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Legal Complainces for StartUps

Startups are prone to go haywire in terms of delivery, execution, and setup costs. Amongst everything, it gets taxing to think and execute tasks related to tax. But this is an important financial element that one can not afford to overlook. A startup may incur losses in initial years and those go unaccounted. But then there are chances to save a new business from further financial losses by shielding it with tax benefits.

Here are five important tax tips for startups useful at many levels – from starting to each stage of progress.

1. Compliance With Tax Norms Makes Life Easier

As a startup, you would want to focus all your efforts and energies in offering better solutions to your customers. The entire concept of compliance is to set you free from other legal requirements and do what you do best – focus on core business. Tax norms help businesses to get clarity on implications of tax in the finances. Once done, the aim should be to have better financial planning by keeping in mind the applicable taxability and other compliance-related expenditures.

2. Hire/Consult Tax Professionals

Professionals in the industry can help you to execute all the necessary formalities, ensuring completion of all those nitty-gritty of the subject matter involved. For some, you will also need advice from tax experts on how to plan your finances by incorporating the tax implications concerned.

Opt for business professional services to ensure complete control over tax-related compliance. Having a professional consultant on-board will also help you prepare for any unforeseen contingencies. Expert opinion in the case of compliance is recommended in case of tax-related compliance queries.

3. Learn About the Broad Norms

Awareness plays a major role when it comes to knowing the legalities involved in running a business. And since the tax is one of the core concerns that new businesses have, an overall & general know-how becomes indispensable. It is essential that startups get acquainted with the applicable laws and provisions. Complying with such standards may prove to be a daunting task given the wide scope and comprehending deeper aspects involved. The Income Tax Act of India, 1961, allows legal authorities to strictly govern income tax along with rigorous checks and harsh penalties imposed upon defaulters.

4. Know Your Rights and Benefits as a Taxpayer

Tax regulations will certainly impact your business as it has its own set of implications that your business cannot escape from. The best thing is to know the rights that you enjoy as a taxpayer. For example, 100per cent tax exemption on profit gains for the first three years with the exception of Minimum Alternate Tax (MAT, 18.5per cent). Then there are exemptions on capital gain tax, the abolition of angel investment tax, and SEBI directed Funds of Funds. Such benefits must be observed and startups should leverage plenty such tax laws and regulation. Doing so will also improve the acceptability levels with VCs, investors, and banks.

5. Deeper Insights for Future Planning

Allocating resources is the key to the streamline all the other business activities and accordingly channelize the finances for the team. For better returns and future financial goals, avoiding taxation can prove disastrous. Startups should dwell deeper to gain important insights that will help those at the helm of affairs to take right decisions. You will learn to allocate resources – channel your finances for better returns – envision financial goalkeeping taxability in mind. There are chances that your future launch may get affected by the tax norms and other requirements. Ensure a tight watch over every minuscule change in the tax regime and align it for your business requirements.

Most of the new startups are stringent with taxation but they lack clear information since the subject has many branches associated with it. Startups should also ensure a pervasive compliance management system with Chartered Accountants, lawyers and tax professionals mentoring it. Try incorporating technology to manage all the compliances with utmost diligence to ensure timely tax payments and completion of all legal formalities pertaining to it.

Source : Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

Advise for contacting VidyaSunil & Associates;

E Mail ID : vidyasunilassociates@gmail.com

Website : http://www.vidyasunilassociates.com

Cell No. : +91 9739834819

Angel Tax

However, it is time for startups to breathe at ease as angel tax is about to be a thing of past. As per media reports, the income tax department has notified about 120 startups that they are exempted of angel tax.

Business daily Livemint reported that about 150 firms had applied for tax relief of which 120 have received the tag of ‘startup’. The intimation was sent to startups in the last few days under a new scheme announced in February which brings an end the much talked about angel tax in the startup community.

On February 19 this year, the Department for Promotion of Industry and Internal Trade (DPIIT), in an announcement, broaden the definition of a ‘startup’ and exempted investors and entrepreneurs from the so-called ‘draconian’ angel tax. As per the new norms, an entity is a startup up to 10-years of its establishment and its turnover hasn’t exceeded INR 100 crores.

Anuj Golecha, Co-Founder, Venture Catalysts says with the relaxation of angel tax norms, the government has given a major relief to startups. Earlier there were a lot of redundancies, stretched timelines, and red-tapism due to the procedures, which will now be eliminated.

“This move will further ensure a conducive environment and enable quick processes for budding entrepreneurs. These numerous measures have widened the scope of startups and eased investment in startups across the network, which is a very positive development,” he said.

