Business Maintenance

Professional Services offered – Complete Compliances at one place

At TaxRaj.com, we have launched tax and regulatory services for companies, limited liability Partnerships/ General Partnerships and Proprietorships Firms. Under this unique retainership service, we take care of complete tax and regulatory compliances on your behalf, which makes you focus just on your business. There would be a specialized service team assigned to each assignment involving accounting, corporate law and taxation services with a Single Point of Contact (SPC) to co-ordinate the entire project.

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 and do hand-holding for all the necessary tax and regulatory compliances, and for them, this single platform solution will be very handy. The idea behind this single platform client centric service module is to work as an outsourced CFO for businesses who either don’t have time or resource to actually get involved themselves or hire someone dedicated.

I know many startup founders who spend whole of their weekends on these tax and regulatory compliances. Now they can spend some quality time with their families, leaving all their compliance worries to TaxRaj.com says Gourav Chaplot, Founder of TaxRaj.com.

Accounting (for Company, LLP, Partnership Firm, Sole Proprietorship)

LEGAL REQUIREMENTS FOR EVERY BUSINESS –

Section 209 of the Companies Act, 1956 requires every company to maintain proper books of account with respect to;

§  all sums of money received and expended by the company and the matters in respect of which receipts and expenditure takes places.

§  all sales and purchases of goods by the company

§  the assets and liabilities of the company

§  in the case of a company engaged in production, processing, manufacturing or mining activities, such particulars relating to utilization of materials or labour or other items of costs as may be prescribed by the Central Government to any class of companies.

Proper books of accounts shall not be deemed to be kept with respect to the matters specified in Section 209(1) & (2),

§  if there are not kept 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. [Section 209(3)]

PENAL PROVISIONS FOR NON-COMPLIANCE –

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 Act, 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, 1956 (1 of 1956).

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 willful act been the cause of any default by the company there under, he shall, in respect of each offence, be punishable with [ 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 [ imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both].

HOW DO WE HELP –

It is not a prudent decision for a startup organization to hire an accountant to take care of the accounting part of the organization, as it increases the initial outflow of the organization, along with non-guarantee of the correctness of the standards followed while preparation of the books of accounts. We comprise of a team of specialized Chartered Accountants who heads your accounting assignment, review each and every transaction fed into the accounting system, assisted by Commerce Post Graduates with work experience of considerable years in the field of accounting. Let us run you down what all we will provide –

§  Punching of bank and cash transactions in recognized accounting software (Tally ERP 9)

§  Accounting for each invoice, bills, vouchers and challans

§  Profit and loss statements – Quarterly Reporting

§  Balance Sheet – Quarterly Reporting

§  Trial Balance – Quarterly Reporting

§  Day Book – Quarterly Reporting

§  Ledgers – Quarterly Reporting

§  Sales, Purchases, Debtors & Creditors – Quarterly Reporting

§  Bank Reconciliation Statements – Quarterly Reporting

§  Finalization of Accounts (after discussion with client)

Please note that we will be providing you with our embedded excel sheets (duly formatted by our in-house Information Technology team). We will share this with you, so that you can book your business transactions (cash incomes and expenses) in a systematic manner and share it with us.

Statutory Audit under Companies Act, 1956 (for Company and LLP)

LEGAL REQUIREMENTS FOR EVERY BUSINESS –

Every company shall, at each annual general meeting, appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting and shall, within seven days of the appointment, give intimation thereof to every auditor so appointed. Section 211(3A) of Companies Act, 1956 provides that every profit and loss account and balance sheet of the company shall comply with the accounting standards.
The statutory auditors are required to make qualification in their report in case any item is treated differently from the prescribed Accounting Standard. However, while qualifying, they should consider the materiality of the relevant item. In addition to this Section 227(3) (d) of Companies Act, 1956 requires an auditor to report whether, in his opinion, the profit and loss account and balance sheet are complied with the accounting standards referred to in Section 211(3C) of Companies Act, 1956.

Only the Limited Liability Partnerships whose contribution exceed Rs. 25 Lakh or whose turnover exceed Rs. 40 Lakh are required to annually get their accounts audited by any Chartered Accountant in practice. Limited Liability Partnerships who are exempted from mandatory audit may also get their accounts audited as per the Limited Liability Partnership Rules 2009.

