TaxationTaxation

To Tax or not to Tax ?To Tax or not to Tax ?

ProprietorshipProprietorship

Singly owned or managed companySingly owned or managed company Mandatory RequirementsMandatory Requirements

Pan Card of ProprietorPan Card of Proprietor Service Tax Number if providing services covered under service taxService Tax Number if providing services covered under service tax TIN number if engaged in trading of goods covered under the Sales Tax TIN number if engaged in trading of goods covered under the Sales Tax

ActAct Current Account with any BankCurrent Account with any Bank TAN Number for TDS deductionTAN Number for TDS deduction

Statutory ComplianceStatutory Compliance Income Tax Return ( ITR 4 )Income Tax Return ( ITR 4 ) Maintenance of Books ( If Tax Audit is compulsory )Maintenance of Books ( If Tax Audit is compulsory ) Service Tax Return ( if service tax number taken )Service Tax Return ( if service tax number taken ) Sales Tax Return ( if TIN number taken )Sales Tax Return ( if TIN number taken ) Filing of TDS Return if Tax Deducted at SourceFiling of TDS Return if Tax Deducted at Source Tax Audit – If applicable as per Income Tax Act ( i.e if turnover exceeds Tax Audit – If applicable as per Income Tax Act ( i.e if turnover exceeds

the statutory limit)the statutory limit)

Partner ShipPartner Ship

Various Individuals creates a partnership concernVarious Individuals creates a partnership concern Mandatory RequirementsMandatory Requirements

Pan Card of PartnershipPan Card of Partnership Partnership DeedPartnership Deed Service Tax Number if providing services covered under service taxService Tax Number if providing services covered under service tax TIN number if engaged in trading of goods covered under the Sales Tax ActTIN number if engaged in trading of goods covered under the Sales Tax Act Current Account with any Bank – Can have various signatoriesCurrent Account with any Bank – Can have various signatories TAN Number for TDS deductionTAN Number for TDS deduction

Statutory ComplianceStatutory Compliance Income Tax Return ( ITR 5 – Partnership concern )Income Tax Return ( ITR 5 – Partnership concern ) Income Tax Return ( ITR 3 – for individuals who are partners )Income Tax Return ( ITR 3 – for individuals who are partners ) Maintenance of Books of AccountsMaintenance of Books of Accounts Service Tax Return ( if service tax number taken )Service Tax Return ( if service tax number taken ) Sales Tax Return ( if TIN number taken )Sales Tax Return ( if TIN number taken ) Filing of TDS Return if Tax Deducted at SourceFiling of TDS Return if Tax Deducted at Source Tax Audit – If applicable as per Income Tax Act ( i.e if turnover exceeds the Tax Audit – If applicable as per Income Tax Act ( i.e if turnover exceeds the

statutory limit)statutory limit)

Private or Public Ltd CoPrivate or Public Ltd Co

Various Individuals are Directors or PromotersVarious Individuals are Directors or Promoters Privately held or Publicly held sharesPrivately held or Publicly held shares Mandatory RequirementsMandatory Requirements

Registration of Company with ROCRegistration of Company with ROC Memorandum of Association and Articles of AssociationMemorandum of Association and Articles of Association Pan of the company.Pan of the company. Service Tax Number if providing services covered under service taxService Tax Number if providing services covered under service tax TIN number if engaged in trading of goods covered under the Sales TIN number if engaged in trading of goods covered under the Sales

Tax ActTax Act Current Account with any Bank – Can have various signatoriesCurrent Account with any Bank – Can have various signatories TAN Number for TDS deductionTAN Number for TDS deduction DIN required for all Directors ( ROC purpose )DIN required for all Directors ( ROC purpose ) Digital Signatures required for Director who is authorized signatoryDigital Signatures required for Director who is authorized signatory

