free to contact us:

Email Us: info@taxzona.in

Contact Number: +919820444477

0 Comments
How to Legally Register a One Person Company in India
How to Legally Register a One Person Company in India

How to Legally Register a One Person Company in India

If you are an entrepreneur or freelancer looking to start your own company, registering a one person company compliance is a perfect option. In this article, we’ll discuss why it’s essential to register your company as both an individual and a business, what steps are involved in getting started with registration, and how a one person company can be beneficial to individuals. This article provides a step-by-step guide to help you find out what the government requires for your business.

What is a One Person Company?

As per the Companies Act 2013, section 2(62), a One Person Corporation defines a company with just one member. This business structure offers numerous benefits, including reduced tax liability and simplified accounting requirements, to legally register a one-person company in India. 

  1. Come up with an official name for your business. This should be the name you use when conducting business, filing taxes, and communicating with customers and other stakeholders.
  2. Make sure your name is available and can be used without infringing on other businesses. You can check the available name on the MCA website and also search the Public Search page of the Trademark Registration page link, which is already available on MCA.
  3. Choose a company location. A one-person company can operate from anywhere globally as long as the business address is included on all legal documents. Select an office or room that will serve as your business headquarters.
  4. Obtain permits and licenses required by State and Central law. There are multiple licenses required to start a business in India, depending upon the nature of the Company Business.

How to Legally Register a One Person Company in India

If you are starting a one-person company, there are a few things you need to do to make the process as smooth as possible. This article will go over registering a one-person company on MCA Portal in India and some tips for avoiding common mistakes.

When creating your business, one of the first steps is registering it with the MCA. Firstly, we need to check the eligibility and documents required to incorporate OPC. Then apply for the DSC & DIN of all the directors. 

The next Step is Name reservation. Once the name is approved, we need to fill out the Spice+ form for company incorporation. When the Spice+ Form has been approved, the Certificate of Incorporation is issued alone with the PAN & TAN of the Company.

Please Note: you need to open a bank account and start business operations. {Read More: Business Registration}

Types of One Person Company

If you’re thinking about starting your own business, there are several different types of businesses you can choose from. The most common type of business is a Private Limited Company, but you also have the option to start a sole proprietorship, partnership, LLP, or OPC. Each has its legal requirements and benefits, so it’s essential to know which one is right for you before taking the plunge. Here’s a brief overview of each type of business:

Sole Proprietorship: A sole proprietorship is the simplest type of business structure. You own all the shares in the company and are responsible for all its liabilities and profits. This type of business is suitable for small entrepreneurs who don’t want to deal with complex paperwork or share management responsibilities.

Partnership: A partnership is where two or more people are involved in managing and owning the business. Each partner has an equal share in the company and is responsible for making decisions together. A partnership offers greater flexibility and control over your business than a corporation, and it can be more profitable than a sole proprietorship.

When to Register a One Person Company

If you are starting a one-person company, there are a few things you will need to do to register the company legally. The most important thing is to make sure you have a good business plan and that all of your paperwork is in order. Here are some other things to keep in mind when registering a one person company:

  1. Make sure you have all the necessary paperwork– This includes setting up accounts for the company, filing paperwork with the government, and creating marketing materials.
  2. Have a good business plan– A good business plan will outline your goals for the company, how you plan on achieving them, and your financial plans.
  3. Get legal advice– It is always essential to get legal advice from an attorney if you have any questions or concerns about registering or running your company.

Requirements to Form a One Person Company

Here are the primary requirements to start a one-person company; you need to follow these rules first.

  • One director (minimum)
  • One member (minimum)
  • Application for the allotment of Direction Identification Number should be made.
  • You need to have a Digital Signature Certificate.

Conclusion

When you are ready to register your one-person company, keep a few things in mind:

  1. Make sure you have all the paperwork in order.
  2. Be sure to choose the right company type.
  3. Register your company as soon as possible!
0 Comments
What is the Difference Between Accounting and Bookkeeping?
What is the Difference Between Accounting And Bookkeeping - Taxzona

What is the Difference Between Accounting and Bookkeeping?

Introduction:

When we hear the term “accounting” at first, it might not be clear what it is. That’s because there are many different types of accounting out there. Accounting services can help you track your income and expenses, manage taxes, prepare for audits, and more. In this article, find out what the difference between accounting and bookkeeping is and how they both contribute to your business success.

