Quick Facts

Goods & Services Tax, 2017

What is Goods & Services Tax?

Goods and Services Tax (commonly called GST) is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages

Who has to Register ?

Business with turnover > Rs.40 Lakhs
Casual taxable person
Input Service Distributor
Inter-state supplier of goods
E-commerce operator or aggregator

What documents required to Register ?

PAN
Aadhaar card
Proof of business registration or Incorporation certificate
Identity and Address proof of Owners
Address proof of the place of business
Bank Account statement/Cancelled cheque
Digital Signature
Letter of Authorization/Board Resolution for Signatory

What is the general GST Rate?

0% – Agri related Goods
0.25% – rough diamonds
3% – Gold, Precious stones
5% – Priority Goods & Common use items
12% – Residual Stand Rate
18% – Services
28% – Aerated drinks
Luxury cars
Cigarettes

What is HSN &SAC ?

HSN is an international classification system of Goods, which has been developed by the World Customs Organization (WCO). SAC is a unified code for recognition, measurement and taxation of services

What is Input Tax Credit (ITC)?

Input tax credit means at the time of paying tax on output i.e Sales, you can reduce the tax you have already paid on inputs i.e Purchases.

Income Tax Act, 1961

What is Income Tax?

Income tax is an annual tax charged on income of a person by the government. It is charged for the corresponding assessment year at the rates laid down by the Finance Act for the assessment year in respect of the previous year.

What is Financial Year?

A twelve month period starting from 1 April and ending at 31 March which is used for calculating various annual financial statements in businesses and organization is known as financial year.

What are Income categories as per Income Tax?

Salaries
Income from house property
Profits and gains of business or profession
Capital gains
Income from other sources.

What is the Limit of Income below which you need neither pay tax nor file return?

For FY 2019-20 Individual, HUF, AOP, and BOI having income below Rs. 2,50,000 need not pay any Income-tax. In respect of resident individuals of the age of 60 years and above but below 80 years, the basic exemption limit is Rs. 3,00,000 and in respect of resident individuals of 80 years and above, the limit is Rs. 5,00,000. For other categories of persons such as co-operative societies, firms, companies and local authorities, no basic exemption limit.

What is the due date for filing income tax returns?

For Individual, HUF, AOP and BOI it is 31st July. For Business entities requiring audit it is 30th September.

What are the allowances and deductions allowed to Salaried Individuals?

House Rent Allowance
Standard deduction of Rs.50,000
Leave Travel Allowance
Interest on Housing Loan
Sec.80C – Insurance premium, NSC, Mutual Fund, PF, PPF, ELSS, Principal on Housing Loan
Sec.80D – Health Insurance
Sec.80E – Interest on Educational Loan
Sec.80G – Eligible Donations
Se.80EE – Additional deduction for Interest on Housing Loan

Accounting

What is Accounting/Book-keeping?

It is the recording of financial transactions in any accounting software. Transactions include sales, sales, receipts and payments by an Individual, HUF Firm, LLP or Companies.

Why Accounting/Book-keeping Is Important?

Helps you to budget your income & expenses
All tax returns can be filed in time
It gives accurate financial information of your business
Assist you in better decision making
Improves your cashflow

How should I maintain the books of accounts?

There are many online and offline accounting softwares for maintaining the books of accounts. You can choose based on your requirement, budget and access flexibility.

What is Outsourced CFO Services?

An Outsourced CFO is a financial expert who provides financial strategy services on a part-time or project basis. An Outsourced CFO provides high-level financial strategy, systems analysis and design, and operational optimizations. An Outsourced CFO can also help a company resolve challenges such as cash flow issues, raising capital, solving tight margins, implementing more efficient systems, or preparing for growth.

What are the general registers maintained under Accounting/Book-keeping?

Cash Register
Bank Register
Sales Register
Purchase Register
Fixed Asset Register
Journal Register

Auditing

Why audit should be done?

Audit to be done to determine whether a business entity is providing a fair and accurate representation of its financial position by examining information given in Books of Accounts

What are the different type of audits carried out in India?

Statutory Audit
Income Tax Audit
Internal Audit
Stock Audit
Process Audit
Due Diligence Audit
Forensic Audit
Management Audit

What is Statutory Audit?

Popularly known as Balancesheet Audit, it a review of financial records under a particular law like Companies Act, Banking Regulation Act, etc. for the purpose of closure of books of accounts for a financial year

What is Internal Audit?