Even though the government has addressed the problem, investors are now keen to understand if they could implement the notification smoothly. Anil Joshi from Unicorn Ventures is sure these reforms will evolve and the government will actively keep making changes as system demands.

“However, if they are not implemented properly then I fear that angels may dissociate themselves from investments as no one wants to get into scrutiny for investment from tax paid income,” he added.

What Next?

Now that angel tax will have been relaxed and it will haunt fewer startups, can India truly be startup nation? Well, honestly – there is a long way to go.

Presently, India stands tall among the top countries as a startup nation. However, at the ground, the government and ecosystem have a lot of work to do to truly call India a startup nation.

From StartupIndia to DigitalIndia, there have been several initiatives that have been kicked off by the central government while on the other side even states have tried to nurture entrepreneurship in their regions. But often while discussing regulator related issues, we often forget to seek Indian Inc’s participation to develop the ecosystem.

“We need active participation from corporates to make the ecosystem more vibrant. They need to actively involve with startups for a solution and also actively scout for acquisition,” Joshi says.

On the other hand, Lakshmi Potluri-CEO, DCF Ventures says the efforts of both the state and central government have started to show. Having said, rural and non-tech entrepreneurs still need a lot of nurturing and handholding to grow into scalable businesses.

“Entrepreneurs outside tier I cities with great ideas are yet to be tapped and nurtured as access to information/mentors is limited or nonexistent. The ecosystem should look at creating opportunities to showcase a variety of startups to the industry in different domestic, industry shows, global platforms, etc. Lastly, more cross border best practices exchange from successful ecosystems such as Israel, Germany etc., will be a wonderful opportunity and insight for those who are running such startup/entrepreneurship facilitation ecosystems,” she adds.

Source : Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

Advise for contacting VidyaSunil & Associates;

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819

Website : http://www.vidyasunilassociates.com

Legal Complainces for StartUps

Here are five important tax tips for startups useful at many levels – from starting to each stage of progress.

1. Compliance With Tax Norms Makes Life Easier

2. Hire/Consult Tax Professionals

3. Learn About the Broad Norms

4. Know Your Rights and Benefits as a Taxpayer

5. Deeper Insights for Future Planning

Source : Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

Advise for contacting VidyaSunil & Associates;

E Mail ID : vidyasunilassociates@gmail.com

Website : http://www.vidyasunilassociates.com

Cell No. : +91 9739834819

VidyaSunil & Associates

VidyaSunil & Associates is into practice of Tax Compliance, Company / Corporate Law Compliance, Accounts, Audit, Fund Raising, GST, Start Up Consultancy established with a objective to provide wide Spectrum of Activities under One Roof.

We aim to be part of your team & provide value added services in a smooth and efficient manner while leaving you to focus on developing your business. We provide a long-term solution that understands your business through personalized “Solution Based Consulting”.

Professional Services are catered in below mentioned expertise fields:

We provide the best advise & practice for Startups / SME / MSME on matters relating to Business Planning & Development, Mergers & Acquisitions (M&A), Business Valuation, Tax Compliance – (Direct & Indirect Taxes).

We are specialized in catering to IT / Non IT / Health Care & Startups – Out Sourced CFO Services / Virtual CFO Services: Accounting / Book Keeping (complaint with I GAAP / IFRS) including Implementation. MIS Reports, Cash Flow Analysis, Financial Modeling, M&A, Costing & Budgeting.

Tax Compliance includes Direct & Indirect Taxes ( including Handling of Litigations/ Attending to Personal Hearings ) Expertise services in Commercial Taxes – GST / KVAT, Central Excise, Service Tax, SEZ, STPI, Import Export Consultations, FEMA & Allied taxes.

Acting Consultant / Advisor & Mentor to various Startups / SME & MSME Ventures.

We are founded by a team of experts in accounting, auditing and taxation services as now grown and diversified into a multi-dimensional consulting firm having footprint not just in the conventional areas like Statutory Audit, Internal Audit, GST Audit, Investigation but also in new sphere as well.