What Is Accounting?

Accounting is a system of gathering, analyzing, and reporting information about economic activities to provide useful information for decision making and management. Bookkeeping is the process of recording financial transactions such as sales, purchases, receipts and payments.

The Difference Between Bookkeeping and Accounting

In accounting, the terms “assets” and “liabilities” refer to the different sides of a firm’s balance sheet. Assets are things that have value and can be used to generate cash flow. Liabilities, on the other hand, are things owed by firms that must be paid back with money. In bookkeeping, assets may also be referred to as “books.”

Person Responsible for Maintaining Books of Accounts

  1. Managing Director,
  2. Whole-Time Director, in charge of finance
  3. Chief Financial Officer (CFO)
  4. Any other person of a company authorized by the Board.

Accounting Standards

An accounting standard is a collection of rules, norms, and procedures that govern the firm’s systematic bookkeeping and other accounting operations throughout the year. The Accounting Standards Board (ASB) is a body within the Institute of Chartered Accountants of India (ICAI) that comprises of members from government departments, academics, other professional groups, and so on. The National Financial Reporting Authority (NFRA) recommends these accounting standard formulations to the Ministry of Corporate Affairs (MCA)

Which One is Right for You?

Bookkeeping is a more common term and is defined as the process of recording financial transactions in order to make sense of the company’s operation. In contrast, accounting is the process of preparing an annual or business registration period report for a set of customers, government agencies, banks, shareholders, etc. One might be best for your specific needs and the other could work well for you if you have a lot of transactions taking place daily.

Conclusion

One of the most common ways a business pays for goods and services is through an accounting firm. An accounting firm will take care of the financial side of a business. They’ll prepare payroll and tax returns, manage bank accounts, and more. A bookkeeper’s responsibilities are to track all transactions that happen with the company registration and make sure they’re documented properly.

In general, accounting is the process of tracking, recording, and reporting financial information about a company or entity. This can be done for any business entity which is usually a local or national legal person or body. Bookkeeping is the process of managing records of transactions taking place in a business to ensure that all the data are properly recorded and maintained. The services offered to businesses in India by Taxzona consultants include accounting, bookkeeping and tax services.

Assisting business owners with their financial records of the company through regular reporting and audits is one aspect of our services. Other services include preparing financial statements, audit/tax compliance procedures, or risk management as well as managing capital projects, small business loans etc. We also provide back-office support for specific projects that involves multiple teams like HR, payroll and procurement and so on.

Comments Off on What is the Difference Between Accounting and Bookkeeping?

Everything You Need to Know About “How to Register a Company in India?

How to Register a Company in India? – Advantages - Company Registration in India

Do you want to start a company in India but can’t seem to get it registered? Don’t worry; this article will teach you all you need to know about how to establish a company in India, the business registration in India, the benefits of company registration, and other compliance criteria that must be completed while starting a business in India.

A Briefing on 'How to Start a Business?'

In India, forming a Private Limited Company is one of the most often advised methods of starting a company. This sort of company imposes both limited accountability and ownership limits on stakeholders. An LLP (Limited Liability Partnership) is a corporate structure in which a group of partners owns and operates it. In a Private Limited Company Registration, the directors and shareholders may be distinct.

Fundamental Requirements for the Indian Company Registration Process

  • The name of your organisation must be different. The proposed name should not be confused with any existing businesses or trademark registrationin India.
  • A company’s registered office does not have to be a commercial site. To utilise a rental property as the registered office, a NOC from the landlord is necessary.
  • A private limited company must have at least two directors and a maximum of fifteen. At least one director of the firm must be an Indian citizen.
  • A business is not required to have a certain quantity of capital. The authorised capital of a firm should be at least one lakh rupees.

The Benefits of Foreigner Company Registration in India

There are various benefits to starting a company. The validity of your firm will be improved if it is registered. It is advantageous to your firm in the following ways:

  • It safeguards you against personal culpability as well as other risks and damages.
  • Increase the number of clients you can have
  • Obtain bank credits and decent investments from trustworthy investors with ease.
  • Provides liability protection for your company’s assets.
  • Increased capital contribution and stability
  • Improves the company’s capacity to develop and grow.

