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Well, this is a common query which fundamentally turns up in the mind of all the start ups. Most of the private limited Companies give a miss to this because of unawareness about the laws. There are lots of compliances which a recently built-in Company also has to abide by. Failing which may screw the business in long run. The indispensable lists of compliance for private limited Companies are mentioned below:
As a layman, no one knows what comes first and what comes second. We at Taxmantra.com comprise of team of Chartered Accountants, Company Secretary, Lawyers and post graduates with considerable working experience who can help you in each and every step. Let us run you down what all we provide:
The moment, a private limited Company is incorporated, it would entail the subsequent essential requirements:
Apart from these, there are numerous additional registrations and requirements which crop up with the extension of the revenue, hiring of employees etc. depending upon the business model.
To name a few:
To put forth in a nutshell, the CFO of a company is the single person answerable for the finances of the company. The answerability takes the entire accounting mechanism which is followed in the company, application of money and revenue sources in a consolidated whole. The role of a CFO stretches to preparation of budgets, establishing budgetary control points and internal checks, planning the reserves and surplus of the company, retention of profits and ploughing back the profits back into the company.
Hiring a CFO is always a cost intrinsic matter. Start-ups or SMEs are often not in a position to spend oodles on the same. Hence, it is not feasible for them to appoint a full time CFO.
Book-keeping involves taking record of all sums of money received and expended by the company and the matters in respect of which receipts and expenditure takes place, all sales and purchases of goods, the assets and liabilities of the company in a meaningful way which is interpretable to the owners of the organization, third parties, Government authorities and the auditors of the organization. Proper books of accounts shall not be deemed to be kept if such books as are necessary to give a true and fair view of the state of the affairs of the company or branch office, as the case may be, and to explain its transactions and if such books are not kept on accrual basis and according to the double entry system of accounting.
If a company contravenes any provisions of these rules, the company and every officer thereof who is in default, including the persons referred to in sub-section (6) of section 209 of the Companies Act, 2013, shall be punishable as provided under sub-section (2) of section 642 read with sub-sections (5) and (7) of section 209 of Companies Act, 2013. Section 642(2) – Any rule made under sub- section (1) may provide that a contravention thereof shall be punishable with fine which may extend to five hundred rupees and where the contravention is a continuing one, with a further fine which may extend to fifty rupees for every day after the first during which such contravention continues. Sec 209(5) – If any of the persons referred to in sub- section (6) fails to take all reasonable steps to secure compliance by the company with the requirements of this section, or has by his own wilful act been the cause of any default by the company there under, he shall, in respect of each offence, be punishable with 6[imprisonment for a term. which may extend to six months, or with fine which may extend to one thousand rupees, or with both Sec 209(7) – If any person, not being a person referred to in sub- section (6), having been charged by the managing agent, secretaries and treasurers, 2[ managing director, manager] or Board of directors, as the case may be, with the duty of seeing that the requirements of this section are complied with, makes default in doing so, he shall, in respect of each offence, be punishable with 1[ imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
Definitely many of your customers will deduct taxes while paying the invoices and will pay you the lesser amount. You can claim the equivalent tax deducted at source while filing the yearly income tax returns of your organization.
Since we would undertake the day to day accounting assignment of your business, we would ensure and provide the following –
True. In this case, the clients of your organization shall deduct tax at source on the billed amount and pay the net amount. But interestingly, your organization shall be entitled to the tax credit equivalent to the amount of tax deducted, and eligible to claim the same while filing the yearly income tax returns. It is mostly seen not a prudent decision for small businesses and new businesses to hire a CFO or full time senior accountant to take care of the entire finances and do hand-holding for all the necessary tax and regulatory compliances. The directors / promoters of the company either do not have time or resource to actually get involved themselves or afford to hire a full time CFO at a premium CTC. Even if the affordability is not a matter of concern, it is a challenging task to get a CFO who has a prior experience working in a similar business model, since in today’s dynamic and innovative business models which are creating worldwide impact, there is no spoon fed system of controlling finances which can work.
Certainly. Taxmantra.com is an E-Return Intermediary authorized by Income Tax Department. We can access your Tax Credit Statement at any given point of time and provide the relevant information. We can readily inform if any tax at source has been deducted on your income and never deposited, or if deposited, the credit has not been given to your organization. This is a purely Value added service which in-house CFOs fail to provide.
Regretfully, the rates for deducting taxes on expenditure are not fixed. The rates for deduction of taxes at source are different which depends upon the category and amount of expenditure to be made. The type and amount of expenditure has to be taken into consideration to conclude the rate and section of the Act, under which the tax shall be deducted.