Our Services:

We offer a wide array of professional services in the areas mentioned below:

Accounting and Payroll Services

︎Setting up of accounting system

︎Book keeping and general accounting services

︎Preparation of Financial Statements

︎Cash Forecasting

︎Budgeting

︎Financial reporting & Analysis

︎Liaison with Financial Institutions and Banks

Strategizing, Planning and Compliance, Advisory and Representation

︎Direct Taxes (Income Tax, TDS, Wealth Tax)

︎Indirect Taxes (GST, PT & Others)

︎Assistance in Statutory Compliances

︎Filing of Income Tax Returns for Individuals, Partnership forms, LLP, Private Limited companies

︎Calculation, Review, Reconciliation, Payment & Filing of GST, PT, TDS, e-TDS, PF, ESI, etc.,

Statutory Registrations and Compliances

︎Registration of entities as a proprietary concern, partnership firm, private limited company, public limited company, trust, AOP etc

︎Registration with different Statutory bodies of PAN, TAN, GST, Professional Tax, Shop & ︎Establishment (Labour Licence), Provide

︎Export & Import Licence, MSMED, etc.

︎Assistance for compliance with the procedures of company law including maintenance of statutory registers, filing of statutory return

︎Meetings and other day to day operational matters.

Looking forward to hear back from you for any support/assistance

Advice for Connect :

VidyaSunil & Associates

Web : http://www.vidyasunilassociates.com

Cell No. : 9739834819 / 9480633382

Outsourced Accounting Services

We are a 10 year old company based out of Bangalore and engaged in providing a range of services to our clients who are mainly drawn from the IT and services sectors.

Our team includes professionals of diversified fields from post graduates, who are well versed in the services sector and manufacturing, construction sector.

We cater to the needs of many IT , Services and Manufacturing Companies including MNCs. You can find the complete list of detailed professional services in our website.

We provide services in terms of the following :

Virtual CFO services
Accounting and book-keeping services
CFO/Controller support services
On-line payroll and statutory compliances
Direct and indirect tax compliance services
GST related services including filing of multiple returns, etc
Obtaining GST refunds including filing of refund claims, follow up with the Department, etc.
Handling of service tax/GST/VAT audits, replying to show cause notices, filing of appeals, etc
Handling issues related to VAT/service tax including pending re-assessments, investigations, etc
Transfer pricing related services
Company Secretarial services including maintenance of minutes, ledgers, etc
Due Diligence related services

We can also help in obtaining refunds for exporters, under the GST regime.

Our delivery team is well trained to handle recognized packages like SAP, TALLY, SAGE and QUICKBOOKS.

We would be pleased to offer our services to your Company, on highly competitive rates.

At a time when your cash flows could have been impacted due to the prevailing Covid situation, we could be of value to you.

Advice Connect :

VidyaSunil & Associates

Web : http://www.vidyasunilassociates.com

Cell No. : 9739834819 / 9480633382

File your Income Tax Returns

As per current tax laws, the basic tax exemption limit applicable to an individual depends on the tax regime chosen by him/her. If an individual opts for the new tax regime, then basic exemption limit will be Rs 2.5 lakh irrespective of his/her age.

However, if an individual opts for the old tax regime, then basic exemption limit depends on the age of the person. Currently, the basic exemption limit for resident individuals below the age of 60 years is Rs 2.5 lakh. For senior citizens aged 60 years and above but below 80 years, income up to Rs 3 lakh is exempted from tax.
For super senior citizens (those above the age of 80 years), the basic exemption limit is up to Rs 5 lakh.
Individuals who fall under seventh proviso to Section 139(1) are as follows:

a) who have deposited an amount or aggregate of the amounts exceeding Rs 1 crore in one or more current accounts maintained with a banking company or a co-operative bank; or

b) who have incurred an expenditure of an amount or aggregate of the amounts exceeding Rs 2 lakh for himself or any other person for travel to a foreign country; or

c) who have incurred expenditure of an amount or aggregate of the amounts exceeding Rs 1 lakh rupees towards consumption of electricity or;

d) who full-fill such other conditions as maybe prescribed.

Therefore, if you are required to file ITR mandatorily due to any of the conditions mentioned above, then ensure that you have filed your tax return before the deadline or else late fee will be levied even if your gross total income is below the taxable limit.

Advice for contact :
VidyaSunil and Associates
Web : http://www.vidyasunilassociates.com

File your Income Tax Returns now to avoid interest penalty !!!

The tax department has extended deadline for filing income tax returns to 31 December from 30 September. If a taxpayer didn’t file her ITR on or before 31 July and has outstanding tax to be paid, she will be charged a monthly interest of 1% on the outstanding tax amount.The income tax department, last week, extended the deadline for filing income tax returns to 31 December from 30 September. However, there is no relief on interest penalty for taxpayers who have an outstanding tax liability above ₹1 lakh and are late in filing their returns.