Documents required for Company Registration Process in India

For Indian to Register a Company in India:

  1. PAN Card Copy of a proposed Directors
  2. Address proof of the directors such as Passport/ Voter ID/ Ration card / Electricity bill / Aadhar card
  3. Residential proof for e.g. Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill etc etc.
  4. Registered office proof
  5. Proof of evidence for any utility service like telephone, gas, electricity, etc. for office premises
  6. Identity and address proof of shareholders
  7. MOA and AOA

For Foreign Nationals to Register a Company in India:

  1. Copy of Passport (Notarized or Apostille)
  2. Address proof of the directors such as Driving License, Residence Card, Bank Statement, Government issued form of identity containing address
  3. Residential proof for e.g. Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill and many more.
  4. Registered office proof
  5. Proof of evidence of any utility service like telephone, gas, electricity, etc. for the office premises etc.
  6. Identity and address proof of shareholders
  7. MOA and AOA

How to Register a Company in India?

  • Get DSIC
  • Apply for the DIN (Digital Identification Number)
  • Apply for the Name Availability
  • Submission of a document such as MOA and AOA
  • Fill in all the details in Form Spice+
  • Registrar of Company will issue a Certificate of Incorporation with PAN & TAN.

About Taxzona

TAXZONA Consultancy is today recognized as one of the respected firms in its area of practice. We are an active member of several tax professionals.

To know more about our services and for a free consultation, get in touch with our team on taxzona@gmail.com or call 9820444477.

0 Comments
The scheme Maharashtra Settlement of Arrears of Tax, interest, penalty or late fee scheme 2022
Amnesty Scheme

The scheme Maharashtra Settlement of Arrears of Tax, interest, penalty or late fee scheme 2022

The Government of Maharashtra on 11th of March 2022 has announced “the Amnesty Scheme 2022” to settle the various Old cases of Sales Tax Department. Maharashtra Deputy Chief Minister, Mr. Ajit Pawar announces Amesty Scheme for Sales Tax Matters on 11th March, 2022. The due date for settlement of Sales Tax Cases will be applicable from April 1st, 2022 to September 30th, 2022.

The State Government has notified the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Scheme, 2022.

The State Government is of the view that since the past two years, the whole world has been suffering from pandemic that has effected the business and entrepreneurs so hard that many business is closed forever. Pandemic has had an adverse effect on economic growth of our Country. In order to provide relief to the industry and business sector, The Amnesty Scheme, 2022 on various taxes levied by the Sales Tax Department before the introduction of the Goods and Services Tax (GST Act, 2017) is introduced.

The Amnesty scheme, 2022 is applicable to all the pending dues for the periods up to 31/06/2017 i.e. before introduction of GST Act, 2017. In opt in for this scheme, the appeal filed by the dealers up till 31st March, 2022 will have to be withdrawn unconditionally.

The Amnesty Scheme, 2022 provided relief to dealers in two parts i.e.

  1. Arrears up to INR 10.000 or less per year as per any statutory order passed under the various tax laws implemented by the department are waived off completely. As a result, small dealers will be benefited in almost 1 lakh cases.

  • Dealers having arrears as on the 1st April, 2022 up to INR 10 lakhs or less as will have the option to pay a lump sum amount of 20% of the total arrears. Waiver will be granted to the remaining 80% of the arrears. As a result medium dealers will benefit in almost 2.20 lakh cases.

  • Other Dealers having Sales Tax dues above INR 10 lakhs or above who would not opt for lumpsum option will have to pay 100% of the undisputed tax, 30% of the disputed tax, 10% of the interest and 5% of the penalty for the periods up to 31st March 2005. For the periods from 1st April 2005 to 30th June 2017, this proportion would be 50% of the disputed tax, 15% of the interest and 5% of the penalty. Upon payment as per the aforesaid proportions. the balance arrears shall be waived.

In order to avail the benefits of this Amnesty Scheme, 2022, Dealer has to pay the required amount at one time within the stipulated time period mentioned above. However, the dealers having arrears of more than Rs. 50 lakhs have been provided an option to pay the requisite arrears in Instalments.

0 Comments

Advance Tax Installment for the FY 2021-22

Last or you can say the fourth advance tax installment is due on 15th March 2022, for the FY 2021-22 & by this date, the Taxpayers need to pay 100% of their advance tax liability. Failure to pay before time may attract penal Interest.