PENAL PROVISIONS FOR NON-COMPLIANCE –

Section 224(3) provides that if no auditors are appointed or re-appointed at an annual general meeting of a company, the Central Government may appoint a person to fill the vacancy. Therefore, the power of the Central Government to appoint auditors becomes exercisable when no auditors are appointed or reappointed at an annual general meeting of a company. The Company is required to give intimation electronically to the Regional Director (Powers of the Central Government were delegated to the Regional Director) vide Notification No. GSR 288(E) dated 31st May, 1991) in new e-Form 24A prescribed by Notification No. GSR 56(E) dated 10th Feb., 2006. Obligation has been cast on the company that within seven days of the Central Government’s power u/s 224(3) becoming exercisable, it shall give a notice of that fact to that Government; and if a company fails to give such notice, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees. Consequences of failure to pass a special resolution at an AGM for appointment of an auditor under section 224A:— (a) it shall be deemed that no auditor or auditors had been appointed by the company at its annual general meeting; and (b) the power of the Central Government under section 224(3), to appoint auditors becomes exercisable.

HOW DO WE HELP –

Upon confirmation of appointment of auditor in the first Board meeting by the BOD (in case of first appointment of auditor) or in the Annual General Meeting by the shareholders (in case of subsequent appointment /re-appointment) by an intimation, and after filing Form 23B i.e. intimating the concerned ROC for being appointed / re-appointed, our network firm will undertake the statutory company audit of your company / LLP and report accordingly.

For FY 2014-15, audit report has to be suggestively attested latest by 31st August, 2015, in view of the AGM to be held latest by 30th September, 2015 in which such audit report is to be adopted.

Annual ROC Compliances (for Company and LLP)

LEGAL REQUIREMENTS FOR EVERY BUSINESS –

This includes filing of necessary forms by a company on annual basis with MCA, as mandated by Companies Act, 1956 and LLP Act, 2008 for Companies and LLPs respectively.

Sr. No.

Document

e-Form

1

Balance-Sheet

Form 23AC to be filed by all Companies

2

Profit & Loss Account

Form 23ACA to be filed by all Companies

3

Annual Return

Form 20B to be filed by Companies having share capital

4

Annual Return

Form 21A to be filed by companies without share capital

5

Compliance Certificate

Form 66 to be filed by Companies having paid up capital of Rs.10 lakh to Rs. 5 crore

6

Intimation by Auditor

Form ADT-1 to be filed by company to ROC on appointment

 

 

Sr. No.

Document

e-Form

1

Annual Return

Form 11 to be filed by all LLPs

2

Statement of Account and Solvency

Form 8 to be filed by all LLPs

 

PENAL PROVISIONS FOR NON-COMPLIANCE –

For companies with authorized share capital up to Rs 5 lacs

For FY 2013-14 and prior
Normal Fees : Rs 400 per year
Additional Fees : Rs 3600 per year

For FY 2014-15
Normal Fees : Rs 400
Additional Fees : NIL
 

For LLPs with contribution up to Rs 1 lac

For FY 2012-13
Normal Fees : Rs 100 per year
Additional Fees : NIL

Apart from the above additional fees, the concerned company /LLP is under all possibilities to receive a show cause notice from the concerned ROC, added with deactivating the company / LLP and further punitive action, as per the discretion of the concerned ROC.

HOW DO WE HELP –

Upon completion of accounting i.e. Finalization of Accounts and getting the accounts duly audited, our Company Secretaries and Company Law experts will prepare the annual returns and file the required forms with ROC and send you the system generated ROC payment challans to ensure transparency, and get it approved by the concerned ROC. We take all precautionary and minute measures in preparing the forms, so that it gets approved.

As far as the question of companies and LLPs registered by us is concerned, the question of additional fees does not arise since we provide them all the maintenance services from Day 1, and keep the companies and LLPs in perfect compliance with the law. Coming to companies and LLPs not registered by us, we provide them the entire maintenance package to ensure compliance with the various laws applicable, and recommend corrective measures if they had defaulted in any manner before approaching us.

Income Tax Compliances

LEGAL REQUIREMENTS FOR EVERY BUSINESS –

Every person being a company or being a person other than a company, if his/her total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form.