On 9 September, a notification by the Central Board of Direct Taxes (CBDT) said “the extension of the dates … shall not apply to explanation 1 to section 234A of the (IT) Act.”What this means is that if a taxpayer didn’t file her ITR on or before 31 July and has outstanding tax to be paid to the IT department, under section 234A she will be charged a monthly interest of 1% on the outstanding tax amount. This penalty will be levied only on those whose outstanding tax is above ₹1 lakh after removing advance tax or TDS that might have already been paid.Hence, it is advised that you pay your pending tax, if any, at the earliest.

“It’s advisable to compute tax immediately even if ITR may be filed later. This may help us in saving interest. After paying the outstanding tax, which is done through net banking, one can file ITR anytime before 31 December,”. This move does not impact small taxpayers who are likely to have tax liability under ₹1 lakh.

Advice for contact :

VidyaSunil and Associates

Web : www.vidyasunilassociates.com

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Statutory Complainces for Private Limited Companies

Intimation for immediate compliance:

Auditor has to be appointed with in 30days form the date of incorporation.

Time period of issue a share certificate (Section 56 (2)) Subscriber to the memorandum: – Allotment of any of its share: – 2 months from the date of allotment.

Penalty for non-compliance:

a. Company: – Rs.25,000/- but which may extend to Rs.5,00,000/-

b. Officer: – Rs.10,000/- but which may extend to Rs.1,00,000/-

c. Stamp Due: – 10 times of additional fee as stamp duty

The declaration for commencement of business shall be filled within 180 days from the date of getting CERTIFICATE OF INCORPORATION.

Professional tax enrolment has to be paid for Rs.2500/- on or before 30days from the date of business commencement. Non-compliance Penalty 50% and Interest 1.5% is applicable and no tax is payable for holding any Profession for less than 120 days in that year.

We are pleased to inform you that we are providing following services for the companies:

Registration Service / Business Licenses:

Goods and Service Tax (GST), Professional Tax (PT), Import Export Code (IE Code), Registration under Shop and Commercial Establishment Act, Employee State Insurance (ESI), Provident Fund (PF), Registration under Micro Small and Medium Enterprises Act (MSME), Representation and Facilitation etc.

Accounting Services:

Monthly Accounting, Annual Accounting, Preparation of MIS reports, Reconciliation of Accounts payable (AP), Reconciliation of Accounts Receivables (AR), Reconciliation of Bank accounts (BRS), Fixed Asset Accounting, Inventory Accounting, Payroll, Accounting Software Setup, Accounts Implementation in Tally.ERP9 and Preparation of Financial Statements.

Regular Compliance:

GST Returns, e-TDS Returns, PT Returns, ESI Returns, EPF Returns etc.,

Advise for Connect :

VidyaSunil & Associates

Web ; http://www.vidyasunilassociates.com

Cell No. 9739834819 / 9480633382

Income Tax – Old Regime v/s New Regime – Which one do u opt?

The salaried have the option to choose between both the income tax regimes every year !!!

The ITR filing season has set in. This is the first year to choose, between the old tax regime with deductions and exemption and new tax regime without deductions and exemption but with lower slab rates, while filing your ITR. Taxpayer are confused as to which one to opt for. Let us broadly discuss the features of both the regime.

What the new tax regime provides

The option of new tax regime is available to all individuals and HUFs. This is optional. Under the new tax regime tax is payable at lower slab rates on the income up to Rs. 15 lakh as compared to old regime. Under the new regime tax slabs rates of 5%, 10%, 15%, 20% and 25% are applicable on each successive increase of Rs. 2.50 lakh starting from the basic exemption of Rs. 2.5 lakh till 15 lakhs of total income.

If you wish to opt for the new tax regime you have to forgo various tax deductions and exemptions otherwise available under old regime. Under the new tax regime, salaried people cannot avail major benefits of items like standard deduction, House Rent Allowance (HRA), Leave Travel Assistance (LTA) and even some of the allowances allowed for performing duties. Various deductions like those available under Section 80 C (comprised of various items like EPF, LIP, School Fee, PPF, NSC, ELSS, home loan repayment etc.) , 80D (for health insurance premiums) , 80 CCD(1) & 80 CCD(1B) (for NPS) will also not be available to both categories of taxpayer i.e. salaried and self-employed. You also forfeit the claim for home loan interest for self-occupied as well as to set off or carry forward the loss in respect of let out property. You also will not be able to set off any brought forward losses against current income under new scheme.

Likewise retired senior citizen cannot claim standard deduction against pension received by them in respect of their past employment. Deduction up to Rs. 50,000 available to senior citizen for interest from post office and banks u/s 80TTB will also not be available.