In this article, we will cover all the provisions you need to know about Advance Tax :

Who Needs to Pay Advance Tax Installment?

If the Tax amount for the particular financial year is greater than INR 10,000/- then, the provisions of Advance Tax are applicable to you. For computing Advance Tax, one needs to include All the incomes earned till the date of computation of advance tax & also these incomes which are certain as Income to the person during the financial year are considered on an estimated basis for the computation & payment of advance tax.

However, there are certain exemptions which are as follows:

  1. Senior Citizen is exempt from paying Advance Tax subject to the following two conditions:
  2. They should be a Resident Individual, and
  3. They should not have any income from Business & Profession.

So, Any person who is a senior citizen i.e. an individual of age 60 years or above, and satisfies both the above-mentioned conditions need not pay Advance Tax Installments

  1. Salaried Employee is exempt from paying Advance Tax subject to the following two conditions:
  2. No Other Source of Income, and
  3. Employers deduct tax at source before paying salary and deposit it with the Income Tax department.

But, if the Assessee, also have Income from other sources like rent from a property or capital gain or interest from bank deposit and etc, etc which is not informed to the Employer, then the Assessee needs to pay the total tax liability if the income from other sources increases from Rs 10,000 a year.

What is the Due Date for Payment of Advance Tax?

What is the Due Date for Payment of Advance Tax?

The following is the due date for payment of Advance Tax for the FY 2021-22 (AY 2022-23) for both corporate as well as non-corporate Assessee :

Installment

Due Date

Percentage of Tax to be Paid

1

15-06-2021

15%

2

15-09-2021

45%

3

15-12-2021

75%

4

15-03-2022

100%

The percentage mentioned in the third column is the percentage of Tax Liability.

Business or Profession Assessee having income under the presumptive income scheme u/s 44AD or 44ADA also have to pay the whole amount of the advance tax by the 15th March of the Year. However, here the exemption is that any amount deposited till 31st March of the FY is also treated as advance tax of that financial year. 

The process to Pay Advance Tax?

  1. Online Procedure
  2. Login to the income tax website “incometax.gov.in
  3. Click on the “e-pay Tax” tab
  4. Now, you will be redirected to NSDL Website
  5. To pay advance tax, select “Challan 280”
  6. Fill in the required details
  7. Choose the “Netbanking” option to pay online
  8. After successful payment, a challan will be displayed which will contain the information number and payment details.
  9. Challan is proof of the payment that has been done
  10. Offline Procedure

The Assessee needs to visit the designated bank branch and fill the challan form as per Challan 280 Format and then pay the taxes.

Consequences for Late Payment of Advance Tax?

The Assessee is liable to pay advance tax before the end of the financial year in four installments as mentioned in the above table. If the Assessee fails to pay the advance tax according to the table mentioned above, then the Assessee needs to pay interest on the late payment. The interest payable can be rounded off to the nearest hundreds.

This interest on late payment of Advance Tax falls under Two Sections :

  1. Section 234C
  2. Section 234B

After the payment, if there is a change in income computed at the time of paying Advance Tax,  then you can update the revenue of advance tax in the next installments as per the new liability estimate.

If you are liable to pay Advance tax and have not yet paid, do it asap before the last date. Please note the last date to pay the fourth Instalment of Advance Tax is 15-03-2022. You can also contact us to computing your Advance Tax Liability and related consultancy.

0 Comments

WHAT IS INCOME TAX

What is income tax? Income tax is a direct tax imposed on the income of individuals and other entities by the government. Indian residents are required to consider their income from India as well as overseas during tax filing; whereas, foreigners are taxed only on their income originating from India. Incomes of different nature and volumes of entities other than corporate bodies are stacked under different income heads and slab rates.

INCOME:

WHAT ARE THE SOURCES OF INCOME TAXED UNDER WHAT IS INCOME TAX?

Apart from a few exemptions and deductions almost all income earned during a previous year from whatever sources e.g. salary, business, profession, rental property, sale of assets, interest, etc. are subject to income tax. Following are the 5 categories under which income needs to be classified.

  1. Income from salary
  2. Income from House Property
  3. Income from Business or Profession
  4. Income from Capital Gains
  5. Income from Other Sources.
  6. What is income tax? Read more

HOW INCOME IS CALCULATED FOR INCOME TAX PURPOSES?

