Basic Tax Detail

TAX is a compulasory contribution to state revenue, levied by the government on workers income and business profits, or added to the cost of some goods, services, and transaction. 

What is Tan ?

Those who are liable to deduct TDS as per provisions of Income Tax have to obtain TAN. TAN full form is Tax deduction and collection account Number. What amount you deduct as TDS that you have to deposit with Government by mentioning your TAN. Then you have to file TDS return and whenever you issue Form 16A you have to mention your TAN.

Income Tax Refund 

When your TDS is more that your income tax liability you will get back excess amount and that is called Refund. Sometimes it may happen that you have paid more tax then what you are liable to pay then also you will get Refund.

What is PAN?

Full form of PAN is Permanent Account Number. It is issued by Indian Income Tax Department. People have misconception about this that once they obtain PAN they have to file income tax return. No it’s not like that if you have income more than basic exemption limit (for PY 2012-13 it’s 2,00,000) or you have foreign assets then only filing of income tax is compulsory.

What is Previous Year?

Suppose you have started your business on 20th May, 2012, then your 1st previous year will be 20th may 2012 to 1st March, 2013 i.e. P.Y. 2012-13. In any other cases your previous year will start on 1st April and end on next 31st march. In simple meaning, Previous Year means actual year (financial year) starting on 1st April and ending on following 31st March i.e. previous year means the year in which you earn the income.

What is Assesment Year?

To know the exact tax liability of particular year you have to wait until that year ends. When your Previous Year ends Assessment year relevant to that Previous Year will start. i.e. in above example Assessment year will be 2013-14. The year in which we self assess our income tax liability and we file our income tax  return.

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Foreign Direct Investment in India

Foreign direct investment (FDI) is an investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company.

Method of Foreign Direct Investment

Foreign direct investments can be made in a variety of ways, including the opening of a subsidiary or associate company in a foreign country, acquiring a controlling interest in an existing foreign company, or by means of a merger or joint venture with a foreign company investment.

FDI Inflows Jump 53 Per Cent In Last 2 Years in India

India saw a record 53 per cent increase in FDI in last two years as the investment climate brightened due to steps taken to foster growth, price stability and fiscal prudence which also improved the overall macroeconomic stability.

In the last two years, there has been 53 per cent rise in FDI into the country, which is a record high.

Many sectors have been opened up for Foreign Direct Investment over the years starting from 1991. In addition to opening up more sectors for FDI, related conditionalities have been smoothened by this government, the minister said.

Improving the ease of doing business is a "work in progress", he said, adding that measures have also been initiated to ensure that the system itself is more transparent.

Investment Ideas Suitable For Indian Business

It is a very common belief that starting a business in India requires huge amount of investment. But not all businesses require too much investment. India is a land of opportunities and one can start a business with low investment or even no investment. You can start a business in India with a nominal amount of investment and grow your business. India has a rapidly growing economy and has a massive population. In this article we will discuss some ideas for business start-up in India.

•  Home canteen: Running a home canteen requires low investment in business. Off late, the business of food supply has gained a lot of popularity. It is a profitable small-scale business. You can start a business in India with a nominal amount of investment and grow your business. 

•  Dance instructor:You can work as a dance instructor and this does not require a whole lot of money. You can open your own school or work as a freelance dance instructor. Since dance forms an integral part of Indian culture, many parents like their kids to learn dance from a very early age. Therefore, there are plenty of opportunities for a dance instructor to earn both fame and money. 

•  Fashion designing:If you are good at art and like fashion, then fashion designing is the best choice. In order to make the most sought-after outfits you will have to undergo training in this field. 

•  Data entry jobs:This job does not require huge investment. If you have a computer at home and internet connection, you can start a data entry company. Filling up forms online is a popular example of data entry jobs on the Internet.

VALUE ADDED TAX

What is VAT?
Value Added Tax (VAT) is a general consumption tax assessed on the value added to goods. It is a general tax that applies, in principle, to all commercial activities involving the production and distribution of goods. It is a consumption tax because it is borne ultimately by the final consumer. In India, it is the replacement of existing sales tax structure; the only difference being the manner of levy. 
It is a multi-stage tax, levied only on value added at each stage in the chain of production of goods with the provision of a set-off for the tax paid at earlier stages in the chain. It is assumed that due to cross-checking in a multi-staged tax, tax evasion will be checked, resulting in higher revenues to the government. VAT being state level tax, is controlled and administered by State Government, through various states level laws, rules and regulations. 