Regretfully yes, and fatal in nature. First of all, the expenditure on which tax has not been deducted at source, or deducted but not paid, shall be disallowed under Income Tax Act, 1961, which means that the deductibility of such expense shall not be allowed, which shall increase the net profits of your organization and thereby increasing the net tax liability of your organization. Failure to deduct taxes or wrong deduction of TDS (non deposit, short deposit or late deposit):
|Default/ Failure||Section||Nature of Demand||Quantum of demand or penalty|
|Failure to deduct tax at source||201(1)|
|Equal to tax amount deductible but not deducted|
@1 % p.m. of tax deductible
Equal amount of tax deductible but not deducted
|Failure to deposit tax at source||201(1)||Tax demand||Equal to tax amount not deposited|
|201(1A)||Interestemail@example.com% p.m. of tax not deducted|
|276B||Prosecution||Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine|
|Failure to apply for TAN No. u/s 203A||272BB||Penalty||Rs. 10000|
|Failure to issue TDS certificate u/s 203||272(A)(g)||Penalty||Rs. 100 every day during which the failure continues subject to maximum of TDS amount.|
|Failure to furnish statement of perquisite or profit in lieu of salary u/s 192(2C)||272(A)(i)||Penalty||Rs. 100 every day during which the failure continues subject to maximum of TDS amount|
|Failure to mention PAN of the deductee in the TDS statements and certificates||272B||Penalty||Rs. 10000|
If the TDS returns are not filed within due date, a late filing fee of Rs 200 per day until the return is filed. You have to pay this for every day of delay until the fine amount is equal to the amount you are supposed to pay as TDS. In addition to this, the assessing officer may direct a person who fails to file the statement of TDS within due date to pay penalty minimum of Rs.10,000 which may extended to Rs.1,00,000.
Service Tax Registration is required to be taken within 30 days, when the aggregate value of services provided exceeds Rs 9 lakhs in a financial year. Although, Service tax is required to be paid only when the aggregate value of services provided exceeds Rs 10 lakhs in a financial year. The service provider also has the option of not availing the exemption of the basic limit and can pay service tax irrespective of his total aggregate turnover. However, once the service provider starts paying service tax during a financial year, such option cannot be withdrawn during the remaining part of such financial year.
The compliances associated with Service tax are enlisted below:
Oh, yes, definitely interest and penalties would be levied. The following may be the consequences: According to section 7C of Service Tax Rules, 1994 late fee is payable as follows:
|Delay up to 15 days||Rs. 500|
|Delay beyond 15 days and up to 30 days||Rs. 1,000|
|Delay beyond 30 days||Rs 1,000 + 100 per day of default subject to a maximum of Rs 20,000|
Every organization shall, on or before the due date, furnish a return of its income in the prescribed form. As per the provisions of section 139 of the Income Tax Act, 1961 the due dates for filing of returns of income for different category of assessee are as under:
A Company or Firm or LLP is required to furnish the return of income in all the following illustrative cases, a company or firm or LLP is under an obligation to file Return of income:
Taxmantra.com has a dedicated team of professionals who shall file the return of income and claim the refund of Rs 1.5 lacs. This again is a purely Value added service which in-house Chartered Accountants fail to provide.
If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the proviso to that sub-section, fails to furnish such return before the end of the relevant Assessment Year, the Assessing Officer shall direct that such person shall pay, by way of penalty, a sum of Rs 5000.
Apart from the penalty, there are some of the major disadvantages of non-filing /delayed filing of returns which runs briefly as under –
Anytime someone receives a notice from the Income Tax Department, there seems to be an overwhelming sense of fear that goes with it. Just looking at such envelopes can bring thoughts of impending fines and appearances and adds to the stress of daily life. But not all notices come bearing bad news. While some bear great news such as tax refunds, there are a few that are more of an announcement or statement of facts and have no positive or negative impact. One such notice is the Intimation under section 143(1) which is being received by all assesses who have filed their income tax returns. This notification is a computer generated message stating any errors made or any interest found payable or refundable. This message is generated automatically and has no human intervention. These intimations are often sent via email within a time frame of 1 year from the financial year in which the return was filed.
Founder & CEO,Sun Dew Solutions Private Limited
We have been working with Taxmantra for over 5 years now since our incorporation as a company. We love the way they handle the assignments, very organised, process driven and excellent communication – which matters the most. If you want to run your accounts and finance side of the business with zero headache, Taxmantra surely is the key choice.
Founder, Citrya Innovations Private Limited
Appreciate your due diligence, follow up with me and then working through the portal issues and having the GST returns filed timely. Thank you for the good work and engagement. It feels good to know that my compliances are in good hands.
Devi Prasad Biswal
Co-Founder, Bookyourgym Fitness Private Limited
We have never worked with any team who is as dedicated as Taxmantra, we have really loved working with you guys. We have also started recommending you to whomever we know is starting a company! We look forward to a long working relationship with them and highly recommend them especially to start-ups.
Salaried in Bangalore
Taxmantra is unarguably the best website for any tax-related matter that you might have. Very easy to use and the ticketing system is highly intuitive and user-friendly. I used their service during the peak tax season and was amazingly surprised by the fast responses and turnaround time. Since then I have recommended the service to several friends and family members who have been nothing but delighted by the service.
Founder, ADD-on-GYAN Educational Services
Guys, if you are looking for a CA who will travel your start-up journey with you, it has to be Taxmantra.com . Alok has given us support at every step possible, sometimes not even charging for it (on many occasions) just because he cares. And, you have absolutely no clue how much I harass the team – with delays, super delays, weird queries, and what not – and they don’t even flinch, let alone complain And, I really don’t know what we would do without their help.
Co-Founder, Buyhatke Internet Private Limited
The legal tasks associated with running a company or raising funds often come across as boring. Taxmantra has freed up my time in these respects, improving the productivity and minimizing lapses. Taxmantra has also served as an advisor and mentor in different aspects of our investment process.