How the scheme works

As one can claim various exemptions and deduction and the composition of these tax benefits widely differ from person to person, a ready made comparative calculation chart cannot be given as to depict which regime is beneficial. However, looking at the tax benefits which majority of the taxpayer have to forgo, the benefits available with existing regime outweigh the benefits of lower rates of tax by migrating to new regime. Let us try to understand the implications with examples.

First let us take case of a salaried person. Since majority of salaried either claim benefit of HRA for rent paid or in all probability would have bought a house with home loan. Presuming he has bought a house with home loan, he has to forgo home loan benefits for interest as well as principal repayment for 3.50 lakh taken together comprised of 1.50 lakh under Section 80C for principal prepayment and Rs. 2 lakh for home loan interest for self-occupied house property. After taking into account the fact that he also will have to forgo standard deduction of Rs. 50,000/-, he will have to forgo to deduction of Rs. 4,00,000/- resulting in tax impact of Rs. 80,000 if he is in 20% tax slab having income between ₹5 lakh to 10 lakh. The net tax benefit forgone is higher than the tax liability of Rs. 62,500 under new scheme. For those in 30% tax slab the tax effect of the benefit forgone @ 30% would be 1.20 lakh against the tax saving of Rs. 37,500 accruing by opting for new regime.

Now let us take an example for a self-employed person who can avail full deduction under Section 80 C for Rs. 1.50 lakh and for Rs. 50,000/- under Section 80CCD(1B) for contribution towards National Pension System for easy understanding of both the regimes. Presuming aggregate income of Rs. 7 lakhs he will have a tax liability of Rs. 32,500/- under new tax regime. However if he is able to claim deduction of Rs. 2 lakhs explained above he will be able to reduce his total income to 5 lakhs on which he will not have to pay any tax due to rebate of Rs. 12,500 available u/s 87A. By investing two lakh rupees one can save Rs. 32,500 of tax under the old regime.

Why will people not opt for new tax regime

Since salaried have to forgo various benefits like standard deduction, HRA, LTA and there would be many mandatory items like employee provident fund contribution, life insurance premium, school fee, home loan principal repayment, it will make sense for most of the salaried to stay with old regime. Even for self employed tax payers who have a home loan running it does not make any sense to switch to the new regime.

In my opinion the new tax regime is only useful for those who have liquidity problem and are not able to avail full benefits of Section 80 C and who do not have any health insurance as well as do not have any home loan running. The new regime may be suitable for only a handful of self-employed or an HUF for which rebate under Section 87A is not available.

Switching from one regime to another

The salaried have the option to choose between both the regimes every year. Even if you have opted a particular tax regime with your employer, you can still choose the other regime while filing your ITR in case the other option seems more beneficial to you while computing the tax liability at the time of filing the ITR.

Please note that the self-employed do not have the choice to come back to old tax regime once the new one is opted unless they stop having business income. So the person with business income has to be vary careful while migrating to new regime as it is only one way journey for them.

Whether the new scheme works for you or the old one will depend on composition of your income and deductions available and one will have to take decision based on his circumstances.

Advice for contact :

VidyaSunil & Associates

Cell No. 9739834819 / 9480633382

E Mail ID : vidyasunilassociates@gmail.com

Businesses can utilize IGST credit to settle centre, state tax dues: CBIC

Businesses that have accumulated Integrated GST (IGST) credit in their books can settle it against central and state tax dues in any proportion, the revenue department has said. Importers typically pay IGST on goods they bring into the country. Also IGST is paid on inter-state movement of goods. This tax is supposed to be set-off against the actual GST paid, or may be claimed as refund in certain cases.

The Central Board of Indirect Taxes and Customs (CBIC) in March had allowed utilisation of input tax credit (ITC) of IGST towards the payment of Central GST and State GST, in any order subject to the condition that the entire IGST liability has been first discharged using the accumulated credit.

However, there were confusion among taxpayers regarding the quantum of utilisation of IGST credit in paying CGST and SGST dues. The CBIC has now clarified that the IGST credit can be used in payment of CGST or SGST in any order or proportion.

Under Goods and Services Tax (GST), the tax levied on consumption of goods or rendering of service is split 50:50 between the centre (CGST) and the state (SGST). On inter-state movement of goods as well as imports, an IGST is levied, which accrues to the centre.

Source : Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

Advise for contacting VidyaSunil & Associates;

Website : http://www.vidyasunilassociates.com

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819