What is the procedure for registration under VAT?
A dealer who is required to apply for registration shall make an application for registration to the Commissioner in the prescribed form within a period of thirty days from the date of his becoming liable to pay tax under the Act. The local VAT office conducts an inspection of the premises within three days after submitting the application. After the inspection is being conducted, the relevant deposit fee is required to be paid. On payment of the professional fee deposit, the TIN No. will be allotted and Certificate will be issued within a day. 

Documents required for VAT registration
The application for registration is typically required to be accompanied by the following documents:

• Deposit receipt of prescribed amount towards fees for registration. Such deposit receipt is to be obtained from the appropriate treasury after payment of the fee amount.
• Copy of the constitution document e.g. Partnership deed for a partnership firm, Memorandum and Articles of Association for a company.
• Board Resolution authorizing the signatory to sign the application in case of company.
• Proof of identification of the authorized signatory e.g. voter identity card, passport, driving license.
• Proof of principal place of business e.g. rent receipt, lease agreement, electricity bill.

Who is required to sign the application for registration?

The Application for registration is required to be verified and signed by an authorized signatory. An authorized signatory for different categories of persons is: 

• Proprietor, in case of proprietorship concern
• Managing partner, in case of partnership firm and where there is no managing partner, by any of the partners.
• Managing Director or authorized signatory, in case of a company.
• Karta, in case of Hindu Undivided Family and authorized signatory.

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PERMANENT ACCOUNT NUMBER

What is PAN?

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any person who applies for it or to whom the department allots the number without an application. 

PAN enables the department to link all transactions of the PAN holder with the department. These transactions include tax payments, TDS/TCS credits, returns of income/wealth/gift/FBT, specified transactions, correspondence, and so on. PAN, thus, acts as an identifier for the person with the tax department. It also serves as an important ID proof. 

Why is it necessary to have PAN?

It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. It is also compulsory to quote PAN in all documents pertaining to the following financial transactions:

• Sale or purchase of any immovable property valued at five lac rupees or more;
• Sale or purchase of a motor vehicle or vehicle;
• A time deposit, exceeding fifty thousand rupees, with a banking company ;
• A deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank;
• A contract of a value exceeding one lac rupees for sale or purchase of securities;
• Opening a bank account;
• Making an application for installation of a telephone connection (including a cellular telephone connection);
• Payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time;
• Payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day;
• Deposit in cash aggregating fifty thousand rupees or more with a bank during any one day;
• Payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time.
The primary purpose of PAN is to bring a universal identification key factor for all financial transactions and indirectly prevent tax evasion by keeping a track of monetary transactions of high net worth individuals.

Who must obtain PAN?

The following persons need to obtain PAN:

• All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.
• Any person carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed five lac rupees in any previous year.
• Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.
• The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

How to Obtain PAN?

The application for PAN must be made on Form 49A, which can be obtained from IT PAN Service Centers or TIN Facilitation Centers, or can be downloaded from the website of the Income Tax Department, UTI Investor Services or NSDL. The completed form is then submitted to any TIN Facilitation Center or PAN Service Center.

Documents Required

The following documents should be attached with the application form:

• Proof of identity
• Proof of address
• Photograph (For Individual applicants)

Non Residents, have the option of applying through a resident representative, or they can apply directly in case they are residents of one of the 90+ countries listed on their web site as mailing locations.

OUR ROLE

Our team has the hands on experience of obtaining PAN for our clients. We can assist you in:

• Filing the application form
• Liaising with the authorities
• Obtaining PAN

Addressing any queries raised by the department.   

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WHAT IS PAYROLL

Payroll is the process by which employers pay an employee for the work they have done. Any business with employees should have a payroll established. Although, payroll seems like a mundane task, it involves many aspects including, withholding taxes from each paycheck and making sure accurate funds are paid to the correct government agency.

From an accounting perspective, payroll is crucial because payroll and payroll taxes considerably affect the net income of most companies and because they are subject to laws and regulations (e.g. in the US, payroll is subject to federal, state, and local regulations).


Three Basics of Payroll

Pay Day!
Every week? Every other week? On an agreed upon schedule, just calculate your employees’ wages, withhold the correct amount of taxes & issue their paycheck.

Paying Payroll Taxes
You will need to pay the government the Federal & State taxes withheld from your employees’ paychecks — as well as payroll taxes your business owes.