Income Tax department has provided various due dates for filing of Income tax return for various type of assessee. 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:

30th Sept. of Assessment Year – Company, LLP (with tax audit), Partnership Firms (with tax audit), Sole Proprietorships (with tax audit).
31st July of Assessment Year – LLP (without tax audit), Partnership Firms (without tax audit), Sole Proprietorships (without tax audit)

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:

§  A newly incorporated company or Firm or LLP which has not commenced business.

§  A foreign company/foreign firm operating in India and having no incomes in India

§  A company or firm or LLP whose entire income is exempt from Income Tax.

§  A company or firm or LLP which is in the process of setting up the business.

§  A company or firm or LLP which has incurred Loss.

§  A company or firm or LLP which has closed all its activities and is in the nature of a defunct company or firm or LLP.

PENAL PROVISIONS FOR NON-COMPLIANCE

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 provisos 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 –

§  Return cannot be revised.

§  Business loss (Speculation or otherwise), capital loss, loss due to owning and maintaining of race horses cannot be carry forwarded.

§  Loss of Interest on refund u/s 244A.

§  Interest u/s 234A will be charged.

HOW DO WE HELP –

Assessment Year 2013-2014 will be influenced by some very important amendments which have been made in the Income-tax Rules with reference to filing of Income-tax Return. However, as always, we are all set to ensure your correct income tax return, with the best possible income tax planning.

1) Tax Audit Report Details: The filing of audit reports was made mandatory in ITR Form 5, 6 and 7 after the tax department noticed discrepancies in filing of some returns along with audit reports.

2) E-filing Mandatory: This is a real important new amendment whereby it is now compulsory for persons having income in excess of Rs. 5 lakhs for the Assessment Year 2014-15 to file their Income-tax Return in the Electronic Form

3) Electronic submission of Audit Report: It is well known fact that tax payers are not required enclosing any papers or documents with their Income-tax Return. However, the new amendment provides that where the assessee is required to furnish a report of Audit as per section 115AB or 92E or 115JB of the Income-tax Act, 1961, then such audit report shall be furnished electronically with the Income-tax Return.

TDS Compliances

LEGAL REQUIREMENTS FOR EVERY BUSINESS –

TDS is the tax paid by individuals on certain types of incomes. The deductor, or the person paying the income, deducts the tax and pays the balance to the deductee, or the one receiving the income.

The types of income which invite TDS include salary paid to employees, interest on bank deposits and bonds, winnings from lotteries and horse races, payment to contractors and sub-contractors, insurance commission, commission or brokerage, rent, fees for professional and technical services, etc.

TDS is deductible at various rates specified by the government. Also, there are prescribed thresholds listed for different types of incomes and TDS may be levied only above this limit.

The deductor issues a TDS certificate to the deductee, giving details of the tax cut. It is treated as tax paid by the deductee on income earned, and adjusted against income tax payable for the year while filing the return.

The responsibility of deducting tax at source and depositing it with the government lies with the deductor. The TDS should be deposited within a week of the end of the month in which the deduction is made.

The returns for the TDS must be filed by all deductors every quarter on the prescribed forms. The respective due dates for filing of returns is 15 July (April – June quarter), 15 October (July – Sept quarter), 15 January (Oct – Dec quarter) and 15 May (Jan – March quarter).

PENAL PROVISIONS FOR NON-COMPLIANCE –

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)

Tax demand

Equal to tax amount deductible but not deducted

201(1A)

Interest

@1 % p.m. of tax deductible

271C

Penalty

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)

Interest

@1.5% 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 furnish prescribed statements u/s 200(3)

272A(2)(k)

Penalty

Rs. 100 every day during which the failure continues subject to maximum of TDS amount

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 TDS return is not filed within the specified due dates being 15th July, 2015 for the 1st quarter corresponding to FY 2015-16, the major consequences would be levy interest.

However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 1 Crore or Rs. 25 Lacs respectively in previous year, there is a requirement to deduct tax at source.

HOW DO WE HELP –

Since we would undertake the day to day accounting assignment of your business, we would ensure and provide the following –

§  Allotment of TAN no. from NSDL.