To calculate taxable income one needs to take professional advice from CA or income tax consultants for taxability of various transactions and required experts to compute net income from each head of income. Under an income tax, there are different provisions and schemes for the computation of income tax return filing for a different type of assesses. Below is an overview for having a brief idea about the taxable amount computed under different heads of what is income tax?

 

Income from

Taxable Amount

1 Salary Net salary after deduction of few allowance and PT
2 House property Total annual rent less Standard deduction of 30% and municipal tax paid
3 Business and Profession Net profit from the business/profession
4 Capital gain Gain on sale of Capital Assets
5 Other sources All other income such as Interest income, winning from lottery, residual income, etc.

RETURN

WHO IS REQUIRED TO FILE AN INCOME TAX RETURN?

Income tax return (ITR) is the form that is filled and submitted by taxpayers to declare their income earned and tax payable, with the income tax department.

Is it mandatory to file ITR by every citizen?

In any of the following situations (as per the Income Tax Act), it is mandatory for you to file an Income Tax Return in India.

  1. Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs 2.5 lakhs in FY 2019-20.
  2. You are a company or a firm irrespective of whether you have income or loss during the financial year
  3. You want to claim a Refund of TDS.
  4. You want to carry forward a loss under a head of income
  5. if you are a Resident individual and have an asset or financial interest in an entity located outside of India.
  6. If you are a Resident and a signing authority in a foreign account. You are required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust
  7. If you are a foreign company taking treaty benefit on a transaction in India
  8. Proof of return filing may also be required at the time of applying for a loan or a visa

WHAT ARE THE DUE DATEs FOR FILING INCOME TAX RETURN?

Taxpayers

ITR Filing Date

All individuals, HUFs, Association of persons, the body of individuals who needs to file ITR return and are not liable for accounts audit lies into this category

31st July of the relevant assessment year

All individuals, companies (sole proprietorship firms, partnership firms), persons of firms who need to file IT returns and are liable for accounts audit lies into this category

31st October of the relevant assessment year as per Finance Bill 2020 (Previously it was the 30th Day of September)

Taxpayers who are required to furnish reports u/s 92E

30th November of the relevant assessment year

Deadline for filing late income tax returns for all individuals & companies

31st march of the immediate next year

WHAT ARE THE LATE FEES & INTEREST?

The Late fees for not filing ITR FY 2019-20 are given in the table below –

E-filing date
Income below Rs 5,00,000
Income above Rs 5,00,000

Up to 30th Nov 2020

0

0

Between 1st Dec to 31st Dec 2020

Rs 1000

Rs 5000

Between 1st Jan 2021 to 31st Mar 2021

Rs 1000

Rs 10000

Apart from the penalty for late filing, interest under section 234A at 1% per month or part thereof will be charged till the date of payment of taxes & knowing what is income tax.

PAYMENT

WHAT IS THE RATE OF INCOME TAX FOR INDIVIDUALS

Income Tax Slab FY20-21
Tax Rates As Per New Regime
Tax Rates As Per Old Regime

₹0 – ₹2,50,000

Nil

Nil

₹2,50,001 – ₹ 5,00,000

5%

5%

₹5,00,001 – ₹ 7,50,000

₹12500 + 10% of total income exceeding ₹5,00,000

₹12500 + 20% of total income exceeding ₹5,00,000

₹7,50,001 – ₹ 10,00,000

₹37500 + 15% of total income exceeding ₹7,50,000

₹62500 + 20% of total income exceeding ₹7,50,000

₹10,00,001 – ₹12,50,000

₹75000 + 20% of total income exceeding ₹10,00,000

₹112500 + 30% of total income exceeding ₹10,00,000

₹12,50,001 – ₹15,00,000

₹125000 + 25% of total income exceeding ₹12,50,000

₹187500 + 30% of total income exceeding ₹12,50,000

Above ₹ 15,00,000

₹187500 + 30% of total income exceeding ₹15,00,000

₹262500 + 30% of total income exceeding ₹15,00,000

WHEN DOES TAX NEED TO BE PAID?

If a person’s total tax liability is Rs 10,000 or more in a financial year you are required to pay advance tax. The advance tax applies to all taxpayers, salaried, Self-employed, and businesses. Senior citizens, who are 60 years or older who do not run a business, are exempt from paying advance tax.