Filing Tax Forms
Let’s face it. Forms are frustrating. But you’re required to fill & file them, so the government knows who’s been paid what, the taxes paid, & other details. Most businesses file quarterly;
and some file monthly or yearly.
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SETTING UP IN INDIA

Procedure, method and list of documents for fitting a Project workplace in Asian country.

RBI has liberlised and simplified the the procedures for institution of Project Offices in Asian country. General permission has been granted to foreign entities for fitting Project Office(s) in Asian country. This permission is subject to the adherence to the provisions of Regulation four, and Regulation five of the FEMA Regulation No. twenty two that bury alia includes the subsequent conditions to be glad :click here

(i) it's secured from associate Indian company a contract to execute a project in India; and

(ii) The project is funded by inward remittal from abroad; or

(iii) The project is funded by a bilateral or tripartite International Finance Agency; or

(iv) The project has been cleared by associate applicable authority; or

(v) an organization or entity in {india|India|Republic of Asian country|Bharat|Asian country|Asian nation} grant the contract has been granted Term Loan by a Public institution or a bank in India for the project.

In case the on top of criteria don't seem to be met, the foreign entity must approach the Federal Reserve Bank for approval.click here

The foreign company establishing a Project workplace in {india|India|Republic of Asian country|Bharat|Asian country|Asian nation} is needed to furnish a report through the involved AD class - I bank branch to the involved Regional workplace of Federal Reserve Bank of India below whose jurisdiction the Project workplace is ready up at intervals sixty days of multinational of the new Project workplace with the subsequent details.

(i) Name and address of the Foreign Company,

(ii) Reference variety and date of letter grant the contract

(iii) Particulars of the authority grant the comes / contract,

(iv) the full quantity of contract,

(v) Address / e-mail address, / {telephone variety|phone number|number|signal|signaling|sign} / fax number of the Project workplace,

(vi) Tenure of Project workplace,

(vii) temporary details of the Project undertaken,

(viii) associate endeavor to the result that the Project workplace is eligible to avail of the final Permission below Regulation five(viii) AD branch with whom the account has been opened and also the foreign currency during which the account is opened

OPENING OF FOREIGN CURRENCY ACCOUNT

Project Offices will through their AD class – I banks open non-interest bearing Foreign Currency Account in Asian country subject to the following:

(i) The Project workplace has been established in Asian country, with the final / specific permission of Federal Reserve Bank, having the requisite approval from the involved Project enabling Authority.

(ii) The contract below that the project has been sanctioned, specifically provides for payment in foreign currency.

(iii) The permissible debits and credits within the account shall be as under:

Debits:

Payment of project connected expenditure.

Credits:

* Foreign currency receipts from the Project enabling Authority, and 

* Remittances from parent / cluster company abroad or bilateral / tripartite international funding agency.

(iv) The responsibility of guaranteeing that solely the approved debits and credits area unit allowed within the Foreign Currency Account shall rest exclusively with the involved branch of the AD.

(v) The Foreign Currency account is also closed at the completion of the Project.

REPORTINGS

Foreign entities fitting Project workplace in Asian country ought to submit a report back to the Director General of Police (DGP) of the state involved wherever the project workplace has been established at intervals 5 operating days of the PO changing into practical. just in case of quite one workplace, the report ought to be stocked to every DGP of the involved state wherever the workplace has been established. The copy of the report in ought to even be filed with AD Bank by the fresh established Project workplace. 

The Project workplace shall conjointly submit associate annual activity certificate to the AD branch.

COMPLIANCES WITH THE REGISTRAR OF firms AND DIRECTOR GENERAL OF POLICE

Once Project workplace has been established, the PO is additionally needed to be registered with the Registrar of firms (“ROC”) in Asian country below the provisions of the businesses Act, 2013, at intervals a amount of thirty days from such date of multinational of the LO. The registration application is to be filed in e-form FC-1. constant is to be filed on-line with the mythical monster along side the requisite documents.

List of Documents needed for registration

- The certificate of incorporation/ registration. Latest Audited record of the human Foreign Company.

- Board Resolution of the Foreign Company on the corporate Letter head

- List of administrators and Secretary of the Foreign Company, punctually echt by any of its administrators.

- Power of professional (POA) authorize to represent the Foreign Company before the run and mythical monster.

- Declaration of the administrators
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