§  Proper section applicability while deducting tax at source

§  Proper base of calculation of tax deducted at source

§  Monthly computation of tax deducted at source and payment by due date in the succeeding month

§  Quarterly computation of TDS deducted on payments received by the business, so as to check with Form 26AS quarterly

§  Quarterly filing of TDS returns within the prescribed due dates.

§  Adjusting TDS with the income tax liability at the end of the year while closing the books of accounts

Service Tax Compliance

LEGAL REQUIREMENTS FOR EVERY BUSINESS –

Every service provider of a taxable service, may it be a company, LLP, Partnership Firm or a Sole Proprietorship is required to take registration with the jurisdictional Central Excise Office and charge service tax when the aggregate value of services provided exceeds the threshold of Rs 10 lacs

A person liable to pay service tax should file an application for registration within thirty days from the date on which the service tax on particular taxable service comes into effect or within thirty days from the commencement of his activity.

Every assessee is required to submit a half yearly return in form S.T.3 . For the purpose of filing returns half year is counted from April to September and October to March. Date of filing of Returns: The half yearly return is required to be filed by the 25th of the month following a particular half year. (Rule 7(2) of Service Tax Rules, 1994)

PENAL PROVISIONS FOR NON-COMPLIANCE –

Penalty on late filing of service Tax return 

 

Period of Delay

Penalty/late fee before finance ACT 2011

Penalty/late fee After finance ACT 2011

for delay up to 15 days

INR 500

INR 500

for delay beyond 15 days but up to 30 days

INR 1,000

INR 1,000

for delay beyond 30 days

INR 1,000 + INR 100 per day (from 31st daysubject to a maximum amount of Rs 2000.

INR 1,000 + INR 100 per day (from 31st day subject to a maximum amount of Rs 20000.

‘Provided also that where the gross amount of service tax payable is nil, the Central Excise officer may, on being satisfied that there is sufficient reason for not filing the return, reduce or waive the penalty’

 

HOW DO WE HELP –

Since we would undertake the day to day accounting assignment of your business, we would ensure and provide the following –

§  Allotment of Service Tax Code no. from CBEC.

§  Proper service registration and determination of service tax rate applicable.

§  Proper base of calculation of service tax

§  Monthly computation of Service Tax and payment by due date in the succeeding month

§  Half Yearly computation of Service Tax  received by the business

§  Half Yearly filing of Service Tax returns within the prescribed due dates.

 

 

 

VAT Compliance

LEGAL REQUIREMENTS FOR EVERY BUSINESS –

Every Person carrying on business in Rajasthan, may it be a company, LLP, Partnership Firm or a Sole Proprietorship is required to take registration under under Rajasthan Vat Act, 2006 and charge VAT when the aggregate value of taxable goods sold exceeds the threshold of Rs 10 lacs.

A person liable to pay service tax should file an application for registration within thirty days from the date on which the VAT on particular taxable service comes into effect or within thirty days from the commencement of his activity.

Every assessee is required to submit a Quarterly  return in form VAT10 along with Form VAT 10A . For the purpose of filing returns Quarter is counted from April to June, July to September, October to December and January to March.

Date of filing of Returns: The Quarterly return in form VAT 10 is required to be filed by the Dealer withing  45th days. Annual Return is Required to be filed Before 31st December of Relevant Financial year.

Above mentioned returns are not required to be filed by composition Dealer  who are required to file Annual Return Before 30th June of relevant financial year.

PENAL PROVISIONS FOR NON-COMPLIANCE –

 

 All below mentioned Late Fees are required to be deposited in Advance to Govt before filing of Return

Type of Dealer

Latefees for every day of Default

Maximum Penalty per Return

 

NIL TURNOVER DEALER

Rs. 50/- PER DAY

Rs. 1,000/-

 

Dealer Below 20000/-Annually  VAT Paying

Rs. 100/- PER DAY

Rs. 5,000/-

 

Dealer More Than  20000/-Annually VAT paying

Rs. 200/- PER DAY

Rs. 25000/-

 

HOW DO WE HELP –

Since we would undertake the day to day accounting assignment And filing VAT RETURNS  of your business, we would ensure and provide the following –

§  Allotment of TIN no. from Commercial Taxes Department.

§  Monthly computation of VAT payable and payment by due date in the succeeding month

§  Quarterly computation of vat  to be paid by the business and filing of vat returns.

§  Yearly filing of VAT Return .