Private or Public Ltd CoPrivate or Public Ltd Co

Statutory ComplianceStatutory Compliance Audit and Tax Audit – If applicable as per Income Tax ActAudit and Tax Audit – If applicable as per Income Tax Act Income Tax Return ( ITR 6 – Partnership concern Income Tax Return ( ITR 6 – Partnership concern Maintenance of Books of AccountsMaintenance of Books of Accounts Service Tax Return ( if service tax number taken )Service Tax Return ( if service tax number taken ) Sales Tax Return ( if TIN number taken )Sales Tax Return ( if TIN number taken ) Filing of TDS Return if Tax Deducted at SourceFiling of TDS Return if Tax Deducted at Source Registrar of Companies – Annual Return with ROC form 20B, 66 for Registrar of Companies – Annual Return with ROC form 20B, 66 for

compliance certificate, 23AC and ACAcompliance certificate, 23AC and ACA Tax Audit – If applicable as per Income Tax Act ( i.e if turnover Tax Audit – If applicable as per Income Tax Act ( i.e if turnover

exceeds the statutory limit)exceeds the statutory limit)

Income Tax Income Tax

Income Tax Site – Income Tax Site – http://www.incometaxindiaefiling.gov.in Different forms for different concernsDifferent forms for different concerns

ITR 4 – ProprietorshipITR 4 – Proprietorship ITR 5 – PartnershipITR 5 – Partnership ITR 6 – Limited CompaniesITR 6 – Limited Companies Due DatesDue Dates

3131stst July for whom tax audit is not required. July for whom tax audit is not required. For Individuals/Partnership who requires tax audit u/s For Individuals/Partnership who requires tax audit u/s

44AB – 3044AB – 30thth September September For Companies – 30For Companies – 30thth September September

Rates of Income TaxRates of Income Tax Individuals – As per the Tax SlabIndividuals – As per the Tax Slab Partnership and Corporate – 30% of the Profit and SurchargePartnership and Corporate – 30% of the Profit and Surcharge

Tax Deducted at Source Tax Deducted at Source

Income Tax Site – Income Tax Site – http://tin-nsdl.com TAN number is compulsoryTAN number is compulsory TDS deducted should be deposited on or before 7TDS deducted should be deposited on or before 7 thth of every month (April of every month (April

to February) and to February) and TDS deducted in March should be deposited on or before 30TDS deducted in March should be deposited on or before 30 thth April April Different TDS certificates issued for different deducteesDifferent TDS certificates issued for different deductees

Form 16 for salaried employeesForm 16 for salaried employees Form 16A for professionals and other deducteesForm 16A for professionals and other deductees

Due Dates for filing TDS ReturnsDue Dates for filing TDS Returns 11stst Quarter April to June – 15 Quarter April to June – 15thth July July 22ndnd Quarter July to Sep – 15 Quarter July to Sep – 15thth Oct Oct 33rdrd Quarter Oct – December – 15 Quarter Oct – December – 15thth Jan Jan 44thth Quarter Jan – March – 15 Quarter Jan – March – 15thth May May

Rates of TDSRates of TDS Depends upon the deductor and deductee and type of transactionDepends upon the deductor and deductee and type of transaction

Sales Tax Sales Tax

TIN Number has to be obtained compulsorily if TIN Number has to be obtained compulsorily if Sales Tax is applicable i.e once sales transaction is Sales Tax is applicable i.e once sales transaction is done, covered under the Sales Tax Act.done, covered under the Sales Tax Act.

Due date for remittance of VAT and CST returns – Due date for remittance of VAT and CST returns – for Financial Year 2010 - 2011 – 20th of the for Financial Year 2010 - 2011 – 20th of the following month.following month.

Sales Tax need to be deposited Sales Tax need to be deposited monthly/quarterly/annually depending upon the monthly/quarterly/annually depending upon the turnover and quantum of Tax Payable. turnover and quantum of Tax Payable.