Focus is to ensure strong internal control systems to minimize the risk of accidental or deliberate errors and omissions. Safeguarding of assets, adequate division of authority over key control areas and compliance with internal operating policies and guidelines are other focus areas

What is Income Tax Audit?

A business entity carrying on business having turnover exceeding Rs.1 Crore and carrying on profession having turnover exceeding Rs.50 Lakhs has to get its books audited under the Income Tax regulations from a Chartered Accountant.

What id Due Diligence Audit?

Conducting financial, legal and accounting reviews in case of mergers, acquisitions and investments is termed as Duediligence

Compliances

What are the general statutotry compliances a business entity in India should aware of?

GST Compliances
Tax Deducted at Source (commonly called TDS)
Labour Compliances – ESI, PF, PT
Registrar of Companies (commonly called RoC)
FEMA/RBI Compliances
FSSAI Registration

Why one should comply with GST regulations?

It builds confidence at your customer level
You will be allotted with better rating by GST council
Reduces the legal hurdles like receiving notices, penalties, prosecution

What are the Registrar of Companies (commonly called RoC)?

Every Company on carrying out specified transactions as per the Companies Act has to intimate the same to Ministry of Corporate Affairs through filing of ROC E-Forms. Such transactions include share allotments, director change, registered address change, closure of books of accounts, buy-back of shares, reistration of charges etc. A LLP also need to file annual E-Forms disclosing its financial position

What is Tax Deducted at Source (commonly called TDS)?

Tax Deducted at Source (TDS) is a mechanism through which the Governemt keep track of incomes above a specified limit. Every person making remittance to the other in the nature of salary, contract charges, professional charges, rents, commission, ete above the specified threshhold limit has to do TDS at specified percentage and remit such TDS amount to the Government. Subsequently, the deductor will file the E-TDS returns to passon the TDS benefit the deductee.

How should I carryout international transactions?

Every inward and outward of money to and from India is governed by FEMA/RBI regulations. Every entity carrying on such cross border transactions like FDI, ECB Loans, etc has to report to RBI is specified forms.

What are compliances to be followed when paying salary to employees?

The applicable business entity should deduct the employees contribution of PF & ESI from salary of an employee and remit the same along with employee contribution to the repective department. The employer is also supposed to deduct and remit the Professional Tax as per the State regulations in which the business entity is situated. The employees to who the salary paid net of deductions is more than the basic tax slab, the TDS has to be applied on the salaries.

Business Registrations

What are different type of business entities can be registered in India?

Proprietorship Concern
Partnership Firm
Limited Liability Partnership
One Person Company
Private Limited Company
Public Limited Company
Trust
Co-operative Societies
Venture Capital Company
Banking Company
Chit Fund Company

What is PAN & TAN and who has get PAN & TAN?

Permanent Account Number (PAN) is issued by Income Tax Department for facilitating the filing of income tax returns, banking transactions etc. Tax Deduction and Collection Account Number (TAN) has to be obtained by a person who has to do TDS under Income tax regulations.

What are the different ways in which a Proprietorship can be registered?

Every registration of proprietorship concern will be on the PAN of the Proprietor. A proprietor can have registration of his trade name under any of following;

GST Registration
Trade License
Shops & Establishment Registration
MSME Registration
Trademark Registration

Should I register my Partnership Firm?

No, registration of a partnership is not necessary. However, for a partner to sue another partner or the firm itself, the partnership should be registered. Moreover, for the partnership to bring any suit to court, the firm should be registered. For this reason, it is recommended that larger businesses register the partnership deed

How should I register a LLP?

A Limited Liability Partnership (commonly called LLP) is a combination of Company and a Partnership Firm suitable for a small-businesses. The LLP should be registered with Ministry of Corporate of Affairs. 2 or more persons named as Designated Partners can apply for LLP registration with Ministry of Corporate Affairs.

How do I open a Company?

Company can be incorporated under Ministry of Corporate Affairs (MCA) in the form of One Person Company (OPC), Private Limited Company or Public Limited Company. A person or group of individuals can apply to MCA along with relevant documents to get their company registered.

What are the local registrations to be done by a Business Entity in Bangalore?

A business entity in Bangalore generally has to get following registration as applicable;

Trade License issued by B.B.M.P
Shops & Establishment Registration from Dept. of Labour
FSSAI Registration from Food Safety & Standards Authority India
Professional Tax Registration from Commercial Tax Department

Do I have any registration for carrying on international business transactions?

You need to obtain a Import Export Code (IEC) for carrying on the international transactions.