Due Date
Advance Tax Payable

On or before 15th June

15% of advance tax

On or before 15th September

45% of advance tax less advance tax already paid

On or before 15th December

75% of advance tax less advance tax already paid

On or before 15th March

100% of advance tax less advance tax already paid

0 Comments
Food License in India
food license in india

Food License in India

Food License in India:

A food license in india or FSSAI license is granted to all manufacturers, traders, restaurants carrying out any food business which may involve manufacturing or processing. On applying for FSSAI registration, a unique 14-digit license number is issued which has to be quoted on all food packages. Food License in india is issued by FSSAI now FoSCos which stands for FOOD SAFETY COMPLIANCE SYSTEM. FoSCos is the new system launched by FSSAI which was effective in some states from 01-06-2020 and from 01-11-2020 it’s working on PAN India.

Who needs Food License in India? :

Every food business operator involved in the manufacturing, processing, storage distribution, and sale of food products must compulsorily obtain FSSAI Registration or License. The registration procedure is aimed to create more accountability on the FBO to maintain the quality of the food products.

Types of Food License in India :

There are Three Types of Food License in India which is issued by the Authority depending upon the Turnover and activity of the Food Business Operator (FBO). The Three Types of Licenses is as follows :

  1. Basic Registration – Small Business operator having Annual Turnover upto Rs. 12 Lakhs
  2. State License – FBO having Annual Turnover between Rs. 12 Lakhs till Rs. 20 Crores
  3. Central License – FBO having Annual Turnover above Rs. 20 crores or involved into Import and Export Business

Basic Registration Requirements:

FSSAI Registration is a basic license and it is required for all the FBOs involved in the small-scale food business. This category covers the following businesses:

  1. Any FBO with an annual turnover of not more than Rs. 12 lakh.
  2. Petty retailer dealing in food products
  3. Any person who manufactures or sells any food article by himself
  4. Food sale is done by the temporary stallholder
  5. Any individual who distributes food in any religious or social gathering except a caterer
  6. Small-scale or cottage industries dealing in the food business and the following.
    Sn. Business Activity Capacity
    1. Food production capacity (other than milk and meat) Up to 100 kg/ltr per day
    2. Procurement, handling, and collection of milk Up to 500 ltr per day
    3. Slaughtering capacity 2 large animals or 10 small animals or 50 poultry birds per day or less

State & Central License Requirement :

For all other FBOs apart from those mentioned above, an FSSAI license has to be obtained. FSSAI License can be classified into two categories i.e. State FSSAI License and Central FSSAI. License based on the size of the business whether it is a medium scale or large scale business. Generally, FBOs who are large manufacturers, importers, exporters dealing in large-scale food businesses need to obtain FSSAI registration from the central government and FBO with small to medium-sized manufacturing units, transporters, marketers, traders, etc., need to take FSSAI registration from the state government.

To apply for State food License in India the FBO must have a turnover between Rs 12 lakh to Rs 20 crore. Other conditions include manufacturing units having a capacity of 2MT per day, dairy units handling business up to 5000 liters per day. 3-star hotels and above, repackers, relabelling units, clubs, canteens all catering businesses irrespective of their turnover need to apply for the license. The tenure of the license is a maximum of 5 years and a minimum of 1 year.

To apply for a central license the FBO must have a turnover exceeding Rs. 20 crores and needs to have operations in two or more states. All importers and exporters need to apply for this license. The maximum tenure is 5 years and the minimum is 1 year.

Renewal of License/Registration :

The FSSAI license/Registration is essential to commence the food business, similarly, it is imperative to renew the license. The license is issued for a validity of 1 year or 5 years, so the business must apply for renewal 30 days prior to the expiry of the current license.

Annual Compliance of Food License in India:

The FBO has to file Returns. The Periodicity of the return is pre-defined based on the type of FBO which is as follows :

  1. Only Merchant Exporter can file Quarterly annual report through online system
  2. FBO manufacturing Milk and/or Milk products shall file half yearly return in the Form D-2 and submit it manually to the to the concerned Central/State licensing Authority for the periods 1st April to 30th September and 1st October to 31st March of every financial within a month from the end of the period
  3. Manufacturers and Importers have to file Annual Return(Form D-1) and submit it manually to the concerned Central/State licensing Authority on or before 31st May of each year for each class of food handled by him during the previous financial year.