Returns can be filed monthly or quarterly /annually Returns can be filed monthly or quarterly /annually depending upon the turnover and quantum of Tax depending upon the turnover and quantum of Tax PayablePayable

Service Tax Service Tax

Service tax is mandatory if services provided covered under the Service tax is mandatory if services provided covered under the service tax.service tax.

Mandatory for all types of concernMandatory for all types of concern Rate of Service Tax 14% on the services renderedRate of Service Tax 14% on the services rendered To apply – ST 1 form is requiredTo apply – ST 1 form is required To file service tax return ST 3 form is requiredTo file service tax return ST 3 form is required Service Tax Site - Service Tax Site - http://www.servicetax.gov.in/ Due dates for depositing service tax isDue dates for depositing service tax is

Incase of Companies – April to Feb (5Incase of Companies – April to Feb (5 thth of every following month) and of every following month) and March – 31March – 31stst March March

Incase of Non Companies – April to June – 5Incase of Non Companies – April to June – 5 thth July, July to Sep – 5 July, July to Sep – 5thth Oct, Oct Oct, Oct – Dec – 5– Dec – 5thth Jan and Jan – March – 31 Jan and Jan – March – 31stst March March

Due date for filing service tax returns –Due date for filing service tax returns – Half yearly – April to Sep – 25Half yearly – April to Sep – 25 thth Oct Oct Half yearly – Oct to March – 25Half yearly – Oct to March – 25 thth April April

Accounting Management Accounting Management

Method of Accounting – Accrual or Receipt Basis ( Cash Method of Accounting – Accrual or Receipt Basis ( Cash Basis )Basis )

Accounting Standard – ICAI – Indian GAAP – General Accounting Standard – ICAI – Indian GAAP – General Accounting and Auditing PracticesAccounting and Auditing Practices

Types of Accounts – Balance Sheet, Profit and Loss, Cash Types of Accounts – Balance Sheet, Profit and Loss, Cash Flow, Ratio Analysis, Bank Reconciliation, Flow, Ratio Analysis, Bank Reconciliation,

Types of Books – Cash Book, Bank Book, Ledger – Journal Types of Books – Cash Book, Bank Book, Ledger – Journal Vouching, Debtors and CreditorsVouching, Debtors and Creditors

Types of Vouchers – Cash, Bank, JVTypes of Vouchers – Cash, Bank, JV U/s 44AA – Compulsory maintenance of books of account if U/s 44AA – Compulsory maintenance of books of account if

the turn over exceeds Rs 1 crore.the turn over exceeds Rs 1 crore.

Accounting Management – Important FiguresAccounting Management – Important Figures

Balance Sheet – Assets should match the LiabilitiesBalance Sheet – Assets should match the Liabilities Profit and Loss Account - Gross and Net ProfitProfit and Loss Account - Gross and Net Profit Earnings before Interest, Tax and DepreciationEarnings before Interest, Tax and Depreciation Ratio Analysis – Stock Turnover, Debtors Turnover, Net Ratio Analysis – Stock Turnover, Debtors Turnover, Net

Profit, Current Ratio etc.Profit, Current Ratio etc. Cash Flow and Fund Flow in positive and negative Cash Flow and Fund Flow in positive and negative Valuation of the Company.Valuation of the Company.

Fair accounting and compliance practice Fair accounting and compliance practice

If accounting and compliance practice followed properly and If accounting and compliance practice followed properly and on time you come in good books of the regulatory bodyon time you come in good books of the regulatory body

Increase in credit worthiness and easy to obtain creditIncrease in credit worthiness and easy to obtain credit Checks on creditors and debtors – Helps in to reduce the credit Checks on creditors and debtors – Helps in to reduce the credit

period and bad debtsperiod and bad debts Increase in valuation of the company as following correct Increase in valuation of the company as following correct

accounting principals may give correct gross and net profit accounting principals may give correct gross and net profit figures along with other relevant figures.figures along with other relevant figures.