Penalty for Non-Compliance of Rules & Regulations :

The following are the list of penalties for non-compliance with rules & regulations as defined under the FSS Act, 2006 :

Sn. Type of Non-Compliance Penalty amount
1. Extraneous matter in food Rs. 1 Lakh
2. Unhygienic processing or manufacture Rs. 1 Lakh
3. Failure to comply with Food safety officer direction Rs. 2 Lakhs
4. Food quality not in compliance with act Rs. 2 Lakhs
5. Misbranded Food Rs. 3 Lakhs
6. Sub-standard food Rs. 5 Lakhs
7. Home bakers selling products without license Rs. 5 Lakhs
8. Misleading advertisement or false description Rs. 10 Lakhs

0 Comments
GSTR-2B – GST ITC can be claimed or available only when reflected in GSTR 2A/2B wef January 01, 2022 :
GSTR-2B - GST ITC can be claimed or available only when reflected in GSTR 2A/2B wef January 01, 2022 :

GSTR-2B – GST ITC can be claimed or available only when reflected in GSTR 2A/2B wef January 01, 2022 :

GSTR-2B : Hon’ble Finance Minister, Nirmala Sitaraman Ji, in budget 2021-22, proposed changes vide Finance Bill, 202, that amends the Central Goods & Service Tax Act, 2017 to incorporate a fresh condition for availing of ITC. The New Condition to avail ITC is as under :

“It was been proposed to insert the new clause ‘(aa)’, after clause (a), in Section 16(2) of the CGST Act, that provides an additional condition to claim ITC based on GSTR-2A and newly introduced GSTR-2B, i.e., ITC on invoice or debit note can be availed only when details of such invoice/debit note have been furnished by the supplier in his  outward supplies (GSTR-1) and such details have been communicated to the recipient of such invoice or debit note.”

Hence From January 2022 onwards, Input tax credit (ITC) will be available only up to what is reflected in GSTR-2B, To simplify and for a better understanding of the provisions,  here is the flow chart of what to add (+) and what to less (-) from GSTR-2B to arrive at “ITC to be claimed” in GSTR-3B.

Add : Download GSTR-2B form

(Generally it is available in the afternoon of 14th of every month)

Less : Remove ineligible ITC from GSTR-2B form

Such a motor car, food, health insurance, gift, capital expense relating to immovable property etc. Kindly refer Section 17(5) of CGST Act, 2017 for the list of Blocked/Ineligible ITC

Less : Remove ITC claimed in earlier period from GSTR-2B

Example invoice dated 10-12-2021 ITC taken in GSTR-3B of Dec-21, however supplier disclosed same ITC recently and appearing in GSTR-2B of Jan-22.

Less : Remove goods received in next month from GSTR-2B form

Example invoice date 30-01-2022 and also appearing in GSTR-2B of Jan-22 , however goods are received from company 5th Feb 2022 , this ITC is to be claimed in GSTR-3B of Feb 2022

Less : Remove ITC not relating to your business from GSTR-2B form

Example A solds goods to B, but in GSTR-1 shown GSTIN of D , Here D needs to be remove ITC from is GSTR-2B

Add : import ITC to be Taken based on bill of entries from GSTR-2B form

Example in Jan 2022, 3 bill of entries are filled by company, However in GSTR-2B of Jan only 1 bill of entries is reflecting, company can claim ITC of remaining 2 bill of entries too in Jan 2022, even though it is not reflecting in GSTR-2B

Add : pending ITC from GSTR-2B form

Example invoice date 10-11-20 21 supplier filled his GST-R1 & GSTR-3B within due date, However buyer has not taken ITC in Nov / Dec yet, same can be now taken in Jan 2022 Hope the above Summary will help you to compute exact ITC that can be availed in Form GSTR 3B from January 2022. Also, Please note, there is no relevance of 5% limit mentioned in Rule 36(4) of the Central Goods and Services Tax Rules, 2017 (“CGST Rules”)

Notes :

a) It is important that utmost efforts are to be taken to ensure that ITC balance as per books and GST returns is matching. b) It is recommended that reconciliation of ITC as per books and GSTR-2B should be done monthly basis, to keep track of ITC mismatch c) It is only for information

0 Comments